Get started

Community ideas

BITCOIN forming the first 4H Golden Cross in 5 months!Bitcoin (BTCUSD) is about to form a Golden Cross on the 4H time-frame, which will be the first such formation in almost 5 months (since September 18 2023)! Regardless of the time that has passed since its last occurrence (which is a strong parameter), that pattern alone is a strong enough bullish signal for the short-term. This can be the signal that can trigger a strong rally back to January's High but within the technical context of the dominant medium-term pattern that is none other than an Inverse Head and Shoulders (IH&S). That is a technical bullish reversal pattern that is formed on market bottoms. It could be no coincidence that the last 4H Golden Cross (chart on the right) was formed while BTC was completing an Inverse Head and Shoulders. The standard target of such patterns is the 2.0 Fibonacci extension level. As you see on October 20 2023 that was exactly where the price consolidated and it happened to be a Resistance level from a former High. The 2.0 Fib on the current IH&S happens to be only marginally above the 49000 Resistance and that is our Target for the short-term. Do you agree that the emergence of a 4H Golden Cross and the Inverse Head and Shoulders can take the price back to January's High? Feel free to let us know in the comments section below! ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
CRYPTO:BTCUSDLong
by TradingShot
44
Trading Options: Setups and Rules In a previous video, I explained my share trading strategy, specifically for choppy markets (available here): But many of you have asked about when I decide to take options over shares and what setups do I look for. This video covers my own option rules and setup guidelines. Key points from the video: Always wait for re-tests of support and resistance. Second is good, third is best! Always draw out intra-day trends via trendlines. This alerts you to changes in market condition. Confirm breakouts by marking re-test highs and re-test lows (explained in more detail in the video) Thanks for watching and as always, safe trades!
NASDAQ:NVDAEducation
by Steversteves
5
A simple guide to creating a solid portfolio.Hello, Creating a solid portfolio can be a tough task for most investors. Understanding easy ways of beginning that journey can greatly improve your performance as an investor & greatly amplify your results. The times of just buying the S&P and waiting for your money to keep growing is long gone & active investing can widen the gap between yourself and the normal investor. Below we will be guiding on how you can future proof your stock picks using the NAS100 as an example & point of beginning. 1: Understand the index Understanding the index you want to begin with is the 1st point to look at. This will help you choose the correct index for your journey. In our case The Nasdaq 100 is an index of the hundred largest non-financial stocks listed on the NASDAQ stock exchange. The companies included in this index are often technology or biotechnology firms. 2: Do an analysis of where the index is trading at A simple analysis of where the index is trading at guides you on where most of its components would be trading at. In our case the index is correcting giving as hope that we will easily find companies that are in great points for future buys. The health of the companies will be key in our choices. The chart below shows that we are in correction 3: Know the components of your index All the components of the NAS 100 can be easily found on the www.tradingview.com website via link www.tradingview.com A simple google search will also list all this companies for you. The NAS 100 has 100 components meaning that you have 100 companies to look at. For the purpose of this educational post we will be looking at the biggest 3 companies in the index. We shall evaluate the 3 companies using both fundamental analysis & technical analysis. From fundamental analysis we shall look at key metrics in the balance sheet (does the company have debt), From the income statement (Are revenues steadily increasing over time) & Cashflow statement (Does the company have positive free cashflow). Please note that you can always get deeper with understanding the companies more. Companies that you can access their products are even better for retail investors. Next, we shall evaluate the 3 companies from a technical view using wave analysis. We shall then make calls on whether we are looking for buys or sells or wait recommendations. The 3 companies we shall evaluate are Microsoft, Apple & Alphabet. Company 1: Microsoft Microsoft Corp engages in the development and support of software, services, devices, and solutions. It operates through the following business segments: Productivity and Business Processes; Intelligent Cloud; and More Personal Computing. Key metrics 1: Does the company have debt: (Yes) 2023: Total debt 79.44 billion : Total Debt represents all the interest-bearing obligations of the company, regardless of when these obligations are due for payments. 2:Are revenues steadily increasing over time? Yes ( 2021: USD 168 billion, 2022: USD 198.27 billion, 2023: USD 211.92 billion) 3: Does the company have positive free cashflow Yes (2023: USD 59.48) Technical analysis Company 2: Apple Apple, Inc engages in the design, manufacture, and sale of smartphones, personal computers, tablets, wearables and accessories, and other variety of related services. Key metrics 1: Does the company have debt: Total debt: Total debt USD 123.93 billion : Total Debt represents all the interest-bearing obligations of the company, regardless of when these obligations are due for payments. 2:Are revenues steadily increasing over time? YES 2021: ‪USD 365.82 B‬ 2022: USD 394.33 B‬ 2023: USD ‪383.29 B‬ 3: Does the company have positive free cashflow: YES; USD 99.58 billion Technical analysis We have an alert for buy from USD 170.8 areas Company 3: Alphabet Alphabet, Inc is a holding company. It operates through the Google segment which includes its main Internet products such as ads, Android, Chrome, hardware, Google Cloud, Google Maps, Google Play, Search, and YouTube. Key Metrics 1: Does the company have debt: YES ‪USD 29.87 B‬ 2: Are revenues steadily increasing over time? YES. 2022: USD 280.88 B‬, 2023: USD 307.16B 3: Does the company have positive free cashflow: YES. USD 69.50 Billion Technical analysis Buying at current place not good. Look for sell if price breaks trendline aggressively. Below are our recommendations for the 3 stocks. Microsoft: No trade setup Apple: Look for buy from USD 170.8 areas Alphabet: Buying at current place not good. Look for sell if price breaks trendline aggressively. We will then look at all the other stocks that make the components of the index using the above metrics & choose the best stocks to invest in. Good luck in your journey. We shall be sharing more educational content.
FX:NAS100Education
by thesharkke
10
TradingView Community Awards 2023Our 2023 Community Awards have arrived! It's time to shine light on the standout traders, the ones who have not only shared consistent ideas on our network, but have also expanded their influence and captivated our trading community with countless boosts, follows, and comments. Below, you'll find the profiles of our winners. This includes the top achievers who not only made it to our Editors' Picks but also bagged a free Premium plan! And let's not forget our second and third-place stars, who are also getting their well-deserved spotlight. Make sure to check out and follow these remarkable authors! 🌟🏆📈👇 🏆 Most popular ideas: These are the ideas that created the most engagement from our community in 2023. Check out how they stood the test of time. 🔥📈💡 🥇 Gold - Bitcoin Price prediction 🥈 Silver - NVDA: Short of the Century (Update) 🥉 Bronze - Will the price of gold continue to rise? 🏆 Most Valuable Pine Scripts Dive into the most valuable Pine Scripts of 2023 on TradingView. They're game-changers, loaded with innovative features to enhance your trading. Check them out and level up your strategies! 🌲📊🚀 🥇 Gold 🥈 Silver 🥉 Bronze Bonus: Best Pine library 🏆 🏆 Best Educational Ideas Packed with wisdom and top-notch strategies, these ideas are gold mines for anyone keen to learn. Dive in and boost your trading know-how!📖💡 🥇 Gold - Trading like a Pro with Heiken Ashi 🥈 Silver - Fitting patterns to your bias? 🥉 Bronze - Investing in Crypto 🏆 The Top Chatters Our most active chatters of 2023 on TradingView! Think of them as the Chatty Cathys and Talkative Toms of the TradingView social network.🎙️😄 🥇 Gold : www.tradingview.com 🥈 Silver : www.tradingview.com 🥉 Bronze : www.tradingview.com 🏆 Top Live Streamers These are the superstars turning screens into stages, dishing out live trading drama and wisdom. Tune in to their channels for a front-row seat to the action! 🎥🎤 🥇 Gold : www.tradingview.com 🥈 Silver : www.tradingview.com 🥉 Bronze : www.tradingview.com 🏆 Top Commenters Spotlight on 2023's Top Comments on ideas at TradingView! These gems are more than just words; they're mini-masterpieces of wit and wisdom. 💬📊🤓 🥇 Gold : www.tradingview.com - Nayanstock 🥈 Silver : www.tradingview.com - Kabuci 🥉 Bronze : www.tradingview.com - Juggy… 🏆 Top Editors’ Picks Take a look at 2023's stars on TradingView, consistently featured in Editors' Picks! They're the maestros of the market, delivering quality insights and analyses time and again. Follow their work for a steady stream of top-notch trading wisdom. 🔮📈🧙‍♂️ 🥇 Gold : www.tradingview.com 🥈 Silver : www.tradingview.com 🥉 Bronze : www.tradingview.com And there you have it! Our 2023 community award winners. Now, let’s all have a fantastic 2024 together. Godspeed! Team TradingView 📈🌲
BITSTAMP:BTCUSD
by TradingView
31
Bitcoin REALISM I am definitely not going to win any popularity competitions with my comments and thoughts. But that's not the point when it comes to making money. The main issue for me still in Crypto Land is the lack of realism. The image on the front cover was from a google search of "realism" I guess the confused face made my day. This is exactly how you need to be looking when you read these points below. I have explained the logic of every major move over the last couple of years and this guys - is no different. So let's start by exploring the reality of market cap for one. When you buy a stock you have a number of stocks in circulation times that by the price and you can get a market cap. Of course, unlike most companies on the exchange Bitcoin CANNOT just issue new stock. We have to remember some Bitcoin are gone and lost forever so this number will likely end up around 20million and not the full 21m. The current Market cap is roughly 19,806,000 x $42,897. Let's call it a little over 820 Billion. At the ATH of $69,000 we saw $1.302 Trillion. Lets look at what is needed and an angle of attack if Bitcoin was to hit $500k by Jan 25, 26, 27, 28 or 2029. This is only one aspect of the story. Prior to the ETF launch people were saying silly things like "Trillions coming in, $100k imminent" Blackrock's largest ETF is roughly $354 Billion. This is the SP500 fund founded back in 2001. So 23 years old roughly now. Here's the actual chart. What does this mean? Well, let's say Blackrock decided to close their biggest ETF and throw it all into Bitcoin. That level would still not take us back to the current ATH. Bullish, Bullish, Bullish - we are still $25,000+ under the current ATH. So what about other ETF's? Obviously the market is bigger than just Blackrock. Let's look at this aspect too. Look at the end of 2021 as the ETF market collectively was at it's high. We are talking about $10Trillion in 8,552 ETF's. I've posted several times about the current COT landscape. Clearly social media Bitcoin is buzzing and everyone is about to become rich, it's different this time and so on. Well, COT says otherwise. Back at the top when everyone was calling for $135,000 I said the reason for the drop would be liquidity. So why is this different? I said there were two likely scenario's on the table as we moved down. The first was we were in an early stage accumulation, we needed to go up to 32k and back down to the low 20's. This would allow us to travel much higher and sustain such a large move. The second option was bearish. Well, I guess the second move played out. The momentum is still clearly not with us - we are still FWB:25K + under the current ATH - not what one would or should expect after 12 Bitcoin specific ETF's obtaining approval & launching. Look at the momentum People seem to fall into the echo chamber and all logic leaves the building. I have been at this game a long, long time. Seen it all before and I am sure I will see it again. This does not mean I am Bearish or anti Bitcoin - not for one second. I am one of the lucky ones in at the right time, sold a lot on the way up and happy with the current holdings. All I am trying to emphasis here - is don't get sucked into the void which is not supported by ANY sound logic. I recently watched a couple of video's with Warren Buffet, another with Jim Rickards. They both explained something very interesting in a very clear way. Although Anti Bitcoin - what they said made a lot of sense. The same lesson kinda applies to things like gold. When you buy an asset, the asset can produce for you. So assume you buy a house - you get rental income each month and with the price of the property going up over time you make gains there. Buy a business same thing - Buffet explained this using a farm as the example. Sell grains, cows or whatever you farm. Over time you still hold the asset. This isn't true for the likes of diamonds, gold or Bitcoin. Hence it fits into the greater fool theory. If I sell you my last bitcoin I picked up for less than $200. You buy it all today at $42,850. You have to find someone else willing to pay you more than the $42,850 in the future. For me, this is the main reason I don't personally care up or down or sideways here. But many in the echo chamber do. The average price across the breakeven addresses are around $37k - this is Breakeven not profit. So imagine majority of the retail crowd with an average entry after DCA'in at $37k. These are all things to keep in mind when your playing shorter term moves. ETF's are structured in such a way long term growth can be expected, volatility get's somewhat reduced. You noticed what's happened on the weekends since the launch? So whilst I expect it to go up in the long run. We need a healthy pullback as to be expected. This gives more time for real accumulation to happen - but this will also put some stress on that average (BE) level of $37k. Just keep this in mind and one more thing if you want to comment on "oh your wrong - up only" give some logic to support it or I won't bother responding. This move will take time. For me, nothing has changed since 2022. We are not ready for new highs - YET... Anyway enjoyed or not I thought it was worth another educational post. Stay safe! Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
COINBASE:BTCUSDEducation
by Mayfair_Ventures
74
BTC Market Cycle | Repetitive and Predictable Market CycleThe Bitcoin market cycle can be easily predicted by studying historical data. Whenever you seek an idea of where the market is heading, you can always look at the past to gauge the future. However, this doesn't guarantee that the predictions stated here will unfold exactly as described; it's a PREDICTION, not a fact. Let's examine the chart displayed here. The market cycle repeats itself every four years, with our chart divided into four cycles, the fourth being the current cycle we are in. Every four years, Bitcoin undergoes a major event known as Halving, where the number of blocks containing Bitcoins is halved every four years. We started with 50 Bitcoins released in a block every 10 minutes; in 2012, that amount was reduced to 25 BTC. In the following cycle, it was halved again, and this will continue to happen every four years until all Bitcoins are mined. Currently, we are heading towards the fourth halving event, which will see the number of blocks released reduced to 3.125 BTC. Due to this event, the price of Bitcoin appreciates in value every four years. This is driven by supply and demand, as fewer Bitcoins are mined than in the previous four years (reduced supply), creating scarcity and increasing demand. The mining difficulty also increases, causing miners to be reluctant to sell the Bitcoins they've mined, contributing to the price increase. On our chart, we have three completed cycles that look almost identical. The cycles consist of a bull market where the price experiences a significant increase, followed by a bear market where the price drops in the range of 80–85%. This is followed by the first expansion, where we see a slight price increase, followed by the first accumulation phase. Prices move up and down within a specified range during this phase, also known as the consolidation phase. We then move on to the second expansion and the second accumulation, usually forming just before or within the halving period. This not only shows us that the market cycles are similar but also allows us to predict future events. At the time of writing this, we are three months away from the fourth halving, and it appears we have entered the second accumulation phase, as seen in the past three cycles. Prices should trade in a specified range for a few months after the halving. When you examine the halving events on the chart, you can observe that we usually enter the bull run somewhere between 6 to 8 months after the halving. Based on that, we can predict that the next bull run will start between October and December 2024, lasting until the fourth quarter of 2025. In the past, the cycles have been accurate, and we can expect the same unless a global catastrophic event occurs, as seen in March 2020 during the COVID-19 pandemic. In that phase, there was no second expansion as all markets crashed. It is my opinion that this led to the bull run not reaching its full potential. Had we experienced the second expansion, the price would have moved slightly higher before the second accumulation phase, leading to an extended bull run pushing the price near or above $100k. My price prediction at the end of the cycle, assuming world events stay normal, is to see Bitcoin in the range of $120–150K. What do you think the price of Bitcoin at the end of 2025 will be? Like, share, and feel free to leave a comment. Let me know if you agree or disagree with this analysis.
BNC:BLXLong
by TeeBusa
68
Ultra-Fast Scalping Strategies in ForexUltra-Fast Scalping Strategies in Forex Scalping is a high-speed trading strategy that targets quick profits from small price movements. It's a method that appeals to those who want a hands-on, immediate trading experience. This article delves into three of the best 1-minute scalping strategies: Heikin-Ashi Pullback, RSI Extremes, and Stochastic Oscillator Quick Signal, explaining their nuances and applications in a trading environment. What Is Scalping? Scalping is a trading strategy focused on capturing small price movements in financial markets. Traders employing this tactic aim to gain several pips – tiny increments in price – from each trade, often executing dozens or even hundreds of trades in a single day. Due to the high frequency of trades, transaction costs and speed are significant considerations. This strategy requires a deep understanding of market trends, real-time data analysis, and a disciplined approach to risk management. While scalping is commonly used in forex markets, it's applicable to stocks, commodities, and other financial instruments. To see how these ultra-fast scalping strategies work in practice, consider using FXOpen’s free TickTrader platform. There, you’ll find all of the tools discussed in this article waiting for you. Heikin-Ashi Pullback The Heikin-Ashi Pullback strategy focuses on identifying pullbacks within established trends using Heikin-Ashi candlestick charts. By pinpointing moments when the trend briefly reverses, this strategy offers traders an opportunity to enter the market with the anticipation that the dominant trend will resume. Entry Traders may observe a clear trend with consecutive Heikin-Ashi candles in one colour. During a bearish trend with red candles, many traders wait for the candles to turn green, signalling a pullback. Entry is typically considered when a red Heikin-Ashi candle appears after one or more green pullback candles. Conversely, during a bullish trend with green candles, traders often wait for the candles to turn red, indicating a pullback. Entry is generally initiated when a green Heikin-Ashi candle appears after one or more red pullback candles. Stop Loss A stop-loss is commonly placed at the high or low of the entry candle. Alternatively, traders may set it above or below a nearby swing point for additional safety. Take Profit The position is usually closed when a single opposite-coloured candle appears. Some traders opt to exit when the trend reaches a predetermined resistance or support level. The Heikin-Ashi Pullback strategy capitalises on the market's natural ebb and flow. By entering during a pullback, traders aim to benefit from the market's tendency to resume its prevailing trend. This ultra-fast scalping strategy provides a structured approach to identify high-probability entry and exit points, making it a favoured choice among scalpers. RSI Extremes The RSI Extremes strategy is often highlighted as one of the best scalping strategies, especially when used as a 1-minute forex scalping strategy. It uses the Relative Strength Index (RSI) with a period setting of 7 to identify potential reversals at extreme overbought or oversold levels. Entry Traders typically use a 7-period RSI applied to a 1-minute chart. An entry may be considered when the RSI crosses above 80 and subsequently moves back below, indicating a potential short position. Similarly, an entry point can be seen when the RSI dips below 20 and then moves back above, suggesting a long position. Stop Loss A common approach is to place a stop-loss a few pips above or below the entry candle. Alternatively, traders may opt for a stop-loss above or below a nearby swing high or low for additional risk management. Take Profit Take-profit levels are generally set near a key support or resistance level. Another option is to exit the trade when RSI approaches the 50-level, signalling diminishing momentum. The RSI Extremes strategy leverages the RSI's effectiveness in identifying market extremes. Traders capitalise on brief price reversals, providing a structured way to enter and exit trades in line with market momentum. Stochastic Oscillator Quick Signal The Stochastic Oscillator Quick Signal serves as an easy forex scalping strategy designed to capture short-term price movements. Using the Stochastic Oscillator, traders can identify overbought and oversold conditions to make timely entries and exits. Entry Many traders apply a Stochastic Oscillator with settings (14, 3, 3) to a 1-minute chart. Entry points are often considered when the %K line (blue) crosses above the %D line (orange) and both are below 20, suggesting a long position. Conversely, traders may look for an entry when the %K line crosses below the %D line and both are above 80, indicating a potential short position. Stop Loss A stop-loss is usually placed a few pips away from the entry point. Alternatively, it can be set above or below a nearby swing high or low as an additional safety measure. Take Profit Many traders set the take-profit level when the Stochastic Oscillator reaches the opposite extreme. Another approach is to close the position when a divergence occurs between the price and the oscillator. This strategy employs the Stochastic indicator, an ideal 1-minute scalping strategy indicator, for detecting quick reversals in market momentum. By employing this indicator, traders aim to take advantage of brief oversold or overbought conditions to make rapid gains. The Bottom Line Navigating the fast-paced world of scalping can be challenging, but with the right strategies and tools, it's possible to find success. Each of the strategies discussed offers a unique way to approach the market and seek out profit opportunities. Still, it’s worth noting that they should be modified in accordance with a trader’s unique trading approach. For traders eager to put these strategies into practice, consider opening an FXOpen account. You’ll gain access to hundreds of markets, competitive trading costs, and lightning-fast execution speeds – all crucial aspects for scalping trading success. Good luck! This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
22
Trading Converging Chart PatternsWe discussed identification and classification of different chart patterns and chart pattern extensions in our previous posts. Algorithmic Identification of Chart Patterns Flag and Pennant Chart Patterns In this installment, we shift our focus towards the practical trading strategies applicable to a select group of these patterns. Acknowledging that a universal trading rule cannot apply to all patterns, we narrow our examination to those of the converging variety. We will specifically address the following converging patterns: Rising Wedge (Converging Type) Falling Wedge (Converging Type) Converging Triangle Rising Triangle (Converging Type) Falling Triangle (Converging Type) This selection will guide our discussion on how to approach these patterns from a trading perspective. 🎲 Historical Bias and General Perception Each pattern we've discussed carries a historical sentiment that is widely regarded as a guideline for trading. Before we delve into our specific trading strategies, it's crucial to understand these historical sentiments and the general market interpretations associated with them. 🟡 The Dynamics of Contracting Wedge Patterns Contracting Wedge patterns are typically indicative of the Elliott Wave Structure's diagonal waves, potentially marking either the beginning or conclusion of these waves. A contracting wedge within a leading diagonal may experience a brief retracement before the trend resumes. Conversely, if found in an ending diagonal, it could signal the termination of wave 5 or C, possibly hinting at a significant trend reversal. The prevailing view suggests that these patterns usually precede a short-term directional shift: Rising Wedges are seen as bearish signals, while Falling Wedges are interpreted as bullish. It's essential to consider the trend prior to the formation of these patterns, as it significantly aids in determining their context within the Elliott Wave cycles, specifically identifying them as part of waves 1, A, 5, or C. For an in-depth exploration, refer to our detailed analysis in Decoding Wedge Patterns 🎯 Rising Wedge (Converging Type) The Rising Wedge pattern, historically viewed with a bearish bias, suggests that a downward trend is more likely upon a breakout below its lower trend line. This perception positions the pattern as a signal for traders to consider bearish positions once the price breaks through this critical support. 🎯 Falling Wedge (Converging Type) The Falling Wedge pattern is traditionally seen through a bullish lens, indicating potential upward momentum when the price surpasses its upper trend line. This established viewpoint suggests initiating long positions as a strategic response to such a breakout, aligning with the pattern's optimistic forecast. 🟡 Contracting Triangle Patterns Contracting Triangles, encompassing Converging, Ascending, and Descending Triangles, are particularly noteworthy when they appear as part of the Elliott Wave's B or 2 waves. These patterns typically signal a continuation of the pre-existing trend that preceded the triangle's formation. This principle also underpins the Pennant Pattern, which emerges following an impulse wave, indicating a pause before the trend's resumption. 🎲 Alternate Way of Looking into Converging Patterns Main issue with historical perception are: There is no clear back testing data to prove whether the general perception is correct or more profitable. Elliott Waves concepts are very much subjective and can be often difficult for beginners and misleading even for experts. So, the alternative way is to treat all the converging patterns equally and devise a method to trade using a universal way. This allows us to back test our thesis and be definitive about the profitability of these patterns. Here are our simple steps to devise and test a converging pattern based strategy. Consider all converging patterns as bidirectional. Meaning, they can be traded on either side. Thus chose to trade based on the breakout. If the price beaks up, then trade long and if the price breaks down, then trade short. For each direction, define criteria for entry, stop, target prices and also an invalidation price at which the trade is ignored even without entry. Backtest and Forward test the strategy and collect data with respect to win ratio, risk reward and profit factor to understand the profitability of patterns and the methodology. Now, let's break it further down. 🟡 Defining The Pattern Trade Conditions Measure the ending distance between the trend line pairs and set breakout points above and beyond the convergence zone. 🎯 Entry Points - These can be formed on either side of the convergence zone. Adding a small buffer on top of the convergence zone is ideal for setting the entry points of converging patterns. Formula for Entry can be: Long Entry Price = Top + (Top - Bottom) X Entry Ratio Short Entry Price = Bottom - (Top-Bottom) X Entry Ratio Whereas Top refers to the upper side of the convergence zone and bottom refers to the lower side of the convergence zone. Entry Ratio is the buffer ratio to apply on top of the convergence zone to get entry points. 🎯 Stop Price - Long entry can act as stop for short orders and the short entry can act as stop price for long orders. However, this is not mandatory and different logic for stops can be applied for both sides. Formula for Stop Can be Long Stop Price = Bottom - (Top - Bottom) X Stop Ratio Short Stop Price = Top + (Top - Bottom) X Stop Ratio 🎯 Target Price - It is always good to set targets based on desired risk reward ratio. That means, the target should always depend on the distance between entry and stop price. The general formula for Target can be: Target Price = Entry + (Entry-Stop) X Risk Reward 🎯 Invalidation Price - Invalidation price is a level where the trade direction for a particular pattern needs to be ignored or invalidated. This price need to be beyond stop price. In general, trade is closed when a pattern hits invalidation price. Formula for Invalidation price is the same as that of Stop Price, but Invalidation Ratio is more than that of Stop Ratio Long Invalidation Price = Bottom - (Top - Bottom) X Invalidation Ratio Short Invalidation Price = Top + (Top - Bottom) X Invalidation Ratio 🟡 Back Test and Forward Test and Measure the Profit Factor It is important to perform sufficient testing to understand the profitability of the strategy before using them on the live trades. Use multiple timeframes and symbols to perform a series of back tests and forward tests, and collect as much data as possible on the historical outcomes of the strategy. Profit Factor of the strategy can be calculated by using a simple formula Profit Factor = (Wins/Losses) X Risk Reward 🟡 Use Filters and Different Combinations Filters will help us in filtering out noise and trade only the selective patterns. The filters can include a simple logic such as trade long only if price is above 200 SMA and trade short only if price is below 200 SMA. Or it can be as complex as looking into the divergence signals or other complex variables.
Education
by Trendoscope
13
Community challenge: Share Your Best Trading Idea!Hey there, fellow investors and trading enthusiasts! We're starting the year with an exciting opportunity to reward the wisdom and experience that each of you brings to the table. With markets reaching new highs, and the economy continuing its unpredictable nature, it's a perfect time to talk about the markets. After all, it's this volatility that makes the markets interesting, right? Whether you're a seasoned veteran or a newbie eager to learn, your perspectives are incredibly valuable, and now you can even win an exclusive reward for sharing them! What's your prediction for a breakthrough trade this year? Comment below and share your thoughts. Three lucky participants with the most insightful comments will win the super-exclusive TradingView mug 🎁 Remember, if a comment resonates with you or sparks an idea, feel free to like or reply to it! We can't wait to read your comments! 🔥
NASDAQ:QQQ
by TradingView
118
GBPCHF H4 | Bearish continuationGBPCHF could fall towards an overlap support and continue the downtrend, reversing to our take profit level. Sell entry is at 1.09333 which is an overlap support level. Stop loss is at 1.09998 which is an overlap resistance level. Take profit is at 1.08063 which is a swing-low support that aligns with the 61.8% Fibonacci retracement level. High Risk Investment Warning Trading Forex/CFDs on margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd, previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763), please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Please be advised that the information presented on TradingView is provided to FXCM (‘Company’, ‘we’) by a third-party provider (‘TFA Global Pte Ltd’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by TFA Global Pte Ltd. The speaker(s) is neither an employee, agent nor representative of FXCM and is therefore acting independently. The opinions given are their own, constitute general market commentary, and do not constitute the opinion or advice of FXCM or any form of personal or investment advice. FXCM neither endorses nor guarantees offerings of third-party speakers, nor is FXCM responsible for the content, veracity or opinions of third-party speakers, presenters or participants.
Short
by FXCM
19
Trade Planning: Learning Through Consistency and DisciplineIm going to do a series of posts that are all about trade planning and learning about consistency and discipline through a practice. In this exercise, I will be consistently planning, executing what I planned, and documenting 30 trades. A trade plan consists of a method, trade management, position sizing, documentation and review. A trade plan should state ahead of time, exactly where to enter, where to place stop, how the trade is managed, where to exit, and position sizing. This kind of accountability and responsibility offers a contrast to the our normal ineffective emotional impulses that we usually make our trade decisions from so that we can make a choice. I will talk more about each part of the trading plan future posts. This exercise is not about the method, a setup, picking the right stocks, being right, winning, loosing, or predicting markets. It doesn't matter if all the trades are losses. The purpose is to learn about consistency and discipline through your own personal insight. Its through discipline and consistency that we begin to re-wire old ineffective habits and develop an effective mindset for trading markets. Doing something consistently also offers a bassline to compare and truly learn. There is often resistance to this kind of responsibility. If you want to take up the guidelines of the practice, just step into it as much as your ready for and make it your own. This is not meant for you to follow my trades or worry about my method or setup. Its not important and besides, my setups lose most of the time anyways. Use your own method, there are plenty out there and work on making it as simple and objective as possible. I also suggest you start out sim trading this or using very small size.
NASDAQ:ADBEEducation
by ShaneBlankenship
17
Forex 3-Session Trading SystemForex 3-Session Trading System In the dynamic world of forex trading, mastering session-specific strategies can be essential for your trading performance. The Asian, European and US sessions in forex have their own unique rhythms and opportunities. This article delves into three strategies tailored to these sessions, offering insights for traders to navigate the complexities of the forex market. Understanding Forex Trading Sessions In forex trading, being familiar with the different forex trading sessions is essential. These sessions correspond to the active hours of major global financial markets, each exhibiting distinct trading characteristics. Wondering what time does the Asian session start? Here’s a concise summary of the major sessions: Tokyo Session Forex Time: Typically runs from 11:00 AM to 8:00 AM GMT. This session is the primary Asian session, with contributions from other significant markets like Sydney. It's noted for its relatively lower volatility. London Session Forex Time: Active from 8:00 AM to 5:00 PM GMT (winter) and from 7:00 AM to 4:00 PM GMT (summer), this session encompasses European market activities. It is marked by high volatility and substantial trading volume, particularly during its overlap with other sessions. New York Session Forex Time: Occurs from 1:00 PM to 10:00 PM GMT (winter) and from 12:00 PM to 9:00 PM GMT (summer), involving American markets. Characterised by high liquidity, its overlap with the London session is particularly notable for trading activity. Below, you’ll find three session trading systems. To gain the best understanding, consider following along in FXOpen’s free TickTrader platform. Note that they’re considered to be best employed on the 1-minute to 15-minute charts, with the 5-minute being preferred. Asian-London Breakout Trading the Asian session can present unique opportunities, especially when combined with the increased volatility of the London session. The Asian-London Breakout Strategy capitalises on this dynamic. During the relatively calm Asian session, traders often observe the formation of a tight price range. This range is defined by its high and low points, serving as critical markers for the strategy. Entry As the London session begins, around 7:00-8:00 AM GMT, traders may set buy/sell stop orders at both the high and low of the Asian session's range. This approach aims to harness the surge in volatility as European traders enter the market. Stop Loss Once an order is triggered, a stop loss may be placed above or below the opposing high or low of the range. The other order that wasn't triggered is usually cancelled. Take Profit Traders may look to take profits at the end of the London session or extend into the New York session, targeting major support or resistance levels. Alternatively, they may trail a stop loss above or below key swing points that emerge as the trading day progresses. The rationale behind this strategy is that the Asian session's consolidation often leads to a breakout as the London session begins, with new volumes and market participants. By setting orders on both ends of the Asian session range, traders can potentially capture significant moves regardless of the direction. London Range Retest The London Range Retest Strategy is a popular method for traders focusing on the volatility and patterns of the London session. It involves identifying a specific range and capitalising on its breakout and subsequent retest. This strategy focuses on the range formed typically between 7:30 and 8:30 AM GMT during the London session. Traders have the flexibility to adjust this timeframe, possibly extending it from 7:00 to 9:00 AM GMT to better suit their trading style. Entry Traders look for a breakout from this defined range. Once a breakout occurs, they wait for a retest of the range. Entry points may be identified either at the high or low of the range, at the 50% retracement level (the midpoint between the high and low), or at a specific support or resistance level indicated on the chart. Stop Loss The stop loss might be set beyond the high or low of the range, potentially ensuring a level of protection against market reversals after entry. Take Profit Given that the entry may not be triggered until later in the day, traders might prefer to close the trade at the end of the New York session. Alternatively, they may set their take profit at a suitable support or resistance level, aligning with the market’s momentum. The strategy's rationale lies in leveraging the initial volatility of the London session for a range breakout, followed by a patient wait for a retest. This method offers a structured entry point while managing risk with a well-defined stop loss. London-New York Reversal The London-New York Reversal Strategy focuses on the trend reversals often observed at the start of the New York session. It combines technical analysis with timing, offering traders a method to capitalise on these shifts. This strategy leverages the period between 12:30 and 1:30 PM GMT, a time when the New York session's commencement frequently triggers market reversals as the US stock market opens. The key tool here is the Relative Strength Index (RSI) indicator, which is particularly useful for spotting divergences. Entry Traders monitor the RSI for divergences with the price movement. An entry may be considered when a divergence forms, coupled with signs of a market reversal. This might be indicated by a specific candlestick pattern, such as an engulfing candle, confirming the reversal. Stop Loss The stop loss may be placed above or below a nearby high or low, depending on the direction of the trade. This placement helps manage risk in case the expected reversal does not materialise as anticipated. Take Profit Profit targets might be set at the London opening range, a strategy that aligns with the previous session's initial movements. Alternatively, traders may choose to take profits at another appropriate support or resistance level in line with the ongoing market trends. The strategy's basis lies in the observation that the overlap of the London and New York sessions can result in trend reversals, particularly detectable through RSI divergences and specific price patterns. The Bottom Line In conclusion, these forex session-specific strategies offer valuable tools for traders. By understanding and applying these techniques, you may enhance your trading performance. To put these strategies into practice and experience the dynamic forex market firsthand, consider opening an FXOpen account. It’s a step towards applying these insights in a real-world trading environment, where theory meets practice. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice
Education
by FXOpen
11
Tesla Triangle Bottoming Out NASDAQ:TSLA currently has two major confluences that I've been watching develop over the last few weeks. Firstly, coming off the 6 month high of mid July, Tesla has retraced to the Fibonacci 0.618. Secondly, A classic triangle is now clear. Triangles break out either to the top or the bottom. However, there are multiple confluences that are pushing me towards a (short term) Long position for a breakout: #1: The Psychological. It's been very trendy to short Tesla as of late. According to CNN , short sellers lost 12.2b in liquidity shorting Tesla last year. I suspect retail and algos are looking for a buy opportunity. #2: Long Term Technicals. There are only so many people on this planet that can afford high quality electric vehicles. But, the Model 3 and Model Y is now within reach of most consumers. However, electric vehicles are starting to show some previously unknown issues with a mass market. CBS News reports that Tesla owners can expect to find a 30% reduction in range in temperatures below freezing. For many Americans, this can be hard to swallow, especially for those commuting 50-60 miles a day for work. #3: Adam Jonas. Adam Jonas cut his bullish price target from 380 to 345 this morning citing multiple factors including, "Global EV momentum is stalling. The market is oversupplied (and not enough) demand." #4. Price Action. I'll go into this a bit more below with my expectations. I see two scenarios playing out long term, but first lets set the baseline: 618 fibonacci is extremely stable, and it near perfectly lines up with the price action triangle. Tesla earnings are two days. I suspect we'll see intraday tomorrow as people anticipate the report but nothing drastic. Cybertruck has been delivering for the past few months and I expect we'll see a Christmas sales bump missed in the October report as prices continue to drop. If the earnings report is positive (It most likely is) We will absolutely see a retracement to the 0.5. As there is (currently) little price action to support a resistance of the 0.5, it's possible that it could push past and there could be a retest towards late November through early December trade chop. Anything beyond that would be ultra speculative, but two likely scenarios will play out after the move up: First and what I believe to be most likely, We'll see another retracement to 618 and a bottom side triangle breakout. Fibonacci velocity resistance on the same high & low shows weak support. Combine this negative sentiment towards luxury goods and vehicles in general ( highest delinquency in 30 years ) and we very well could setup for a false or full on breakout of this triangle. Second and personally less likely, we setup for a mini bull flag as price action consolidates and breakout at the top. Any way it swings will be interesting. I'll be keeping an eye on other confluences that appear as the retracement plays out to make a more accurate guestimate. Cheers -T
NASDAQ:TSLALong
by TMace2
44
EURGBP H4 | Potential bullish breakoutEUR/GBP is trading close to a pullback support and could potentially break above a descending trendline to make a bullish rise to the upside. Buy entry is at 0.85700 which is a potential bullish breakout level (wait for price to break through the descending trendline for confirmation). Stop loss is at 0.85350 which is a level that sits under a pullback support. Take profit is at 0.86150 which is a pullback resistance that aligns close to the 38.2% Fibonacci retracement level. High Risk Investment Warning Trading Forex/CFDs on margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd, previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763), please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Please be advised that the information presented on TradingView is provided to FXCM (‘Company’, ‘we’) by a third-party provider (‘TFA Global Pte Ltd’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by TFA Global Pte Ltd. The speaker(s) is neither an employee, agent nor representative of FXCM and is therefore acting independently. The opinions given are their own, constitute general market commentary, and do not constitute the opinion or advice of FXCM or any form of personal or investment advice. FXCM neither endorses nor guarantees offerings of third-party speakers, nor is FXCM responsible for the content, veracity or opinions of third-party speakers, presenters or participants.
Long
by FXCM
12
🅱️ Bitcoin Moving Below EMA50 Confirms Major CrashThis is not a drill... I repeat, this is not a drill! Bitcoin is moving once more below EMA50 after a very weak bounce 16-January. Moving daily below EMA50 simply confirms the upcoming correction without a shadow of doubt. This move is support by low volume and a weak RSI. This signal only confirms when the day closes below $42,142 (EMA50). While this is likely to happen today or fast, it can also take its time. We are looking at the 20th of January, on or around this date (near) for the next major move to fully develop —based on Astrology (planetary movements). Seeing these bearish signals, no doubt the next major move is down. Prepare for a correction... This is not a surprise we've been expecting this for months. All related markets are also bearish. The signals are coming from all across. Prepare accordingly. We still have some time left. Thank you for reading. Namaste.
Short
by AlanSantana
200
Using price action & tradingview tools to trade betterHello, Price action is a vital aspect of trading, and analyzing candlestick patterns is key to understanding market dynamics. The size of candles, representing the range between opening and closing prices, is crucial for traders. Large candles signal strong momentum and potential trends, while smaller candles suggest indecision or lack of clear direction. Traders use candle size to identify entry and exit points, manage risk, and gauge market sentiment. By examining the relationship between candle sizes and volume, traders can make informed decisions based on visual representations of price movements. In summary, candle size is a valuable tool in price action analysis, helping traders interpret market behavior for better decision-making. A key tool you can use to measure the momentum of an asset is the Date & price range tool . This tool allows users to place points vertically on two different prices. A Text appears along the box displaying the total size of the price moving in terms of actual share price, percentage and time the move took. E.g the chart below shows the move took 3234 days and was +1024.43% in terms of increase. Once you've got the hang of price action and figured out which way the trend is going, the next big thing is spotting patterns that tell you when to jump in. We focus on two things: motive moves, which show the trend, and corrections, which give us good entry points . Motive moves are like the big, important moves we want to trade, and corrections are where we can get in on the action. Recognizing these patterns helps us know when it's smart to join the market and increases our chances of making successful trades. a good example of these can be identified below Once you've identified patterns, the next step is deciding when to get in. There are two main types: risk entries and risk-averse entries. Risk entries often align with motive moves, indicating a trader's willingness to take on more risk for potentially higher rewards. Below is a great way of looking at both of this Risk taking entry Risk averse entry This is where the correction has already been broken and a trend determined. The Risk to reward ratio is lower and therefore less profit can be achieved here. Next we shall be looking at how to look at the indicators to support your trading hypothesis and make better trades. Good luck and all the best.
NSEKE:SCOMEducation
by thesharkke
5
Flag and Pennant Chart Patterns🎲 An extension to Chart Patterns based on Trend Line Pairs - Flags and Pennants After exploring Algorithmic Identification and Classification of Chart Patterns , we now delve into extensions of these patterns, focusing on Flag and Pennant Chart Patterns. These patterns evolve from basic trend line pair-based structures, often influenced by preceding market impulses. 🎲 Identification rules for the Extension Patterns 🎯 Identify the existence of Base Chart Patterns Before identifying the flag and pennant patterns, we first need to identify the existence of following base trend line pair based converging or parallel patterns. Ascending Channel Descending Channel Rising Wedge (Contracting) Falling Wedge (Contracting) Converging Triangle Descending Triangle (Contracting) Ascending Triangle (Contracting) 🎯 Identifying Extension Patterns. The key to pinpointing these patterns lies in spotting a strong impulsive wave – akin to a flagpole – preceding a base pattern. This setup suggests potential for an extension pattern: A Bullish Flag emerges from a positive impulse followed by a descending channel or a falling wedge A Bearish Flag appears after a negative impulse leading to an ascending channel or a rising wedge. A Bullish Pennant is indicated by a positive thrust preceding a converging triangle or ascending triangle. A Bearish Pennant follows a negative impulse and a converging or descending triangle. 🎲 Pattern Classifications and Characteristics 🎯 Bullish Flag Pattern Characteristics of Bullish Flag Pattern are as follows Starts with a positive impulse wave Immediately followed by either a short descending channel or a falling wedge Here is an example of Bullish Flag Pattern 🎯 Bearish Flag Pattern Characteristics of Bearish Flag Pattern are as follows Starts with a negative impulse wave Immediately followed by either a short ascending channel or a rising wedge Here is an example of Bearish Flag Pattern 🎯 Bullish Pennant Pattern Characteristics of Bullish Pennant Pattern are as follows Starts with a positive impulse wave Immediately followed by either a converging triangle or ascending triangle pattern. Here is an example of Bullish Pennant Pattern 🎯 Bearish Pennant Pattern Characteristics of Bearish Pennant Pattern are as follows Starts with a negative impulse wave Immediately followed by either a converging triangle or a descending converging triangle pattern. Here is an example of Bearish Pennant Pattern 🎲 Trading Extension Patterns In a strong market trend, it's common to see temporary periods of consolidation, forming patterns that either converge or range, often counter to the ongoing trend direction. Such pauses may lay the groundwork for the continuation of the trend post-breakout. The assumption that the trend will resume shapes the underlying bias of Flag and Pennant patterns It's important, however, not to base decisions solely on past trends. Conducting personal back testing is crucial to ascertain the most effective entry and exit strategies for these patterns. Remember, the behavior of these patterns can vary significantly with the volatility of the asset and the specific timeframe being analyzed. Approach the interpretation of these patterns with prudence, considering that market dynamics are subject to a wide array of influencing factors that might deviate from expected outcomes. For investors and traders, it's essential to engage in thorough back testing, establishing entry points, stop-loss orders, and target goals that align with your individual trading style and risk appetite. This step is key to assessing the viability of these patterns in line with your personal trading strategies and goals. It's fairly common to witness a breakout followed by a swift price reversal after these patterns have formed. Additionally, there's room for innovation in trading by going against the bias if the breakout occurs in the opposite direction, specially when the trend before the formation of the pattern is in against the pattern bias. 🎲 Cheat Sheet
Education
by Trendoscope
14
DOW JONES Why you don't want to miss this rally.Dow Jones (DJI) is pulling back on a technical correction as the 1W RSI got overbought (above the 70.00 mark) on the December 26 1W candle. That was basically the first time since June 01 2021 it got overbought and that time also gave a technical pull-back. What draws our attention more than that time though is the December 19 2016 pull-back when the 1W RSI was again overbought. The difference here is that the price action and patterns that preceded that pull-back/ consolidation are very similar. A Lower Lows bottom on the 1W MA200 (orange trend-line) that took place on a 1W RSI Higher Lows Bullish Divergence, gave way to a break and sustainable rise above the 1W MA50 (blue trend-line). Following the current pull-back/ consolidation we are at, a very strong Channel Up took place. As a result, even though the sentiment is bearish on the short-term, possibly until the January 31 Fed Meeting, it is clear that the long-term trend is bullish. Every such correction has high probabilities from now on to be a buy opportunity. The target can be as high as 43000 within 2024. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:DJILong
by TradingShot
49
3 of the Top Trading StrategiesTrading in the financial markets requires a blend of intuition, analysis, and well-tested strategies. This article delves into three of the top trading strategies that offer valuable insights to traders of all experience levels. We’ll break down their specific components, entries and exits and explain why they work for stock market trading and trading in other markets. For the best results, head over to FXOpen’s free TickTrader platform. There, you’ll find all of the charts and tools you need to put these trading strategies into practice. RSI + MACD Divergence The RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) are two common indicators featured in many day trading guides, known for their ability to help traders identify price changes in fast-moving markets. Both the RSI and MACD are used to gauge the momentum of a trend, but when they diverge from the actual price movement, it's often an early warning sign that a reversal may be due soon. Entry/Exit Criteria Entry: Divergence in RSI and MACD: For a bullish divergence, the price makes a lower low while the RSI and MACD make higher lows. Conversely, for a bearish divergence, the price makes a higher high while the RSI and MACD make lower highs. RSI movement: An entry signal is given when the RSI crosses above 30 (indicative of potential upward momentum) or dips below 70 (suggesting possible downward momentum). Stop Losses: For a bullish divergence: Traders will often place a stop loss slightly below the recent swing low or a support level. For a bearish divergence: It's typical to set the stop loss just above the recent swing high or a resistance level. Take Profits: Traders may consider closing their position when there's a shift in the momentum indicated by either the RSI moving back to the 50 level or the MACD line crossing its signal line. Why Does This Strategy Work? When both RSI and MACD show divergence with the price, it's like having two witnesses corroborating the same story. Divergence in these indicators often suggests that the prevailing momentum behind a price trend is weakening. This weakening momentum, coupled with other market factors, can lead to a trend reversal. By entering a trade when the RSI dips below 70 or rises above 30, traders are attempting to catch the initial phase of a potential trend reversal, capitalising on the early momentum shift. The combined strength and validation from both indicators provide a more robust trading signal, reducing the likelihood of false entries and improving the probability of successful trades. A Pullback to Support/Resistance Understanding support and resistance levels is fundamental in technical analysis. These levels represent price points where the asset has historically faced buying or selling pressure, making them pivotal areas to watch. When the price breaks through these levels and then retraces to test them, traders have an opportunity to capitalise on the market's attempt to reconfirm or challenge the breakout. This price action strategy is preferred by many for its simplicity and repeatability. Entry/Exit Criteria Entry: After a bullish breakout: The price should retrace back to what was previously a resistance level. If this resistance-turned-support holds, it's an indication that the breakout is genuine and the price is likely to continue its upward trajectory. After a bearish breakout: The price should retrace to the former support level. If this support-turned-resistance holds, it suggests the breakout is valid, and the price may continue its decline. Stop Losses: Following a bullish breakout: Traders often position the stop loss just below the new support level (formerly resistance) or an adjacent swing low to safeguard against false breakouts. After a bearish breakout: The stop loss is typically set just above the new resistance level (formerly support) or a nearby swing high. Take Profits: As the price progresses away from the support or resistance level post-pullback, traders could eye subsequent support or resistance levels as potential areas to take profits. Why Does This Strategy Work? A pullback to support or resistance is essentially the market's way of reevaluating and confirming its initial breakout decision. If resistance is broken and then successfully tested as a new support, it underscores the market's bullish sentiment. Similarly, if a support level is breached and then reaffirmed as resistance, it underlines the bearish stance of the market. This self-confirmation builds trust in the breakout's authenticity, allowing traders to join the trend with more confidence. As this dynamic unfolds, it attracts more participants, further fueling the trend's direction. Stochastic + HMA The combination of the Stochastic Oscillator and Hull Moving Average (HMA) offers a powerful toolset for traders. Let's briefly introduce both indicators before diving into the strategy. Stochastic Oscillator: A momentum indicator comparing a particular closing price of an asset to a range of its prices over a certain period. Levels above 80 typically indicate that the asset is overbought, while levels below 20 suggest it is oversold. Hull Moving Average (HMA): A type of moving average that responds faster to price changes than standard moving averages. It reduces lag and increases responsiveness, making it useful for short-term traders. Note that this strategy works best when trades are taken in the direction of the overall trend. Entry/Exit Criteria Entry: The Stochastic Oscillator should be either in overbought (>80) or oversold (<20) areas. Once the Stochastic moves back below 80 or rises above 20, it indicates a potential momentum shift. Subsequently, if the 9-period HMA (blue) crosses over the 21-period HMA (red) shortly after, this acts as a confirmation of a trend reversal. For an uptrend, the crossover of the 9-period HMA above the 21-period HMA confirms a buy signal at the close of the candle. Conversely, for a downtrend, the 9-period HMA crossing below the 21-period HMA confirms a sell signal. Stop Losses: Traders often set the stop loss just above (for short positions) or below (for long positions) the nearby swing points to manage risk effectively. Take Profits: Traders employing the Stochastic + HMA strategy might look for signs of trend exhaustion or a reversal in the Stochastic Oscillator for clues to take profits. Additionally, monitoring subsequent crossing of the 9-period HMA back over the 21-period HMA in the opposite direction of the trade, or reaching a nearby support or resistance level, could serve as sensible points to lock in gains. Why Does This Strategy Work? The Stochastic oscillator's primary function is to identify overextended conditions in the market. Like all indicators used in isolation, it can provide false signals. However, when paired with the faster-reacting HMA, the Stochastic's early warning is confirmed by the HMA. The quick response of the 9-period HMA to price changes combined with the smoother, longer 21-period HMA gives traders a clear indication of short-term momentum shifts, increasing the likelihood of successful trades in fast-moving markets. The Bottom Line In summary, traders exploring various types of trading in the stock market can benefit from these strategies. Moreover, they’re not just limited to stocks; you’ll find the same repeatable trades across the forex, commodities, and crypto* markets. However, it’s vital to remember that the strategies are a framework that should be tailored to a specific trade. The key to using them effectively is in continuous learning and practice. Once you’re ready to apply them for real, you can consider opening an FXOpen account. When you do, you’ll gain access to a diverse range of markets, competitive trading costs, and rapid execution speeds. Happy trading! *At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
16
Indicator Insights Part 3: A Different Way to Use RSIIn this instalment of our educational series, Indicator Insights, we shift our focus to the Relative Strength Index (RSI) , exploring a non-traditional approach that harnesses its power to identify strong momentum stocks. While the conventional use of RSI is often associated with overbought and oversold conditions, our alternative method employs RSI as a relative strength indicator, uncovering stocks exhibiting high levels of relative strength. Understanding RSI - The Traditional Approach The RSI is a momentum oscillator that measures the speed and change of price movements. Traditionally, traders use RSI to identify overbought and oversold conditions. The standard interpretation suggests that a stock is potentially overbought when the RSI surpasses 70, indicating a potential reversal or pullback. Conversely, an RSI below 30 might suggest that a stock is oversold, hinting at a possible upward reversal. A Different Perspective - RSI as a Relative Strength Indicator Our alternative approach views RSI as more than just an overbought/oversold signal generator. Instead, we leverage it as a relative strength indicator, pinpointing stocks that exhibit robust momentum compared to the broader market. The strategy involves waiting for an RSI reading to reach +75, signalling significant strength, and then strategically entering a position during a pullback when the RSI retreats to 50. Methodology: Buying Strong Momentum Stocks Identifying Strong Momentum (RSI +75): Monitor stocks with RSI readings reaching +75, indicating robust upward momentum. Waiting for the Pullback (RSI 50): Exercise patience and wait for the RSI to retreat to 50. This pullback suggests a temporary cooling-off period in the stock's momentum. Strategic Entry: Initiate a long position when the RSI starts to move back above 50, anticipating a potential resumption of the strong upward trend. Advantages of This Approach: Relative Strength Focus: By emphasising relative strength, this strategy aims to align with stocks demonstrating a sustained and potent upward trend compared to the broader market. Disciplined Entry: Waiting for the RSI to retreat to 50 provides a disciplined entry point, reducing the likelihood of entering trades during extended periods of overbought conditions. Momentum Confirmation: Combining RSI readings with a pullback strategy helps confirm the sustainability of the stock's momentum before entering a position. Potential Limitations: False Signals: As with any strategy, false signals may occur, especially in volatile markets. Traders should exercise caution and consider additional factors in their decision-making process. Market Conditions: This method may perform better in trending markets and may be less effective in choppy or sideways conditions. Worked Example 1: Buying RSI Pullback on Daily Timeframe Let's illustrate this approach with a practical example: Stock: Tesco (TSCO) RSI Reaches +75: RSI for Tesco reaches +75, signalling strong momentum. Pullback to RSI 50: Tesco experiences a pullback, and RSI retreats to 50. Strategic Entry: A long position is initiated as the stock shows signs of resuming its strong upward trend and RSI turns back above 50. Tesco (TSCO) Daily Candle Chart Past performance is not a reliable indicator of future results Worked Example 2: Buying RSI Pullback on Hourly Timeframe Stock: Apple (AAPL) RSI Reaches +75: Hourly RSI for Apple reaches +75, signalling strong momentum. Pullback to RSI 50: Apple experiences a pullback, and RSI retreats to 50. Strategic Entry: A long position is initiated as the stock shows signs of resuming its strong upward trend and RSI moves back above 50. AAPL Hourly Candle Chart Past performance is not a reliable indicator of future results Summary: This non-traditional use of RSI as a relative strength indicator offers traders a simple way of identifying and capitalising on strong momentum stocks. By waiting for RSI to reach +75 and strategically entering during a pullback to 50, traders can align with stocks exhibiting exceptional strength relative to the broader market. Disclaimer: This is for information and learning purposes only and is intended for UK audiences. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
NASDAQ:TSLAEducation
by Capitalcom
9
Learn Best Price Action Patterns by Accuracy Last year, I shared more than 1300 free signals and forecasts for Gold, Forex, Commodities and Indexes. In my predictions, quite often I relied on classic price action patterns. In this article, I will reveal the win rate of each pattern, the most accurate and the least accurate formations of the last year. Please, note that all the predictions and forecasts that I shared this year are available on TradingView and you can back test any of the setup that I identified this year by your own. Just choose a relevant tag on my TradingView page. Also, some forecasts & signals were based on a combination of multiple patterns. Here is the list of the patterns that I personally trade: 🔘 Double Top or Bottom with Equal Highs The pattern is considered to be valid when the highs or lows of the pattern are equal. The pattern gives a bearish/bullish signal when its neckline is broken. 🔘 Double Top or Bottom with Lower High/Higher Low or Cup & Handle The pattern is considered to be valid when the second top/bottom of the patterns is lower/higher than the first one. The pattern gives a bearish/bullish signal when its neckline is broken. 🔘 Head & Shoulders and Inverted Head and Shoulders The pattern gives a bearish/bullish signal when its neckline is broken. 🔘 Horizontal Range The pattern is the extension of a classic double top/bottom with at least 3 equal highs/lows. The pattern gives a bearish/bullish signal when its neckline is broken. 🔘 Bullish/Bearish Flag The pattern represents a rising/falling parallel channel. It gives a bullish/bearish signal when its upper/lower boundary is broken. 🔘 Rising/Falling Wedge Pattern The pattern represents a contracting rising/falling channel. It gives a bullish/bearish signal when its upper/lower boundary is broken. 🔘 Rising/Falling Expanding Wedge The pattern represents an expanding rising/falling channel. It gives a bullish/bearish signal when its upper/lower boundary is broken. 🔘 Descending/Ascending Triangle The pattern is the extension of a cup & handle pattern with at least 2 lower highs/lows. The pattern gives a bearish/bullish signal when its neckline is broken. Please, also note that all the patterns that I identified and traded were formed on key horizontal or vertical structures. Remember that the accuracy of any pattern drops dramatically if it is formed beyond key levels. I consider the pattern to be a winning one if after a neckline breakout, it managed to reach the closest horizontal or vertical structure, not invalidating the pattern's highs/lows. For example, if the price violated the high of the cup and handle pattern after its neckline breakout, such a pattern is losing one. If it reached the closest structure without violation of the high, it is a winning pattern. 🔍 Double Top or Bottom with Equal Highs I spotted 85 setups featuring these patterns. Their accuracy is 62%. 🥉 Double Top or Bottom with Lower High/Higher Low or Cup & Handle 96 setups were spotted. The performance turned out to be a little bit higher than a classic double top/bottom with 65% of the setups hitting the target. 🔍 Head & Shoulders and Inverted Head and Shoulders 58 formations spotted this year. Average win rate is 64% 🏆 Horizontal Range The most accurate pattern of this year. More than 148 patterns were spotted and 74% among them gave accurate signal. 🔍 Bullish/Bearish Flag 38 setups identified this year. The accuracy of the pattern is 57% Rising/Falling Wedge The pattern turned out to be a little bit more accurate. Among 62 formations, 59% end up being profitable. 👎 Rising/Falling Expanding Wedge The worst pattern of this year. I recognized 24 patterns and their accuracy was just 51%. 🥈 Descending/Ascending Triangle 64 patterns were identified. The win rate of the pattern is 66%. The most important conclusion that we can make analyzing the performance of these patterns is that they all have an accuracy above 50%. If you properly combine these patterns with some other technical or fundamental tools, the accuracy of the setup will increase dramatically. Good luck in your trading! ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
27