HOW TO TRADE USING SUPPLY AND DEMANDHere in this video i show you how you can trade with supply and demand zone so you can make profits and reduce loss. Try to understand it very well before application.
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Topic: Time Factor Ideation - Theory for my subscribers
I was thinking this is not the right platform for these ideas but I had to correct myself & post as soon as possible.
Let’s start!
There’s a fascinating correlation between time and investing and time and trading.
There’s actually a natural correlation of time in all cycles. Market Cycles / Economic cycles / Adoption Cycles, Life cycle.
This gnawing prevalence of time and its impact has been explored by a ton of great traders and investors & a result of some of these investigations had lead to us developing a ton of tools: Gan Fans, Fibonacci etc.
The issue with short term trading is that we missed out the greatest tool in investing - time. This is not a knock or promotion of one trading style over another just ideation of thoughts.
Money can be made everyday in the stock market full stop. It doesn’t mean you should be in the stock market everyday. To add it would be wise to listen to the advice of great traders - you should take time a way from the markets. Or surely we will suffer the same faith of those before us.
Continuing previous points. -
We can be at the right place, with the right tools but at the wrong time. You might lose 20 trades in a row due to being right but repeatedly punished for trying to time a move.
You might not be wrong - you are also not right.
If only you kept your first trade open with a clear invalidation level. How many times have you walked away from a good ticker / trade due to frustration and then see it work out?
I’ll go first all the time!
An issue of traders then might be the need to (trade) — for better or worse. Maybe we should change our title to Wealth Obtainer. I kid!
You might get the raise you were looking for but at the wrong time & now you’ve missed out on the opportunity to buy the starter home. Now you are buying overvalued homes in high inflation environments with high interest rates / insurance.
You might be the largest sheep farmer - in a time period where there are no use for sheep and wool.
If only I bought Nvidia while I was 3 year old.
THE CYCLE OF MARKET EMOTIONSWhen delving into the world of trading, one pivotal aspect often overlooked is psychology. In trading, we engage in two distinct psychological aspects: the collective psychology of the trading community and our unique mindset as individual traders. While we cannot change the psychology of the masses, understanding it is crucial. Equally important is the necessity to reflect on and, if needed, adjust our own psychological framework. In this article, we will primarily focus on the psychology of the individual trader.
The Complex Nature of Trading
As an aspiring trader, sooner or later, you will come to appreciate that the intricacies of trading go far beyond merely analyzing charts and fundamental data. It’s a common belief that a majority of new traders—around 80%—will face failure early on. If you haven’t experienced failure yet, consider yourself fortunate, and prepare for the inevitable realization: many of your trading challenges stem from within.
One of the most significant emotional hurdles traders face is fear—fear of missing opportunities, fear of losing money, fear of leaving profits untapped, and fear of making mistakes. If you wish to thrive in this field, overcoming these fears is essential.
The Weight of Fear
Throughout our lives, we’re conditioned to avoid being wrong and to strive to secure our finances. However, trading operates on a different frequency. Many traders dedicate their time solely to identifying promising trades. Once they enter a position, they often experience a tumultuous rollercoaster of emotions, ranging from anxiety over potential losses to elation during winning streaks. It’s vital to recognize that successful trading is not only about these emotions but about keeping them in check.
Experienced traders understand the fundamental role psychology plays in trading; conversely, novices may overlook or dismiss it. I aim to help you develop a better understanding of emotional management as a trader.
Prioritizing Survival
Before anything else, as a trader, you must prioritize staying in the game; survival comes first. Research shows that approximately 90% of traders fail before they ever achieve consistent profits. To belong to the successful 10%, you must adopt a different mindset.
It’s unfortunate that many individuals are drawn to trading due to the thrill it offers—the allure of quick profits with little initial capital. For such traders, the thrill often leads to reckless decisions, with no concrete strategy in place. Instead of following a thorough trading plan that accounts for risk management, they bounce from one tip to another, often neglecting the discipline crucial for success.
The Pitfalls of Emotional Trading
Trading motivated purely by excitement leads to poor decisions characterized by high risk and unfavorable odds. When a loss occurs, many traders seek external factors to blame: the market’s fluctuations, manipulation by large players, or insider trading. However, the harsh reality is that the primary person to be held accountable is you—the trader.
Accepting personal responsibility is a fundamental step towards becoming a successful trader.
Essential Ingredients for Trading Success
To navigate the path of successful trading, you will need to master four critical components: psychology, market analysis, a robust trading plan, and effective money management. In this exploration, we will focus primarily on the psychological component.
Read Also:
The Value of Psychological Awareness
People often ponder whether my background in psychology has contributed to my trading success. The answer is yes. Psychology equips me with the ability to face reality and introspect regarding my emotional responses. This training has taught me that dwelling on past mistakes or feeling regretful is unproductive—what truly matters is taking actionable steps for improvement.
Learn to view each trade as an isolated event, unaffected by previous or subsequent trades. Losses are an inevitable part of trading, and embracing them as a reality is crucial for long-term success.
Understanding Your Trading Style
It’s essential to reflect on your trading personality. Are you a discretionary trader—one who relies on instinct and external inputs such as news articles, broker tips, or peer opinions? Or are you a mechanical trader—someone who follows a well-defined trading plan, adapting it slowly over time while avoiding changes during open trades?
Identifying your style will not only help you understand your reactions to the stresses of trading but will also guide you in crafting a suitable trading plan.
Discovering the Secret to Success
Every trader grapples with the pressures of this challenging profession. Yet, what gives you an edge in this competitive landscape filled with seasoned professionals equipped with advanced tools? The answer lies within you.
Your perception shapes your trading experience. Only you can gauge how you will respond to criticism, endure losing streaks, or celebrate significant wins. Your beliefs and values dictate your attitude toward money, risk, excitement, and perseverance. Becoming aware of these elements is the first step toward mastery—controlling or, if necessary, transforming them.
Read Also:
Crafting Your Trading Plan
To better understand your trading persona, consider maintaining a trading journal. Document your emotional responses, trading behaviors, and overall experiences. This exercise will reveal vital insights about whether you're suited for a specific trading style—be it investment, day trading, or longer-term strategies—and help you craft an appropriate trading plan that aligns with your unique personality.
Read Also:
Conclusion: The Road Ahead
Trading is undoubtedly a difficult and stressful endeavor. However, with the right mindset and tools at your disposal, you can navigate this challenging field with confidence. This article serves as an introduction to understanding the vital psychological factors that can influence your trading performance. As you progress, remember to continually assess your emotional health and refine your trading strategy. Establish a comprehensive trading plan before you leap into future trades, ensuring that you’re as prepared as possible for the challenges ahead. With dedication and self-awareness, you can significantly increase your chances of thriving in the trading world.
By focusing on your mental approach and understanding the roots of your trading behavior, you can pave the way for a successful future in the exciting world of share trading.
Happy trading!
Read Also:
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GANN TRADING LESSON: TIME IS MORE IMPORTANT THAN PRICEGANN TRADING LESSON: TIME IS MORE IMPORTANT THAN PRICE – THE CORE OF W.D. GANN’S METHODOLOGY
William Delbert Gann, one of the most enigmatic figures in trading history, built his legendary status on a profound understanding of market movements. Among his many revolutionary insights, none resonate more than his assertion: “TIME is more important than PRICE.” Gann's studies reveal that markets are governed by cyclical laws where TIME dictates market behavior, and PRICE merely reflects the outcomes.
This article delves deeply into Gann’s philosophy, integrating examples, methodologies, and references from his works, to illuminate why mastering TIME can give traders a significant edge.
Understanding the Superiority of TIME in Trading
1. The Foundation of Gann’s Philosophy:
- In his book “The Tunnel Thru the Air”, Gann states, “The future is but a repetition of the past; cycles can be studied and predicted with mathematical precision.”
- This emphasizes that TIME controls market events. Price, on the other hand, is secondary—a mere result of the unfolding TIME cycles.
2. Why TIME is More Important Than PRICE:
- PRICE is Reactive: Price changes happen as a result of events, but those events themselves are determined by TIME cycles. Without the correct timing, price predictions are speculative at best.
- TIME is Predictive: Understanding TIME cycles allows traders to foresee when significant price movements are likely to occur, providing a roadmap for market behavior.
3. The Illusion of PRICE:
- Traders often fall into the trap of chasing prices—buying highs or selling lows—without realizing that markets move within predetermined TIME windows. Gann showed that price breakouts or breakdowns are unsustainable if they occur outside critical TIME cycles.
Key Concepts from Gann’s Methodology on TIME
1. The Law of Vibration: Gann believed that every market has its unique vibration, influenced by TIME cycles. In “The Law of Vibration”, Gann explains that market movements align with natural and cosmic vibrations, which repeat over TIME.
2. Cyclicality of Markets: Markets move in cycles determined by TIME. Gann’s studies revealed major cycles such as:
- The 20-Year Cycle: Markets often exhibit significant highs or lows every 20 years.
- The 60-Year Cycle: This aligns with major economic booms and depressions.
- Planetary Cycles: Gann tied TIME cycles to planetary movements, including the 11.86-year Jupiter cycle and Saturn’s 29.5-year orbit.
3.The Square of Nine and TIME Projections: Gann’s Square of Nine is one of his most famous tools. While often used to predict price levels, it is equally powerful for determining TIME turning points.
Example: The Square of Nine can map out important dates when markets are likely to reverse, based on the angle of price and TIME.
4. Geometry in TIME: In “The Geometry of Stock Market Profits”, Gann emphasized the relationship between price and TIME through angles. A 1x1 angle (45 degrees) represents the ideal balance between price and TIME. Any deviation from this angle signals acceleration or deceleration in the trend.
5. Astrological Influence on TIME: Gann’s work integrates astrology to predict TIME cycles. He studied planetary aspects, transits, and lunar phases to determine when markets would experience significant changes.
Example: Gann highlighted the importance of eclipses, retrogrades, and planetary conjunctions in marking market highs and lows.
Practical Applications of TIME in Trading
1. Time-Price Symmetry: Gann believed that price movements often mirror TIME durations.
Example: If a market drops 100 points over 10 days, it is likely to recover 100 points over a similar TIME interval.
2. Repetition of Historical Cycles:
Gann showed that the 1929 crash followed a similar TIME pattern to earlier financial crises. By studying historical TIME intervals, traders can predict future market events.
Timing Highs and Lows:
3. Use Fibonacci TIME zones to identify when markets are likely to peak or bottom. Combine this with Gann’s techniques, such as using the Square of Nine, for precise predictions.
Seasonality and TIME Cycles:
4. Markets are influenced by seasonal and cyclical TIME patterns. Gann demonstrated that major market reversals often coincide with solstices, equinoxes, and other seasonal turning points.
Examples of TIME’s Importance in Gann’s Predictions
1. The 1929 Stock Market Crash: Gann predicted the crash using TIME cycles, noting that it occurred 60 years after the Panic of 1869 and 30 years after the 1899 bear market.
2. The 1987 Crash: Gann’s methods, when applied to long-term TIME cycles, also align with the 1987 crash. It occurred exactly 58 years after the 1929 collapse, reflecting the repetitive nature of TIME cycles.
The Interplay Between TIME and PRICE
While PRICE is easier to track and analyze, Gann believed that the greatest trading success comes from aligning PRICE movements with TIME predictions. He illustrated this in his “Master Forecasting Course”, where he taught students to:
- Map out major TIME cycles.
- Identify the angles and relationships between TIME and PRICE.
- Use TIME as a framework to validate PRICE movements.
Steps to Master Gann’s TIME Methodology
Study Historical Cycles:
- Identify significant market events and analyze the TIME intervals between them.
Use Tools Like the Square of Nine:
- Plot critical TIME intervals to predict market reversals.
Combine TIME Analysis with Price Patterns:
- Validate price movements with TIME projections to confirm trends or reversals.
Incorporate Natural and Planetary Cycles:
- Use planetary ephemerides and lunar calendars to enhance TIME forecasts.
Conclusion: Why TIME is the Ultimate Edge
Gann’s timeless wisdom teaches us that focusing solely on PRICE is like chasing shadows. TIME is the true master, dictating when markets turn, rally, or crash. By mastering TIME, traders can move from being reactive to predictive, seizing opportunities before they manifest.
As Gann said, “When TIME is up, price will reverse.” This simple yet profound truth encapsulates the essence of his methodology. Focus on TIME, and the illusion of PRICE will reveal its secrets.
Join the Discussion:
Do you agree with Gann that TIME is the most critical factor in trading? Share your thoughts and experiences below!
Spotting Trends & Unlocking Opportunities in CountertrendDear Traders,
Sometimes my ideas' wording may be weird for you.
This is because I use a quite unique method to find opportunities on the market.
It is not just unique, but quite simple as well.
Best,
Zen
———
Stay Patient, Stay Disciplined! 🏄🏼♂️
Your comments, questions, and support are greatly appreciated! 👊🏼
Getting a Clearer Picture of Your Trading with Key MetricsWhen we look at our trading results, it’s easy to focus on one number: how much money we made or lost 💰. But that alone doesn’t tell us the full story. By breaking things down into a few basic metrics, we can see what’s really going on and figure out where we need to improve.
Start by looking at how many trades you won versus how many you lost. That’s your Winning Trades and Losing Trades count. But counting wins and losses isn’t enough. Check your Total Winning P&L and Total Losing P&L , these show how much money you gained overall on winning trades and how much you lost on losing ones. From there, dig into the details: Average Winning P&L and Average Losing P&L tell you the typical size of your profits and losses, helping you see if your winners generally outpace your losers.
Your Win Rate is the percentage of trades that ended up profitable, while your Loss Rate is the percentage that ended in a loss. A high win rate feels good, but it doesn’t mean much if the losses are huge. That’s why the Profit Factor (Reward-to-Risk Ratio) is so important, it compares how much you’ve made on winning trades to how much you’ve lost on losing ones. If you want a quick snapshot of your long-term performance, look at Expectancy , which blends all of this together into the average profit (or loss) you can expect per trade over time. Your Final P&L 💵 shows your bottom line after everything is said and done.
It also helps to know how your biggest successes and failures stack up. Look at your Largest Win and Largest Loss to get a feel for how extreme your outliers are. To understand the everyday “feel” of your trading, check out your Median P&L . Unlike an average, the median isn’t thrown off by a few giant wins or losses, so it shows what a typical trade looks like.
And finally, the Standard Deviation tells you how much your results vary from one trade to the next. A high standard deviation means your outcomes swing widely, while a lower one points to steadier results📈.
By paying attention to all these numbers, you’ll get a clearer idea of what’s really happening under the surface. You’ll spot patterns, find where you can tighten up risk, and understand if you’re making money due to skill or just good luck. In short, these metrics help you trade with your eyes wide open, making it easier to improve over time.
Testing Candlestick Patterns on Real DataIn his fundamental book "Encyclopedia of Candlestick Charts," Thomas Bulkowski tested dozens of candlestick patterns using S&P market data. His research revealed that many well-known patterns perform quite differently from what conventional wisdom suggests.
In this video, I’ll show you how to conduct a similar analysis using your own data to determine whether those fancy "Hammers" and "Shooting Stars" actually give you an edge in trading.
HOW TO FIND 100X MEMECOIN???Hi i want to make this post as an educational content after 1 year from previous educational posts which i had.
i speak very usual that you can understand content well.
First you should consider this that maybe there are around 100 or 1000 or even 10000 Meme coins out there to be found.
But only 10 of them is valuable and can be next DOGE or SHIBA or PEPE or ....(comment below some valuable Meme which i didn't write).
1. First of all Meme should have a good story that after reeded buy audience they said i should buy some of this token for my children or my self long-term.
i will explain two good story for you as an example:
A. In May 2021, Shiba creator sent the rest to Ethereum co-founder Buterin, who burned 90% of them to increase their value and then donated the remaining 10%.
B. Or Doge Creator which started the token as a Joke and then Elon Mask supports over years.
conclusion: Meme coins are now for dreaming and need a good back story and people need to talk with each other about the funny story of it and boom 🚀.
so search for stories like these two examples or the other stories like we are loving dogs or cats so lets go and buy the meme token of it lol.
But that story wont work on every animal names so take care don't rush to every animal name token which usually are falling hard after some fake pump.
2. Second you need to find strong community now all meme coins have groups and chats before buying go join and see how they are preforming for month and then decide to invest.
3. Third check updates and ... which they had on their own token and see what are the future plans or listing and ....
4. Forth always check the major wallets of that Meme token here are some factors you should be afraid of it:
A. if the huge amount of token like 30% or 50% is in one wallet
B. if the huge amount of token like 70% or 80% is in the hand of one exchange: so it is usually a meme token created by that exchange and other exchange wont list it forever usually and also it created by that exchange with fake pump in green market days to sell you that token and one day it eventually fall hard i see in different exchanges deferent token like this with high fake volume on it but i can not name here and after 2-10 months they dump 70-80% fall and low volume and delisted.
conclusion: be afraid of tokens which huge amounts are in specific wallet because they are usually dangerous also remember they can easily create fake wallets and divide tokens to different wallets so best thing is to check major 20 wallets of that token and see if those wallets hold any other tokens and are really whales or it is fake wallets that all in that meme.
5. Fifth high liquidity: check the Meme token have high liquidity because one day soon or late you want to sell it.
Disclaimer: The content below this are not any more 100% Educational but it is another example i provide for better understanding.
This is the beginning of this 1300% pump we had on Luffyusdt:
why i open long on Luffyusdt meme?
i checked almost all of the things mentioned above.
the story was all right here we have first anime token since 2021 running and they make web3 site to bring anime lovers together and ....
i check the team behind that and i checked evert 0-25 main wallets of this token and see in that 25 wallets 10 of the was whale and 5 of them was exchanges and major wallet is Dead wallet which means they burn 45% of token until now.
this token soon would be 100X in my opinion because it has the potential.
this is my own view and it may be wrong because we are living in crypto market so do your own research always and jump check your major meme holding and hold only valuable one.
any questions or thoughts mentioned in the comments.
also Disclaimer : Trade based on your own experience and research and knowledge.
GANN TRADING LESSON - GANN BOX & TIME CYCLE 144GANN BOX & TIME CYCLE 144 are two pivotal tools introduced by W.D. Gann , a legendary figure in financial markets. These tools integrate time and price dynamics seamlessly, providing traders with revolutionary methods to analyze market movements.
Here, we’ll explore these tools and how traders can apply them to achieve greater precision and insight in their trading. Understanding the interplay between time and price is a cornerstone of effective trading.
What is Gann’s Box?
Gann’s Box is a synthetic coordinate system that enables traders to analyze price dynamics within structured time and price parameters. The box helps visualize patterns and understand the relationship between upward and downward movements over specific periods.
By using this tool, traders can:
Identify directional trends.
Recognize structural alternations of price movement.
Pinpoint significant turning points in the market.
Principles of the Gann Box
First Principle: Directional Price Movements
The Gann Box segments price movements into discrete directional sections. These sections reveal periods of trend continuation or reversal. By overlaying a box on the chart from a significant extremum, traders can observe how price respects its boundaries over time.
Second Principle: Structure of Movement
Markets alternate between upward and downward movements in a structured and often periodic manner. Gann’s Box allows traders to:
Detect these alternations.
Visualize corrections versus trend-directed movements.
Forecast future structural changes based on historical patterns.
Cycle 144: A Unique Trading Model
Gann’s Cycle 144 is an advanced application of the Gann Box. It involves a fixed time cycle of 144 units (e.g., hours, days, or any chosen timeframe) and is based on the following principles:
Begin at the Extremum: The cycle always starts at a key high or low.
End After 144 Units: The cycle concludes after 144 time units.
No Gaps Between Cycles: Models should seamlessly connect without gaps.
Overlapping Models: Multiple cycles can operate simultaneously, enhancing prediction accuracy within the same timeframe.
This model offers a comprehensive framework to predict market movements within defined intervals.
Practical Steps to Apply Gann’s Box
Identify Key Extremums
Locate significant highs or lows on your chart to serve as the starting points.
Construct the Gann Box
Use the chosen extremum to calculate the parameters of the box. Ensure alignment between price and time scales.
Analyze Trends and Corrections
Observe how price behaves within the box, identifying trend continuations, corrections, and potential reversals.
Incorporate Cycle 144
Overlay the Cycle 144 model to refine predictions, ensuring to account for overlapping cycles for greater precision.
Why Gann’s Box Matters for Traders
Gann’s Box is not just a tool but a framework for disciplined and informed trading. Here are its key benefits:
Accurate Forecasting: Pinpoint turning points with precision.
Structured Analysis: Analyze price action within a logical, visual framework.
Improved Decision-Making: Reduce emotional bias by relying on objective patterns.
Conclusion
Gann’s Box and Cycle 144 offer traders a methodical approach to deciphering market movements. By integrating TIME & PRICE , these tools simplify the complexities of trading while providing actionable insights.
As with any trading method, success lies in practice and observation. Study past market movements, experiment with Gann’s concepts, and refine your understanding. With dedication, these tools can transform your approach to trading and unlock new levels of mastery.
Best Lot Size for Scalping Forex For Any Account Size
In this article, I will teach you how to calculate the best fixed lot size for Scalping Forex for any account size in 3 simple steps.
1. Build Up a Trading Watch List
In order to accurately calculate a proper lot size for scalping Forex, you need to know the exact Forex pairs that you trade.
You should create a list of trading currency pairs.
For the sake of the example, imagine that you trade only 4 major USD pairs:
EURUSD, GBPUSD, USDJPY, USDCAD
2. Do Backtesting
Backtest every forex pair in your watch list and find at least 5 trading setups on each pair based on the rules of your trading strategy.
Also, remember that the more setups you will find, the more accurately you will calculate the best lot size for your scalping strategy.
Here are 5 trading setups on EURUSD that meet my entry criteria.
After that, you should calculate a pips value of a stop loss of each trade.
Below, you can see 5 trading setups on GBPUSD pair.
And here are the stop losses of each trade in pips.
Now, USDCAD pair. Again, here are 5 trading setups, meeting the entry rules.
You can see the stop loss of each trade in pips below.
And finally, 5 setups on USDJPY pair.
And here are the stop losses of these trades.
Among these 20 trading setups, you should find the trade with the biggest stop loss.
The biggest stop loss is 15 pips on USDJPY pair.
3. Measure a Lot Size
Open Forex position size calculator.
You can take any free position size calculator that is available.
Fill all the fields.
In currency pair input, the forex pair with the biggest stop loss - USDJPY in our example.
Account currency - your account currency, let's take USD.
Account size - your account size, let's take 10000$.
Risk ratio - that will be the risk % of your trading account per trade, input 1.5%.
Stop Loss - input a pip value of the biggest stop loss that you found - 15 pips.
And click calculate.
That will be the best lot size for scalping Forex with your trading strategy.
The idea is that our maximum loss will not exceed 1.5% of the trading account balance.
While the average risk per trade will be around 1%.
Before you start scalping Forex on a real account, it is very important to know how to properly calculate your risks. Trading with the fixed lot, this technique will help you to calculate the best lot size for your trades.
❤️Please, support my work with like, thank you!❤️
HOW TO INCREASE YOUR OVERALL WIN RATE BY 10%+
Hi again everyone As promised, once a week I'll be bringing simple yet comprehensive guides to improve your over all trading! Here's your next MAGNIFICENT gift! I wasn't gonna do this topic but based on what I have been seeing among a bunch of traders.....this is DEFINITELY NEEDED . As always i really appreciate the support and upvote if you like the weekly posts so far and want more! Let's get right into it!
1. Understand that above all else, market structure (MS) always always always reigns supreme. Not fundamentals. Not news. Not "financial instutions" (that one cracks me up), but MARKET STRUCTURE. All of the other things mentioned above play their ROLES in market structure, but they do not MAKE market structure.
P.S. Of course major red folders like FOMC, NFP, CPI, etc etc will affect it, but that does not change the facts of #1.
Zoom out to gain overall perspective and bias direction, Zoom in to get the details needed within that bias to start finding confluence and begin creating that entry situation to come.
2. DO NOT, and i do repeat, DO NOT get in the habit of changing your bias mid day or multiple times a day/week, UNLESS the market calls for it. (mainly through major points in structure being broken, but there are various ways to determine this with indicators amongst other things like candlestick structure and trendlines, fibs, and other tools.)
I see so many traders lose on a day they would CAKED on had they just stuck to their bias. Trusting in your bias is not only needed, but it is a super power and shows your conviction in your strategy.
3. Stop listening to randoms not just here, but on any platform, and develop YOUR OWN EDGE in the market based on your understanding..... OR..... find a extremely talented and trustworthy mentor to guide you. Regardless, good luck on your own if your ego does not allow you to learn. I trade far better than the vast majority of people and I remain in contact with my mentor so no excuses .
4. Master candlestick analysis. You know how I catch big moves in the market???? Well, its certainly not by ignoring candlestick analysis. Candlesticks will always tell you where breakouts will occur on lower timeframes, and they'll always tell you how wide the range of the market is as well as show you with the wicks which side is getting weaker, but on the higher timeframe.
reread that ^. Literally gave you guys my sauce to interpreting candlesticks on top of posting this for you guys.
5. Control your emotions, king,
6. Trail your stop loss after 25-30 pips gained, everytime. especially in the beginning, since the winners won't come as often, you need to capitalize on winning trades. Any trade that ends in NET positive profit is a winner. point, blank, period. Even if it hits your trailing stop loss, study it! Even if it hits your take profit, study it! Feedback leads to growth.... always.
7. Backtest, backtest, backtest. Make the $15 USD investment and study your edge. study study study notate and improve! innovate and grow!!!! Backtesting is where you test what you know, look your L's and W's in the face and make that committment to see more W's than L's.
HONESTLY, this should increase your win rate by 20% if you're already coming in with some experience. For the newer guys, you're welcome. your trading skill is about to skyrocket, if YOU decide to put that work in. I promise that god wants you to win, if you do!!! GOODLUCK Gs
How I Execute Trades Using Gann’s Square of 9Here in this example, I have used the Square of 9 method to predict a potential market reversal and executions. W.D. Gann, a legendary trader and analyst, is renowned for his pioneering techniques in financial markets.
Among his tools, the Square of 9 stands out as a remarkable system to predict market turning points with precision. In this blog, we’ll explore the fundamentals of the Square of 9, how it works, and how we can use it to improve timing and decision-making in the markets.
What is the Square of 9?
The Square of 9 is a spiral-based numerical grid where numbers are arranged in a square, starting from 1 at the center and spiraling outward. Each number on the grid has angular relationships with other numbers, which Gann believed could forecast significant market movements.
For instance:
Numbers at the same angles (e.g., 39, 67, 105, 150) share a relationship that can signify potential turning points in the market.
By marking these numbers and aligning them with trading days, we can identify key dates for potential price reversals.
Core Assumptions in Price Dynamics
Gann’s methods rely on two key assumptions:
Repetition in Price and Time: Price tends to follow specific patterns or laws over defined intervals of time.
Structured Alternation: The up-and-down movements of price are not random; they alternate in a structured, periodic manner.
These assumptions form the foundation for analyzing price action through tools like the Square of 9.
How to Use the Square of 9
Step 1: Identify Key Market Extremes
Begin by locating significant highs or lows on a price chart. These extremums act as the starting point for your calculations.
Step 2: Calculate Calendar Days
Count the number of calendar days between:
Two highs,
Two lows, or
A high and a low.
Step 3: Locate the Number on the Square of 9
Find the calculated number (e.g., 39) on the Square of 9. Then, mark other numbers that lie on the same angle or corner, such as 67, 105, or 150.
Step 4: Predict Turning Points
Mark these numbers as potential future dates. On these dates, observe the market closely for signs of reversals or continuations.
Practical Example
Now let's Analyse GOLD. In this example we will take a daily candle that is making an all time high. From that high we will count the very next extreme high or low. How many trading days it takes to reach that price point and make a reversal? - 40 Trading days.
Now we will look for the number 40 in Gann square of 9 table. and the very next probable execution or reversal we will get after 70 days according to the table.
We see sharp price movement after 70th day and then at 180th day where we can place our order and execute with other confirmations.
Benefits of Using the Square of 9
Enhanced Timing: Pinpoint potential reversal dates, helping traders refine entry and exit strategies.
Objective Forecasting: Use a structured approach to reduce emotional decision-making.
Improved Accuracy: Combine the Square of 9 with other technical tools for more reliable predictions.
Conclusion
The Square of 9 is a powerful tool for traders who seek to integrate time and price analysis into their strategies. By understanding its mechanics and applying its principles, you can anticipate market turns with greater confidence.
As with any trading tool, practice and observation are essential. Study past market movements using the Square of 9 to develop your intuition and skill. With dedication, you’ll unlock the potential of this fascinating method and take your trading to the next level.
The Psychology behind the OverconfidenceHave you ever been convinced that your next trade was destined to succeed, only to watch it go south? Overconfidence is a prevalent obstacle in trading, affecting both novices and veterans alike. Research indicates that traders who feel a high level of control over market dynamics are often the ones who incur substantial losses due to erroneous decisions.
Overconfidence manifests when traders inflate their perception of their skills, market knowledge, or ability to forecast price movements. This dangerous mindset can blind them to lurking risks and lead to impulsive decisions. While confidence can be a positive trait when rooted in careful analysis and experience, overconfidence typically arises from emotional biases and previous successes. In an unpredictable market, managing overconfidence is crucial for a sustainable trading journey.
Understanding Overconfidence in Trading
Overconfidence in trading refers to the tendency of traders to believe they possess superior abilities in predicting market behavior. Unlike constructive confidence, which is born from experience and diligent decision-making, overconfidence is a cognitive bias that creates the illusion of enhanced control and skill. This self-delusion can be especially harmful in volatile markets where outcomes can shift unexpectedly.
Traders who fall into the trap of overconfidence often assume they can consistently "outsmart" the market based on a few prior successes or assumptions. This can lead to a reckless disregard for risks, such as underestimating potential market downturns or ignoring crucial economic indicators.
The impact of overconfidence on decision-making is significant. It clouds a trader’s judgment, prompting hasty actions rather than careful evaluations. Instead of thoroughly analyzing market data or considering a range of perspectives, overconfident traders often rely on gut instincts, frequently without backing their decisions with technical or fundamental analysis. As a result, they might enter high-risk trades without an appropriate risk assessment, leading to avoidable trading errors and considerable losses, especially during rapid market shifts.
How Overconfidence Impacts Trading Performance
The detrimental effects of overconfidence on trading performance are multi-faceted and primarily encourage heightened risk-taking. One of the clearest signs of this tendency is the tendency to increase position sizes. Overconfident traders, convinced they have a distinct advantage, may take on larger positions than their risk appetite allows, exposing themselves to greater potential losses if the market moves against them. The allure of leveraging can amplify both gains and losses, and excessive leverage can lead to margin calls, resulting in forced position liquidations.
Overconfidence can also lead traders to disregard essential market signals. Such traders may overlook technical and fundamental analysis in favor of their instincts or previous successes. For instance, a trader might open a position even when indicators suggest a decline, purely because of their strong conviction. This tendency can result in them holding onto losing trades for too long, hoping for a reversal when the market's trajectory might not support such optimism. Over time, this behavior can accumulate losses and negatively impact overall profitability.
Ultimately, overconfident traders become less adaptable, often resistant to acknowledging their mistakes. This rigidity and the failure to adhere to a disciplined trading strategy can deplete the gains achieved during fortunate periods, leading to inconsistent performance and in some cases, catastrophic financial repercussions.
Psychological Triggers Behind Overconfidence
Several psychological factors contribute to overconfidence in trading. Success bias and confirmation bias are two of the most prominent. Success bias occurs when traders experience a successful streak, leading them to believe their strategies or skills are foolproof. This temporary success can create a misleading sense of invulnerability, causing traders to take excess risks, overlook critical market signals, or stray from their established trading plans. The thrill of achievement can obstruct the ability to see potential pitfalls.
Confirmation bias compounds these issues by shaping how traders process information. Overconfident traders tend to seek and interpret information that aligns with their existing beliefs, discarding any contradictory data. For example, if a trader has a steadfast belief in the potential of a particular asset, they may only focus on favorable news or indicators, ignoring negative developments. This selective analysis reinforces their overconfidence, leading to poor judgment and increased exposure to risk.
Understanding these psychological triggers is key for traders who wish to keep their overconfidence in check and enhance their trading acumen. By recognizing the influences of success bias and confirmation bias, traders can actively take steps to mitigate their impact, fostering a more disciplined and analytical trading approach.
Cautionary Tales of Overconfidence in Trading
Real-world examples of overconfidence in trading serve as sobering reminders for traders at all experience levels. One notable case is Jesse Livermore, a renowned trader from the early 20th century. Livermore achieved significant profits through his exceptional ability to predict market trends. However, after experiencing considerable success, he developed an overinflated sense of his capabilities, prompting him to engage in reckless trading decisions. This overconfidence ultimately led him to invest heavily in stocks just before the 1929 market crash, resulting in devastating financial losses. His story highlights that even the most skilled traders can succumb to overconfidence, underscoring the importance of discipline and humility.
Another cautionary tale is that of Nick Leeson, who orchestrated the downfall of Barings Bank in the late 1990s. Initially praised for his trading skills, Leeson’s overconfidence burgeoned after a series of successful trades. This hubris drove him to employ unauthorized and excessively risky trading strategies, culminating in £827 million in losses. His failure to acknowledge the severity of his actions, fueled by a belief in his trading prowess, played a pivotal role in the collapse of one of the oldest banks in the UK. This illustrates that overconfidence can have profound consequences, both for individuals and the institutions they represent.
Strategies to Combat Overconfidence in Trading
Mitigating overconfidence is essential for achieving long-term profitability and minimizing risks. Here are several strategies traders can implement to strike a balance between confidence and caution:
#1 Cultivating Discipline and Humility
Discipline is foundational for successful trading. Traders should commit to their trading strategies and rules, resisting the impulse to deviate due to emotional reactions. Creating a detailed trading plan that outlines entry and exit strategies, position sizes, and risk-reward ratios can help prevent impulsive decisions driven by overconfidence.
Humility is equally vital in counterbalancing confidence. By acknowledging the unpredictability of the market and the limitations of their knowledge, traders can help temper their overconfidence. This humble approach promotes continuous learning and enables traders to adapt their strategies based on new information and shifting market conditions.
Read Also :
#2 Data-Driven Decision-Making
Relying on data to guide decisions is a robust strategy against overconfidence. Traders who rely on instincts or past successes may overlook critical information. A comprehensive trading plan should incorporate both technical and fundamental analyses and be rooted in objective data rather than subjective feelings. Regularly reviewing and adjusting trading strategies based on performance metrics and market developments can reinforce discipline and counteract emotional decision-making.
Read Also:
#3 Implementing Strong Risk Management
Robust risk management strategies are crucial in curbing overconfidence. Traders are often drawn to excessive risk when confidence is high, so outlining a maximum acceptable loss for each trade can provide a protective barrier against substantial losses. Stop-loss orders can be effective tools for limiting downside risk.
Diversification of investments across various asset classes, sectors, and geographic regions can mitigate the adverse effects of individual trade losses. Recognizing that trading inherently carries risks allows traders to adopt a more prudent and balanced approach to their investments.
Read Also:
Conclusion
Overconfidence in trading is a prevalent yet perilous barrier that can lead to severe financial setbacks. Identifying key psychological factors, including success bias and confirmation bias, is essential in addressing and reducing the impact of overconfidence. By practicing discipline, relying on data-driven insights, and implementing effective risk management strategies, traders can defend against the pitfalls of overconfidence.
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Analyzing Tokens with the Overall Crypto Market CapWhen analyzing individual tokens like XRP/USD, it’s crucial to consider the bigger picture—the overall crypto market cap. Market cap movements provide a bird's-eye view of the entire crypto ecosystem, acting as a barometer for where individual tokens may be headed. Here’s why using confluences between market cap charts and specific tokens is a powerful approach:
Market Structure Alignment:
The total crypto market cap gives a clear indication of the overall trend—whether we’re in a bullish cycle with higher highs or a consolidation phase. For example, as the market cap approaches key levels like $3.44T and targets $4.44T, this reinforces the bullish structure, supporting the idea that tokens like XRP will also push higher.
Key Levels and Targets:
Market cap charts help identify critical zones, such as liquidity areas, support/resistance, and Fibonacci retracement levels. These align with similar levels on token charts like XRP/USD. For instance, XRP’s retest of $2.90 aligns with market cap breaking into higher territory.
Momentum Validation:
Tokens rarely move independently of the broader market. If the market cap shows strong volume, sustained breakouts, or key retests, it validates token-specific moves. If XRP/USD is showing bullish momentum, but the market cap is stagnant or bearish, this could signal a divergence.
Confluence = Confidence:
By combining token-specific technical analysis (e.g., Fibonacci, trendlines, or order blocks) with macro-level analysis from the market cap, traders gain stronger confirmation for their trades. For example, XRP’s trajectory toward new highs is further supported when the total market cap follows a clear path upward.
Key Takeaways:
The crypto market cap is currently showing bullish structure, targeting $4.44T. This aligns with XRP’s path toward $2.90 and beyond.
Temporary pullbacks in the market cap or XRP are healthy for building support and creating stronger candles for higher breakouts.
Always zoom out—weekly and monthly time frames on the market cap chart provide clarity on long-term trends and help eliminate "noise."
Understanding the interplay between individual tokens and the broader market is essential for making educated trading decisions. Crypto isn’t just about isolated assets; it’s about the entire ecosystem working in harmony.
What’s your take on aligning market cap analysis with token trades? Drop your thoughts in the comments below!
India cement Classic Flag & pole now 360 Watch out classic flag and pole with huge accumulation sign.
Take delivery as per your risk appetite target and stop loss as mentioned.
What is Bitcoin ‘Pairs Trading’? (Example: ETH/BTC)This is for anybody who wants to sell some Bitcoin but is still bullish crypto. 🚀
It’s also if you’re neutral on crypto but think Bitcoin is overvalued vs other tokens.
It’s also just if you’re just interested to see a way to apply a pairs trading strategy .
In case you’ve been hiding under a rock, Bitcoin just broke over $100k - No more waiting for the HODLRS!!
Naturally after hitting this massive milestone, some traders are going to be thinking about taking profits. And if they’re thinking it, some of them are going to be doing it.
But let’s forget about selling for a moment, are you really buying more BTC when it just hit $100k and it's up ~150% this year?
So even if there is not more active selling interest, there’s probably less buying interest.
I think you’d be mad (or very brave) to bet against Bitcoin. BUT
Are these scenarios possible?
Bitcoin trades sideways for a while after hitting $100k
Alt season kicks in and other cryptos play catchup
If you think yes to at least one of these, my team and me have been looking at a pairs trade
What is pairs trading?
Pairs trading in crypto is a market-neutral trading strategy that involves taking a long position in one cryptocurrency and a short position in another, based on the assumption that their historical price relationship will revert to the mean.
The point is to profit from the relative price movement between the two assets, i.e. not the absolute ups or downs of one asset like Bitcoin.
ETH/BTC
I put this crypto pair this way around - I’m not sure if you’re meant to - it just kind of reminds me of EUR/USD in forex trading.
So as a reminder, ETH/BTC is Ethereum’s token Ether priced in Bitcoin. When Ether outperforms Bitcoin it goes up and when Ether underperforms Bitcoin, it goes down.
So it doesn’t actually matter if Bitcoin goes up, down or sideways, if you’re trading ETH/BTC - what matters is what one does relative to the other.
Well this thing has been going down a lot! Until recently.
Going back to the idea of pairs trading - the thesis here is that the Ethererum/Bitcoin price ratio has dropped to bargain levels and could be about to recover.
I’m not going to lie to you - there are a lot of sore hands out there from trying to catch this falling knife!
But this rebound off the 61.8% Fibonacci retracement of the 2020-21 rally has caught our attention.
Dropping to the daily chart, can you see how 0.4000 has acted like a magnet to the price both from above and below?
0.4 is our line in the sand for long positions.
Equally, our risk is well defined in this setup. A drop back under the 61.8% Fib level around 0.32 means the idea isn’t working and it's time to get out and let Bitcoin do its thing!
How to trade it
Specific entries and exits depend on your personal risk tolerance, but broadly there are THREE methods here:
1. Crypto-to-Crypto Spot Trading
Trade ETH directly for BTC (or vice versa) on a cryptocurrency exchange. This is straightforward and involves holding the actual assets.
2. CFD Trading (Contracts for Difference)
Speculate on ETH/BTC price movements using CFDs without owning the underlying cryptocurrencies. This allows for leverage and the ability to short-sell.
3. Spread Trading
Buy ETH and simultaneously short BTC (or vice versa) with equal dollar value to profit from their relative price movement while minimizing exposure to overall market trends.
But that’s just how we are seeing things?
Do you think this is bananas, or could we be onto something?
Please let us know in the comments
Cheers!
Jasper. Chief Market Analyst, Trading Writers
HOW TO TRADE USING CHOCH IN ICT SMART MONEY CONCEPTHere in this video i show you how you can trade using choch . I explain how change of character work and how it can be applied using indicator also . Understanding Choch can make you a better trader if you use well so try to mark out break of strusture (BOS) then find out were the price unable to respect that in other to get CHOCH.
HOW TO TRADE USING ORDER BLOCK IN ICT Here in this video i show you how you can use order block trade so you can make more profits and reduce loss . Here i explain were order block can be place and also apply indicator .
PROVEN STRATEGY FOR PROFITSThe Truth About the Holy Grail Market Strategy
Every trader dreams of finding that perfect strategy—the so-called "Holy Grail" that guarantees success. The one that wins every trade, beats every market condition, and transforms your account overnight.
Here’s the secret: it doesn’t exist.
Why do we chase it, then? Because we’ve been conditioned from a young age to believe there’s always a right answer. In school, careers, and life, we’re taught to strive for perfection and fear mistakes. This mindset slips into trading, where losses feel like personal failures instead of natural steps in the process.
Unfortunately, this is also why strategies claiming "100% accuracy" get so much attention. They feed into our hope of finding that mythical Holy Grail. People flock to these posts, hitting like, commenting, and even buying courses—all based on a fantasy. And the creators? They profit off this hope, knowing full well that no strategy is foolproof.
The reality is, trading isn’t about being right. It’s about being consistent. The pros aren’t chasing Holy Grails—they’re managing risk, mastering probabilities, and playing the long game.
If you’re stuck in the trap of searching for perfection, stop and ask yourself: Am I being sold a dream instead of learning the skills that matter?
Success in trading doesn’t come from avoiding losses but from mastering how to lose small and win big. Once you realize that, you’ll stop chasing myths and start building something real.
✨ Forget the Holy Grail. Focus on discipline, probabilities, and growth. ✨
FOLLOW ME FOR MORE SUCH CONTENT AHEAD
Till then,
HAPPY TRADING :)
Mastering Risk Management: The Silent Key to Trading SuccessMastering Risk Management: The Silent Key to Trading Success
In the world of trading, risk management is often the unsung hero. While many traders obsess over finding the perfect strategy or predicting the next market move, those who truly succeed understand that managing risk is the cornerstone of long-term profitability. Without it, even the most brilliant trading plan can crumble. With it, you build a resilient foundation that allows you to weather the inevitable storms and capitalize on opportunities.
What is Risk Management?
Risk management isn't just a set of rules; it's a mindset and a discipline. It’s the process of identifying, assessing, and controlling potential losses. This goes beyond simply setting stop-loss orders or adjusting position sizes. It's about adopting a framework that ensures every trading decision is made with a clear understanding of the potential downside. Before entering any trade, ask yourself: "What am I willing to lose?" rather than "How much could I gain?"
Why Risk Management Matters
Imagine driving a car without brakes. No matter how powerful the engine or how skilled the driver, the lack of brakes turns every journey into a potential disaster. In trading, risk management is your braking system. It keeps you in control, preventing small mistakes from turning into catastrophic losses.
Many traders focus on their win rate, but it's the size of your losses that often determines your success. Even a strategy with a 50% win rate can be highly profitable if your average loss is much smaller than your average gain. Conversely, a trader who wins 80% of the time but suffers massive losses on the other 20% will likely fail in the long run.
Practical Steps to Effective Risk Management
Know Your Risk Tolerance:
Every trader is different. Understand how much capital you're comfortable risking per trade. For many, this is 1-2% of their total account. This ensures that no single loss can wipe you out.
Set Stop-Losses and Stick to Them:
A stop-loss isn't just a suggestion—it’s a commitment. Place your stop-loss at a point that invalidates your trade idea, not just where it feels convenient. Once it's set, never move it in the heat of the moment.
Position Sizing:
The size of your position should be based on the distance to your stop-loss and the percentage of your capital you're willing to risk. If a trade requires a wider stop, consider reducing your position size to maintain consistent risk.
Diversify Smartly:
Don’t put all your eggs in one basket. Diversification doesn’t mean trading more; it means spreading your risk. Avoid overexposure to a single market or asset class.
Accept and Learn from Losses:
Losses are part of trading. What separates successful traders from the rest is their ability to minimize those losses and learn from them. Every loss is a lesson—an opportunity to refine your approach and strengthen your discipline.
The Emotional Side of Risk Management
Emotions are one of the biggest challenges traders face. Fear and greed can lead to impulsive decisions, such as holding onto losing trades in the hope they’ll turn around or risking too much on a single "sure thing." Effective risk management helps counteract these emotional pitfalls. When you know your risk is controlled, you trade with greater confidence and clarity.
Sticking to your risk management plan, especially during a losing streak, can be tough. It requires discipline and patience. But remember, trading is a marathon, not a sprint. Protecting your capital today ensures you have the opportunity to trade tomorrow.
Conclusion
Risk management isn't the most glamorous part of trading, but it is the most vital. It's the foundation upon which all successful trading is built. Without it, even the best strategies and the most skilled traders are vulnerable. With it, you create a framework that allows you to navigate the unpredictable markets with confidence.
In trading, it's not about how much you can make—it’s about how much you can keep. Master risk management, and you master the art of trading.
What Countries Use the US Dollar?What Countries Use the US Dollar?
The US dollar is more than just the currency of the United States; it's a global powerhouse used by countries worldwide. Whether as legal tender or alongside local currencies, the US dollar plays a significant role in international trade and finance. In this article, we’ll explore what countries use American dollars, where it circulates alongside local money, and why its influence extends far beyond US borders.
Overview of the US Dollar as a Global Currency
The US dollar (USD) has held a dominant position in global finance since the mid-20th century. After World War II, the Bretton Woods Agreement established the USD as the backbone of the international monetary system, linking it to gold and making it the preferred currency for trade and investment. Even though the gold standard was abandoned in the 1970s, the US dollar remained crucial for international transactions.
Today, the USD is the world's primary reserve currency, held by central banks across the globe to stabilise economies and facilitate trade. As of Q2 2024, nearly 60% of all global foreign exchange reserves are in dollars, and it accounts for 88% of forex trades (as of April 2022). The USD is used in pricing major commodities like oil, gold, and metals, further solidifying its role in global markets. Want to observe how prices of these commodities have changed over the years? Head over to FXOpen’s free TickTrader trading platform to get started with real-time charts.
Countries often hold USD as a hedge against their own currencies' volatility or to back their financial systems. Whether through official dollarisation or pegs, many economies depend on the USD for economic stability and international trade.
What Countries Use the US Dollar?
Several countries around the world have adopted the US dollar as their official currency, a practice known as dollarisation. This usually happens when a nation decides that using the USD will provide greater economic stability than their local currency, particularly in countries that have struggled with high inflation or political instability.
So how many countries have dollar currency?
- Ecuador: After a severe economic downturn, Ecuador adopted the US dollar in 2000. By using the USD, Ecuador stabilised its economy, controlled inflation, and regained investor confidence.
- El Salvador: El Salvador is a country where the US dollar is the legal currency. In 2001, it switched to the USD to increase economic stability and promote foreign investment. This move has helped the country maintain inflation at lower levels.
- Zimbabwe: After facing hyperinflation in the late 2000s, Zimbabwe abandoned its currency in 2009 and began using several foreign currencies, including the USD. However, the country has struggled with stability and frequently shifts between foreign currencies and local ones.
- Timor-Leste: Since 2000, Timor-Leste has used the USD to help stabilise its economy, which was heavily reliant on foreign aid and oil exports.
- British Virgin Islands: An overseas British territory, the British Virgin Islands, uses USD as its official currency due to its strong trade links with the US and its role as a financial hub.
- Turks and Caicos Islands: Another British overseas territory in the Caribbean, Turks and Caicos also uses the USD, mainly because of its heavy reliance on tourism from the United States.
- Micronesia, Palau, and the Marshall Islands: These Pacific island nations have long-standing agreements with the US, adopting the US dollar as part of their Compacts of Free Association, which provide economic aid and defence in exchange for using the USD.
- Bonaire, Sint Eustatius, and Saba: Collectively referred to as the Caribbean Netherlands, they officially adopted the United States dollar (USD) as their currency on January 1, 2011, following the dissolution of the Netherlands Antilles in 2010. The switch to the USD was aimed at enhancing economic stability and simplifying transactions with the United States, a key trade partner and significant source of tourism for the region.
Countries and Territories Where the US Dollar Is Used Alongside Local Currencies
In many countries and territories, the US dollar is used alongside local currencies, often for international trade, tourism, or to hedge against inflation. While not officially replacing local money, the US dollar plays a vital role in these economies. Here’s a closer look at other countries that use the US dollar alongside local currencies:
- Panama: Since 1904, Panama has used the US dollar alongside its local currency, the balboa. The country chose the USD due to its strong trading ties with the United States, especially with the Panama Canal's importance to global trade.
- Cambodia: The riel is Cambodia’s official currency, but the US dollar is widely accepted and often preferred for larger transactions. It’s estimated that over 80% of the country’s deposits and loans are in USD, reflecting its dominance in the economy, particularly in urban areas.
- Bahamas: The Bahamian dollar is pegged 1:1 to USD, and both are used interchangeably throughout the islands, especially in tourism-driven sectors. Many businesses and ATMs accept both currencies without issue.
- Bermuda: The Bermudian dollar is also pegged 1:1 to the US dollar, and both are widely accepted. The USD is frequently used in international trade and by tourists visiting the island.
- Belize: In Belize, the Belizean dollar is officially used, but the US dollar is accepted nearly everywhere. The local currency is pegged to the USD at a fixed rate of 2:1, and many businesses, especially those catering to tourists, price goods and services in US dollars.
- Liberia: This country uses the US dollar as its paper currency alongside the Liberian dollar. The USD is often preferred for larger transactions and savings, particularly in urban areas. It has been a significant part of the country’s financial system due to its historical ties with the United States.
- Myanmar (Burma): The Myanmar kyat is the official currency, but the USD is widely used, particularly in tourism, international trade, and foreign investment. Many hotels, airlines, and larger businesses will accept USD for transactions.
- Lebanon: The Lebanese pound is the official currency, but the US dollar is extensively used, especially given the recent economic crisis and hyperinflation. Many sectors of the economy rely on the USD to preserve value and enable trade.
- Argentina: Although the Argentine peso is the national currency, the US dollar is commonly used for savings and major purchases, such as property. High inflation and currency controls have driven many Argentinians to hold USD to protect their wealth.
- Peru: While the Peruvian sol is the official currency, the USD is often used for real estate, tourism, and larger transactions. Many Peruvians prefer to keep their savings in USD to avoid potential depreciation.
- Haiti: The Haitian gourde is the official currency, but the US dollar is widely accepted, particularly in the capital, Port-au-Prince. Many businesses and services cater to both the local population and tourists, pricing in both gourdes and USD.
- Vietnam: While the Vietnamese dong is the official currency, the US dollar is commonly used for larger transactions, particularly in the tourism and real estate sectors. Some high-end hotels and international businesses price goods and services in USD.
How Does the US Dollar Affect Economies That Don’t Use It Directly?
Even countries that don’t use the US dollar directly feel its impact. Many nations peg their local currency to the USD, such as Hong Kong and Saudi Arabia. These currency pegs mean that when the value of the US dollar shifts, so does the value of their currency, affecting everything from inflation to trade competitiveness. A stronger USD can make these countries' exports more expensive and reduce demand, while a weaker dollar has the opposite effect.
Additionally, a large portion of global debt, particularly in emerging markets, is issued in US dollars. If the dollar strengthens, these countries face higher costs when repaying loans, which can strain government budgets and hurt economic growth.
Fluctuations in the USD also influence commodity prices, as goods like oil and gold are priced in dollars. When it rises, commodity prices often fall, impacting countries that rely on exports of these resources.
Challenges of Using the US Dollar
Countries that use USD, whether adopted or pegged to it, face significant challenges. The most pressing issue is the loss of monetary control. When a country uses the US dollar, it can no longer set its own interest rates or control its money supply, leaving it vulnerable to the decisions of the US Federal Reserve. For example, if the Fed raises interest rates, borrowing costs increase globally, even for economies that might not take advantage of tighter monetary policy.
Countries also lose the ability to devalue their currency to make exports more competitive, which can hinder economic growth. This lack of flexibility can be problematic during local economic downturns, as governments have fewer tools to stimulate their economy or combat inflation.
Additionally, dependence on the US dollar exposes economies to external shocks. A sharp appreciation in USD can hurt countries with significant USD-denominated debt, making it more expensive to service loans. While the US dollar provides stability, these countries sacrifice a degree of autonomy over their economic policies.
The Bottom Line
The US dollar’s global reach impacts economies worldwide, whether as legal tender or widely circulated paper currency. Understanding its role can help traders navigate international markets. If you're ready to take advantage of currency movements, consider opening an FXOpen account. With FXOpen, you'll gain access to the tools and platforms to trade major currencies, including the USD, and take advantage of our low-cost, high-speed trading environment.
FAQ
What Country Uses the US Dollar as Its Paper Currency?
Several countries use the US dollar as paper currency alongside their local money. Cambodia, Argentina, and Lebanon, for example, commonly accept USD for larger transactions despite having their own official currencies.
Does El Salvador Use USD?
Yes, El Salvador officially adopted the US dollar in 2001. The decision was made to stabilise the economy and reduce inflation, offering more stability in the financial system. Today, the USD is used for all transactions, making it the primary currency in the country.
Does Panama Use USD?
Yes, Panama has used the US dollar since 1904 alongside its local currency, the balboa. The USD is used for most transactions, and the balboa is pegged 1:1 with the dollar, meaning both currencies are interchangeable within the country.
Does Ecuador Use the US Dollar?
Ecuador has used the US dollar since 2000, after a severe financial crisis. The switch helped stabilise the economy, reduce hyperinflation, and restore public confidence in the financial system. Today, the USD is the sole official currency.
Does Puerto Rico Use the US Dollar?
Yes, as an unincorporated territory of the United States, Puerto Rico uses the US dollar as its official currency. The USD is used for all financial transactions, just like in any US state.
Where Does the US Dollar Have the Most Value?
The US dollar tends to have more purchasing power in countries with weaker local currencies. Examples include countries like Mexico, Vietnam, and Indonesia, where the USD can buy significantly more goods and services compared to stronger economies.
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.
HOW TO TRADE USING PREMIUM AND DISCOUNT USING ICT CONCEPTIn this video i show you how you can apply premium and discount using ict concept so you can buy at discount and make a better profit . This explain every very well about premium or discount drawing us Fibonacci retracement .
