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Risk Management

Human weaknesses that need to be overcome in the trading process Fear of missing out Before entering the market, you may have a bullish or bearish view and enter accordingly. Once you have a position, you are constantly concerned with the fluctuations of your account funds, tormented by various temptations, fears, greed, persistence, hope, and emotions influenced by these changes, and ignoring the market itself. This greatly interferes with normal thinking and judgment. Whether it's a long or short position, whether it's a profit or loss, as long as small gains and losses are within an acceptable range, one should beware of large losses. Traders should focus on the correctness of the process and be content with the results as they come. If you think about the results in advance, it will disturb the entire trading process and result in losses every time. The human mind always jumps ahead to imagine unrealistic outcomes and ignores what is actually happening in the present. This is a big mistake in our lives. These are the causes of fear or greed, which can lead to traders regretting after placing an order or closing a position, causing hesitation and indecision. The reason for this is that there is no effective trading system, causing traders to lack confidence in any aspect of the trading process. Confronting the market Traders must first understand that the market does not shift according to human will. The education we have received since childhood is based on competition, such as overcoming various obstacles and fighting difficulties. This consciousness has deeply rooted itself in the hearts of traders. In fact, when traders enter the market, they still carry this mentality. Often, some elites from various industries come to the market and suffer failures, and even more thoroughly than ordinary people. This is because successful people in other industries have a strong sense of self and do not believe they will fail. They are also unwilling to accept their own failures. Their success makes their personalities become very tough, so when the market turns against them, they do not know how to yield and compromise, but adopt a confrontational attitude until they are destroyed. People in life tend to defend their views to some extent, unwilling to admit their judgment errors. Therefore, regardless of whether a person is right or wrong, they will stick to their attitude to the end. What they defend is not the truth, but their self. This inherent nature of struggle and the attitude of not wanting to yield or give up self is the biggest obstacle in trading. Holding positions, not setting stop losses, and not admitting mistakes can eventually result in large losses or even liquidation. The pursuit of perfection The pursuit of perfection is a very greedy and extreme mentality. Because of this pursuit, it does not allow any flaws, cannot bear even very small losses, and it is difficult to execute a stop loss when necessary, and wants more profit when it is time to close a profitable position. Because of this pursuit, a person tries to capture every movement and does not want to miss any market situation. Everyone has their own limitations and areas in which they are not good at. The pursuit of perfection can easily lead to frequent and impulsive trading. To be continued...
INDEX:BTCUSDEducation
by triumphing
3
When Your Trading Journey Begins... Hey traders, In this article, we will discuss your first steps in trading. Being interested in financial markets and being attracted by an idea to become a full time trader, you decide to learn how to trade. The first obstacle that you will most likely face with is a tremendous range of topics and strategies to study: key levels, price action, technical indicators, fundamental analysis... The problem is that there is no one single way to learn how to trade. Each educational article, each guru on YouTube dictates their own specific path. You will most likely feel lost, not being able to grasp what even to start with. You will chaotically jump from one topic to another, not being able to understand which concepts do actually work. The situation will even worsen once you decide to try to trade on real money. I do not know any trade who would not blow his first trading deposit. Not only you will be paralyzed by the complexity of the subject, but you will also lose money simultaneously. There will be a lot of times when you will think about leaving this game. Many times, you will consider the entire trading industry to be a scam. That is the moment where most of the traders quit. I am telling you all that simply because I want to show you that we all have the same path. We go through the same obstacles and we think the same way. The only difference between a true winner and a loser, however, is that winners never give up. Winners keep working hard and stay patient. And at the end of the day, magic things happen to them. After years of practicing and suffering, one day you will certainly realize how the things work. One day you will become a full time trade. Just don't give up, always remember, “The nearer the dawn the darker the night.” ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
11
Risk-to-Reward > Win RateWe have mentioned it in a list of our previous educational posts and we will state it again: your risk-reward plan is much more important than your win rate. You can have a 90% win rate and still be losing in the long-run. On the contrary, you only need a 35% win rate to be a consistently profitable trader on the longer term. Beginners mainly focus on winning as many trades as possible and it is totally understandable, because we have all been there. "The more trades I enter, the more money I will make" principle has destroyed many trading careers. The explanation to the "Why?" question is pretty simple: when we are new to trading, every win gives us euphoria and makes us think we are the rulers of the market. Guess what happens next, the market hits back, puts us in a position where we are stuck in a losing streak, and humbles us enough to quit trading and think it does not work. As we get more experienced, we lean towards the "Less is more" principle and believe that quality will always be over quantity. As an instance, we have orchestrated 2 scenarios on the graph. The example on the upper side of the screen shows how our trader has a 80% win rate but has yet failed to remain in profits due to the fact that he does not have a solid risk management plan. On the opposite side of the road, we have Trader B who is able to remain in consistent profits by winning only 20% of the executed transactions. All those minor losses that he made got covered by one big win, and as long as he keeps following the current risk management policy and strategy of his, he is sure that he will be consistently profitable in the long run.
BITSTAMP:BTCUSDEducation
by Investroy
11
How to survive in the market for the long-term? In the market, regret is a frequent word. Many people face the complex investment market and often feel fear, hesitation, and regret, whether it's before buying, after buying, after selling, or just watching without buying. How to avoid this phenomenon? The fear, hesitation, and regret are largely due to not knowing how to manage positions and follow the crowd. Often pursuing high probability profits results in the opposite. Risk management is an unavoidable issue when it comes to this. Whether you are a financial master or an individual investor, the importance of risk management is paramount. To relax and operate in the market, you need to face your current situation, make correct judgments on the profit and loss ratio, determine your operating frequency and position management, and give yourself correct psychological guidance. Everyone's personality is different, and their risk tolerance and trading styles are also different. There is no strategy that is 100% accurate, but if you want to survive in the market for a long time, you need to control risk. Don't be afraid of losses. Losses are inevitable, but the key is how much loss you can tolerate. This is the core of risk management. For small losses, we need to prepare ourselves psychologically. This is a link in risk management. Don't rely on luck. The losses brought about by a lucky mentality are incalculable. About 70% of the time in market fluctuations is in oscillation, and only about 30% of the time is in a unilateral surge or decline. Therefore, accumulating small victories is the magic weapon for long-term success. Always wanting to go all-in and make a big move at once may result in missed profits due to not exiting in time. No matter what state you are in now, I hope I can bring you a little bit of help!
INDEX:BTCUSDEducation
by triumphing
The Simpliest Math Behind Every Succesful TraderWhat exactly is risk management? The ability to control your losses so that you do not lose all of your equity is referred to as risk management. This is a system that may be applied to everything that involves probabilities: trading, poker, blackjack, sports betting, and so on. Many inexperienced traders underestimate the significance of risk management or don't understand the basics when it comes to risk management. Would you risk $5,000 on every trade if you had a $10,000 trading account? Probably not. Because it only takes two consecutive losses in order to lose everything. 🧠 Now, let's imagine a thought experiment, in wich 🤩Alex and 🤨Peter are both traders with $10,000 in their accounts. Alex is a high-risk trader who puts $2500 risk on every trade. Peter is a cautious trader who puts $100 risk on every trade. Both apply a trading strategy that has a 50% success rate with an average risk-to-reward ratio of 1:2. For good example, let's imagine the next 8 trades had the following results: 4 losing trades in a row 4 winning trades in a row Here is the result for Alex: -$2,500, -$2,500, -$2,500, -$2,500 = -$10,000 Loss of the total account 😭😭😭😭 Here is the result for Peter: -$100, -$100, -$100, -$100, +$200, +$200, +$200, +$200 = +$800 Profits. 🏆 🏆 🏆 🏆 Can you tell the difference? See how risk management show the difference between being a profitable or losing trader. Peter managed to recover losing trades, and get into good profits after 8 trades. Alex didn't survive 4 trades... 🚨 You might have the finest trading strategy in the world, but if you don't manage how much you lose, you'll lose it all. It's only a matter of probability and time. However, following this basic example will assist you to make your trading more profitable. Simply give it a shot. Kind regards Artem Crypto Follow, Like and Share are appreciated! Take a look at my other Educational ideas below:
INDEX:BTCUSDEducation
by ArShevelev
12
Doing this will make wealth love you more! Avoid these four bad trading habits, and wealth will love you more! In trading markets, whether it's cryptocurrency, forex, futures, or other markets with candlestick charts, it's not advisable to cut losses or take profits at the slightest gain or loss. You should not become greedy when you make large profits and not wait until you suffer a large loss to exit. After opening a position, forget about your entry price, whether you're in a profitable or losing state, so you can hold more objectively, rather than wanting to exit when you've made a little profit or suffered a little loss. It doesn't matter whether prices will rise or fall next, or whether you're in a profitable or losing state now. Your stop-loss point has already been set, and the same goes for your take-profit point. You don't need to worry about anything else. Don't make your entry price the center point of the balance, tilting left and right constantly. The only criterion you should follow is the market situation. FXOPEN:XAUUSD FX:EURUSD NASDAQ:IXIC TVC:USOIL COMEX:GC1!
INDEX:BTCUSDEducation
by triumphing
Market efficiencyWhat is market efficiency, how does it affect earning potential? What does "market efficiency" mean, and how does it affect the chances of making money? Today, we'll talk about how well the crypto market works. We'll look at how quickly it takes in new information and how you can make money from price changes. We are also looking to the near future, when efficiency will go up and there will be less cash and inefficient niches. How Does the Market Work? The speed and accuracy with which information about projects and assets is added to the price shows how efficient the market is. This happens almost right away in markets that work well, but it takes a long time or doesn't happen at all in markets that don't work well. For instance, the US stock market in 1906 is not very good at what it does. Then there was an earthquake in San Francisco, and only three days later, the shares of the Pacific Railroad fell apart. The news from east to west moved too slowly. In 2022, the oil market works well. As soon as OPEC and other countries talked about how they could work together to set a high cap on oil prices, the price went up. That is, no one even raised the ceiling. The price goes up right away because OPEC+ lets this happen. In general, the idea of how well a market works is a theory. Economists have been arguing about whether or not it works for the past 50 years. This idea comes in three different forms. Weak Efficient Market Hypothesis: All market information from the past is included in the price of an asset. Average Efficient Market Hypothesis: The price of an asset includes all market information from the past and all publicly available information from the present. Strong Efficient Market Hypothesis: The price of an asset takes into account all market information from the past, public information from the present, and insider information. We won't keep going back and forth between ideas. The article only needs to know that efficiency is a measurement of how quickly and accurately the market takes in information. Another question is where this information came from. What determines how well the market works? The most important thing is just one thing: the number of trades and how liquid the market is. The market will be more efficient if there are more transactions, and less efficient if there are less. From the amount of money in the market, other things grow: the speed of transactions, the infrastructure, and the speed at which information comes out. But in general, they show up on their own when there are enough investors for someone to want to make money on investment infrastructure. For instance, the elite art market doesn't work well. Not a lot of artists charge a lot for their paintings, and not a lot of people are willing to buy them. There, news moves slowly from person to person. The price is not set by the way the market works. Instead, it is set by haggling. This also works in the stock markets. For "blue chips" like Apple, which are traded by the most investors, the difference in price between buy and sell orders is very small. This means that at any time, the market can very accurately figure out the fair value of the security. Spreads widen where there is less liquidity, and it can be hard to figure out what a fair price is: it "walks" in the spread gap. Here, by the way, the ideas of people who believe that markets take in information so quickly that it is impossible to make money on them fall apart. Everything is simple: if markets are really so efficient that you can't make money by having more information, traders and capital would have left long ago, liquidity would have collapsed, markets would have become inefficient again, and capital would have returned. But we don't talk about the theory here. If you are interested in cryptocurrencies, why do you need to know this? Yes, it is useful even if you are not interested in cryptocurrencies. By definition, it's hard to make money in markets that work well. If the market is working well, it quickly takes in new information and reacts to what's going on around it. This means that any results of fundamental or technical analysis have already been factored into prices by other market participants. You can buy and sell things, but it will be like a casino. It's easier to make money when markets don't work well. The less efficient a market is, the more likely it is that you can learn more about the other people in it, act faster, and make more money. Can cryptocurrency be seen as a market that works well? The article was written so that this math could be done. No, is the short answer. In one of the most recent studies, experts compared Bitcoin prices to the prices of gold, the S&P500, and the USD/EUR currency pair, which are all well-known assets. The rate of price change was multiplied by the market capitalization to figure out how well the market worked. It turned out that the crypto market is much smaller than traditional markets, but here information is "absorbed" much more quickly. This is because trading goes on 24 hours a day, 7 days a week, and information spreads quickly. Also, it's not hard to start trading. But trading in BTC is not as good as trading in traditional assets. It is clear that the efficiency of most other currencies is even lower, and somewhere in the NFT segment, it is much lower. Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch! ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
The importance of waiting for a secure buying point Most investors can never control their inner greed and blindly chase market trends after missing a reasonable entry point. Impatience often leads to premature positions, which means enduring market fluctuations before the expected uptrend or downtrend materializes. In this situation, you often cannot hold on or your stop loss level will not allow you to hold on. If the stop loss level is set too wide, it can lead to significant losses once triggered. If it is set too narrow, it is easy to be hit by market volatility. These phenomena are due to a lack of patience on the part of traders, the underlying reason being the eagerness to make money and the fear of missing out on the best opportunities, manifested in premature entry, which is actually greed. Some people enter the market too late, underlyingly due to fear of missing out on this market cycle and eagerness to make money, which is actually fear. Let's encourage each other! COMEX:GC1! FX:EURUSD TVC:USOIL NASDAQ:IXIC BINANCE:BTCUSDT
FXOPEN:XAUUSDEducation
by triumphing
Algorithm vs Human trading | Which one is the best?Introduction Algorithmic trading has been more popular in recent years, leading some investors to speculate that their human counterparts would soon become obsolete.  Algorithmic trading, according to some experts, provides a number of benefits over human trading, such as the capacity to examine data and make judgments more rapidly.  Nonetheless, there are many who believe that human traders still have value since computers cannot replace their expertise and intuition.  In this article, we'll take a look at the pros and cons of algorithmic trading and discuss its use in the financial markets. Gains from Algorithmic Trading Algorithmic trading has the benefit of being quick. Trading choices may be made by algorithms in microseconds, far quicker than by humans.  This enables investors to take advantage of opportunities that may be missed by human traders and respond swiftly to shifts in the market.  Algorithms also have the benefit of being able to trade around the clock, seven days a week, expanding the hours during which markets may be monitored and exploited. Eliminating human emotion from trading choices is another benefit of algorithmic trading.  When human traders let their emotions cloud their judgment, the results may be disastrous.  Trading judgments made by algorithms, on the other hand, are more likely to be consistent and objective since they are based on facts and logic rather than emotion. Last but not least, trading fees might be lowered with the use of algorithmic trading.  Algorithms eliminate the potential for human mistake and save money on transaction fees by trading automatically. Algorithmic Trading's Drawbacks While algorithmic trading has many benefits, it is also possible that it might have negatives.  The potential for mistakes to be made by trading algorithms is a worry. Mistakes made by algorithms might be costly if they aren't recognized right away.  In addition, losses are possible while using trading algorithms since they are pre-set to react in a predetermined way to market movements or occurrences. Lack of human intuition is another issue that has been raised in relation to algorithmic trading.  While algorithms are programmed to process information and execute trades, they may overlook intangibles like political events and fluctuations in public opinion.  Nonetheless, human traders may be able to employ non-data factors, such as intuition and experience, while making trading judgments. And last, algorithmic trading may amplify market volatility.  Algorithms' ability to rapidly respond to market shifts may both benefit traders and contribute to more volatility. How Humans Fit Into Algorithmic Markets Even if there are benefits to using algorithms to trade, human traders are still vital to the market.  A major benefit of human traders is that they may utilize their expertise and instincts while making trading judgments.  Those in the trading industry may account for intangibles like public sentiment and political events while making trades. Human traders have the benefit of being able to quickly adjust to new market conditions.  Algorithms are designed to make trades based on predetermined parameters, but they may not be able to adapt to sudden shifts in the market.  But, human traders may be better able to adjust to these shifts thanks to their expertise and intuition, allowing them to make non-data-driven trading judgments. At long last, human traders may supplement automated risk-control measures.  Although risk management algorithms may be set to minimize losses in theory,  human traders may be able to see threats that the software misses. Conclusion Although there are benefits to using an algorithm for trading, it is not yet eliminating the need for human traders.  Experienced human traders still play a crucial role in the market because machines cannot replicate their wisdom, insight, and responsiveness to sudden shifts.
Education
by Daveatt
2
Practical advice for a novice traderPractical advice for a novice trader - It doesn't matter what size of the deposit you have, start gaining experience with symbolic sums: $10/50/100, as you gain skills, you can increase the deposit, but be prepared to lose. In addition, with such an initial deposit, the logic of the behavior of market participants will open up to you. - Do not invest in trading those funds, the loss of which will affect the quality of your life, only what you are ready to lose. - Do not rush to leave your main job, let trading be your hobby for some time, perhaps it will grow into something more over time (but this is not certain). - More trades does not mean more profit, you can make several trades in a month and earn more than if you made dozens of trades a day, and sometimes it’s best to be out of the market, but this is very difficult without experience. 90% of a trader's time is spent on analyzing the instrument and the situation, forget about the rush, opportunities appear and disappear every day, know how to wait. - The first transactions can be made on paper, on an unfamiliar chart, but just take into account not only the profit or loss, but also the time spent. - It doesn’t matter what timeframes you work on, as long as you manage to trade profitably, but you need to start studying the chart with higher timeframes: monthly, weekly, daily and go lower, so you will understand the whole picture. - There is no endless growth, as well as an endless fall, markets are cyclical, and reversals usually occur at the most unexpected moments. Do not make decisions on emotions, only a well-thought-out plan. Develop your own trading strategy, according to your initial data and temperament. - Don't ask others where to buy and where to sell, they don't know. - If the instrument has already made several hundred percent growth from the bottom, then it is not rational to enter it without stops, if the profit from the bottom is several thousand percent, then it is contraindicated to enter such an instrument on growth without waiting for a significant rollback! - Even if everything points to a specific direction of movement, always allow 1% for the opposite option, this can save you from significant losses. Always control risks. - If you make a profit, withdraw at least a part, regularly, you must understand why you are spending your time on this. Ideally, over time, withdraw all the money invested, so it will be easier for you to psychologically operate with a deposit. There are no universal strategies. Your trading strategy should be well-considered, but at the same time adaptable to the current market situation. Something works well in a rising market, and does not work well in a falling one, and vice versa. You will be able to earn if you quickly adapt to the situation and skillfully manage risks. Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch! ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
2
Risk Management Strategy Spot trading can yield high returns, but it’s crucial to have a well-defined strategy in place before diving in. This entails analyzing the project, determining the size of your entry, and devising contingency plans in case of unforeseen circumstances. In this article, we’ll discuss our approach to spot trading and share our insights with you. Before entering the spot market, it’s critical to categorize the various assets available. With over 10,000 different projects to choose from, each with its own unique features, we sort them into three categories based on risk level: High Risk: This category includes projects that are prone to exit scams or are high-risk due to their small capitalization. We pledge no more than 0.5% of our total capital to these projects since they pose a significant risk to our portfolio. However, if they perform well, we may see significant returns from just one high-risk transaction. Middle Risk: Projects in this category have an average market capitalization of between $50 million and $500 million. We can pledge up to 1% of our allocated capital to these projects, which are less likely to collapse but still carry a degree of risk. Low Risk: This category includes established mastodons of the cryptocurrency market with a high market capitalization, such as those in the top 50 of Coin Market Cap. We can pledge up to 3% of our allocated capital to these projects, as they are less risky but still carry some risk. To diversify our portfolio, we allocate our capital as follows: Cash reserves: 30% High Risk: 15% Middle Risk: 30% Low Risk: 25% While our portfolio may seem risky, we aim to earn returns rather than simply preserving our capital. However, in the current bear market, we adjust our strategy to focus more on cash reserves: Cash reserves: 70% High Risk: 5% Middle Risk: 15% Low Risk: 10% With over 70% of our portfolio consisting of stablecoins, we can buy back into the market at more favorable prices during drawdowns. In short, a risk management strategy should be tailored to each market. In a bull market, a riskier strategy with more high- and middle-risk projects may be appropriate, while a bear market calls for a risk-free strategy with a small percentage of high- and middle-risk projects and the majority in stable assets. In summary, our risk management strategy for spot trading is designed to minimize losses and prevent undue stress. Consider using it as a starting point for developing your own strategy, and monitor its effectiveness over time.
BITSTAMP:BTCUSDEducation
by Crypto4light
Full Time Trading VS Full Time Job | Everything You Need to Know Hey traders, In this educational article, we will compare full-time trading and full-time job. And I guess, the essential thing to start with is the money aspect. Full-time job guarantees you a stable month-to-month income with the pre-arranged bonuses. In contrast, trading does not give any guarantees. You never know whether a current trading month will be profitable or not. Of course, the average annual earnings of a full-time trader are substantially higher than of an employee. However, you should realize the fact that some trading periods will be negative, some will be around breakeven and only some will be highly profitable. In addition to a stable salary, a full time job usually offers a paid sick-leave and vacation, while being a full-time trader, no one will compensate you your leaves making the position of an employee much more sustainable. Being an employee, you usually work in an office with the fixed working hours. Taking into consideration that people often spend a quite substantial time to get to work and then to get home, a full-time job usually consumes at least 10 hours, not leaving a free-time. In contrast, full-time traders are very flexible with their schedule. Even though they usually stick to a fixed working plan, they spend around 3-4 hours a day on trading. All the rest is their free time, that they can spend on whatever they want. Moreover, traders are not tied to their working place. They can work from everywhere, the only thing that they need is their computer and internet connection. Traders normally work alone. The main advantage of that is the absence of a subordination. You are your own boss and you follow your own rules. However, such a high level of freedom breeds a high level of personal responsibility. We should admit the fact that not every person can organize himself. In addition to that, working alone implies that you are not building social connections and you don't have colleagues. Being an employee, you are the part of a hierarchy. You usually have some subordinates, but you have a supervisor as well. You are constantly among people, you build relationships, and you are never alone. There is a common bias among people, that full time trading beats full time job in all the aspects. In these article, I was trying to show you that it is not the fact. Both have important advantages and disadvantages. It is very important for you to completely realize them before you decide whether you want to trade full time or have a full time job. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
18
Top 15 mistakes and solutions in trading TOP 15 Trader's Mistakes 1 - Lack of knowledge of market operation, technical and fundamental analysis, mass psychology and market cycles In the boom period, when a large number of new participants enter the market, many people believe themselves to be the "god of trading" and the "master of the markets." Beginners are satisfied with a 10-20% profit during the expansion phase, whereas quotes for liquid cryptocurrencies show a gain of 30/50/150%. Everything is contrary to the logic of the majority, which is how markets function. Sadly or luckily, the majority of individuals make common errors and are unable, due to a lack of understanding, to differentiate the fine line when an uptrend is replaced by a downturn and the distribution phase is replaced by a prolonged decline. At the moment of trend reversal, a psychological trap and a sequence of catastrophic events are established for the majority of participants, and a number of concomitant circumstances and lack of experience make it impossible to see the situation objectively. When the market is at its "bottom," the majority loses faith in growth: some sell out and abandon the market, while others wait even lower, do not purchase, and begin shopping only when everything has increased by hundreds of percent. Solution Study theory. Dow Jones theory, the fundamentals of technical and fundamental analysis, and any information regarding market cycles will be of great use. Examining the graph using large timescales, such as days, weeks, and months. You may find a wealth of material about the fundamentals of trading in the public domain or in the trading part of our website. 2 - Covetousness resembles a psychological trap Trading greed presents itself in numerous ways. Many are attracted to the cryptocurrency market by the idea of quick money, but the majority's problem is a lack of understanding of the mechanisms that move the market and how it functions. In order to arouse greed, pampas are constructed with a single "stick to the sky." Everyone sees a growth of 1000%, and as a result, earnings of 20/40/50 and even 200% no longer appear so promising, people do not sell, they are waiting for more, and the price falls into the red. Purchasing a full deposit's worth of cryptocurrencies in a single transaction is also greedy. The typical justification for such a "tactic" is that 10% of the overall deposit is greater than 10% of the portion of the deposit. Yet, when the price declines, the trader incurs losses and cannot cut the average entry price at lower values. Another example is missed opportunity syndrome, or FOMO. The price of the item has climbed by an inadequate amount over the course of one or more candles. Seeing this process, a novice decides to purchase the asset because he believes the price will continue to rise, resulting in losses. Many make the mistake of wanting to gain a lot of money quickly, but this is impossible. Fear and greed are particularly harmful emotions for traders. Solution The market requires a sensible strategy. Greed stems from inexperience and the fear of being late. Refrain from making decisions based on emotions and haste. It is essential to recognize that chances arise and disappear regularly on the market. Before initiating a trade, you should assess and justify your motives for doing so. 3 - Trading in emotional instability and excitement Any emotion in trading is detrimental. The decision to enter or exit a transaction must be calculated beforehand, devoid of emotion and haste. Emotions make it difficult to appraise the situation accurately, and you run the danger of making a mistake that may result in losses. Yet, since emotions are innate, it is impossible to eradicate them entirely; however, they can be managed. If emotions prevail, it is time to close the trading terminal and go on to other tasks. If you wake up at night to check bitcoin prices or are unable to fall asleep, this indicates that you have already made key errors in your risk management system, or that you do not have one. And this requires immediate action and, as much as possible, a "cool" head. Solution Take a break from the trading terminal, spend time with loved ones, or go for a stroll; you need emotional relief and rest from time to time. Sports are effective stress reducers. If you have already reached the point of insomnia and emotional breakdowns, you must conduct a thorough analysis of your risk management strategy and take sometimes difficult measures. If you have executed a number of unproductive transactions or one with an insufficient loss and you have the impression of "winning back," close the trading terminal immediately and do not trade on this day. Do not treat trading as a game of chance; in this emotional condition, you have no chance of success. 4 - leveraged trading Margin instruments can be effective in the hands of a competent trader, though not always and only under certain conditions. This is simply an unmanageable machine for liquidating a deposit in the hands of a novice. Futures and margin are verboten for rookie traders, since you face the risk of not having time to develop experience, but losing your deposit instantly. The average daily volatility of liquid instruments in a sideways movement can reach 3 to 10%, which indicates that squeezes may exceed adequacy when utilizing the 10th leverage - movements by 30 to 100% - on low-liquid pairs. When utilizing such leverage, setting a stop-loss is already problematic, as a stop-loss that is too far away would result in enormous losses in the event that it is triggered, and in nine out of ten situations it will be eliminated by an acceptable percentage. In addition, you will pay a commission for financing, taking into account leverage and transaction commissions. Exchanges will gladly offer you with as much leverage as you like, but this is no longer trading; with this strategy, you have a greater chance of winning money at a casino. Solution Study the fundamentals of trading, master numerous techniques, develop your own trading strategy, and gain real-world trading experience on the spot market by physically purchasing and selling various assets. You will eventually comprehend how the market operates. Under certain circumstances, success on the spot market can be enhanced with margin. 5 - Uselessness of stops Stops in trading are a substantial issue; stop-loss orders are covered in a different article. Stop-loss orders are frequently used irrationally or ignored by novice traders. Traders can be roughly divided into two groups: those who always use stops and those who prefer to operate without them. However, these are extremes. A stop positioned too closely is liable to be obliterated, while the absence of a stop under certain conditions can result in enormous losses. It is irrational to use stops during the accumulation phase because, in about eight out of ten instances, stops are eliminated precisely at those levels when there is a substantial accumulation of them, following which the price reverses and moves in the opposite direction. And when a significant upswing is established after a period of accumulation, a knockout almost always comes; it would be a shame to watch the price rise without participating. Yet there is a tight line here; you must be certain for a large percentage that this is the accumulation period, and you need also have a plan for price averaging, i.e. fiat in reserve. It is irrational to work in the distribution phase without stopping, just as it is crazy to labor in the accumulation phase with a pause. This is significant because many people lose in these situations due to lack of expertise. Eventually, the distribution is finished and a decline occurs, frequently abruptly and by a substantial percentage. Stopping dramatically minimizes the loss. If you have already opened a position and the price moves significantly in your favor, it becomes sense to place a stop-loss to safeguard profits so that if the price reverses, you will still make a profit and not a loss. While dealing with margin instruments, stops are required! Solution If you have no trading experience, we recommend that you constantly utilize stops until you understand how they operate. If the fundamentals are understood, they should be applied sensibly to the circumstance. Similarly, if you were stopped out by a stop, you do not need to re-enter the trade, pause trading, identify what went wrong, and then determine the next entry point. 6 - Non-fixing losses incurred when the price moves against you but you do not close your position If a trader becomes an investor owing to circumstances rather than his own volition, he is a poor trader. The "HODL strategy" is an explanation for a trader's insolvency and their own faults. Long-term asset freezing is the worst thing that can happen to a trader - "I'll wait out the crypto winter and still sell for a profit" is not a trader's behavior model. It does not matter to a trader what the current trend is; he must have effective strategies for any scenario. Waiting out losses is a waste of resources since there is volatility at every price level, and volatility is an opportunity to make money. Trading on financial markets necessitates the presence of lost deals; it's just the nature of the business. No trader has 100 percent profitable trades, and this is typical. Profitable trades must cover bad trades, and losses must be contained. If you are unwilling to recover losses when the price moves against you, you lose control of the situation and become a victim of circumstances. Solution Before entering a trade, you should have a contingency plan in place in the event that the price moves against you. In certain circumstances, this may involve deliberate averaging, while in others, it may include fixing losses. Recognize that losing transactions are a normal part of the process. 7 - Transaction concluded too quickly We touched on this topic briefly at the beginning of the article. The scenario is typical: a trader enters a position and the price begins to move in his favor. The trader takes profit at the predetermined level, but the price continues to rise. In itoge, fixed profit represents a modest proportion of the whole movement. The circumstance is representative of a powerful trend. It would be a stretch to call this a mistake because the profit is fixed; however, in the case of a trading strategy with a limited number of assets, it can take a very long time to wait for the price to roll back below the exit point, in some cases an entire year, and in other instances, the quote may not return to its previous levels. Solution 8 - Depending on your trading approach, there are a variety of solutions, including: The gradual sale of a previously acquired asset at varying prices. Selling of a portion of the asset to remove the invested funds from the transaction and earn a little return, reserving the remaining position (conditionally free asset) for longer-term objectives. Profit protection with a stop-loss order and its progressive approach to the quote, but not too close so as not to be eliminated prematurely. Deviation from the strategy or vice versa - lack of action flexibility Confusion, agitation, and swinging between extremes are certain indicators of a lack of a trading strategy or an indication that it was constructed wrong. Planned action eliminates the possibility of unanticipated situations and makes risks manageable. The plan must account for both potential profits and losses. Frequent strategy adjustments during the trading process are typically detrimental. The contrary is also true: a trading strategy must be adaptable to the current market environment. For instance, you are in a position and the price is moving in your favor, everything is going as planned, you are almost at your goals, but then you learn that the project whose coin you are trading was hacked. In such a circumstance, you will have very little time to make a choice. In such a circumstance, blind adherence to the strategy will definitely result in losses. Solution Your activities must be automated, and you must have a well-thought-out trading plan that takes into consideration all possible eventualities. In the event of a force majeure, it is vital to make swift decisions and build market-specific flexibility. 9 - "Finding knives." Investing a major portion of the deposit in the purchase of an asset amid a severe price decline is a bad choice. It is known as "catching knives" in business parlance. No one can accurately predict where the price will stop fluctuating and begin to consolidate. Before making a decision based on a thorough analysis of the situation, it is vital to comprehend the core cause of such a decline. You cannot make purchases after the upcoming autumn without comprehending the market's overall condition. After distribution at the peaks, the value of altcoins can decrease by 70 to 99 percent. To clarify, an asset in a bear market can lose 50% in a day, 50% in price, another 50% in a day, and another 50% in a day dozens of times before reaching its ultimate bottom. In addition, it is not a certainty that he would recover after this, particularly if it is an illiquid asset, of which there are thousands. Solution If you continue to employ this technique in your trading strategy, you should limit your exposure by allocating a smaller portion of your entire deposit and bear in mind that this "bottom" may not be the last one. With this strategy, it is crucial to master the fundamentals of technical analysis and how to construct horizontal levels and trend lines. 10 - Absence of system, algorithm, and subjective opinion You must know beforehand where you are buying and selling, what portion of your deposit you are working on, the permissible losses, and the rationale for these activities at the same levels. All of this is a trading strategy. In acts, there should be no spontaneity, excessive self-assurance, or hesitancy. You should not take the subjective opinion of another as the truth. The more confident words and assertions sound, the more confidence they inspire on a psychological level, directly into the subconscious, and you begin to feel that these are your own thoughts. The bitcoin market is rife with numerous types of manipulation; therefore, every information must be double-checked. The situation is compounded by the fact that newcomers are frequently directed by their own expectations and desires rather than by objective data. For instance, a break in a trend or a breakdown of a horizontal level is objective evidence, whereas an item that is overbought or oversold is merely an opinion. Solution Incorporating risk management and financial management into your own trading strategy. Use objective knowledge, not the opinion of others, for analysis. If you consume a great deal of information regarding the crypto sector, you need carefully select your sources and listen to opposing viewpoints on the situation. 11 - Ineffective financial management Money management should be the default inclusion in your trading plan. This entails splitting both the deposit and the assigned amount to join the asset, as for different trading techniques. It is not suggested to purchase the entire anticipated quantity of cryptocurrencies in a single transaction, since it will be unable to equalize the entry price in the event of a price decline. Beginners frequently make this error while purchasing something with their entire deposit. In addition, money management covers the distribution of trading and storage locations for assets. We do not encourage trading on a single exchange; use many exchanges. If your bitcoin is sitting idle on an exchange, withdraw it to a cold wallet or hardware wallet. Solution 12 - Money management must be an important component of your trading plan Too slothful to retain records No professional trader would conduct business without keeping transactional statistics and records. It is impossible to comprehend one's own efficiency without this. Some exchanges provide account analytics at a high level, while others do not; however, all statistics are maintained for a specified time frame. After a while, you will forget the prices at which you acquired your own investment portfolio. It will be unusual to sell an item without knowing if you are making a profit or a loss. A trading journal will educate you more than a dozen trading books combined. Record the purchase price, date, exchange, reasons for entry, feelings during the transaction, and similar information. After a period of time, you will be able to study and comprehend the causes of past errors and successful transactions. Solution 13 - Notepad, pen, and a methodical approach. Overestimated dangers Regardless of the size of the deposit, restrict the allocated funds for high-risk strategies to a specific amount or percentage. In the event of a loss, continue trading with the current balance without replenishing it. If a profit is made and the balance increases, transfer a portion of the money to less risky methods or withdraw them to fiat. Elevated risks include x5+ leverage, starting a trade with the full deposit or a substantial portion, entering an asset with a single order without averaging, and trading illiquid assets. Solution 14 - A methodical approach to risk management. Do everything and you will fail There are various methods for constructing working portfolios. Someone trades many specific altcoins, someone trades simply bitcoin, and someone trades circumstances without reference to particular assets; however, success is the most important factor. The enormous number of active cryptocurrencies is one of the primary obstacles for newbies. To handle the situation, it is required to comprehend a variety of project-related aspects, including fundamental analysis, technical analysis, order book status, transaction history, project-related news, price, etc. It is physically impossible to control more than five assets simultaneously without the assistance of a team of analysts. By working with many cryptocurrencies, you run the danger of losing focus and overlooking crucial nuances that will effect the outcome. Solution Initially, do not trade more than three assets; if you can keep track of a larger number, you may gradually increase the quantity. 15 - Inability to withdraw from the market and await suitable conditions. Staying out of the market is one of the most difficult aspects of trading for most novices. There are times when the wisest course of action is to monitor the market. It is not true that the more transactions there are, the greater the profit. You can conduct dozens of transactions per day and incur a loss in a month, or you can conduct two or three transactions per month and earn a profit. It is easier to work during the growth phase, and without theory and experience, it is nearly difficult to earn a profit during the flat and downturn phases. If it were possible to make money during the growing phase, the ideal course of action during the turning point would be to take a vacation or limit the trading portion of the initial deposit in order to get expertise trading with little sums. The remaining 99% of a trader's time is spent on self-development, market analysis, hunting for opportunities, and waiting for advantageous entry points into trades. Solution Utilize the time while you are out of the market to your advantage. Instead of mimicking a monkey's actions, participate in self-education: read foundational literature on trading, discover new trading tactics, and study the assets you're interested in as thoroughly as possible. In this way, at the moment when a beneficial situation occurs on the market, you will be ready for it. Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch! ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
1
Always factor in the possibility of the market’s developmentHello Traders: First educational video since I went away 8 months ago :) This topic has been brought up many times, and I wanted to prepare this video for those who are still struggling with the concept of possibility in the market. Many inconsistent traders, when taking losses, often look at their strategy as the reason why the losses occurred. They often fail to see that the real problem often lies with emotion, psychology, risk:reward, rather than strategy. A good rule of thumb when approaching the market is to have a clear mind and expect anything can happen, regardless of technical analysis. That means, even if a certain setup is developing, there is still probability that you will take a loss after entering. No strategy can give you 100% win rate. No matter how clean the setup is, or how it mimics the past price action or setups, the market can still not go with what you wish it to go. So, when we are waiting for a setup to happen before taking the trade, try to think on the other side as well. If you are looking for a long setup, also think about whether there is a possibility of a sell, and does sell also make sense. As an example, here on USDJPY, I have seen traders share their bullish view and bias. Certainly nothing wrong to follow through with your own view and forecast, however, I would suggest to also look into the possibility of a sell potential. Does the sell potential also make sense ? What if both bullish and bearish outlook exist ? then does it make sense to execute the trade ?
Education
by jojofang0901
19
5 red flags: When to change your trading strategy?Trading is a constant balancing act between risk and reward. Developing a successful trading strategy is a significant accomplishment in its own right, but it is equally important to know when it is time to adjust your approach or when to abandon it altogether. To help you stay ahead of the curve, I've identified the 5 telltale red flags that signal it could be time to change your strategy. Whether it's a shift in market conditions or a decline in performance, these red flags are crucial indicators that something needs to change. Why can live trading results deviate from backtest? It is not uncommon for live trading results to differ from the results obtained during backtesting. The main reasons for it are: 1. Improper Backtesting Methodology This is kind of an "umbrella term" for everything that can go wrong while backtesting, but the facts remain: Backtesting requires a robust methodology to provide reliable results. If the methodology is flawed, the results of the backtest may not accurately reflect the strategy's performance. Common issues include overfitting to past data, using insufficient data ( or cherry-picking your data - talk about introducing a bias into your results! ), or not accounting for transaction costs. 2. Overfitting to Past Data The most common culprit for live trading performance not achieving backtesting expectations is overfitting to past data. Overfitting occurs when a strategy is designed to fit the past performance of a market too closely, leading to a false representation of its potential future performance. Overfitted strategies have beautiful backtesting results but live trading performance fails to deliver even a resemblance of such results. A typical example would be using an overly specific period of any indicator - such as EMA(103). 3. Strategy Not as Robust as Thought Backtesting can provide a false sense of security, and traders may not fully appreciate the limitations of their strategy until they begin live trading. For example, a strategy that performs well in a trending market environment may not perform well in ranging conditions, or a strategy may be vulnerable to certain market events that were not accounted for during backtesting. 4. Execution Issues Live trading often involves executing trades in real-time, which can be subject to various challenges that were not present during backtesting. For example, slippage, latency, or data inaccuracies can all affect the performance of a strategy. 5. Market Conditions Have Changed I almost don't want to add this one to the list, because I worry most people will use this as a scapegoat, and not examine in detail all the previously mentioned reasons, that they actually can influence. But the fact is, the market is dynamic, and conditions can change rapidly. Changes in central bank policy, the introduction of new market participants, shifts in investor sentiment, or changes in economic conditions can all impact a strategy's performance. You must be aware of these potential issues and take steps to address them. This includes ensuring a robust backtesting methodology, regularly monitoring and adjusting the strategies, and being prepared to adapt to changing market conditions. What to do if your strategy shows any of these red flags When you encounter red flags in your trading strategy, it's crucial to take prompt and decisive action. Personally, if my strategy deviates beyond the backtested results in any of the five metrics mentioned below, I immediately stop live trading and switch to paper trading to monitor its performance. A robust backtesting methodology should provide a reliable indicator of the strategy's performance, and any deviation from the backtested results should be taken as a sign that further examination is needed. I cannot recommend any leniency in this matter ( translation: Every time I did, it was a painful lesson ). If you're getting to this position often, it suggests that your backtesting methodology is not robust enough. My guess is: you are either overfitting to past data, or introducing any of the dozens of biases that come with backtesting. The red flags I picked these red flags because of their importance or ability to provide a signal early on. It's important to note that the following list is possibly subjective. Not everyone will agree with me on this list. Everyone will agree, however, that it is a good reason to stop a strategy from live trading if it has significantly deviated from its backtested results . Many traders mistakenly believe that an automated strategy is a "set-and-forget" system. It's not. It is crucial to monitor its performance and be prepared to make adjustments or even stop the strategy if necessary. You might monitor different parameters than me, but you need to monitor something. Make sure your hard work of testing and developing a strategy with a positive expectancy doesn't go to waste. 1. Max drawdown The first and most critical red flag to watch out for is the difference in maximum drawdown between the live trading strategy and its backtested version . Maximum drawdown is a measure of the largest decrease from a peak to a trough in the value of your portfolio balance, expressed as a percentage of the drop from the peak value. Say you started with 100, traded the account up to 150 with a handful of wins, and now you are at 135 after two losses. Your current drawdown is 10%, and as long as your drop from the current peak was not higher until now, this is also your max drawdown. The drawdown curve as a whole is a crucial indicator to monitor. Its other secondary parameters can provide further insight into the performance of your trading strategy. These include: The steepness of the drawdown curve - a steep curve indicates a rapid decrease in value caused by a handful of big losses, while a more gradual curve indicates a slower decline - a longer streak of smaller losses. The number of trades it took to reach the maximum drawdown - a high number of trades indicates a long period of poor performance, while a low number indicates a short period of sizeable losses. Total recovery time - the length of time it takes to recover from the maximum drawdown can provide insight into the resilience of your strategy. Generally, you want a more resilient strategy with quick recovery. By monitoring these parameters in addition to the maximum drawdown, you can gain a more comprehensive understanding of the performance of your trading strategy and make informed decisions about any necessary changes. Side note: To help you gauge the downside risk, calculate your strategy's Ulcer Index . 2. The losing streak length and frequency A losing streak is a consecutive sequence of trades that result in losses. If the maximum length of the losing streak in live trading exceeds the results obtained during backtesting, it could indicate that the strategy may not be as consistent or reliable as originally believed. Try to examine how you would feel in these streaks. If, for example, your strategy regularly alternates between wins and losses, you'll probably feel fine. But if you have periods of long winning streaks and then periods of long losing streaks, it could be emotionally hard to handle. You could get an "itchy hand" and try to fiddle with your strategy even if the losing streak should have been expected since it occurred in the backtest. 3. The Recovery time The total drawdown time can be oversimplified as follows: Total Drawdown Time = Drawdown Time + Recovery Time We looked at the Drawdown time already - in the first red flag, so let's examine the recovery time. The recovery time is the time it takes for the strategy to return to a profitable state from the point of max drawdown. For the recovery time, I have basically only one rule: It has to be more aggressive, than the drawdown time. I want to see a faster recovery than the drawdown time. This happens when your average win is larger than your average loss. Such behavior I consider healthy, and it only motivates me to look at the drawdown period more closely ( Is there a pattern in the drawdown occurrences? Can I identify them and filter them out somehow? ) 4. Win rate This red flag is self-explanatory. The win rate of your live traded strategy should not be significantly different from the backtested version. However, you need to make sure you have enough data before you make any decisions. And therefore it is not the first actionable indicator that something might have gone awry. 5. The trade duration The trade duration difference between your strategy's backtested and live traded versions is another vital red flag to look out for. Trade duration refers to the time a trade is kept open, from entry to exit. If, for example, the trade duration in your backtest was anywhere between 30 min and 4 hours, but in live trading conditions, you observe a handful of trades with a duration of 20 hours. Is that a cause for concern? Does it warrant stopping the strategy? Consider the reasons behind such deviations, as it could be an early example of changing market conditions, mismatches in trade execution, or other factors. In the above example, if you opened a trade at the end of the New York session and closed in the London session, maybe the Asian countries had a national holiday and therefore left markets completely illiquid, but the strategy did what was expected. It is also a good idea to look at the distribution of trades in time. For example, if your backtesting was calibrated to trade during the London and New York sessions, but the live trading strategy generates the majority of trades during the Asian session, this could be a sign of discrepancies that might need to be addressed. Conclusion Knowing when to stop a strategy from live trading is integral to the day trading process. By closely monitoring key metrics and values, and comparing them to the results of your backtesting, you can make an informed decision about whether to continue using a strategy, invest time in improving it, or stop it altogether and look for a better one. And whether you monitor the same indicators or develop your own, as long as you regularly check in on your strategy's results, you are on your way to improving your chances of achieving long-term profitability. I wish you all the best in your trading journey!
CME_MINI:ES1!Education
by CleoFinance
An updated version of my limit order strategyIt's been a while since I've posted anything here. I mostly don't hang out on tradingview anymore, but still check in every now and again. Anyway, if you're reading this, you're probably familiar with my old limit order breakout-retest strategy, where you're pricing the market on breakouts and collecting profits on retests. I've updated this for reliability, but it is more difficult to execute now so you'll have to pay attention and spend a good amount of time testing this for yourself on a demo account. The method is simple (to me at least): 1) With limit orders, you're attempting to go with the direction of the trend. This means that in an uptrend, you're going to find the breakout point of the current move and the swing low from the previous move. 2) From the breakout point to the latest high, you're going to either eyeball a 50% retracement level, or draw a chart for it (will show this below), and then you're going to be placing tiny limit orders going all the way from that 50% retracement down to the swing low of the previous move. You're going to price the market in a wide area this way. You will likely require a script or a bot to do this, as it's slow with inconsistent spacing if you do it by hand. 3) You're going to have a hedge stop instead of a stop loss, at the swing low of the previous move. This is where it gets dangerous and will require practice. The hedge stop will be a stop order with a position size equal to all of your limits combined. I said kind of a lot in all those pics, but I hope I got the message across. :D Make sure you get yourself a script or bot of some sort to deploy those limit orders. If you do it by hand, you'll likely have less of them (which is fine), but always understand your risk before the play is made. On metatrader, I use a "Lines profit loss" indicator to show me the accumulated total of all of my trades. I can drag the line along the screen to see what my P&L will be if price reaches x point. You should get something like this too, or commission it if your platform doesn't have it. Understanding risk numbers is very important for this strategy. Anyway. I hope this helps someone!
Education
by WinkleTrades
🧊The Iceberg Illusion In TradingThe iceberg illusion in trading refers to the perception gap between what people think trading is and what it actually means. Many people see trading as a simple way to make quick profits and accumulate wealth, with the idea that all one has to do is buy low and sell high. However, the reality is far more complex. Under the surface of what appears to be a straightforward process lies a world of risk, stress, and uncertainty. Trading is not just about making money, it requires discipline, patience, and a deep understanding of the markets. Those who don't understand the true nature of trading may face financial loss, depression and failure, much like the hidden dangers beneath the surface of an iceberg. Success in trading often requires much more than just a basic understanding of market trends and patterns, and those who dive in without being fully prepared may face dire consequences. 🔷 Above the Iceberg Above the iceberg, people often see the glamorous and attractive side of trading, characterized by success, wealth, and financial independence. They imagine traders as confident and knowledgeable individuals, making smart decisions and reaping the rewards of their investments. The image of traders making large profits in a short amount of time is one that is often perpetuated by media and popular culture. People often see the stock market as a fast-paced, exciting place where opportunities for financial gain are abundant, and the idea of being able to control one's financial future through trading is alluring. This perception of trading often creates a rosy and idealized image of what it entails, leading many to believe that success in the markets is easy to achieve. 🔶 Bellow the Iceberg Below the iceberg, lies the reality of the challenges and difficulties that traders face on a daily basis. There are many hidden risks and uncertainties that are not immediately apparent to those who are new to the world of trading. Some of the things that people don't know that lie beneath the surface of the iceberg include: 🔸 Market volatility: The stock market is a highly volatile environment, and prices can fluctuate rapidly and unpredictably. This can make it difficult for traders to manage their positions and minimize their losses. 🔸 Emotional stress: Trading can be a highly emotional experience, and the pressure to make the right decisions can be immense. Many traders struggle with anxiety, fear, and depression, particularly when faced with losing trades. 🔸 Lack of understanding: The stock market is complex, and it can be difficult for traders to understand all of the factors that influence market trends and prices. This can lead to costly mistakes and an increased risk of financial loss. 🔸 Competition: The stock market is a highly competitive environment, and traders must be able to keep up with fast-moving markets and make quick decisions based on complex data and information. 🔸 Long-term success: Many traders are focused on short-term profits and may not consider the long-term impact of their trading decisions. Achieving lasting success in the markets requires a well-thought-out strategy and a strong understanding of the markets and the risks involved. 🔸 Timing: Successful trading often requires precise timing, as markets can change rapidly and prices can fluctuate. Traders must have a deep understanding of market trends and be able to make quick decisions to take advantage of opportunities. 🔸 Risk management: Trading involves risk, and traders must be able to manage their positions and minimize their losses. This requires a well-planned and executed risk management strategy, including setting stop-losses and taking profits at appropriate levels. 🔸 Knowledge and experience: Trading is not just about buying low and selling high. It requires a deep understanding of market trends, economics, and financial analysis, as well as years of experience to develop a successful trading strategy. 🔸 Discipline: Trading requires discipline and patience, as well as the ability to stick to a well-thought-out strategy. Many traders make impulsive decisions based on emotions or market rumors, which can lead to financial losses. Welcome to the hardest game in the world. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
11
Become a Better Trader with Bar ReplayIf you're a trader, you know that success in the market requires both skill and experience. But what if you could gain experience without risking your hard-earned cash? That's where TradingView's Bar Replay feature comes in. It's a powerful tool that allows traders to improve their skills by replaying historical market data in a risk-free environment. Bar Replay is like having a time machine for the market. With this feature, you can select any historical date and time and replay the market data as if you were trading in real-time. As the market moves, you can test out different strategies, analyze your performance, and make adjustments to your approach. And the best part? You won't lose any money if you make a mistake! So, how can you use Bar Replay to improve your trading skills? Let's take a look at some tips: Identify your weaknesses: One of the best ways to improve your trading skills is to identify your weaknesses. When replaying market data, pay close attention to the trades that didn't go your way. Ask yourself why they failed and what you could have done differently. Fine-tune your strategy: Once you've identified your weaknesses, it's time to fine-tune your strategy. Test out different approaches and see how they perform in the historical data. Adjust your approach until you find one that consistently generates positive results. Develop a routine: Trading can be stressful, and it's easy to make impulsive decisions. By developing a routine and sticking to it, you can reduce stress and improve your decision-making. Use Bar Replay to practice your routine and make it a habit. Practice risk management: Risk management is crucial to successful trading. Use Bar Replay to test out different risk management approaches and see how they perform over time. By finding the right balance between risk and reward, you can improve your profitability. In conclusion, TradingView's Bar Replay feature is a powerful tool for traders who want to improve their skills. By identifying weaknesses, fine-tuning your strategy, developing a routine, and practicing risk management, you can take your trading to the next level. So, fire up Bar Replay and start improving your skills today!
AMEX:SPYEducation
by TrendFlowIndicator
Don't Blow Your Account | Learn How to Avoid Margin Call Hey traders, In this educational article, I will share with you 5 simple tips that will help you not to blow your trading. 1️⃣Always Use Stop Loss. Let's start with the obvious - with the stop loss order. Never ever trade without that. Before you open your trade, plan in advance its placement, stick to it once the position becomes active and never remove it. 2️⃣ Manage Your Position Sizes I know that most of you are trading with a fixed lot. That is a bad habit. You should measure the lot size for each trading position you take. You should define in advance the risk percentage you are willing to lose per trade and calculate the lot sizes for your trades accordingly, then. 3️⃣Avoid Taking Too Many Positions Remember that in trading, quantity does not imply quality. The more trades you take, the harder it is to manage each position individually. I would suggest opening maximum 5 trades per day and holding no more than 8 trades simultaneously. 4️⃣ Avoid Trading Too Many Markets The wider is your watch list, the harder it is to focus on each individual element inside. Do not try to control as many markets as possible, instead, narrow your watch list and concentrate your attention on your favourite trading instruments. 5️⃣Remember About Volatility The more volatile is the market that you trade, the harder it is to trade it and the bigger stop losses you need to keep your positions safe. Remember, that the volatility is the double-edged sword. It can bring substantial profits, but it can also blow your entire account in a blink of an eye. Following these 5 simple rules, you will make your trading much safer. Study them and add them in your trading plan. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
11
4 Ways to become Better at Risk Management. Hello everyone!👋 Risk management is a vital aspect for every trader. The mastery of this art is aimed to reduce the losses which are most definitely inevitable. Below are 4 tips to become better at risk management. 1. Set realistic goals📝 This should be the first step after funding your account. At this time, you have a clear vision of where you want the account to reach. Since losses are inevitable I recommend that you first put measures that will help you protect what you have and in this case, it's your capital rather than blindly chasing what you don't have. Most traders will focus on setting the profit target forgetting that the drawdown limit is of equal importance. Additionally, set goals that are achievable within a certain timeframe to reduce the strain and the urge to over-risk in order to achieve them. Seeing yourselves as more of a risk manager can have a positive impact on the growth of your account. "True success is all about working towards meaningful goals and dreams" 2. Always Do the math 🧠 Trading involves a few calculations that are necessary before opening any position each time and also after the daily close. Every trade should clearly show how much to lose and how much to win Be aware of your earnings and losses because these are the results of your trade style and behavior. 3. Accept the risk🤝 A trader is more of a risk taker. Taking the risk means you are willing to put your capital on the line for the greater good. Before opening a position make sure to come to terms with how much you are willing to lose in case the trade goes against you. You should know better that without taking a risk then there is no pay. I support the idea of self-talk. I'm I okay with how much I can lose? How much impact will it have on my account? Is the risk manageable? If it's a No, then the risk is too much for you and you ought not to take the trade or you can choose to lower the risk "Do not risk more than you can afford to lose" 4. Mitigate the risk ⌛ Did you know that you can be out of risk and still be in an open position? With this technique, the aim is to reduce the risk and probably get in a zone I refer to as risk-free. Do the following; a. Move the stop loss above the entry if you are bullish and below if you are bearish - If you are in significant profits and there is a potential for a continuation of the trend then employ this technique because definitely you wanna be in the safe zone. b. Take partial profits - You might be in profits but it's never yours if you don't take it Generally, try and implement these tips in your next trades and I hope that you will receive positive growth. Please feel free to give me a thumbs up and add any additional information in the comment section below! Have a great trading week ahead.
CME_MINI:ES1!Education
by Pipsy_Market
🧠 The Mind Of A Smart TraderTrading psychology is influenced by emotions like greed and fear, which can drive irrational behavior in markets. Greed causes excessive risk-taking and speculation, while fear causes traders to exit positions prematurely or avoid risk. Regret can also cause traders to violate discipline and make trades at peak prices, leading to losses. These emotions can be particularly prominent in bull or bear markets and can have a significant impact on market outcomes. Trading psychology is a crucial factor in determining success in trading securities. It includes aspects of an individual's character and behavior that affect their trading decisions. Discipline and risk-taking are critical components of trading psychology, as is the impact of emotions like fear, greed, hope, and regret. It can be as important as knowledge, experience, and skill in determining trading success. 🧠10 Trading mindset tips: 🔹 Stay informed: Stay updated with the latest market news, trends, and developments, as well as your preferred assets. 🔹 Create a trading plan: This should include a clear set of rules for entry, exit, and risk management. Stick to your plan. 🔹 Manage your emotions: Avoid making impulsive decisions, especially during volatile market conditions. Keep a clear head and stick to your plan. 🔹 Continuously educate yourself: Enhance your knowledge and skills by reading books, attending seminars, and practicing with demo accounts. 🔹 Diversify your portfolio: Spread your risk across different assets and markets to reduce your exposure to any one particular market. 🔹 Stay disciplined: Follow your plan and stick to your rules, even if your emotions are telling you otherwise. 🔹 Set realistic expectations: Be mindful of your limitations and don’t overreach. Accept small losses and focus on long-term success. 🔹 Stay focused: Avoid distractions and keep your mind on your trading activities. 🔹 Keep a trading journal: Record your trades, track your progress, and reflect on what you could have done differently. 🔹 Take breaks: Avoid overtrading, which can lead to burnout. Take time to recharge and come back fresh. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
8