Trading Psychology - Where to start & how to improveThis video is part 1 of a coming series on trading psychology.
I tell you where I think a trader should start when it comes to working on their mental game.
Trading Plan
1-2-3-4 Reversal Trading Strategy (Part 2 of 2 Bearish) 1-2-3-4 Forex Reversal Trading Strategy
A 1-2-3-4 reversal chart pattern is build up of 4 definable points, known as point 1, 2 , 3 and 4. A typical 1-2-3-4 chart pattern is best traded after a strong currency pair up - or downtrend and can be defined by an easy set of trading rules.
A trader can confirm the reversal trade using a technical indicator such as DMI or MACD. (or other ones)
1-2-3-4 Basic Rules for Short Trades
Point (1): The high in an up trending currency market.
Point (2): A downward correction in the up trend, the lowest bar in the correction before the price moves back up to point (3).
Point (3): The high in the move up from Point (2) but a failure to make a new higher high(Point 1).
Point (4): Go short 1 pip below point (2)
Daily chart of GBPAUD shows and example of a sell 1-2-3-4 Reversal Trading Strategy, with a 1: 5+ Risk Reward setup. 50 pip stop and 285 target.
This would have been a six day trade, but can use this same strategy on lower time frames. I use the Fib Extension tool for profit targets, help alot.
Weekly Market Maker Cycle (Go With It)Weekly Market Maker Cycle:
On a 1 hour or 4 hour chart, you should be able to find this weekly market maker cycle. If you know what Big Money/Smart Money is doing, trade with them.
The cycle starts on Monday and ends on Friday, MM (Market Maker) will mostly trap traders on Monday, everyone is back on screens and is expecting a highly productive week of trading. MM makes what we call a stop hunt, induce traders to take wrong direction. So MM will reverse price action against everyone.
This cycle has three stages:
1) We have accumulation where the market maker accumulates contracts.
2) Next we have manipulation, where the MM manipulates price against the traders that have been trapped on the contracts MM have accumulated.
3) Lastly we have the trend release, where the MM releases the intended trends after every stop loss has been hit.
The MM has three weekly templates that they follow, but they wont make this very obvious for everyone to see. Its there in front of your eyes its just that you don't pay full attentions to what is really happening on chart, instead you are being fed with useless indicators and zones. At times, MM may start trap on Friday, setting bait for traders to become victims next week. MM do that so on Monday, MM doesn't start on a empty slate, but with traders trapped from previous session or week. If you understand price action you can see this trap by the MM. Forex is a physiology game, which most realtor traders lose.
Without this, you will not become a profitable trader
Yes, this is risk management.
Without proper risk management, your trading strategy based on levels, indicators, patterns, etc.will not make any sense.
Any trading strategy should be supported by strict risk management, where the maximum allowable losses per transaction and the risk ratio are observed:the profit is always more than 1/2.
You don't have to be right in every trade. It's just that your profit in successful transactions should be greater than the losses in unprofitable transactions. This correct use of risk management will lead you to success.
____________
The example shows one of the real scenarios of any trading system where the rules of risk management are observed:
Deposit of 10,000$
The risk per transaction is -1% (or -100$)
Total trades:
4 profitable trades = +14%
10 losing trades = -10%
Total: +4% (or + 400$)
Even though only 30% of the total number of profitable transactions, we still have a profitable result.
Learn risk management and become a consistently profitable trader.
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Comparing hedge funds to retail investorsHere are some of the average profits and losses of the client of a Forex broker:
From the 01/03/2014 to the 31/03/2015 FXCM accounts on the GBPJPY:
- Average winner was 39 "pips" ("percentage in point" that are not percentages in points
- Average loser was 64 "pips"
In that period the GBPJPY ATR was:
- On daily candles 140 "pips"
- On 12 hour candles 90 "pips"
- On 4 hour candles 55 "pips"
So on GBPJPY their average "investment" was held for about 4 hours.
Remember the few investors holding for weeks or months push the average tremendously up.
And on USDCAD:
- Average winner was 61 "pips"
- Average loser was 75 "pips"
In that period the USDCAD ATR was:
- On daily candles 75 "pips"
- On 12 hour candles 55 "pips"
- On 4 hour candles 30 "pips"
So USDCAD was trending and clearly non-daytraders moved the average up, but still, it's the same on all currencies, a total disregard for the range (and safe to assume market conditions or structure) they all always go for "40 pips" "winners" no matter if that takes 1 hour or 16 hours.
Looking at profits assuming everything else is equal (lower timeframes don't add randomness), what would be most optimal?
Assume making 1R every 4 trades
Spread = 1.5p => -6p/4t
Here is the cost to performance:
15 min R = 3p ==> - 200%
4 hours R = 10p ==> - 60%
2 days R = 40p ==> -15%
1 week R = 75p ==> -8%
1 month R = 175p => -3.4%
3 month R = 350p => -1.7%
1 year R = 800p => -0.75%
There is a big advantage up to 1 week - 1 month, then past that it is not as significant.
Of course there is an optimal holding period, or at least optimal holding periods, and that is set by the market.
Hedge funds have all sorts of regulations, as well as the 2/20 scam. So even if the cost of their investing is -3% you can add 33% in fees. And then add heavy taxes but that's the same for all short term. Which is why they are bad. Especially since the dot com bubble, before that hedge funds actually did slightly better than the S&P 500 (the average of hedge funds including the baddies).
Of course 99% of day traders lose money so they do not actually make 1R every 4 trades (how could they when they go for a risk to reward of 2:1?) which means the cost to performance is above 100%.
Placing money with a hedge fund is throwing money out of the window and hoping the wind will push some back in, placing money by oneself as an individual investor is throwing money directly in the fire after pouring oil on it to be absolutely certain to never see it again. Maybe they all have a crush on their broker.
It is said that the more retail traders join the more money hedge funds manage to make, I do not know if this is true. What is confirmed is that HFT firms, market makers, brokers, and probably quants too, make money on the back of these "individual investors" that are in the vast majority day traders. There is not much more to it. Brokers have tried over and over to gain an edge but there is none. Academics have even on occasion cancelled papers because "the data was as random as it gets". Retail investors have 0 predictive abilities, there is absolutely nothing to extract. If the market goes up, they'll be selling, if the market goes down, they'll be buying, I could code them in 1 line: If (close > open) then sell (close-open) * (LOTS_CONSTANT). Tada!
Nothing special here... And nothing new, same thing as centuries ago they are dumb money that goes in the wrong direction fomos and focusses on very short term.
8 TRADING HABITS OF SUCCESSFUL TRADERS👩💻👨💻
Hey traders,
Consistently profitable traders have a lot of things in common. Watching how they act and following their ideas & thoughts we can spot a lot of commonalities among them.
In this article, I have collected 8 trading habits that a trader should have to become successful.
1️⃣ - Continuous Learning 📚
The markets are infinitely deep in their nature.
Trading & constant monitoring of the market always unveil new, uncharted elements and things.
With 8 years of day trading, I can't help wondering how many new things I learn each and every day.
With continuous learning you evolve, you become better and it improves your trading performance & results.
2️⃣- Emotional Stability 🙏
The market is a wild beast who always wants to bite us.
And most of the time it manages to do that:
drawdowns, losing streaks...
Those who trade for at least 1 year know how unpredictable and unstable the market is.
A perfectly looking trading setup can easily turn into a big losing trade.
Of course, that is painful, of course with more and more losers, the anxiety will pursue us, the stress will overwhelm us.
Only by remaining stable and calm, you will manage to overcome the negative periods.
Learn to control your emotions, learn to take losses!
3️⃣ - Constant Practice 💪
Pro traders never stop, they always watch the charts, they always monitor the prices, and follow the market.
Trading requires constant TRADING.
Just spending one single week on a vacation without charts, you can not imagine how hard it is to return back.
The trading skills must be constantly maintained.
4️⃣ - Trade Journaling 📝
Pro traders always assess their past performance & results.
They track each and every trading position that they opened.
Both losing trades and winning trades require analysis and observations.
Only by studying the past results the trader can improve his trading performance and evolve. Only by identifying mistakes & peculiar commonalities, the trader learns to lose less than he makes.
5️⃣ - Anticipation of Different Outcomes 👁
Everything can happen in financial markets.
Pro trader always reasons in probabilities.
He knows that 100% chances do not exist.
Accepting the probabilities the trader (even while opening the trade) is always ready for completely different outcomes and accepts each and every move of the market.
6️⃣ - Flexibility & Adaptivity 🕺
The markets are always changing.
If you were trading before COVID crisis, I guess you feel how the reality among us shifted. With fundamental changes in our daily lives, the markets changed as well.
It is hard to say what exactly has altered though, however, we all can feel it.
In order to survive in a constantly changing environment, one should adapt. One should look for ways to be one step ahead.
To beat an evolving market, the traders should constantly polish their trading strategies, drop the things that don't work anymore, and adopt the new, reliable ones.
That is the only way to stay afloat.
7️⃣ - Selection of Right Markets 📈
The trader always knows what to trade and he always has a reason.
He admits that some financial instruments are appropriate for his trading style while some are completely not.
Pro trader does not wander around aimlessly from one market to another. He has a plan to follow and rules to rely on.
8️⃣ - Realistic Expectations ⭐️
Many newbie traders drop trading just because of wrong expectations.
The desire to get rich quick, to catch 20/1 risk to reward trades without substantial losses is playing a dirty trick with them.
The true trader is not greedy, in contrast, he is humble and the only thing that he wants is simply to win more than he loses and make that amount sufficient enough to have a good living.
Adapting these 8 habits, you will see dramatic improvements in your trading.
And even though most of them require a substantial effort and many years of practicing, trust me, it is worth it and it will help you in your daily life as well.
Would you add some other habits to this list?🤓
Let me know in a comment section.
❤️Please, support this idea with a like and share your feedback in a comment section!❤️
Fibonacci Extensions Part 5What Are Fibonacci Extensions?
Fibonacci extensions are a tool that traders can use to establish profit targets or estimate how far a price may travel after a pullback is finished. Extension levels are also possible areas where the price may reverse.
Key Takeaways:
Common Fibonacci extension levels are 61.8%, 100%, 161.8%, 200%, and 261.8%.
The Fibonacci extensions show how far the next price wave could move following a pullback.
Fibonacci ratios are common in everyday life, seen in galaxy formations, architecture, as well as how some plants grow. Therefore, some traders believe these common ratios may also have significance in the financial markets.
Extension levels signal possible areas of importance, but should not be relied on exclusively.
The Difference Between Fibonacci Extensions and Fibonacci Retracements
While extensions show where the price will go following a retracement, Fibonacci retracement levels indicate how deep a retracement could be. In other words, Fibonacci retracements measure the pullbacks within a trend, while Fibonacci extensions measure the impulse waves in the direction of the trend.
YOUR PROFIT FORMULA | Three Essential Ingredients 🤔💭💫
Hey traders, We must admit that it is phenomenally difficult to become a consistently profitable trader.
This journey requires years of practicing and training, constant losses, and nervous breakdowns.
If you are a struggling trader, if you are still looking for your way to succeed in this game, here is the formula that will help you to chase consistent profits.
💰Consistent profits = 📝Trading Strategy + 🤬Emotions + 📈Market Sentiment
Let's discuss each element separately.
📝Trading Strategy:
To be in profit in a long run requires an understanding of what do you actually trade.
You must have strict and objective entry conditions.
You must rely on the objective & verifiable rules for the execution of market analysis.
You must have a plan to follow.
A plan that is backtested and proved its efficiency.
🤬Emotions:
Even the best trading plan, the most accurate trading strategy can be easily beaten by emotions.
Emotional decisions such as revenge trading and early position close
can easily blow the account of any size in a blink of an eye.
The most disappointing thing to note right here is the fact that you can be taught how to execute technical analysis but you can not be taught to control your emotions.
Your main enemy here is yourself and being in a constant battle with your greed and fear it is very easy to go broke.
Only by being humble, disciplined and patient, you can successfully apply a trading strategy.
📈Market Sentiment:
Mastering your emotions and having studied a trading strategy, it looks like it is finally the time to make money.
However, occasionally the market tends to be irrational.
Being chaotic and unpredictable, sometimes the market neglects every technical and fundamental rule.
Crisis, euphoria: the reasons can be different.
The fact is that such things happen.
And it is your duty to learn to deal with unfavorable market conditions.
💰To become a consistently profitable trader, you must become the master of these three elements.
Only then the doors to freedom and independence will be opened to you.
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How To Spot and Use Liquidity Zones In Your TradingIn this video we show how you can easily spot where liquidity is on a chart and how to use this information to profit from in your own trading
Of course for a successful trading strategy, this is only a small part of the puzzle and you will need to add many more aspects of analysis.
Please LIKE, SHARE & COMMENT on this video to show your support.
Let me know if you have any questions below!
How To Share Your Watchlists (Video Walkthrough)We know how important your Watchlist is.
Your Watchlist is where you organize all of your favorite symbols, follow them, and plan ahead. It's also where you track your investments and trade ideas.
Our new Advanced View tool makes it possible to share your Watchlists. We believe this is an important next step in Watchlist technology. You can now share your favorite Watchlists with friends, family, and across the Internet either on your blog or social media profile. You can collaborate with groups to make a perfect watchlist, sharing the link and making edits as needed.
Create, share, and learn. Get feedback from others and do the research before you make the trade. Our new Watchlist tools can help everyone share and collaborate around markets.
Here are links to the two Watchlists we talked about in this video. You can copy this Watchlists, edit them, and add them to your profile:
1. Up-And-Coming Cryptocurrencies
2. Space Stocks
The first step to getting started is opening your Watchlist, then clicking the three circles at the top right ••• and selecting Advanced View. From there, you can toggle your Watchlist to be shareable, copying the link and sharing it as needed. You will also see a symbol distribution showing the breakdown of the Watchlist you're looking at. We explain all of this in the video! Make sure you watch it.
Please let us know if you have any questions, comments or feedback. You can share them in the comments below.
Thank you for watching,
Team TradingView
IMPROVE YOUR TRADING | Simple Flowchart For You to Follow 🧭📍
A short ⚠️disclaimer before we start:
the rules that will be discussed in this post are applicable only for technicians - traders that are relying on price action/structure/etc.
Also, we assume that structure levels do work and for us, key levels are considered to be the safest trading zones/points.
In order to increase the accuracy of your predictions analyzing different financial markets, you must learn to identify the direction of the market.📈
The identification of the market trend must be based on strict & reliable & testable rules.
It can be based on technical indicators or price action
Personally, I prefer to rely on price action.
Here are a couple of examples of how I identify the market trend:
There are three main types of market trends:
Bullish Trend
Bearish Trend
Sideways Market
Depending on the current direction of the market, on the chart, I drew a flow chart✔️ that will help you to act safely.
➡️Sideways market signifies consolidation & indecision. Usually being in such a state the market tends to coil in horizontal ranges.
To trade such a market safely, the best option for you will be to wait for a breakout of the range & wait for the initiation of the trend.
➡️Once you spotted a bullish market, do not rush to buy.
Your task will be to identify the closest strong structure support.
You must be patient enough to let the price reach that support first (and by the way, there is no guarantee that it will happen) and then you must wait for a certain confirmation.
Please, check the article about different types of confirmations:
Only once you get the needed confirmation you can buy the market.
➡️The same strategy will be applicable to a bearish market.
Spotting a short rally it is way early to just sell the asset from a random point.
You must find the closest strong structure resistance and wait for the moment when the price will approach that.
Then your task will be to wait for a confirmation and only when you got the reliable trigger you short the market.
🦉Try to rely on this flow chart and I promise you that you will see a dramatic increase in your trading performance.
And even though it may appear to you that this flow chart is TOO SIMPLE, in practice, even such a set of rules requires iron discipline and patience.
Thank you so much for reading this article,
I hope you enjoy it!
❤️Please, support it with like and comment. Thank you!
How to use trendline to identify price action structure/patternHi everyone:
Many have asked me about how to properly use trendlines to identify price action structures and patterns. So in today’s educational video, I will go over this topic in more detail.
First, I use the trendline as a “frame” to identify structures and patterns, and NOT use it as a Support/Resistance.
What I do is to put in the trendline for the highs and lows of the price action that can help me to pinpoint what the price is doing, what kind of a correctional structure that it is currently in.
Typically after an impulse phase of the market, then we start to identify a structure/pattern by connecting the swing highs and lows.
Second, as I always point out in my videos/streams, a structure/pattern needs at least 2 swing highs and lows to classify as a structure.
Certainly more swing highs and lows are good, but it's not necessary. Often I get asked about the “third touch” or more. To me it's not necessary, but if price does form the third touch, I would proceed the same as the price has a second touch.
Third, we are identifying the price action correctional structure, and sometimes the market is not perfect, it will not give you a textbook looking bullish flag as an example.
Hence the backtesting and chartwork from each trader is important to get your mind familiarized with the market and its “imperfect” development of the price action.
After identifying the impulse phase, then look to see what the market is doing. Is it falling into a consolidation ?
Not much movement except sideway price action, or ascending/descending like consolidation will give you a clue on whether the price is correcting to continue, or correcting to reverse.
Take a look at the educational videos I have made in the past regarding the type of correctional structures we typically see in the market. All the videos are down below.
Continue to backtest and do chart work to get familiar with drawing in the structures/patterns. The more you do these, the better and easier it is for you to identify them in your trading journey.
Remember, the market is not perfect, so not all the structures/patterns will be “Textbook” like on the real, live market. Learn to deal with the “imperfect” market, so you can better utilize price action analysis to your advantage.
Any questions, comments or feedback welcome to let me know :)
Thank you
Below are all my price action structures/patterns videos on different type of corrections.
Continuation and Reversal Correction
Identify a correction for the next impulse move in price action analysis
Impulse VS Correction
Multi-time frame analysis
Continuation Bull/Bear Flag
Parallel Channel (Horizontal, Ascending, Descending)
Reversal Ascending/Descending Channel
Reversal Rising/Falling Wedge
Reversal Double Top/Bottom
Reversal Head & Shoulder Pattern
Reversal “M” and “W” style pattern
Reversal Impulse Price Action
Continuation/Reversal Expanding Structure/Pattern
What Type Of Forex Trader Are You? Four Types Of Forex Traders:
1) Day Trader- A day trader is one who closes all trade positions at the end of each trading day and makes sure there are no open positions overnight. Day traders function with an extensive knowledge and experience of what the Forex entails. This category of Forex traders makes use of a variety of methods to make proper trading decisions that lead to success. Some trade securities with the use of technical indicators and analysis in the calculation of favorable trade entry and exit time frames while other trade based on instincts.
2) Position Trader- A position trader trades securities in the Forex market by holding a trade position for a long-term, in a period of weeks to months and sometimes, years. These set of traders, unlike day traders, are less concerned with short-term price fluctuations and the economic news release of the day. Position traders are not active traders. They initiate few trade positions in an entire year.
3) Scalper Trader- A scalper trader holds a trade position for a short-term period in an attempt to make profits out of the short hold. These set of traders buy and sell securities many times in a day with the mindset of making a small percentage of consistent profits out of the market. A scalper uses a manual and automated trading system on various platforms thereby developing functional strategies that generate profits from the bid and ask spreads. The manual system of trading involves the trader making trade executions while sitting in front of his computer while the automated trading strategy involves the trader setting rules and guidelines on how to use trade signals.
4) Swing Trader- A swing trader are those who make profits and returns in the Forex market by holding a trade position overnight to several weeks. These set of traders make use of fundamental analysis, the intrinsic value of a security, price trends, patterns, and technical analysis to search for financial instruments with short-term price momentum. Swing traders trade by the identification of securities which has an extraordinary possibility to move in a short time frame. The goal in swing trading is to trade on large price moves on a daily basis by spending longer time (weeks and months) monitoring the security in question.
Different forex trading order types:What we are going to do here is give a refresher on the types of orders in Forex trading so you can begin really taking advantage of what is available and hopefully incorporate additional order types to your trading style and money management approach better.
Please read carefully everything in the picture, I'm sure will be helpful for you!
The list of order types in forex trading:
Market Orders
Limit Orders
Take Profit Orders
Stop Loss Orders
Trailing Stop Orders
P.S. Did you like my article? Share it with your friends, it will be the best “thank you" :)
Ask me questions and comment below. I’ll be glad to answer your questions and give necessary explanations.
Rally Base Rally (Need2Know)Part 2: Rally Base Rally
Rally- Prices go suddenly upwards
Base- Price goes into a range or sideways makes a demand zone
Base areas are always best times to get on trades with right risk management always.
Rally- Price breaks out of demand zone and continues on upwards
Drop Base Drop (DBD) Need2KnowPart 1: Drop-Base-Drop
Drop- market suddenly is bearish
Base- market ranges or goes sideways, then
Drop- market again breaks out of range and goes down
Note: The Base area on 1 hour, 4 hour and daily charts are best times to set up any new trades with right risk management as always.
High or Low Liquidity & Volume (When Is It?)Liquidity and Volume (When Is high and low periods of both?)
Generally per day in Forex trading 24/5 market their is 12 hours of low liquidity and low volume, which is after London ends to Tokyo ends.
Then, the other 12 hrs of high liquidity and high volume, which is easier to scalp or day trade which is at end of Tokyo to end of London.
You would need to know when Tokyo ends to London ends in your time zone (yes that overlaps New York 1st 4 hours too). Best hours to trade.
For your health: keep Forex trading within a certain times of days, so you can live life and maintain balance and enjoy fresh air......
Trading Daily Charts (Might Save Your Trading)If You Master Forex Trading On Daily Charts, You Can Trade For A Lifetime. (Understand the language of candlesticks on daily charts)
1) Quality trades not Quantity of trades- Trade your best trade setups only at swing points on daily charts.
2) Patience- You make money waiting not trading. You do not need to trade 20-30 times on lower time frames per month, when 2-3 times will make same money with less emotions and stress. Also, you will have more time freedom to enjoy life and find balance. Forex trading is not everything you are.
3) Probabilities- Only trade your best set ups at swing points (ex: like support/resistance, fib ret 50% to 61.8% area, swing points, etc..
4) Lower Lot Size- Related to using high stop loss, but like chart example let trade run for one or two weeks. 1:5 to 1:8 Risk Reward on trades will be goal.
5) Turtle Not Rabbit Trading Is Key- Trading Forex is a turtle marathon not a rabbit sprint race. Slow down- have faith in your strategy and edge.
6) Daily Trading Might Be Your Holly Grail- Look for entering only on Engulfing, Harami or Pin-bar setups on daily charts (that is all you need).
If you are part of the majority of Forex traders whom trading is difficult, DO NOT trade lower time frames which are under 1 hour (to much noise).
Only trade daily time frames until the end of this year and master them. Then maybe, next year can go to lower time frames of 4 hours and 1 hours. You tube videos on Forex trading position sizing, risk management and Forex daily charts. Daily charts help develop a more effective and accurate market bias, higher risk and reward (look at example chart) with 50 pip stop risk vs. 5xs to 8xs reward- which is great. Slow ans stead wins the race (Hare vs Turtle).
Spot Trading vs Margin Trading Pros and ConsSpot Trading is the most basic form of trading method and is the most suitable for beginners in trading. It's simply a BUY > HOLD > SELL mechanism.
On the Other Hand
Margin Trading is complicated and should only be done by experienced traders. There are various components to margin trading such as Maintenance margin, margin calls, leverage, and liquidation.
Pros and cons of Spot Trading
👉Spot trading is easy to learn and understand and is a good starting point for beginners in Trading.
👉It's an easy process to manage risk in spot trading not taking all the complications of liquidation or margin calls.
👉You can hold an asset for a much longer time and in the case of cryptocurrency can also transfer to any cold wallet.
👉No Trading happens during downtrends.
👉The potentials gains are not very good on a smaller investment amount.
Pros and cons of Margin Trading
👉Margin Trading needs some advanced knowledge of various things such as margin calls, liquidation, leverage, etc. Hence it's not recommended for new traders.
👉You can make profits on both uptrends(by going LONG) and downtrends(by going SHORT).
👉Gives an ability to trade much larger amounts with a relatively small initial investment by using leverage.
👉Margin Trading is risky, and if not done properly can blow your account in a very short time span.
👉Profits are higher when utilizing margin trading, and so are the losses. Every exchange has its own rules for margin trading, which need to be understood carefully before investing.
Thanks for reading and what kind of trading technique do you use and why? Share in the comments below.
For more similar educational ideas, scripts and trend analysis follow us.
Happy Trading.
Daily Primer: Break your limits 💥In todays daily primer we talk about limitations and cause and effect. This short 5 minute video will give you the necessary guidance as to what you need to focus on to achieve the success you seek in the markets.
Success in trading, just like in any other business, is a
cause and effect relationship:
Poor or average causes = poor or average results
good causes = good results
excellent causes = excellent results
If you want to achieve success, do the work!
(metal: have patience, discipline, resilience)
(work ethic: prepare your charts, know the news, prepare your plan)
Forex Correlations ( Need To Know )Noted chart only has a few highly traded pairs and their either highly correlated negative or positive pairs on daily charts.
If you trade more then one pair at a time, you should know which pairs either mostly go same direction and or go opposite direction.
You might not want to do two trades that have a positive correlation or negative correlation for diversity and so you do not lose two trades at same time.
There are websites which have further information on Forex correlation- you should check out.
Top 5 Most Traded Forex Currencies & Sessions The Top 5 Most Traded Currencies in the World
1. US Dollar (USD)
The official currency of the United States of America, the US Dollar is also the world’s primary reserve currency.
Most traded currency pair: EUR/USD
Most active trading session: New York and London sessions
2. Euro (EUR)
The second widely traded currency is the Euro.
Most traded currency pair: EUR/USD
Most active trading session: London and New York sessions
3. Japanese Yen (JPY)
The Japanese Yen is the official currency of Japan.
Most traded currency pair: USD/JPY
Most active trading session: New York and Tokyo sessions
4. Great British Pound (GBP)
The official currency of the United Kingdom and its territories, the GBP is known colloquially as the Pound Sterling.
Most traded currency pair: GBP/USD
Most active trading session: London and New York sessions
5. Australian Dollar (AUD)
The Australian Dollar is the official currency of the Commonwealth of Australia.
Most traded currency pair: AUD/USD
Most active trading session: Sydney/Tokyo and New York sessions
The Different Types Of Trading StrategiesHello everyone, as we all know the market action discounts everything :)
_________________________________Make sure to Like and Follow if you like the idea_________________________________
In today’s video, we are going to be talking about The Different Types Of Trading Strategies, We are going to compare them to each other and look at their characteristics.
Characteristics include 1) Time Duration, Type of Chart, Trade Targets & Risks, Frequency of Trades, Entry and Exit Time.
There are 4 types of trading styles :
Most people fall in the first 3
1) Scalping
2) Day trading
3) Swing trading
4) Position trading (Refers to holding a certain position over a very long time frame like a number of years, I think this type of trade is more of an investment than trading but technically it's still trading so I had to mention it ).
So Let Us Start...
1) Scalping
Time Duration is between a few seconds and a number of minutes
The Analysis is done on 1,2 and 5 minutes charts
Small targets considering the very short trade duration
High frequency of trades because of the small risk on each trade
Scalpers need to know exactly when to enter and when to exit a trade because a small mistake can have a huge impact on the trade
2) Day trading
Time Duration from 15 min to a number of hours
The analysis is done on 30 min, 1 hour, and 4-hour charts
These trades have a larger target than Scalping
Day Traders have a lower trade frequency than scalpers and its usually between 2-10 trades per week
Day Traders doesn’t have to be so precise with entry and exits like in Scalping because being late for a trade on a daily basis won't have that much of an impact on the trade.
3) Swing trading
Time Duration typically last from a day to a couple of months
The Analysis is done daily, weekly & monthly charts
Because of the time frame, Targets usually are way larger than day trading or scalping
Low frequency in trades, Usually between 2-15 trades per month
Entry and exits here don’t have a big impact because the targets are so big
So now you ask yourself how do I know which type of trader am I?
And it comes down to 2 main factors :
Personality: You could be someone who likes to hold trades and profit big so swing trading is for you, Or you could be someone who doesn’t like to hold trades over a day period so scalping or day trading could be for you.
Lifestyle: So you may not have the time to always watch the market and how it's moving, so scalping and day trading are not for you, but for swing trading, u only have to check the market once a day so it's the better option for you.
Don’t feel like you need to decide what type of trader you are, you should try all of them and see for yourself what are you comfortable with after all there is no right answer.
I hope that I was able to help you understand The Different Types of Traders better and if you have any more questions don't hesitate to ask.
Hit that like if you found this helpful and check out my other video about the Moving Average, Stochastic oscillator, The Dow Jones Theory, How To Trade Breakouts, The RSI, The MACD, and The Bollinger Bands, links will be bellow
