Due to popular demand I've decided to bring this series back for a week 2 and I'll continue to release 3-5 trading ideas every Saturday. How do you guys feel about the name of this series? Would you like me to change the name to something like "Setup Saturdays" or are you guys cool with the current naming scheme?submitted by AD3133 to Forex [link] [comments]
So this week I wanted to be a lot more in depth in my analysis and setups since I didn't think I was super clear last week with my reasoning on some the setups. I want these posts to be as beginner friendly as possible because there's a lot more beginners in this Subreddit than I had realized. I want you to use this as an educational tool and not as a signal service as a result I'm going to give you possible trade setups and I want you to be the judge of whether you should enter once/if price gets to that point since I feel like that will benefit beginners in the long run. I got a couple questions about top down time frame analysis so that'll be a focus of today's post. Scroll down to NZDJPY if you really want an in-depth look at how I perform top down time frame analysis.
I'll include a picture of a chart and my TradingView chart so if you want to zoom in and out of the chart you'll have that ability to do so.
Quick Disclaimer: Some of the charts pricing might be off by a bit since I started working on this during the New York session on Friday. If any of the charts are impacted in a way that alters the setup I'll be sure to update the charts before I post this on Saturday. Just gotta hope that hope that Powell doesn't break the market or else I might have to redo this entire post.
TradingView Link For Daily: https://www.tradingview.com/chart/AUDUSD/Wb5K2bS8-AUDUSD-Daily-For-Reddit-Post-6-20-U-AD3133/
Analysis: Which way is the trend pointing? It looks like it's pointing up which we can see with the green trend line but how about we zoom in to the 4 hour char to see if that's actually the case.
Tip: When drawing a trend line, especially on the daily and higher time frames, remember to hit as many wicks as possible since they are relevant and not just some anomaly you can ignore.
AUDUSD 4 Hour
TradingView Link For 4 Hour: https://www.tradingview.com/chart/AUDUSD/aah8294z-AUDUSD-4-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: When we got close to where we are with price and we draw a Fibonacci Retracement from the point where price took off to the point where price peaked we can see that price came down to .5 Fibonacci level where it then started going up again. Coincidence? Possibly. As a result I believe that price could continue higher and it would be justified if it did. However, if we look at the trend lines we can see that price appears to have broke put of of our major trend line (Green) which means that price could fall to the downside if it's actually a breakout. Price then appears like it would then adhere to the new minor trend line (Red). There's also the possibility that this was just a fake breakout and price could go up and adhere to green trend line. I'm going to have a selling bias on this trade since price looks like it double topped at the highs of this year and it looks like we could see price fall. I'm leaning towards the drop of price due to the symmetrical triangle pattern created by the major and minor trend line and looks like price is going to get pushed down which we should get an idea of soon.
Tip: Every time price makes a large move and falls/rises after making a peak/valley always pull out the Fibonacci retracement tool to see if price will bounce from the .382, .5, or .618 levels as they are the most significant levels. This can tell you if you're going to likely get a trend continuation.
AUDUSD 1 Hour
TradingView Link For 1 Hour: https://www.tradingview.com/chart/AUDUSD/IHgrnfYs-AUDUSD-1-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: I drew out multiple different scenarios which I think can play out since like I said before we're not trying to predict a single movement but we're preparing to be reactive to an ideal condition which may be thrown at us. Remember that major trend line we drew in on the daily chart well it's going to play a large role here. This trend line has been in the making since March so we're not just going to brush it off. The trend line appears to have been broken and we seem to be sticking that minor trend line after the break of the symmetrical triangle pattern. After the break of the symmetrical triangle pattern price usually gets pushed heavily to one side and it looks like price is wanting to get pushed to the downside. As a result, I'm going to really keep on eyes on scenario the blue arrows display since I think it's the most probable. Looking at the scenario there are going to be two potentially good entry points for a sell. The first being when price goes up to retest the green trend line which would also serve as a bounce from our red trend line. Once we get that bounce we could enter in for a sell with a take profit hopefully somewhere around the .66 area. Another good entry would be when price breaks the zone of support of .68 and after it retests it. Wait for a confirmation candlestick pattern showing price will fall when retesting (i.e. railroad track, bullish engulfment candle, evening star, shooting star, etc.). Look for these candlestick patterns on the 15 minute chart. Once you got the confirmation take the sell and ride price down to the .66 zone. The other scenario that could occur is we could see price go back into the green trend line by breaking the red trend line (Orange Arrows). If this occurs we want to catch the retest bounce of the red trend line and ride price up to the high of the year which is at .702. At that point price could break the resistance at which point we could catch the retest of the zone and ride price up. Or it could go up to .702 create a triple top and fall. If you get a candlestick confirmation saying it'll fall then take a sell at the high of the year.
If there's something I really like in Forex it's definitely got to be harmonic patterns due to their high accuracy. NZDUSD just recently completed one of them and this is a really good indicator of what price is going to do.
TradingView Chart For Daily: https://www.tradingview.com/chart/NZDUSD/zQpHzUcK-NZDUSD-Daily-For-Reddit-Post-6-20-U-AD3133/
Analysis: Yes, we have trend line that says that price is going up however I make exceptions for Harmonic patterns since they are accurate about 80%-90% of the time. The pattern you see above is know as a Bearish Bat Pattern. Like the name says it's an indicator that price is going to go Bearish so although the trend line is going up I'm going to have a bearish bias on this trade.
NZDUSD 4 Hour
TradingView Chart For 4 Hour: https://www.tradingview.com/chart/NZDUSD/C29kpCyO-NZDUSD-4-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: Not really much to add here just tossed on a Fibonacci retracement tool from where price took off to the peak just to check for any potential support from any of the major levels which we don't appear to have. We'll go a lot more in-depth on this pair on the 1 hour chart since that's where things get interesting.
NZDUSD 1 Hour
TradingView Link For 1 Hour: https://www.tradingview.com/chart/NZDUSD/dKJatcM7-NZDUSD-1-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: Looking at price we can see that since June 11th price has been trading in a boxed consolidation range. Again I drew out the possibilities I believe could be ideal for us. Remember that I said Harmonics work 80%-90%. Well that means that they fail 10%-20% of the time which is definitely not something we can neglect. We can see that there's a descending triangle which price is reaching the end of. This means that price is getting ready to move to one direction since big moves always come after consolidation. If it moves to upside wait for price to close above the the spot marked D then you can enter for a buy and ride price up to the .67525 zone where price could break to upside or bounce back down (Orange Arrow). Remember to wait for it to actually close above point D since it could create a triple top and drive price back down. It's the same procedure as AUDUSD here if it makes this move where if it breaks it then catch the retest and if it looks like it's wanting to fall down wait for a confirmation pattern. If it breaks the box to the downside and breaks the support zone then take a sell and ride price down to the trend line at which point you should close the trade as there's a chance price could move against you and it's best to secure profits while you can. Once at the trend line it could bounce and if it does you should be able to ride price up to that .67525 zone (Green Arrow). If price breaks the trend line then wait for the retest and you should be able to ride price down pretty far (Red Arrows). I think you should be able to ride it down to .5918 zone but you'll have to keep your on it.
TradingView Link For Daily: https://www.tradingview.com/chart/EURNZD/jzgmGcRe-EURNZD-Daily-For-Reddit-Post-6-20-U-AD3133/
Analysis: Well we got a pretty clear descending channel and price looks like it's at the top part of the channel currently so we're going to want to look for some optimal selling conditions due to the down trend.
EURNZD 4 Hour
TradingView Link For 4 Hour: https://www.tradingview.com/chart/EURNZD/YzOpvcH7-EURNZD-4-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: Looking at the 4 hour chart we can see that there appears to be a symmetrical triangle coming to it's end meaning price is getting ready to get pushed to a side. I believe it'll break the triangle and fall to the downside so once you see it break it would be a good idea to take a sell and ride price down to that support zone at 1.7187. Price could also briefly break to the upside then bounce off the top of the channel and it does take a trade from the bounce and ride price down to the same support zone. At that point, I'll leave it up to you to determine how you think price will go and what you should be looking for. Consider it to be a little quiz if you want to think of it like that. You've got my charts so use them as a reference since I've already marked some crucial support/resistance zones which we should keep our on for the next couple weeks.
EURNZD 1 Hour
TradingView Link For 1 Hour: https://www.tradingview.com/chart/EURNZD/ICWvgEsg-EURNZD-1-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: There's nothing that special on the one hour chart that I have to point out since I think we pretty much got all the big stuff out of the way on our analysis of the 4 hour chart. Be sure to get a good sell in there since there are two potentially good setups which I've outlined for you. Also be sure to be careful and wait for the bounce of the channel if price goes that way since there's a chance price could break the channel and I don't want you to take a loss because you were impatient.
This pair is going to be really fun since we're going to be looking through a lot of time frames so if you really want to learn about a top down approach to analyzing time frames and trends then pay very close attention to how I break down this trade.
TradingView Link For Monthly: https://www.tradingview.com/chart/NZDJPY/jZh4F2Jv-NZDJPY-Monthly-For-Reddit-Post-6-20-U-AD3133/
Analysis: Yes, we're actually going to be looking at the monthly chart. I bet you guys don't do that very often. Looking at it we can see that price has been following a clear down trend line since late 2014. If you look at the wick of this month's candle you can see that it appears to have touched the trend line meaning we could see a good opportunity to catch a sell since it had just recently bounced off. Let's take a look at lower time frames to see if this continues to be true.
TradingView Link For Weekly: https://www.tradingview.com/chart/NZDJPY/dpvI29BB-NZDJPY-Weekly-For-Reddit-Post-6-20-U-AD3133/
Analysis: When zooming into the weekly we can see that using the wicks of the candles we can actually draw a channel for the low portion that runs pretty much in parallel to the trend line we drew on the monthly chart. We can see that price clearly bounced from the trend line and I think this gives us good reason to believe in the coming weeks we could see the price drop. Also looking at the Bollinger Bands we can see that price also bounced from the top band which also supports a drop of price. Let's go into the daily to see if we can get a better idea.
TradingView Link For Daily: https://www.tradingview.com/chart/NZDJPY/NbWLURkU-NZDJPY-Daily-For-Reddit-Post-6-20-U-AD3133/
Analysis: Looking at the daily time frame we can see that price is currently consolidated and remember big moves always come after consolidation. If you look closely however you can see that price looks like it's about to break the 200 day EMA (Orange line). If it breaks the EMA we could see price drop pretty far at an accelerated rate. Besides those couple observations there's not much else going on with the daily chart.
NZDJPY 4 Hour
TradingView Link For 4 Hour: https://www.tradingview.com/chart/NZDJPY/d1kaogH5-NZDJPY-4-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: Would you look at that, it looks like we got a descending triangle on the 4 hour chart which looks like it's coming to an end. Looking at price it looks like it's wanting to push to the downside. Once you get a break below the lows of the day of June 11th I think it would be a safe bet to take a sell trade and ride it down for 66.825 for this week. If it breaks the 66.825 support zone then I'll definitely take a sell and try to ride price down to the bottom of the channel which we drew on the weekly chart. There's also the possibility that price could take support at any of these support zones and then head back up to test the top of the channel. At which point I'll be looking to get into a sell at the top of the channel but I won't ride price up to the channel since at this current point in time I feel like there's a large amount of risk in that.
NZDJPY 1 Hour
TradingView Link For 1 Hour: https://www.tradingview.com/chart/NZDJPY/83b47mFS-NZDJPY-1-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: Not much more to add here since I think by this point we got the entire story so I'm not going to say much more about the 1 hour chart since I think the analysis for the 4 hour chart also sums this up pretty well.
Well that was a lot of information to go through and I hope you found some value in this since it took me quite a few hours to put this together for you guys. Truth be told, I spent most of Friday working on this so I hope at least one person finds some value in which case I'll consider it a win.
So you guys tired of me yet or do you want me to continue this series for a week 3? It takes a lot of time and effort to put this together so I'll only do it if people want it or else I'll pretty much feel like I wasted my time. I might put together a little lesson on how to use the COT in order to catch some big reversal moves in the market since the COT pretty much tells you what the hedge funds are doing and you also want to trade with the hedge funds and institutions. It'll probably take a couple weeks since I'll have to compile some data together and wait for a setup before putting that out but I'll be working on it. Are there any other things you may want explained? Let me know and I'll try to find setups which contain the topic you may want more details on. I hope you have a great trading week!
﷽submitted by aibnsamin1 to Bitcoin [link] [comments]
The Federal Reserve and the United States government are pumping extreme amounts of money into the economy, already totaling over $484 billion. They are doing so because it already had a goal to inflate the United States Dollar (USD) so that the market can continue to all-time highs. It has always had this goal. They do not care how much inflation goes up by now as we are going into a depression with the potential to totally crash the US economy forever. They believe the only way to save the market from going to zero or negative values is to inflate it so much that it cannot possibly crash that low. Even if the market does not dip that low, inflation serves the interest of powerful people.
The impending crash of the stock market has ramifications for Bitcoin, as, though there is no direct ongoing-correlation between the two, major movements in traditional markets will necessarily affect Bitcoin. According to the Blockchain Center’s Cryptocurrency Correlation Tool, Bitcoin is not correlated with the stock market. However, when major market movements occur, they send ripples throughout the financial ecosystem which necessary affect even ordinarily uncorrelated assets.
Therefore, Bitcoin will reach X price on X date after crashing to a price of X by X date.
Stock Market CrashThe Federal Reserve has caused some serious consternation with their release of ridiculous amounts of money in an attempt to buoy the economy. At face value, it does not seem to have any rationale or logic behind it other than keeping the economy afloat long enough for individuals to profit financially and politically. However, there is an underlying basis to what is going on which is important to understand in order to profit financially.
All markets are functionally price probing systems. They constantly undergo a price-discovery process. In a fiat system, money is an illusory and a fundamentally synthetic instrument with no intrinsic value – similar to Bitcoin. The primary difference between Bitcoin is the underlying technology which provides a slew of benefits that fiat does not. Fiat, however, has an advantage in being able to have the support of powerful nation-states which can use their might to insure the currency’s prosperity.
Traditional stock markets are composed of indices (pl. of index). Indices are non-trading market instruments which are essentially summaries of business values which comprise them. They are continuously recalculated throughout a trading day, and sometimes reflected through tradable instruments such as Exchange Traded Funds or Futures. Indices are weighted by market capitalizations of various businesses.
Price theory essentially states that when a market fails to take out a new low in a given range, it will have an objective to take out the high. When a market fails to take out a new high, it has an objective to make a new low. This is why price-time charts go up and down, as it does this on a second-by-second, minute-by-minute, day-by-day, and even century-by-century basis. Therefore, market indices will always return to some type of bull market as, once a true low is formed, the market will have a price objective to take out a new high outside of its’ given range – which is an all-time high. Instruments can only functionally fall to zero, whereas they can grow infinitely.
So, why inflate the economy so much?
Deflation is disastrous for central banks and markets as it raises the possibility of producing an overall price objective of zero or negative values. Therefore, under a fractional reserve system with a fiat currency managed by a central bank – the goal of the central bank is to depreciate the currency. The dollar is manipulated constantly with the intention of depreciating its’ value.
Central banks have a goal of continued inflated fiat values. They tend to ordinarily contain it at less than ten percent (10%) per annum in order for the psyche of the general populace to slowly adjust price increases. As such, the markets are divorced from any other logic. Economic policy is the maintenance of human egos, not catering to fundamental analysis. Gross Domestic Product (GDP) growth is well-known not to be a measure of actual growth or output. It is a measure of increase in dollars processed. Banks seek to produce raising numbers which make society feel like it is growing economically, making people optimistic. To do so, the currency is inflated, though inflation itself does not actually increase growth. When society is optimistic, it spends and engages in business – resulting in actual growth. It also encourages people to take on credit and debts, creating more fictional fiat.
Inflation is necessary for markets to continue to reach new heights, generating positive emotional responses from the populace, encouraging spending, encouraging debt intake, further inflating the currency, and increasing the sale of government bonds. The fiat system only survives by generating more imaginary money on a regular basis.
Bitcoin investors may profit from this by realizing that stock investors as a whole always stand to profit from the market so long as it is managed by a central bank and does not collapse entirely. If those elements are filled, it has an unending price objective to raise to new heights. It also allows us to realize that this response indicates that the higher-ups believe that the economy could crash in entirety, and it may be wise for investors to have multiple well-thought-out exit strategies.
Economic Analysis of BitcoinThe reason why the Fed is so aggressively inflating the economy is due to fears that it will collapse forever or never rebound. As such, coupled with a global depression, a huge demand will appear for a reserve currency which is fundamentally different than the previous system. Bitcoin, though a currency or asset, is also a market. It also undergoes a constant price-probing process. Unlike traditional markets, Bitcoin has the exact opposite goal. Bitcoin seeks to appreciate in value and not depreciate. This has a quite different affect in that Bitcoin could potentially become worthless and have a price objective of zero.
Bitcoin was created in 2008 by a now famous mysterious figure known as Satoshi Nakamoto and its’ open source code was released in 2009. It was the first decentralized cryptocurrency to utilize a novel protocol known as the blockchain. Up to one megabyte of data may be sent with each transaction. It is decentralized, anonymous, transparent, easy to set-up, and provides myriad other benefits. Bitcoin is not backed up by anything other than its’ own technology.
Bitcoin is can never be expected to collapse as a framework, even were it to become worthless. The stock market has the potential to collapse in entirety, whereas, as long as the internet exists, Bitcoin will be a functional system with a self-authenticating framework. That capacity to persist regardless of the actual price of Bitcoin and the deflationary nature of Bitcoin means that it has something which fiat does not – inherent value.
Bitcoin is based on a distributed database known as the “blockchain.” Blockchains are essentially decentralized virtual ledger books, replete with pages known as “blocks.” Each page in a ledger is composed of paragraph entries, which are the actual transactions in the block.
Blockchains store information in the form of numerical transactions, which are just numbers. We can consider these numbers digital assets, such as Bitcoin. The data in a blockchain is immutable and recorded only by consensus-based algorithms. Bitcoin is cryptographic and all transactions are direct, without intermediary, peer-to-peer.
Bitcoin does not require trust in a central bank. It requires trust on the technology behind it, which is open-source and may be evaluated by anyone at any time. Furthermore, it is impossible to manipulate as doing so would require all of the nodes in the network to be hacked at once – unlike the stock market which is manipulated by the government and “Market Makers”. Bitcoin is also private in that, though the ledge is openly distributed, it is encrypted. Bitcoin’s blockchain has one of the greatest redundancy and information disaster recovery systems ever developed.
Bitcoin has a distributed governance model in that it is controlled by its’ users. There is no need to trust a payment processor or bank, or even to pay fees to such entities. There are also no third-party fees for transaction processing. As the ledge is immutable and transparent it is never possible to change it – the data on the blockchain is permanent. The system is not easily susceptible to attacks as it is widely distributed. Furthermore, as users of Bitcoin have their private keys assigned to their transactions, they are virtually impossible to fake. No lengthy verification, reconciliation, nor clearing process exists with Bitcoin.
Bitcoin is based on a proof-of-work algorithm. Every transaction on the network has an associated mathetical “puzzle”. Computers known as miners compete to solve the complex cryptographic hash algorithm that comprises that puzzle. The solution is proof that the miner engaged in sufficient work. The puzzle is known as a nonce, a number used only once. There is only one major nonce at a time and it issues 12.5 Bitcoin. Once it is solved, the fact that the nonce has been solved is made public.
A block is mined on average of once every ten minutes. However, the blockchain checks every 2,016,000 minutes (approximately four years) if 201,600 blocks were mined. If it was faster, it increases difficulty by half, thereby deflating Bitcoin. If it was slower, it decreases, thereby inflating Bitcoin. It will continue to do this until zero Bitcoin are issued, projected at the year 2140. On the twelfth of May, 2020, the blockchain will halve the amount of Bitcoin issued when each nonce is guessed. When Bitcoin was first created, fifty were issued per block as a reward to miners. 6.25 BTC will be issued from that point on once each nonce is solved.
Unlike fiat, Bitcoin is a deflationary currency. As BTC becomes scarcer, demand for it will increase, also raising the price. In this, BTC is similar to gold. It is predictable in its’ output, unlike the USD, as it is based on a programmed supply. We can predict BTC’s deflation and inflation almost exactly, if not exactly. Only 21 million BTC will ever be produced, unless the entire network concedes to change the protocol – which is highly unlikely.
Some of the drawbacks to BTC include congestion. At peak congestion, it may take an entire day to process a Bitcoin transaction as only three to five transactions may be processed per second. Receiving priority on a payment may cost up to the equivalent of twenty dollars ($20). Bitcoin mining consumes enough energy in one day to power a single-family home for an entire week.
Trading or Investing?The fundamental divide in trading revolves around the question of market structure. Many feel that the market operates totally randomly and its’ behavior cannot be predicted. For the purposes of this article, we will assume that the market has a structure, but that that structure is not perfect. That market structure naturally generates chart patterns as the market records prices in time. In order to determine when the stock market will crash, causing a major decline in BTC price, we will analyze an instrument, an exchange traded fund, which represents an index, as opposed to a particular stock. The price patterns of the various stocks in an index are effectively smoothed out. In doing so, a more technical picture arises. Perhaps the most popular of these is the SPDR S&P Standard and Poor 500 Exchange Traded Fund ($SPY).
In trading, little to no concern is given about value of underlying asset. We are concerned primarily about liquidity and trading ranges, which are the amount of value fluctuating on a short-term basis, as measured by volatility-implied trading ranges. Fundamental analysis plays a role, however markets often do not react to real-world factors in a logical fashion. Therefore, fundamental analysis is more appropriate for long-term investing.
The fundamental derivatives of a chart are time (x-axis) and price (y-axis). The primary technical indicator is price, as everything else is lagging in the past. Price represents current asking price and incorrectly implementing positions based on price is one of the biggest trading errors.
Markets and currencies ordinarily have noise, their tendency to back-and-fill, which must be filtered out for true pattern recognition. That noise does have a utility, however, in allowing traders second chances to enter favorable positions at slightly less favorable entry points. When you have any market with enough liquidity for historical data to record a pattern, then a structure can be divined. The market probes prices as part of an ongoing price-discovery process. Market technicians must sometimes look outside of the technical realm and use visual inspection to ascertain the relevance of certain patterns, using a qualitative eye that recognizes the underlying quantitative nature
Markets and instruments rise slower than they correct, however they rise much more than they fall. In the same vein, instruments can only fall to having no worth, whereas they could theoretically grow infinitely and have continued to grow over time. Money in a fiat system is illusory. It is a fundamentally synthetic instrument which has no intrinsic value. Hence, the recent seemingly illogical fluctuations in the market.
According to trade theory, the unending purpose of a market or instrument is to create and break price ranges according to the laws of supply and demand. We must determine when to trade based on each market inflection point as defined in price and in time as opposed to abandoning the trend (as the contrarian trading in this sub often does). Time and Price symmetry must be used to be in accordance with the trend. When coupled with a favorable risk to reward ratio, the ability to stay in the market for most of the defined time period, and adherence to risk management rules; the trader has a solid methodology for achieving considerable gains.
We will engage in a longer term market-oriented analysis to avoid any time-focused pressure. The Bitcoin market is open twenty-four-hours a day, so trading may be done when the individual is ready, without any pressing need to be constantly alert. Let alone, we can safely project months in advance with relatively high accuracy. Bitcoin is an asset which an individual can both trade and invest, however this article will be focused on trading due to the wide volatility in BTC prices over the short-term.
Technical Indicator Analysis of BitcoinTechnical indicators are often considered self-fulfilling prophecies due to mass-market psychology gravitating towards certain common numbers yielded from them. They are also often discounted when it comes to BTC. That means a trader must be especially aware of these numbers as they can prognosticate market movements. Often, they are meaningless in the larger picture of things.
Trend Definition Analysis of BitcoinTrend definition is highly powerful, cannot be understated. Knowledge of trend logic is enough to be a profitable trader, yet defining a trend is an arduous process. Multiple trends coexist across multiple time frames and across multiple market sectors. Like time structure, it makes the underlying price of the instrument irrelevant. Trend definitions cannot determine the validity of newly formed discretes. Trend becomes apparent when trades based in counter-trend inflection points continue to fail.
Downtrends are defined as an instrument making lower lows and lower highs that are recurrent, additive, qualified swing setups. Downtrends for all instruments are similar, except forex. They are fast and complete much quicker than uptrends. An average downtrend is 18 months, something which we will return to. An uptrend inception occurs when an instrument reaches a point where it fails to make a new low, then that low will be tested. After that, the instrument will either have a deep range retracement or it may take out the low slightly, resulting in a double-bottom. A swing must eventually form.
A simple way to roughly determine trend is to attempt to draw a line from three tops going upwards (uptrend) or a line from three bottoms going downwards (downtrend). It is not possible to correctly draw a downtrend line on the BTC chart, but it is possible to correctly draw an uptrend – indicating that the overall trend is downwards. The only mitigating factor is the impending stock market crash.
Time Symmetry Analysis of BitcoinTime is the movement from the past through the present into the future. It is a measurement in quantified intervals. In many ways, our perception of it is a human construct. It is more powerful than price as time may be utilized for a trade regardless of the market inflection point’s price. Were it possible to perfectly understand time, price would be totally irrelevant due to the predictive certainty time affords. Time structure is easier to learn than price, but much more difficult to apply with any accuracy. It is the hardest aspect of trading to learn, but also the most rewarding.
Humans do not have the ability to recognize every time window, however the ability to define market inflection points in terms of time is the single most powerful trading edge. Regardless, price should not be abandoned for time alone. Time structure analysis It is inherently flawed, as such the markets have a fail-safe, which is Price Structure. Even though Time is much more powerful, Price Structure should never be completely ignored. Time is the qualifier for Price and vice versa. Time can fail by tricking traders into counter-trend trading.
Time is a predestined trade quantifier, a filter to slow trades down, as it allows a trader to specifically focus on specific time windows and rest at others. It allows for quantitative measurements to reach deterministic values and is the primary qualifier for trends. Time structure should be utilized before price structure, and it is the primary trade criterion which requires support from price. We can see price structure on a chart, as areas of mathematical support or resistance, but we cannot see time structure.
Time may be used to tell us an exact point in the future where the market will inflect, after Price Theory has been fulfilled. In the present, price objectives based on price theory added to possible future times for market inflection points give us the exact time of market inflection points and price.
Time Structure is repetitions of time or inherent cycles of time, occurring in a methodical way to provide time windows which may be utilized for inflection points. They are not easily recognized and not easily defined by a price chart as measuring and observing time is very exact. Time structure is not a science, yet it does require precise measurements. Nothing is certain or definite. The critical question must be if a particular approach to time structure is currently lucrative or not.
We will measure it in intervals of 180 bars. Our goal is to determine time windows, when the market will react and when we should pay the most attention. By using time repetitions, the fact that market inflection points occurred at some point in the past and should, therefore, reoccur at some point in the future, we should obtain confidence as to when SPY will reach a market inflection point. Time repetitions are essentially the market’s memory. However, simply measuring the time between two points then trying to extrapolate into the future does not work. Measuring time is not the same as defining time repetitions. We will evaluate past sessions for market inflection points, whether discretes, qualified swings, or intra-range. Then records the times that the market has made highs or lows in a comparable time period to the future one seeks to trade in.
What follows is a time Histogram – A grouping of times which appear close together, then segregated based on that closeness. Time is aligned into combined histogram of repetitions and cycles, however cycles are irrelevant on a daily basis. If trading on an hourly basis, do not use hours.
Evaluating the yearly lows, we see that BTC tends to have its lows primarily at the beginning of every year, with a possibility of it being at the end of the year. Following the same methodology, we get the middle of the month as the likeliest day. However, evaluating the monthly lows for the past year, the beginning and end of the month are more likely for lows.
Therefore, we have two primary dates from our histogram.
1/1/21, 1/15/21, and 1/29/21
2:00am, 8:00am, 12:00pm, or 10:00pm
In fact, the high for this year was February the 14th, only thirty days off from our histogram calculations.
The 8.6-Year Armstrong-Princeton Global Economic Confidence model states that 2.15 year intervals occur between corrections, relevant highs and lows. 2.15 years from the all-time peak discrete is February 9, 2020 – a reasonably accurate depiction of the low for this year (which was on 3/12/20). (Taking only the Armstrong model into account, the next high should be Saturday, April 23, 2022). Therefore, the Armstrong model indicates that we have actually bottomed out for the year!
Bear markets cannot exist in perpetuity whereas bull markets can. Bear markets will eventually have price objectives of zero, whereas bull markets can increase to infinity. It can occur for individual market instruments, but not markets as a whole. Since bull markets are defined by low volatility, they also last longer. Once a bull market is indicated, the trader can remain in a long position until a new high is reached, then switch to shorts. The average bear market is eighteen months long, giving us a date of August 19th, 2021 for the end of this bear market – roughly speaking. They cannot be shorter than fifteen months for a central-bank controlled market, which does not apply to Bitcoin. (Otherwise, it would continue until Sunday, September 12, 2021.) However, we should expect Bitcoin to experience its’ exponential growth after the stock market re-enters a bull market.
Terry Laundy’s T-Theory implemented by measuring the time of an indicator from peak to trough, then using that to define a future time window. It is similar to an head-and-shoulders pattern in that it is the process of forming the right side from a synthetic technical indicator. If the indicator is making continued lows, then time is recalculated for defining the right side of the T. The date of the market inflection point may be a price or indicator inflection date, so it is not always exactly useful. It is better to make us aware of possible market inflection points, clustered with other data. It gives us an RSI low of May, 9th 2020.
The Bradley Cycle is coupled with volatility allows start dates for campaigns or put options as insurance in portfolios for stocks. However, it is also useful for predicting market moves instead of terminal dates for discretes. Using dates which correspond to discretes, we can see how those dates correspond with changes in VIX.
Therefore, our timeline looks like:
Part 1submitted by whatthefx to Forex [link] [comments]
We're going to start this post with dealing with common heckles. Some people have heckled me already in this posting series. I know from having done things like this publicly a few times before there are catchphrase heckles to be dealt with, and we'll do this one and for all here. If I've linked you here, you've done a FMH (Frequently Made Heckle).
If you're not a heckler, you can skip the line break for the strategy stuff, but this section may still be interesting for you.
FMH 1 : Elliot wave does not work all the time.
I know. The clock in my living-room does not work all the time. If it tells me it's 2am and I look out and it's broad day light, I use some discerning judgement based on my experience of looking out of a window, and I suspect it may be incorrect. If it tells me it's 8.30am and I look out and see little kids with school bags walking past the window, I suspect the clock may have a point.
When I write all the rules and exceptions in my posts, I am not doing this to make the posts longer. These are rules and exceptions designed to describe situations when it probably is happening. Of course it does not "Always work". I am not say it does. Your assumption I have not thought through the same extraordinary simplistic, "But, what if ...." questions is either you under estimating me, over estimating you, or both.
FMH 2 : Fibs levels do not work, studies show it is as good as random.
Two points. Firstly, I've read some of these studies. These hypothetical things done by people who have never traded in the market and want to produce intellectual ideas about it. While reading through the method of the experiment it's apparent to me it won't work. I could save them some time if they call me and tell me their hypothesis;
"Nope. You'll lose about 20% a year doing that. Good general idea. Okay starting point, but you get fucked here, here and here. Work on that".
I will not value the opinion of someone paid to write papers on fibs over my experience being paid to trade them. I will not go out my way to try to get you to value my opinion. I've learned people will either test things I say and know the truth of them for their selves with me posting the amount of interesting evidence/results that I do, and others would not test it if I posted a million examples.
Point two. Not perfect does not mean not practical. Fib levels do not react absolutely perfectly. I suspect the reason for this is so many people use them to put stops behind these days. In days gone by, they were probably more accurate, but as stop clusters became more predictable and concentrated this change. Game theory sort of stuff. Read more about my thoughts on this here.
The thing is, for those who pay enough time and attention, there are patterns of when the fibs either do work very well, or "do not work" in the exact same way over and over again. If they do "not work" in the same way over and over, that's the same as working to me. I am looking for patterns to trade for profit. Not to compile a pretty chart of data points as to if price turned specifically on the 61.8 over a million samples.
FMH 3 - "Everything you're saying is wrong", "You're an idiot", "I am non-specifically and non-constructively disagreeing" (Yeah, people drop that last one, verbatim, all the time)
Pics, or it didn't happen. I am willing to "get up here" so to speak and succeed or fail in front of everyone. I'm posting what I do, and explaining all my rational. Results are being tracked. Time and continuity will display my outcomes. Is there a way you suggest you can provide stronger proof I am wrong that I am proposing to prove I am right?
If you're just saying you think I am stupid, because you know the market so much better than me my standard reply is as follows;
" If you'd like to propose, explain and track a strategy you think will outperform this we can both keep our records and that will best determine who's opinions have profitability. It seems something that would be good for the community. "
Pics or it didn't happen. Only analysts and economists are paid for opinions. My job demands a far more practical approach.
FMH 4 - "What REALLY happened with (insert news related thing) this and your guesses were just lucky".
If I said it would happen yesterday, then set trades for it happening and profited from them today; it does not matter to me the reason you give me for it tomorrow. If you choose to view the market as being like this, you may. If it ever does start to become more relevant to me making profits or not, I will pay attention to other things. Right now, I do not follow them closely and that has never mattered. Either I am consistently lucky, physic or right. Pick the flavor for you.
I will not engage in conversation on any of these points coming from a closed minded perspective. By which I mean you only commenting to tell me why you're right. If you feel someone has to add balance with these comments, go ahead. I encourage people to be scientific in their approach and having different viewpoints helps with this. Do your own experiments.
I will answer honest questions, and will gladly engage people who disagree with me and do so from the perspective of personal study. Usually we can both learn and teach if both of us have firsthand knowledge. This is rare, but enjoyable.
On to GBPUSD. As I said may be possible in the previous post, the trade for the bigger run up post Chicago was missed. This can happen. It's better to miss bad opportunities than squander good money on bad ones, and at the time I had the option of entering, there was no way to tell the difference between these - so I did nothing.
Later in the day price continued to be consistent with the formations of a spike pattern. Here I engaged the market.
GBPUSD 1 Minute
My entering pattern was to first open two small trades with a 13 pip stop. This was an emergency stop, I always planned to tighten it up (it'd only hit in the event of an immediate capitulation). The risk here was about 0.15%. When the market moved a bit lower, I entered more positions and having more data felt better about where to place stops. All stops went to 6 pips or less (bigger position, same starting risk).
As price reached the best level, I opened my largest trade. Stop went from 3 - 6 pips with big stops being 2 pips. Effective stop something like 3-4 pips. Targets hit for 10 - 12 pips, giving an effective pay off on risk just short of 1:3. I do not use aggressive position sizing in this part of the trade (usually it already carries made profits), so the net risk was low. Around 0.25%. Net gain in positions was 0.6%.
GBPUSD 1 min
From left to right the positions get bigger. Notice also the biggest position (low) takes profit a good bit before where I forecast the high (bulk close). This trade hitting should give assurance of breakeven on this trade, so the risk on capital is gone on this trade on a double top move, then profits accumulated in the breakout.
Results for the day;
Current Gain = 0.65%
Max risk exposure possible - 0.4%
Max real equity drawdown - < 0.2%
Due to not being entirely available for trading today this was a big under-performance of what the strategy could have achieved. It's been a decent example day to show the logistics of how the trades can form. To make 2 - 3% today with the same draw-down was possible.
Part Onesubmitted by whatthefx to Forex [link] [comments]
It will benefit your understanding of this to take some time to read through at least all of these post, and also my other ones. Over the last weeks I've introduced some concepts I think are useful, demonstrated how a person could use them to make profit and presented for consideration ways you can go and test if what I am saying is true in your trading. Now I am going to start to bring this all together to show you how a person can plan well ahead and be well prepared to profit in Forex.
Three weeks ago I gave a swing analysis on GBPUSD (as part of speaking about a broader idea of trend following). It said this.
Long term bearish picture here of 1.190. An area I expect us to have a big move in possibly feature a 100 plus pip candle (dare I speculate ... news event, or random fundamental). We got into 1.199s, and then price started to stall.
I then explain by "ping swing" theory and pointed out all the indicators this ping swing was coming.
When explaining what the ping swing was all about, I said it set up the really big move in the other direction. The breakout. What I more commonly refer to as the impulse leg.
So based upon all of these factors I am prepared to trade a move that may be surprisingly strong from a really specific area (will get into trades later). Everything in my analysis form and strategies design allow me to be ready and position my trades to profit from some wild event there may be in the coming week or two weeks (maybe three ... four, eeek. I'm hedging). Now I'm not saying I know there is going to be a certain type of Brexit news ... I do not care. I'm not saying we should think it's very possible the FOMC spikes high and then fucking crashes (surely something to do with that illusive "pricing in" thing) ... I do not care. I am not predicting these fundamental events.
What I am saying is based upon the information I have shared with you so far, a person can design a trade plan that would position them for this sort of price action, and this sort of price action almost always happens when there's a news event. Got that? Think it's very possible there is a huge swing coming, entirely unrelated to any news events that may happen in the future that I could not know about now.
What sort of price action could we expect ... ?
We already have the trade plan for that last week.
GBPUSD closed near the high on some of my brokers but crashed 30 pips in the last minute of the day on another, and this probably means it's opening up gap low. Exactly what we'd expect.
Do this experiment, find this double top pattern. Find the "confirmation" move I explained, and then honestly think where you'd set a stop "safe above the highs" here. Count how many pips it went past that. Probably about 5 - 7 and then crashed. That's the trap.
Lays the next trap. For this let's recap the traps I've shown you and see where we are in the cycle of possible mistakes.
Last week I said we were at the transition from black to blue. Then "the news" made that happen. Then late in the week I said look for spike out trend continuations. All this happened.
So selling into that event was either devastatingly unlucky, there was nothing you can do about it and it is what it is if it happens again (frequently). Or, it was selling mistake #2 (shown as 4 here near the low)
What do we have after selling mistake number #2. Selling mistake number #3 (no need to re-invest the wheel).
#3 is a 5 (just to be confusing), and this is "deep correction" selling mistake. Would you think it would be fair to agree anyone selling the double top like move we've discussed here would have made the mistake of thinking a deep correction was a trend continuation? People will have. They do every cycle. This is why I can "predict" it. Or, it's lucky and there's no way you can know. Pick your flavor.
Mistake #4 . Single candle price action. In this case I am forecasting this to be the crash pre-close (on some brokers) or the gap down (a gap is just a big swing). This looks like the real deal on the trend continuation. People will sell into this early in the week. It may be in the form of a big gap down, it making it's low early in the week and then people sell the gap fill (or part retrace). Anyway, the better trade is on the other side of this. We have not yet hit the 61.8 fib and this sort of sell off would be a "known" seller trap.
#5 tends to form when price first hits the 61.8, There is an immediate and dramatic sell off. Then there is a spike out of the 61.8 and the real trend move begins. We should watch for this sort of action Tue/Wed and should expect to be seeing it (very specifically) close to 1.2343.
Which is no surprise to see shaping up since this specific PA is what I started speaking about when it was at the lows.
So if we see these further confirms;
1 - Price spikes/gaps down and then returns aggressively to the high
2 - Price hits 61.8 and falls quickly
3 - These things happen in the immediate foreshadow of a news event (FOMC?)
All of these things would be consistent with things that happen before the following scenario:
1 - News is released. It's unexpected. Either the number is off, it was random (tweet etc) or the market just moved totally different from how it would be expected to (cue theories to fill gaps).
2 - Price moves rapidly up. It makes a "new breakout" of a "key level", and then capitulates. 100 + pips can be moved in very short periods of time.
3 - After this move has happened, there is a sharp low made and we uptrend for the next few weeks.
I am not "predicting the future", but this is a viable trade plan for the coming week(s). We sell GBPUSD 1.2340 area. Stop 1.2410 or so. We target 1.1900. Then we look for the market to make a low (after a very volatile fall) in the 1.1850 sort of area. As a rule of thumb (and I am not being flippant, this is true), if you see people in forums asking what just happened, that will probably be your cue to go and find this trade on your chart. This is a regular indicator.
I think if this is to happen this week, the high will be made Wed/Thurs and crash late week. If it's not to happen this week, a ranging week may be ahead. Even a couple weeks. These would not invalidate the analysis, for the market to range a few weeks to form a "strong high" and then do this take out move I've described is also something to be expected. I would be surprised to not see GBPUSD drop 300 pip from the high in coming month.
Prepare for the Impulse!
TL;DR - I will try and flip an account from $50 or less to $1,000 over 2019. I will post all my account details so my strategy can be seen/copied. I will do this using only three or four trading setups. All of which are simple enough to learn. I will start trading on 10th January.submitted by inweedwetrust to Forex [link] [comments]
As I see it there are two mains ways to understand how to make money in the markets. The first is to know what the biggest winners in the markets are doing and duplicating what they do. This is hard. Most of the biggest players will not publicly tell people what they are doing. You need to be able to kinda slide in with them and see if you can pick up some info. Not suitable for most people, takes a lot of networking and even then you have to be able to make the correct inferences.
Another way is to know the most common trades of losing traders and then be on the other side of their common mistakes. This is usually far easier, usually everyone knows the mind of a losing trader. I learned about what losing traders do every day by being one of them for many years. I noticed I had an some sort of affinity for buying at the very top of moves and selling at the very bottom. This sucked, however, is was obvious there was winning trades on the other side of what I was doing and the adjustments to be a good trader were small (albeit, tricky).
Thus began the study for entries and maximum risk:reward. See, there have been times I have bought aiming for a 10 pip scalps and hit 100 pips stops loss. Hell, there have been times I was going for 5 pips and hit 100 stop out. This can seem discouraging, but it does mean there must be 1:10 risk:reward pay-off on the other side of these mistakes, and they were mistakes.
If you repeatedly enter and exit at the wrong times, you are making mistakes and probably the same ones over and over again. The market is tricking you! There are specific ways in which price moves that compel people to make these mistakes (I won’t go into this in this post, because it takes too long and this is going to be a long post anyway, but a lot of this is FOMO).
Making mistakes is okay. In fact, as I see it, making mistakes is an essential part of becoming an expert. Making a mistake enough times to understand intrinsically why it is a mistake and then make the required adjustments. Understanding at a deep level why you trade the way you do and why others make the mistakes they do, is an important part of becoming an expert in your chosen area of focus.
I could talk more on these concepts, but to keep the length of the post down, I will crack on to actual examples of trades I look for. Here are my three main criteria. I am looking for tops/bottoms of moves (edge entries). I am looking for 1:3 RR or more potential pay-offs. My strategy assumes that retail trades will lose most of the time. This seems a fair enough assumption. Without meaning to sound too crass about it, smart money will beat dumb money most of the time if the game is base on money. They just will.
So to summarize, I am looking for the points newbies get trapped in bad positions entering into moves too late. From these areas, I am looking for high RR entries.
I call this one the “Lightning Bolt correction”, but it is most commonly referred to as a “two leg correction”. I call it a “Lightning Bolt correction” because it looks a bit like one, and it zaps you. If you get it wrong.
Once I see price making the first sell-off move and then begin to rally towards the highs again, I am waiting for a washout spike low. The common trades mistakes I am trading against here is them being too eager to buy into the trend too early and for the to get stopped out/reverse position when it looks like it is making another bearish breakout. Right at that point they panic … literally one candle under there is where I want to be getting in. I want to be buying their stop loss, essentially. “Oh, you don’t want that ...okay, I will have that!”
I need a precise entry. I want to use tiny stops (for big RR) so I need to be cute with entries. For this, I need entry rules. Not just arbitrarily buying the spike out. There are a few moving parts to this that are outside the scope of this post but one of my mains ways is using a fibs extension and looking for reversals just after the 1.61% level. How to draw the fibs is something else that is outside the scope of this but for one simple rule, they can be drawn on the failed new high leg.
I am looking for a few specific things for a prime setup. Firstly, I am looking for the false hope candles, the ones that look like they will reverse the market and let those buying too early get out break-even or even at profit. In this case, you can see the hammer and engulfing candle off the 127 level, then it spikes low in that “stop-hunt” sort of style.
Secondly I want to see it trading just past my entry level (161 ext). This rule has come from nothing other than sheer volume. The amount of times I’ve been stopped out by 1 pip by that little sly final low has gave birth to this rule. I am looking for the market to trade under support in a manner that looks like a new strong breakout. When I see this, I am looking to get in with tiny stops, right under the lows. I will also be using smaller charts at this time and looking for reversal clusters of candles. Things like dojis, inverted hammers etc. These are great for sticking stops under.
Important note, when the lightning bolt correction fails to be a good entry, I expect to see another two legs down. I may look to sell into this area sometimes, and also be looking for buying on another couple legs down. It is important to note, though, when this does not work out, I expect there to be continued momentum that is enough to stop out and reasonable stop level for my entry. Which is why I want to cut quick. If a 10 pips stop will hit, usually a 30 pips stop will too. Bin it and look for the next opportunity at better RR.
Another setup I am watching for is harmonic patterns, and I am using these as a multi-purpose indicator. When I see potentially harmonic patterns forming, I am using their completion level as take profits, I do not want to try and run though reversal patterns I can see forming hours ahead of time. I also use them for entering (similar rules of looking for specific entry criteria for small stops). Finally, I use them as a continuation pattern. If the harmonic pattern runs past the area it may have reversed from, there is a high probability that the market will continue to trend and very basic trend following strategies work well. I learned this from being too stubborn sticking with what I thought were harmonic reversals only to be ran over by a trend (seriously, everything I know I know from how it used to make me lose).
A method of spotting these sorts of M/W harmonics is they tend to form after a second spike out leg never formed. When this happens, it gives me a really good idea of where my profit targets should be and where my next big breakout level is. It is worth noting, larger harmonics using have small harmonics inside them (on lower time-frames) and this can be used for dialling in optimum entries. I also use harmonics far more extensively in ranging markets. Where they tend to have higher win rates.
Next setup is the good old fashioned double bottoms/double top/one tick trap sort of setup. This comes in when the market is highly over extended. It has a small sell-off and rallies back to the highs before having a much larger sell-off. This is a more risky trade in that it sells into what looks like trending momentum and can be stopped out more. However, it also pays a high RR when it works, allowing for it to be ran at reduced risk and still be highly profitable when it comes through.
From these sorts of moves, I am always looking for a follow up buy if it forms a lightning bolt sort of setup.
All of these setups always offer 1:3 or better RR. If they do not, you are doing it wrong (and it will be your stop placement that is wrong). This is not to say the target is always 1:3+, sometimes it is best to lock in profits with training stops. It just means that every time you enter, you can potentially have a trade that runs for many times more than you risked. 1:10 RR can be hit in these sorts of setups sometimes. Paying you 20% for 2% risked.
I want to really stress here that what I am doing is trading against small traders mistakes. I am not trying to “beat the market maker”. I am not trying to reverse engineer J.P Morgan’s black boxes. I do not think I am smart enough to gain a worthwhile edge over these traders. They have more money, they have more data, they have better softwares … they are stronger. Me trying to “beat the market maker” is like me trying to beat up Mike Tyson. I might be able to kick him in the balls and feel smug for a few seconds. However, when he gets up, he is still Tyson and I am still me. I am still going to be pummeled.
I’ve seen some people that were fairly bright people going into training courses and coming out dumb as shit. Thinking they somehow are now going to dominate Goldman Sachs because they learned a chart pattern. Get a grip. For real, get a fucking grip. These buzz phrases are marketeering. Realististically, if you want to win in the markets, you need to have an edge over somebody.
I don’t have edges on the banks. If I could find one, they’d take it away from me. Edges work on inefficiencies in what others do that you can spot and they can not. I do not expect to out-think a banks analysis team. I know for damn sure I can out-think a version of me from 5 years ago … and I know there are enough of them in the markets. I look to trade against them. I just look to protect myself from the larger players so they can only hurt me in limited ways. Rather than letting them corner me and beat me to a pulp (in the form of me watching $1,000 drop off my equity because I moved a stop or something), I just let them kick me in the butt as I run away. It hurts a little, but I will be over it soon.
I believe using these principles, these three simple enough edge entry setups, selectiveness (remembering you are trading against the areas people make mistakes, wait for they areas) and measured aggression a person can make impressive compounded gains over a year. I will attempt to demonstrate this by taking an account of under $100 to over $1,000 in a year. I will use max 10% on risk on a position, the risk will scale down as the account size increases. In most cases, 5% risk per trade will be used, so I will be going for 10-20% or so profits. I will be looking only for prime opportunities, so few trades but hard hitting ones when I take them.
I will start trading around the 10th January. Set remind me if you want to follow along. I will also post my investor login details, so you can see the trades in my account in real time. Letting you see when I place my orders and how I manage running positions.
I also think these same principles can be tweaked in such a way it is possible to flip $50 or so into $1,000 in under a month. I’ve done $10 to $1,000 in three days before. This is far more complex in trade management, though. Making it hard to explain/understand and un-viable for many people to copy (it hedges, does not comply with FIFO, needs 1:500 leverage and also needs spreads under half a pip on EURUSD - not everyone can access all they things). I see all too often people act as if this can’t be done and everyone saying it is lying to sell you something. I do not sell signals. I do not sell training. I have no dog in this fight, I am just saying it can be done. There are people who do it. If you dismiss it as impossible; you will never be one of them.
If I try this 10 times with $50, I probably am more likely to make $1,000 ($500 profit) in a couple months than standard ideas would double $500 - I think I have better RR, even though I may go bust 5 or more times. I may also try to demonstrate this, but it is kinda just show-boating, quite honestly. When it works, it looks cool. When it does not, I can go bust in a single day (see example https://www.fxblue.com/users/redditmicroflip).
So I may or may not try and demonstrate this. All this is, is just taking good basic concepts and applying accelerated risk tactics to them and hitting a winning streak (of far less trades than you may think). Once you have good entries and RR optimization in place - there really is no reason why you can not scale these up to do what may people call impossible (without even trying it).
I know there are a lot of people who do not think these things are possible and tend to just troll whenever people talk about these things. There used to be a time when I’d try to explain why I thought the way I did … before I noticed they only cared about telling me why they were right and discussion was pointless. Therefore, when it comes to replies, I will reply to all comments that ask me a question regarding why I think this can be done, or why I done something that I done. If you are commenting just to tell me all the reasons you think I am wrong and you are right, I will probably not reply. I may well consider your points if they are good ones. I just do not entering into discussions with people who already know everything; it serves no purpose.
I want to talk a bit more about using higher percentage of risk than usual. Firstly, let me say that there are good reasons for risk caps that people often cite as “musts”. There are reasons why 2% is considered optimum for a lot of strategies and there are reasons drawing down too much is a really bad thing.
Please do not be ignorant of this. Please do not assume I am, either. In previous work I done, I was selecting trading strategies that could be used for investment. When doing this, my only concern was drawdown metrics. These are essential for professional money management and they are also essential for personal long-term success in trading.
So please do not think I have not thought of these sorts of things Many of the reasons people say these things can’t work are basic 101 stuff anyone even remotely committed to learning about trading learns in their first 6 months. Trust me, I have thought about these concepts. I just never stopped thinking when I found out what public consensus was.
While these 101 rules make a lot of sense, it does not take away from the fact there are other betting strategies, and if you can know the approximate win rate and pay-off of trades, you can have other ways of deriving optimal bet sizes (risk per trade). Using Kelly Criterion, for example, if the pay-off is 1:3 and there is a 75% chance of winning, the optimal bet size is 62.5%. It would be a viable (high risk) strategy to have extremely filtered conditions that looked for just one perfect set up a month, makingover 150% if it was successful.
Let’s do some math on if you can pull that off three months in a row (using 150% gain, for easy math). Start $100. Month two starts $250. Month three $625. Month three ends $1,562. You have won three trades. Can you win three trades in a row under these conditions? I don’t know … but don’t assume no-one can.
This is extremely high risk, let’s scale it down to meet somewhere in the middle of the extremes. Let’s look at 10%. Same thing, 10% risk looking for ideal opportunities. Maybe trading once every week or so. 30% pay-off is you win. Let’s be realistic here, a lot of strategies can drawdown 10% using low risk without actually having had that good a chance to generate 30% gains in the trades it took to do so. It could be argued that trading seldomly but taking 5* the risk your “supposed” to take can be more risk efficient than many strategies people are using.
I am not saying that you should be doing these things with tens of thousands of dollars. I am not saying you should do these things as long term strategies. What I am saying is do not dismiss things out of hand just because they buck the “common knowns”. There are ways you can use more aggressive trading tactics to turn small sums of money into they $1,000s of dollars accounts that you exercise they stringent money management tactics on.
With all the above being said, you do have to actually understand to what extent you have an edge doing what you are doing. To do this, you should be using standard sorts of risks. Get the basics in place, just do not think you have to always be basic. Once you have good basics in place and actually make a bit of money, you can section off profits for higher risk versions of strategies. The basic concepts of money management are golden. For longevity and large funds; learned them and use them! Just don’t forget to think for yourself once you have done that.
Okay, I have thought this through a bit more and decided I don't want to post my live account investor login, because it has my full name and I do not know who any of you are. Instead, for copying/observing, I will give demo account login (since I can choose any name for a demo).
I will also copy onto a live account and have that tracked via Myfxbook.
I will do two versions. One will be FIFO compliant. It will trade only single trade positions. The other will not be FIFO compliant, it will open trades in batches. I will link up live account in a week or so. For now, if anyone wants to do BETA testing with the copy trader, you can do so with the following details (this is the non-FIFO compliant version).
Account tracking/copying details.
IC Markets MT4
Account number: 10307003
Investor PW: lGdMaRe6
(Not FIFO compliant)
Valid and Invalid Complaints.
There are a few things that can pop up in copy trading. I am not a n00b when it comes to this, so I can somewhat forecast what these will be. I can kinda predict what sort of comments there may be. Some of these are valid points that if you raise I should (and will) reply to. Some are things outside of the scope of things I can influence, and as such, there is no point in me replying to. I will just cover them all here the one time.
Valid complains are if I do something dumb or dramatically outside of the strategy I have laid out here. won't do these, if I do, you can pitchfork ----E
“Oi, idiot! You opened a trade randomly on a news spike. I got slipped 20 pips and it was a shit entry”.
Perfectly valid complaint.
“Why did you open a trade during swaps hours when the spread was 30 pips?”
“You left huge trades open running into the weekend and now I have serious gap paranoia!”
These are examples of me doing dumb stuff. If I do dumb stuff, it is fair enough people say things amounting to “Yo, that was dumb stuff”.
“You bought EURUSD when it was clearly a sell!!!!”
Okay … you sell. No-one is asking you to copy my trades. I am not trading your strategy. Different positions make a market.
“You opened a position too big and I lost X%”.
No. Na uh. You copied a position too big. If you are using a trade copier, you can set maximum risk. If you neglect to do this, you are taking 100% risk. You have no valid compliant for losing. The act of copying and setting the risk settings is you selecting your risk. I am not responsible for your risk. I accept absolutely no liability for any losses.
*Suggested fix. Refer to risk control in copy trading software
“You lost X trades in a row at X% so I lost too much”.
Nope. You copied. See above. Anything relating to losing too much in trades (placed in liquid/standard market conditions) is entirely you. I can lose my money. Only you can set it up so you can lose yours. I do not have access to your account. Only mine.
*Suggested fix. Refer to risk control in copy trading software
“Price keeps trading close to the pending limit orders but not filling. Your account shows profits, but mine is not getting them”.
This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours.
* Suggested fix. Compare the spread on your broker with the spread on mine. Adjust your orders accordingly. Buy limit orders will need to move up a little. Sell limit orders should not need adjusted.
“I got stopped out right before the market turned, I have a loss but your account shows a profit”.
This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there differences in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours.
** Suggested fix. Compare the spread on your broker with the spread on mine. Adjust your orders accordingly. Stop losses on sell orders will need to move up a bit. Stops on buy orders will be fine.
“Your trade got stopped out right before the market turned, if it was one more pip in the stop, it would have been a winner!!!”
Yeah. This happens. This is where the “risk” part of “risk:reward” comes in.
“Price traded close to take profit, yours filled but mines never”.
This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there differences in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours.
(Side note, this should not be an issue since when my trade closes, it should ping your account to close, too. You might get a couple less pips).
*** Suggested fix. Compare the spread on your broker with the spread on mine. Adjust your orders accordingly. Take profits on buys will need to move up a bit. Sell take profits will be fine.
“My brokers spread jumped to 20 during the New York session so the open trade made a bigger loss than it should”.
Your broker might just suck if this happens. This is brokerage. I have no control over this. My trades are placed to profit from my brokerage conditions. I do not know, so can not account for yours. Also, if accounting for random spread spikes like this was something I had to do, this strategy would not be a thing. It only works with fair brokerage conditions.
*Suggested fix. Do a bit of Googling and find out if you have a horrific broker. If so, fix that! A good search phrase is; “(Broker name) FPA reviews”.
“Price hit the stop loss but was going really fast and my stop got slipped X pips”.
This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there differences in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours.
If my trade also got slipped on the stop, I was slipped using ECN conditions with excellent execution; sometimes slips just happen. I am doing the most I can to prevent them, but it is a fact of liquidity that sometimes we get slipped (slippage can also work in our favor, paying us more than the take profit would have been).
“Orders you placed failed to execute on my account because they were too large”.
This is brokerage. I have no control over this. Margin requirements vary. I have 1:500 leverage available. I will not always be using it, but I can. If you can’t, this will make a difference.
“Your account is making profits trading things my broker does not have”
I have a full range of assets to trade with the broker I use. Included Forex, indices, commodities and cryptocurrencies. I may or may not use the extent of these options. I can not account for your brokerage conditions.
I think I have covered most of the common ones here. There are some general rules of thumb, though. Basically, if I do something that is dumb and would have a high probability of losing on any broker traded on, this is a valid complain.
Anything that pertains to risk taken in standard trading conditions is under your control.
Also, anything at all that pertains to brokerage variance there is nothing I can do, other than fully brief you on what to expect up-front. Since I am taking the time to do this, I won’t be a punchbag for anything that happens later pertaining to this.
I am not using an elitist broker. You don’t need $50,000 to open an account, it is only $200. It is accessible to most people - brokerage conditions akin to what I am using are absolutely available to anyone in the UK/Europe/Asia (North America, I am not so up on, so can’t say). With the broker I use, and with others. If you do not take the time to make sure you are trading with a good broker, there is nothing I can do about how that affects your trades.
I am using an A book broker, if you are using B book; it will almost certainly be worse results. You have bad costs. You are essentially buying from reseller and paying a mark-up. (A/B book AKA ECN/Market maker; learn about this here). My EURUSD spread will typically be 0.02 pips or so, if yours is 1 pip, this is a huge difference.
These are typical spreads I am working on.
Check the full range of spreads on Forex, commodities, indices and crypto.
Please understand I want nothing from you if you benefit from this, but I am also due you nothing if you lose. My only term of offering this is that people do not moan at me if they lose money.
I have been fully upfront saying this is geared towards higher risk. I have provided information and tools for you to take control over this. If I do lose people’s money and I know that, I honestly will feel a bit sad about it. However, if you complain about it, all I will say is “I told you that might happen”, because, I am telling you that might happen.
Make clear headed assessments of how much money you can afford to risk, and use these when making your decisions. They are yours to make, and not my responsibility.
Crazy Kelly Compounding: $100 - $11,000 in 6 Trades.
$100 to $11,000 in 6 trades? Is it a scam? Is it a gamble? … No, it’s maths.
Common sense risk disclaimer: Don’t be a dick! Don’t risk money you can’t afford to lose. Do not risk money doing these things until you can show a regular profit on low risk.
Let’s talk about Crazy Kelly Compounding (CKC). Kelly criterion is a method for selecting optimal bet sizes if the odds and win rate are known (in other words, once you have worked out how to create and assess your edge). You can Google to learn about it in detail. The formula for Kelly criterion is;
((odds-1) * (percentage estimate)) - (1-percent estimate) / (odds-1) X 100
Now let’s say you can filter down a strategy to have a 80% win rate. It trades very rarely, but it had a very high success rate when it does. Let’s say you get 1:2 RR on that trade. Kelly would give you an optimum bet size of about 60% here. So if you win, you win 120%. Losing three trades in a row will bust you. You can still recover from anything less than that, fairly easily with a couple winning trades.
This is where CKC comes in. What if you could string some of these wins together, compounding the gains (so you were risking 60% each time)? What if you could pull off 6 trades in a row doing this?
Here is the math;
This shows years, substitute years for trades. 6 trades returns $11,338! This can be done. The question really is if you are able to dial in good enough entries, filter out enough sub-par trades and have the guts to pull the trigger when the time is right. Obviously you need to be willing to take the hit, obviously that hit gets bigger each time you go for it, but the reward to risk ratio is pretty decent if you can afford to lose the money.
We could maybe set something up to do this on cent brokers. So people can do it literally risking a couple dollars. I’d have to check to see if there was suitable spreads etc offered on them, though. They can be kinda icky.
Now listen, I am serious … don’t be a dick. Don’t rush out next week trying to retire by the weekend. What I am showing you is the EXTRA rewards that come with being able to produce good solid results and being able to section off some money for high risk “all or nothing” attempts; using your proven strategies.
I am not saying anyone can open 6 trades and make $11,000 … that is rather improbable. What I am saying is once you can get the strategy side right, and you can know your numbers; then you can use the numbers to see where the limits actually are, how fast your strategy can really go.
This CKC concept is not intended to inspire you to be reckless in trading, it is intended to inspire you to put focus on learning the core skills I am telling you that are behind being able to do this.
The double top pattern is one of the most common technical patterns used by Forex traders. It’s certainly one of my go-to methods of identifying a potential top. Just as the name implies, this price action pattern involves the formation of two highs at a critical resistance level. Looking for a complete guide on how to trade double tops and bottoms in the Forex market? Then look no further. Whether you’re a complete beginner or an experienced trader, I’m sure you’ll find a few handy trading tips in the following article.. We’ve covered everything you need to know to successfully trade double tops and bottoms, and will show you a few simple methods that can be A double top is a reversal pattern that is formed after there is an extended move up. The “tops” are peaks which are formed when the price hits a certain level that can’t be broken. After hitting this level, the price will bounce off it slightly, but then return back to test the level again. Market chatter jittery over recent gains The Nasdaq has been on a decent run recently but it could be in the process of forming a double top. Take a look at the chart below for the pattern forming forex mentoring programs 31 replies. Price pattern scanner where I choose the pattern 4 replies. Backtesting programs 18 replies. MT working with other programs 6 replies. Tradeing software/programs 11 replies
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