Portfolio Optimization: Invest Logically to Ensure the Highest ROI

Portfolio optimization

Portfolio optimization is something that stock traders typically are more concerned with than other traders. However, if you are trading multiple markets, we should at least be aware of the general idea of portfolio optimization.

The idea behind optimization is to make a portfolio, or in other words the group of investments that you are participating in, perform better than random stocks. The rate of return is without a doubt the largest portion of optimization, but you also have to worry about efficiency, and of course other things such as transaction costs. Quite frankly, in the Forex world, transaction costs are built-in with the spread, just as they are in the CFD markets. However, there are a few things that I would mention as far as portfolio optimization is concerned.

Correlation is the biggest thing you need to be aware of. There are some assets that move together. For example, the Australian dollar tends to rise and fall with the price of gold. So if you were to go long the AUD/USD pair, and go long the gold CFD, you would be putting yourself at risk because both could fall at the same time and do quite a bit of damage. Ultimately though, what you can do is mitigate your risk of buying trading uncorrelated markets.

For example, you could buy the DAX CFD, while shorting the USD/CAD. These are 2 markets that have absolutely nothing to do with each other, and have very little in the way of correlation. The idea is that both markets can move in the direction you need them to, and not hurt you. Or, one could go in the right direction and the other one could fall against you, but over the longer term you should essentially “even out” when it comes to your returns.

This is a huge subject that takes a lot of study, but it is something you should be aware of. Look for the correlations between currencies and CFD markets, and learn not to overextend your portfolio and one direction by accident.

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How to Find the Right Trade Size and Trade Risk Free

Do you want to know more about trade size and how to find the right one? Watch our latest video to find out how to approach the size of a trade to get profitable trading results and trade risk free.

How to Find the Right Trade Size – A simple guide

One of the most important things that you can do as a traitor is protect your account. One of the most dangerous things you can do is to trade sizes that are just simply unacceptable for the amount of risk capital that you have. Trade size is something that a lot of traders seem to have to learn about the hard way.

There are several ways to approach the size of a trade, but the most common is to base it on a percentage of your total account size. For example, if you believe that an acceptable amount to risk per trade is 5%, then you just simply take 5% of your account size and risk that much on the trade. So, if you need to have 50 pips as your stop loss, you need to do the math and figure out how much you can trade.

A lot of this comes down to cover, but the reality is that there is a certain amount of mathematics involved. Simply put, the more you risk on a particular trade, the more likely it is to do severe damage to your account. Yes, you can make large amounts of money at fairly quick manner, but at the same time you can lose drastic amounts of your account in one swift move. Having said that, it’s vital that you find the right trade size.

Most traders in the Forex world seemed to risk anywhere from 1-2% per trade. Ultimately, the right sized position is up to you but if you risk half of your account on one single trade, you could cause quite a bit of trouble. On the other hand, if you risk very small amounts per every trade, you can stay in the game much longer, and let the concept of compounding interest take hold and accelerate your profits.

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Which pairs

Knowing which currency past to trade, how do you figure out which currency is to trade at any given time. Well the answer is by knowing your fundamental analysis.
Now fundamental analysis is the underlying reasons for why a currency is being either bought or sold. Now all I recently purchased a car for my family. Now I didn’t just go out and buy the very first car but I saw for sale. Now I did my research. I wanted to get the car that met my criteria. I wanted a car have a good safety record for my family, was suitable for long journeys, etc. So often my research I then look to getting a good car at a good price.
Now buying in selling currencies is done by exactly the same principles. You need to focus on the reasons for why people are buying or selling currencies. And fundamental analysis is the way that the vast majority of professional firms trade. If like many firms invest thousands and thousands of dollars in getting up to date market news straight into the trading desks. Every day, by myself, we’ll look at Bloomberg and Reuters feeds in order to help me to decide which currencies to trade.
Fundamental analysis is the reasons why our currency is moving the way it does and you want to be buying the currency used to have fundamental reasons to be bought and sending the currencies but how fundamental reasons to be sold and the very best trades all when you pair up a strong currency with a weak currency, it’s common sense really. So for example, if one central bank surprises a market by raising interest rates, that currency will likely appreciate and if at the same time another central bank surprised markets by cutting interest rates that currency will likely depreciate. You would them pass these currencies with opposing outlooks against the chopper as your trade able currency path and you would almost certainly make a very healthy profits in not extreme example. I’ll see that is an extreme example but the principle is important.
Weak currencies against strong currencies and vice versa to get the best rates and the fundamental price of each currency is based upon the expectations of the market, what’s going to happen next, what’s the mood of the market, on any given individual day market expectations and move revolves around the central bank is going to be doing.
Next so the central bank should be your focus. Let me give an example recently which happened just on Friday gone and it was set in the non-farm payroll day and president trump tweeted in a not very subtle move is that I’m really looking forward to the job numbers today and Kenny traders were eyeing the job report and Kenny traders were actually thinking hang on if president trump is saying I’m looking for the jobs reports today, he’s off your using the data. So we can expect the US still appreciate into the jobs report and sure enough from the morning soon as president trump issued his decree the dollar, yen was appreciating all through the London, New York session as traders awaited the non-farm payroll. So that’s a good example.
Then of knowing what to try it, knowing what the market is thinking and trying to preempt the next move by the central banks. So which they look, what’s the latest news out free currency, has that been any top tier data released, what is that mean what’s the central bank focusing on, is the important data that’s been released and if it is look to trade that currency path, I gates in opposite path as you go in the opposite direction by doing this and then only applying your technical strategy to these currencies, you are rapidly and increasing your odds and chances are trading successfully every single day.

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Using Volume Profile Analysis

Hello and welcome to this video from Diary of a traitor. Today we’re going to be going over volume at price analysis or some people like to call it the volume profile now volume and price analysis differs from the regular volume because instead of looking at the volume down here where it’s telling us how much of something was traded over a period of time and then it usually shades it red or green to say there were more buyers or sellers so where I’m looking at now there were 1000 or 1631 thousand contracts or stocks or coins or units of currency that were treated over this hour. That that we traded and that most of the volume was from people selling. So that gives us a good idea of what is happening with a timeframe, but it doesn’t tell us what is happening with the price and this is one of the hidden gems and kind of the greatest advantages for intraday trading or day trading. And. Sometimes you can find this for free on some software, but in at least in trading view, this is a this is a paid software or paid version and the volume profile we’re going to go to session volume. So the session volume only brings up what is what is the volume profile appears for just the day that it’s happening. So the open of Crypto currencies on trading view as that ends and closes and opens at 7:00 p.m. Central Standard Time. And so this is the volume profile but I’d like to I’d like to get rid of the Histogram a little bit and then create larger value areas. Rose rather and then I like to decrease the value area just a little bit. And then what we see here is the volume profile for each session. And if you can see that essentially what we have is we have a we have a horizontal representation of volume versus a vertical so were vertical volume tells us what has happened and how much has been traded during a certain set of time. This is telling us how much of something has traded at a particular price and if we were to even zoom in a bit here. And we were to apply the values. Very hard to see right now what we can see that the. For instance right here this says that we had 38 at this price level of about 82 58 in bitcoin and there were 38 bitcoin bought versus 56 sold. And so what this does the volume profile it tells us where most of the activity happens in this red line. Tells us where our where our point of control they call this the V.P. Ossi the pop or Paak PEOC the point of control is where the most of the volume at a price has been traded. So the price has spent most of the time trading at this 82 32 value area. And what’s the point of control tells us. Is that if prices are trading below the point of control, we are in an in a bearish and a weak condition and if we are trading above we are in a bullish in a strong condition.

And you’ll see that as the forms as the point of control forms we can get into conditions where it acts as a natural support and resistance there. So the price was trading here fell down came back up to visit that formed a resistance area and it broke down away. That became a lot of selling pressure. Additionally, when we came down to the current price range we are trading with a point of control down here at seventy nine hundred.

We are trading below that and we have not reached back up to it so we are considered to be in a in a weak and bearish cycle here. But we can look back and see over time. A thing to notice on on your charts is looking at. How the point of controls is forming are they ascending or descending and as the gap between them expanding that can tell us a lot. What we really like to see and identify are these. High volume and low volume nodes so a big peak in volume rate here. This is called a high volume node. And then areas where there’s not a lot of activity those are called Lowboy nodes or I’d like to combine deserts. And so the behavior of these zones is that when price approaches a low volume, area it can, it will a price area that has not had a lot of volume it moves through it really fast and you may not be able to see so much on a on a. On this type of chart volume, but we could look at a different way. So this is great for Intraday trading and looking at how the price action has been over the last few days to trade, but sometimes we need a broader view so we can do a fixed range.

And for fixed range let’s say we want to. Well, let’s go to a daily chart. And then let’s find the beginning of the month. So let’s look for higher Herewill start start on May 1st and we’ll make a fixed range of May 1st and that will go all the way to where we are now. All right, now here’s our volume profile for the current month of May in 2018 and we’ll do the same thing where I like to get a few more bars lower volume areas and get rid of the shade background because this is all I really need. So for the entire month of May, this is what we’ve got so far and the price action we see that the point of control is down here is that the 80 300 value area. And that we are trading below that line. The point of control while it acts as kind of a natural support resistance and it also acts as a natural point to return to. So think of price being attached to the point of control like a rubber band. The further it pulls away the more it wants to snap back up to it. And we have a high degree of probability that when Price comes from a higher or lower end it retraces all the way to the point of control and then goes above it or below whatever direction it is.

We have a high chance of retracing the entire move above here. So in this scenario if we were to trade all the way back above to this point of control on this chart here we have a high probability of actually trading higher and above this. The point of control is also very, very useful to use with natural areas of support and resistance or zones of control based off of Pivot’s if you remember watching a video we did recently together over Pivot’s. Redo pivots point standard if we take a look here this pivot was at 80 400 which is right within the value range of our point of control. So that is telling us that we have a very strong area of support and resistance so if price were to return to this area it would have a very difficult time getting there. Now we should also look at the prior month trading period because that is also going to give us an idea of wall prices falling down below this point of control where could it go. And so we’re going to get session by may want the fixed range. So we’re going to go to April first. And we’re going to trade that entire range here and do the same thing we did for the others. And what do we see here we see that the point of control. In April was down here where we spent the majority of the time trading down at the 68 100 value area. Now what is interesting to take a look at is. So we have what we’re basically looking at a monthly volume profile and we see that price. Trading pretty rapidly above through this area to see where we have this lot of volume here acting as a support zone as we moved up. It was easier to move up because there was not a lot of volume traded in here. And then we start to form another kind of base. We saw a high note form and that was very easy to trade through it. And so the past volume profiles can tell us a lot and if we really want to get a broad view, this is kind of a more dynamic style of. We can, we can get to a. Look at it through the visible range, which will just tell us everything on the chart that is currently visible. It will form that Moim profile. Sometimes just a little bit easier to see the kind of a larger picture view. We’ll go to 50 rows actually probably these 100 rows same volume area. And if we want to go just from the all-time high here we destroyed our screen over there about right there. And so this is the volume profile of the all-time high of set in December 15th to now.

And so what we’re looking at is the work actually treating just slightly below the current value the most traded volume areas and we’re right below the point of control which is 81 78. So that is the point of control on this large swing from the swing high to where we currently are. This is telling us that we are slightly below the point of control and so that is a bearish condition. So we should observe over the next few days and watch to see what price does at these levels because the behavior and the theory behind us says that while this is a high volume no trend and we’re technically trading below its so price has a much easier time moving down than it does moving up. If we ever saw price trading back up to 93 56 or that 93 100 zone. If we look above us all of this price activity very very very open. Not a lot there. If we even want to scroll out and go all the way to let’s go to 20 cent beginning of 2017. And this is our volume profile for 2017 for now. So we can see that the volume profiles actually telling us the poison control is way down here at 1185. And that we’re in.

We’re kind of in the middle of a big trading zone right here. So this is a pretty interesting way to look at it go to our weekly. We can see the whole price history and we can see that over the entire price history of Bitcoin’s chart and trading view the point of control is down at two hundred twelve dollars it seems like a light like kind of a silly value but it’s really not in the long run it’s just telling us where most of the participation has happened. And again, if we were to go with a recent swing low to that all time swing high and we look at where we’re at we’re still sitting right below that that boiling point of the controlled zone of 80 100 80 280 100. And that is what price is currently trading at. And if we see below us that the volume profile starts to decline to lower we go. So it is going to be much easier for price to move lower than it is to move higher. All right. That was just a little intro. And look at volume profile and how it can be used in your trading I hope you find this video very informative and useful and look forward to talking with you in our next videos bye.

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Using the DXY in your trading

Hello and welcome to Diary of a traitor. Today’s video we’re going to go over how to implement the dollar index into your trading if you’re forex trader. The dollar index is it’s just a basket of currencies and their dollar pairs and rates. It shows you how the dollar performing against that basket of currencies. Now most of the dollar index has the euro the euro U.S. Dollar paring it. It also has the pound, dollar the dollar, yen and it has the Swedish kronor in there as well. There’s a lot of discussion about them you know reducing the dollar index because it should probably have the peso in there. The Canadian dollar the Renminbi Chinese currency and balance it all of bit because it’s it has not changed for a long time. But regardless when we see the dollar index it’s giving us an idea of where the dollar is performing against other currencies other dollar pairs and how do we implement this into our trading well. We want to if we are let’s say we trade the euro dollar and I want to do a side by side comparison. So here’s the Euro and then I’ll put the dollar index over here. And if you don’t have the dollar if you don’t know where to find the dollar index we just go to a D X Y and click on CFD that means contracting for difference and it’ll give you this and then just click on it it’ll put it in your watch list and then you can get the dollar index right here. So what you’ll notice is that one great example. And I think something that will all be able to notice is that as the dollar index rises the euro falls. All right, if we look at the current price action right now if we were to highlight that zone, we can see that we’ve had this. These are both hourly charts. We can see that we’ve had three hours of a downtrend in those candlesticks and currently now it looks like we’re having somewhat of a bounce. We look over here we see really just the exact opposite of that move. We have three hours of a rise in the euro followed by a little bit of a top here forming with some selling and this is pretty normal to see because you know the again most of the dollar index is weighted with the euro I think it’s 50 to 56 per cent of it is weighted with the euro. So how does that work with other with other currencies because you know, sometimes it’s not easy to catch a change in the dollar strength when trading the euro because they’re too sensitive. One thing that we can look at is the pound, dollar whatever currency is whatever dollar currency besides the euro. Sometimes we can catch a move that happens and the dollar index before we notice a change in another currency and we sometimes kind of have to do this on a shorter timeframe like a 15 minute timeframe. So this is the pound, dollar on the left and then here is the dollar index on the right. And what I’m looking for is some type of Candlestick pattern or change that indicates we’ll see some move in in price before the dollar index that would happen a little bit before we would see a change in another for the pair. So if I’m looking here to see this was at 745 Mourning’s 745 the morning that one wouldn’t have really tipped anything off. However, with the selling that was going on here the selling is kind of indicating that we had some selling pressure. That was a little bit ahead of the game in the dollar index that we wouldn’t have caught on the pound so we could have capitalized on noticing a drive down in the dollar index by looking at a long trade in the pound. These sometimes these will, this is like an arbitrage opportunity if you want to consider it that, but sometimes we can get a view of this on the daily chart as well because not every move that we see is going to have an inverse reaction.

So on the pound, dollar and then the dollar index what I’m saying is that it is possible to have days where the dollar index is trading down and the pound is trading down but those instances are far and few between. But when you notice them those are good signs that you should, you should take the trade that it’s going to be going. So what I’m what I’m saying is that if you notice that the dollar index is rising and on that same daily chart you see a candlestick or a couple candlesticks that are also rising when the dollar is at the same time.

That’s a good indication that you’re having a lagging move in in the in the pound, dollar and that you can, you could safely entertain a short idea because there’s a bit of a lag in the performance of that pair.

If we look at the first of June where you are right here, here’s the first of June that’s a bullish that’s a bullish looking Candlestick right. Well, rather not know if it’s bulls Candlestick, but we had we had a day where there was more buyers and sellers and that is shared with the pound as well.

But what do we know about this. We know that as we were as we were we’re moving we saw two large and large sell off from a top were pretty top heavy here and then we see the dollar index is actually starting to continue a move lower because then we had a shared bearish Candlestick on the fourth. So both the dollar index and the pound had an up day on the same day and then followed by a down day on the same day. But whereas this is where we use we use our trader’s intuition we use some oscillators so we could use the stochastic RSI on that chart and on this chart as well and looked down and certainly looking at it on these days.

What could we infer from these moves well because the stochastic RSI was on a downward slope. We would know that the dollar index as a whole because it’s so weighted against other currencies we knew that the euro was trending up heavily here, even though the pound wasn’t that we had a good idea that the conditions of our oscillators and the relative trend change that we noticed earlier in the day Zwai told us that a long entry on the close of the daily would have been a nice drive up and that’s exactly what happened.

Now again, you don’t see a lot of these trade opportunities pop up, but when they do you know you should notice them and pay attention to them. Certainly one of the nice ways to kind of gauge where is the if you trade a lot of the dollar pairs like the dollar yen the gold dollar US dollar Canadian dollar et cetera et cetera paying attention to the dollar index is a very good way to kind of gauge the overall strength of that currency with the pairs that you’re trading and that that can really help you determine your intraday trades and your macro weekly trades by gauging how the dollar index is currently operating because certainly if we have a day where we’re if we’re up in the dollar index and we’re up in another non euro pair like the like the pound dollar the Canadian dollar Aussie dollar New Zealand dollar.

If they’re outperforming if they’re trading up during the day the same time as the dollar index is then we need to pay attention to those times because those toys can certainly turn into good trading opportunities. Thank you for watching this video and I look forward to talking with you in the future with our future videos bye.

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Using the 100 and 200 EMA

Video is going to be looking at using the 100 and 200 moving average and your trading now these two moving averages are two of the most widely followed and most popular moving averages that are used in the financial markets. And I’m just going to give you a quick rundown of some examples of how good they are technically. Now obviously when using any technical analysis you always want to combine that with some fundamental reasons for the trial. You don’t want to just be blindly following the tech because when you do, you’re going to find yourself very frustrated and you’re not going to be getting the best out of your trading. With that being said, whether the 100 and 200 moving average do offer excellent places to enter the market. And I just wanted to give this one example. This is the Australian dollar, Japanese yen Pan Am I have in front of me the four hour chart. Now if you were following the Australian dollar, Japanese yen you would know that this pair has been in a bearish about that downtrend for some time. There’s been a very important fundamental drivers for that and the fundamental driver has been there’s been rhetoric after the U.S. U.S. China trade war and the tariffs that the US is going to put on China has meant the Australian dollar has been sold quite heavily.

And the reason the Australian dollar has been sold quite heavily because of the U.S. China trade war tariffs are quite simply because Australian dollar is a proxy for how well China has got it going. So for example, if China were doing badly the Australian dollar will do badly its about 30 per cent of Australia’s GDP, which is consisted of exports that it sends to China. So if China isn’t producing then Australia is not going to be able to exporting so high and hence the Australian dollar is way down. The Japanese yen by contrast, has been bid on the risk of sentiment that’s been in the markets the genuine concern about global trade tensions and global growth slowing down has meant the Japanese yen was bit. So you had a technical and funded. You had a fundamental reason to sell the Australian dollar, Japanese yen pair. Nowhere on the four hour chart, we see some excellent places we could use the one hundred and two hundred moving average to enter those short positions and you can see how the Australian dollar yen respected the hundred moving average, there at a brokerage here and then the 200 moving average is expected here over a number of days.

This provides the key resistance level before prices finally sold down. We at the moment we have another test of the 200 moving average and prices just testing the 100 moving average threatening more downside potentially down to this 79 handle. So the hunter moving average offers excellent places for you to enter technical trades and you can look at a 100 moving average expected 200 moving average expected, respected again here and here respectively again here and you can see can use some Candlestick analysis you have a you know a kind of hidden bias and taking action from this bar, here you have a decent bearish pinball over 200 moving average here you have a bearish outside ball you have another bearish outside bar you have another bearish outside bar of a hundred moving average. So you know using the technical analysis Candlestick Paton’s as well as the moving averages you can see why don’t use the 100 and 200 moving average and you’re trading when you’ve got a good technical fundamental bias for a trial. When you pull up the 100 and 200 moving average and it might give you some decent areas to define and limit your risk by using them. Thanks guys. Bye for now.

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Using Short Charts

Hello and welcome to Diary of a trader. in some of our previous videos we have discussed the importance of identifying where market bottoms may arrive and where we may see the turning point in the market and the video. If you watched it was the most recent video on using Ethereum as an example, then you saw that we had all these confluent zones of these shared Fibonacci areas. We had angles within the Gahn square of 90 and we also had a volume supporting that one. But today I really want to discuss how to use this is really specific to just crypto currencies is how to use short charts to determine. Whether it’s safe to go long or short in a long term or short term trading buy. So we’ll use Bitcoin as this example, so if I look at bitcoins chart I see that you know we have been in a downtrend and I see that we are finding some type of support maybe but not sure you know hard to determine whether or not this will stay. It’s just a false supported zone are we going to just continue down lower while looking at just this chart can sometimes not provide enough info or even if it does provide enough info. We always like to see other contrary and confirming information. And one of the benefits excuse me of of crypto currencies is that many of the most traded pairs like bitcoin, Ethereum like coin iOS Cardno they will have accompanying chart charts. And this is usually just from one data provider and that’s bit Phoenix there another crypto currency exchange and so if we look at. This is the bitcoin Dollar pair, but the shorts. So this chart represents its short, meaning that these are bear trades. These are people who are taking short positions against Bitcoin. This chart shows us how much participation shorts are having so if there are more people shorting bitcoin on this chart, it will look bullish it will look like buyer’s. Let’s look at the daily on this so. We can see that as we have gone on and we’ve we’ve progressed over the last ever since the end of the month of May and the beginning of June we’ve had an increase and the people participating in shorting bitcoin. OK, so this is the short interest now as we’re looking at this though. What has happened as we’ve moved forward during the day is we’ve gotten kind of expensive. We’ve really technically gone parabolic and if you remember the definition of a parabolic rise as you have a clear and steady trend. But then the swing are the trend. They get more and more expensive in there. They’re right the slope or the pitch increases considerably as we move higher. And so this is the definition of a parabolic move. And that is exactly what happened with this chart. In addition to that. We can see that in our Phibbs retracement from Swing High Swing low. We see that we have found

A stopping area not only at the top of our Mukulu cloud but.But that has also equated to the 50 percent retracement zone in the in the in the in our Fibonacci retracement. So we see this short volume is coming down so a lot of people who bought the remember a parabolic rise that people. Are experiencing fono fear Of Missing Out. Where people have participated at the top here thinking they’re going to shoot at at these levels, but in fact they’re going to be the people that will fuel a rise lower.

So we’re looking at the chart here we see that as Bitcoin has been rising in value from its most recent swing. We see that the bitcoin shorts have been falling and so as we see more and more decreased values in this chart we can see higher prices correspond to bitcoin. Now one thing we may notice and this does happen as you’ll see bitcoin rising in value as well as the shorts and so there’s a couple of ways that you can that you can view this because if prices in bitcoin are rising but the short interest is rising as well. That means that there are a lot of people trying to short the rally in Bitcoin. And if we don’t see the response of selling. As there are. As more shorts are pouring in then all that means is that there’s not enough short opportunity there’s not enough or rather there’s not enough participants to move prices lower and that means that all the people that have been buying are eventually going to have to cover because as the prices rally in bitcoin the short positions decrease in value and they’re going to get you know you know this is traded on margin. So you’re going to have to eat a loss and those people who are trying to short. And are holding those shorts as bitcoin is rising they’re going to have to cover and they’re going to be turning into buyers. All right, so that is a this is a good tool that not a lot of people utilize but people should and in fact I might in my opinion, I think that this is a this is a phenomenal tool that we have at our disposal because we get to see a chart that represents the actual participation of people who are taking the short side of this market. And we really do not get access to this kind of information in other markets such as the futures or an orange for. So we get to see a live representation of the shorts and they even have a long biffing X has a chart showing the long participation as well. All right.

So this is a very awesome and useful tool to implement in your trading in crypto currencies. And I hope you find this video helpful and useful and I look forward to talking with to you and our next video.

Have a great day. Bye.

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Using Gann Planetary Lines

Hello and welcome to this video from diary of a trade. And today we’re going to go over synoptic lines and planetary lines and how they relate to trading and this is an Optima by market analyst. It’s a very awesome piece of software. Now if I want to. Look at how and why planetary lines work first I’m going to need a chart so I’m going to go with I’m going to use Bitcoin. And the dollar pair and so this is the daily close. And so what I want to do is I want to add. The lines of planets onto a chart. Now the gentleman responsible for doing this his name was William Delbert Gahn and he had a idea of changing. The way that we look at charts and the way we look at horizontal and vertical lines of support and resistance and time cycles and so what you did. There’s something called Gahn planetary line. But in addition to that there’s also a sonata Clines and all these angles are is. The longitudinal position of a planet and then convert it into a price chart. And so if we look at this synoptic line here. We can tell that this is the Synoptic cycles of Mercury and Venus onto a chart together.

But Bitcoin is mostly sensitive to Mars and Uranus. And if we can tell just by looking that this synoptic relationship seems to act as the normal and natural area that Bitcoin follows. If we were to go back in time here and even look back we can see that there is a lot of. Past price history that shows that bitcoin really likes to follow this cycle and as it flattens out and planes out we get to see how it may trade. Now one of the strengths of this is that there are harmonics that we can add to kind of increase that we can, we can, we can input the visible lines in between these major cycles to give us kind of another area of support resistance to look at. So if we’re looking at it with only the two harmonics we have one major one minor. We could go with eight. It looks a little noisy but certainly if we were to zoom in we could see that this is still a viable way to look at our chart we can see some natural areas of support resistance. But you know personally I just like to leave two on there that is enough and you can see that price. And Bitcoin really responds accurately to these levels and what is what is actually very interesting about synoptic lines or planetary lines is that these are naturally occurring mathematical measurements.

These are not these are not subjective and dynamic values that you just add because something that support a resistance area. It does take a little a little work on the analysts’ part because you have to determine which planetary Sonata cycles will work. Oftentimes you can get there by using just Ganta code GPL Gahn planetary lines. And if we put that on our screen we see here the first one is just, this is only mercury and mercury seems to hold up as a pretty standard area of support existence, but we can also look at Venus Mars and this is why Mars is such an important cycle and planet for bitcoin. Not every instruments not every market is going to respond to the same planet. So in each church seems to be sensitive to one versus the other. Jupiter and Saturn are certainly charts that show the most amount of relevance in many markets. It’s actually a pretty fascinating. Way to look at these markets and what’s actually kind of fun to do is if we if we plot all of these on our screen. So here we’ve got Mercury and we’ll just change that black and then we can add another one and we’ll call it, we’ll do Venus and we’ll color that one. Blue. And that sees let’s add. We’ve already got Mars, Mercury again, there let’s do Jupiter, Saturn. No, we don’t have Mars on Mars. And we will color that red. And we’ll just leave those things on there for now. And what we want to look for as this happens is we see that there are times when they cross each other when some planets are going to cross each other when we notice that happen and we can see it happening in the future. We should be aware of what Prince was doing at that time because often prices have some type of response to planets that that cross each other have a crossover and Amirs cycle. So for instance in bitcoin we saw that when Mercury star Venus and mercury and Saturn were all crossing over each other we were near a market high and then that promptly sold off. And where do we see the next time when we have a major crossover here in the future. What we have to set up a few more do a thousand Blinkx bars. You can look over in the future and we can see that that next one is probably we’re looking at at this faster plants are really looking at some time in September of 2019. And the most of the close interaction we’re going to find from here. Is more than likely going to be this zone here and that’s in October of 2018. But with all of these planetary angles and planetary lines what’s important to know is that there is generally one and sometimes two planetary angles that that some charts are more sensitive to than others and they act as very neat and clean areas of natural support resistance. And I’ve done this. I do this in my own trading in my own charts. This is the euro. And this is the planetary line of Saturn. The pound Planetary line of this is a synoptic lines of Uranus and Pluto. The Aussie dollar can see these wavy lines. This is Jupiter and Saturn. U.S. dollar Canadian dollar. Jupiter and Uranus and then bitcoin. Finally we have. A on it. This is just Mars. All right. So this is a very powerful form of analysis and it’s fun to learn about fun to apply. And you know without having to know a lot about the math and how it’s applied and placed on the charts software can do that for you. Now these days and it’s a it’s a fantastic way to add some natural structure and elements to your to your trading.

Hope you find this really enjoyable and I look forward to talking to you in our future videos. Thank you.

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Using Bollinger Bands

Hello and welcome to Diary of a traitor. Today’s video is going to be on Bollinger your bands and we’re going to explain how they work. What is their purpose and how to implement them into your training? There is a fairly common indicator and we’ve known about Bollinger bands for quite some time. They were created by a gentleman named John Ballinger. And he has a whole website dedicated to this indicator. And if you’re not familiar with where to find it on trading view you just go to indicators and if you just type in B B and we have Bolger bands right here OK. There are also two comforting indicators that you can use Bolger bandwidth and the percent but for right now will just look at the indicator itself. Now there are three components to the Bollinger bands. There’s an upper band a lower band and then the middle the middle is just a simple moving average and Trading View has a default of 20. But I believe John Bollinger had it set to 21. And without going into a lot of the specifics about the calculations that go into measuring these we just need to understand that Bollinger brands are a measure of volatility. So it’s measuring the action. And the direction and how powerful the drive up or down is and then that is reflected inside. Our Ballinger bands and so on. Looking at the Euro dollar right now and if we look at this zone here OK, we can see that as Price was moving down pretty heavy. The Bollinger bands they expanded are okay, they got very. They moved up they got wider so they formed like a B bubble. Okay and then it traded outside and came back in. And then what happened.

The Bollinger bands they constricted. This is called a squeeze or Bollinger band Squeeze or sometimes people just call it a squeeze. Now the squeeze, depending who you talk to, this is such a source of some contention here, whether there’s a squeeze happened before a move or does it happen after a move. This is one of those chicken and the egg argument. But that’s not really important. All we need to know is that after a big move we do see. Ballinger bands enter a squeeze which means we’re reduced volatility, it’s just consolidation and then we also know that squeezes precede breakouts and so when we know we are in a squeeze. This is the time for us to be aware this is the time for us to watch to see what is happening with the price. So we see some consolidation and then price moves beyond and up when it starts to trade above the cloud. This is called a kind of riding the cloud. This is generally a very very bullish while even if it’s bearish like down here. If price is riding the upper band that is a sign of a very powerful trend and you don’t want to trade counter to this Ballinger band. Will keep you in trades if you trade the smartly. All right. Now notice and observe what happens where. Alright, we started to enter a squeeze. Over a short period here, but then we traded up and it fell back down. So how do you know that this is going to fall? Well, this is where you start to use some other indicators. Let’s take a look at these to Kaster Karzai. And maybe, just the RSI itself. And we’ll get rid of these other two indicators for right now.

Now if you’re not familiar with these two indicators without going into a whole lot of detail we know that if prices trading above the seventh level on the RSI that that is considered to be an overbought market. So there’s a there’s a reduced chance of prices moving higher and increased chance of them moving lower. Similarly with stochastic czars with us to cassocks if we see a big spike like this if we see prices up trading in this range, then we know that prices may fall down and if they’re down here if the price is down here, then we know that prices may trade up and if we use them in combination with one another we have a very easy to identify a trading system that we can follow with the Bollinger bands. So let’s look at something different price or different to instead let’s look at the let’s look at the pound dollar. All right now. If we were not using any indicators we see that we have a squeeze here that forms the ball and your bands are tight and then they expand because prices trading and it comes back down and we’re moving here. And then we see prices fall down here only to trade back up and this is where somebody might think well I can go along now because the price was rejected lover. Well, this is where our indicators come into play. Right this is where we use other forms of market analysis to help us. If we saw price trading above the Bollinger advance. We know that automatically that that means that prices moving at an extreme. But then if I look at my stochastic case the stochastic is aside, I know that I’m at an elevated level. I know that it’s hard for price to continue higher here. The Orsatti is still neutral not overbought but it is near overbought level. So the highest probability of price and the direction is to go down and then we observe that all right we see it coming down. Falls below the moving average and then this is a good signal. When are in a squeeze and then you break out, whichever direction you break out wherever you retest the middle line here. That is usually a good pullback trade so you can re-enter a shot here. And so we would enter that short and that’s confirmed by well were not oversold. And we are elevated in the stochastic syndicator and so we would we would we would take a short. All right. And when we saw price getting back inside the Bollinger bands that’s our signal to consider selling and taking some profit. Additionally, prices right here and where’s the are sight indeed the oversold territory and it’s to cassocks our size and deep oversold territory. So this is where we could consider covering that short and possibly going long, but we want it, we don’t want to go along yet until we hold the above the 20. Okay, so you can see that the proper application of the Bollinger bands with other indicators can help yield very high quality and high probability trades. Lots of winning opportunities when you use the Bollinger bands with your indicators. Now it’s very important to notice. That when you’re looking for an instrument that is in a squeeze it can be in a squeeze moving up and it can be in a squeeze moving down. But a flat area trying to find them here for you. But a flat area of squeezing like right here. These indicators will help us find false breakouts. All right so we’re trading here and then we trade down okay, we start to trade below under that below the lower band here.

The Lord Bollinger band and these are telling us this is a fake breakout. Because we are in these extended conditions and our oscillator. And this is where we observe prices going to change and move in a different direction. All right. Thank you for watching this video. Hope you find it helpful. And we look forward to seeing you at our next video.

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Understanding Point and Figure Charts

Hello and welcome to diary of a trader. And today’s video we’re going to go over another type of chart option that’s called point and figure you’ve probably seen this before. If I go up to the trading views different types of charts I can look at where we have bars, hollow candles hiking Nashi line area bass line Renco Lineberry Kagi all those what we want is a point and figure and painting figures is going to be a lot like a light Kagi or Rinko or Gan’s swing charts you know where where with Kagi charts there is no time involved. Pointon figure is only a price driven style and that is all you need to worry about is just price and will notice that you know we have X’s and Os and ultimate you know this is just time based price price movements that don’t take and take into consideration the time. And if we look at this we see that they always represent bearish movement and the Xs represent bullish movement and right now by default what trading we will do as a Senate to ETR and the reversal of Mattice is shown as 3 so that means that we would need three of the Xs or O’s to form a new line and each each line or column as they’re called is only going to have X’s or o’s. So the ETR it says is is point 0 0 0 1 Excuse me 0 1 5. The problem ETR is that it changes and adjusts so it could it could change from one moment to the other so I like to use. I’d recommend that use the static settings so I could go with the box size so each Exar 0 is going to represent. 5 pips.

Okay and then the reversal of the 3 means that so if there is when there are 3 or 15 pips of movement that’s going to reverse the candlestick or sorrier rather than the direction and paint the X’s or the O’s. So if we’re looking at this pound, dollar chart you can see it’s a very actually clean chart because we can, we can really identify where a lot of our trend lines are going to go. We can see there’s a trend there we have a short term trend down here. We can, we can draw our Fibonacci levels like we have sitting here. It’s actually draw our fill level from this swing to swing for a long term Phibbs swing and then we could also drop from the most recent swings as well from here to here. All right and so what is a common or a common way to trade point and figure charts is that let’s say that we know we are, we are in a kind of a consolidated zone here what we would look for to do is that we are trading in this range here, then we would probably want to put a buy level of bov the acts of the prior calm that would be a good buy entry also a good sell entry would be if we were trading up here we took profit. We saw Lo was made, but it didn’t breach a prior column. So we just keep looking and looking and then finally when we see that there is a price that moves beyond the previous low of the column. That’s when we would enter in a short and we can see this kind of progress as we go along.

It’s also very easy to spot areas of support and resistance because they’re very flat levels you know for some people the 5 5 pips is not going to be too fast so you could actually go to 10 pips if we want and that will reduce our reduce our it’ll reduce the trade opportunities to have. But but it will give you more accurate changes. That’s the that’s kind of the danger with a lot of these price only based charts like Ranko and into and Kagi charged range based charts and then all and then we have the point figures that you can be stuck at a certain column for quite some time before it changes, but at that same time you know when you have a smaller brick or a smaller box size then you you run the risk of getting into a lot of false breakouts or are you know you can end up just getting in and out of trades too fast. But then the problem is you think well I should go with a longer time frame or not a longer timeframe a higher box size you get into the problem then of not getting very many signals and so that can sometimes bother people too, but the signals that you would get on the longer time are though not the longest time from the higher box count are going to be more representative of an honest and sustained move.

So certainly as we see here the most recent price action we see that you know when price rallied up a little bit and then we formed a new column of all is when we broke the prior low there you know we can see or actually if you didn’t want to break parallel you could draw a triangle and there was a triangle there when we broke that and painted a 0 then certainly the short trader was correct.

So what are we looking for here, right where we’re at will, close here on the circle was 131 60 and so we are at a 10 PIP counts Brekke. So that means we would have to trade up 30 pips from here so we would need to trade up to 90 so once we got up to 1 31 90 we would end up painting our green Xs on here and then and then and that would tell us that we are getting close to some type of reversal and then ultimately let’s say we had those green Xs fill up this entire column here where we are by A.B we have a couple options we could buy up on a re-entry into this upwards trend line or we can wait till we broke the previous X the previous high of the previous X so we can trade that there to there’s a couple of options but point and figure charts. This is an old school of looking at charts, it’s been around for quite a long time. It’s a very very effective form of trading in fact, if we use if we use the Mukhriz or enough food system the volume profile that is a another tool in our trading toolbox that helps us with trading the point and figure charts, point for your charts again just like Ranko if you’re somebody who struggles with candlesticks and interpreting candlesticks or gets whips out too much candlesticks then maybe something like point figure is a is a chart that chart for you because not everybody can trade candlesticks.

It’s not meant, you know there are various chart styles because they adapt to certain people so yeah. Hope you guys found this video interesting and I look forward to talking with you and our future videos bye.

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Tweezer

Traders we continue to cover basic Candlestick patterns and strategies that you can use in your daily trading. So today we’re going to cover the strategy to other which is a strategy that is very common in Haiti. And it presents one of the most reliable reversal strategies paton’s. There are two types of features US and many other Kansi Bathurst’s that are at the top the fees are bottom. So in this particular chart pound the dollar. For our chart we have a trend and this is the first the first step or a condition that. You must fulfill if you will, If you believe that this feature pattern in place so this is an uptrend obviously you can be pushed higher be pushed to a kind of more than 350 pips to the upside and then at the end but the top is actually of interest. So we have to Candlestick and tweets that these are in Candlestick pattern. In this particular case we can buy the bearish tweezer top of that awkward at the end of an actor and you can see there for a scandal that the Bulls the price higher. Close near the heights of the hype, but the closer to the high. End. However, on the second day the price opens it does not create, and you have a stream reporting conditions so we don’t really higher than the previous scandal, but are more or less Suvi we push lower and the trend or to sentiment reversed completely. So the market more or less as I said opens and strait goes down, meaning that the entire gains of the day or the previews the previous day so we I said Shreveport and important conditions. First, it’s a trend. Second conditions. Hold to be that are talking about two candles. First one bullish second money is a bearish and the second one does not create a new high. We are talking about bearish trees are tops and of course that did it all. Everything that has been gained the previous day must be erased the second candle. Lisa knew that the bears are stronger than the Bulls since we had the lows and the Bee erased all the gains from yesterday. And as you can see in this chart the LBL will be pushed over, especially once you see the information in this huge along or read candle.

This means that you are going to continue down unlike some other bathroom’s that more or less offer us a sign of what is going to happen in the future. Too easy it can be traded almost immediately as soon as you have the close of the second candle. You can actually trade a pool just above the highs and then look below for the first. There’s the sense where you’re going to take your profits off of the table so that pound, dollar chart book again after the correction. Here we have again a minor uptrend. B go from 30 to 40 70 for more than 200 peeps and at the top we have a long Bushkin. But the second candle is longer and it does not create a new high. So a 1 1 bullish from bearish again, but the bearish prevails which means that again reveals a pattern and the push immediately lowered. On the other side bullish tweezer bottom. Is a Coors during a downtrend and bears continue to take the price lower as you can see. So we have a downtrend. Look, we have a big push here. From 120 350 to 120 250 so no one trading session or be put forward hundred pages. But at the bottom of what we have reversed so since the candle the candle the second candle the bullish candle opens at the bottom it does not create a new high. It erases all of the gains from the previous year from the previous scandal and then it starts pushing higher creating higher and higher highs. So again we are talking about the reversal in the price action and the US as it is the bearish tweezer pattern in this case if you’re looking to enter into the trade you can resist reversal which means it is a quadrilateral pattern quarter of a reversal pattern that you enter into the trade. You put your stock closed below the previous low and then you’ll look depending on your risk management. What are you trying to get it depends for example, let’s see, this example. So if you wanted to do trade you can see the price drop here at this low. So if you have entered here after that, after the Kendrew has closed at 22 55 until 30 to 95 you could have 40 pips take profit while your stop loss for the family perhaps or 2 to 1 or a reward. You know this particular trade presence. So again we said is a reversal pattern. It’s a common one. You can find in your everyday chart charts. It’s extremely up also reliable on daily and weekly charts and it shows that the market is reversing its reversal pattern.

The market is reversed and then you can start thinking about entering trades to ride the upcoming trend.

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TrendlineStrategyFinal

Hello everyone. Today we’re going to go over one of the most basic sports strategies Old trend van strategy and its basic says it has three key rules that are very easy to set and to identify. And therefore it offers you a very good reason to leave or reassure which is of course key in every trade. So first you mention three basic rules are the first to be to identify seeing heights OLIVOS the pending. Is it a bearish or bullish strategy. We have two examples here in its two major there’s a dollar and dollar yen to show and to show how this strategy actually works in practice. Here we have a Eurodollar. Here we are current Keelin downturn because we are creating over the highs and overflows and therefore. You’re trying to identify peaks. Here is the first the first. And then the price goes down. Then you’re looking for a second peak that you can connect the current trend line. And what’s important here when these two touchiest 1 and 2 we don’t have any break in the trend line. So the trend needs to have. At least two of course patches that you can connect and then as soon as that happens you’re actually looking to enter into the trade. So the third part should be the first opportunity to enter into the trade and play the trade again. Again the trend line. So here we are looking of course to sell here again the trend line scenes. It is very easy to identify where your stop loss is and where you take profit is actually going to see. Now in this dollar, check for example.
So we have to Duchy says he said. And then you’re looking for a touch to enter into the trade as well as the toothache happens, he concedes happened in this particular case at 120 140. We were selling, the price we are entering the trade. At market at 120 140 and Stop-Loss should be approximately in the strategy for our 10 to 50 pips above the trend line. Here we’re talking about a one hour chart and destructed the best on our charts. So here we were selling the pair 140 but actually why I choose this example is because here we also have hindered M.A which is also very visual. Also provide a very strong resistance to talk to any more. That has a tendency to go higher. So what is actually advisable here is that you use both these lines as resistance so you’ll set the trend line at one point month 40 but you put your of actually above the annd a hundred. Why? Because the price may move briefly above the trend line and then react and turn over opport patching the hundred. So here you would put your stock lots approximately. Four fifths of about moving average and you can see here that what happens is the price matched the trend line and then returns returned back. Of course it rotated back over

So often who is identified or stop off now. You are trying to identify your take profits high risk reward ratio is what you actually see here so what you what are you risking in order to gain something. And it should be at least two point 5 1 a while, anything off 2 2 2 2 2 1 is actually extremely profitable. So here we are receiving more or less let’s say 25 beats orders to gain 75 how he identified the state profit. Well, after we didn’t front their stock losses. Actually, we are looking to make some profit in the straight. So if you’re looking to risk 35 fixed again 25 but if looking to gain for example, at least 40 50 deals in this particular example, we have a report here, which the horizontal support you see that the price touched the trend line here and then rotated back over and then the inbounds from this 120 60 level which immediately becomes support for us looking to target that spot again. And this is actually what happened in the end. Of course at this point we don’t know this is going to happen, but since we had that we show that the price has bacon is one point sixty.

We know that there’s going to be some movement and some interest in buying the Eurodollar this particular price. So the advice will be to take your profits close to this level not exactly to get to this level, but actually 4 5. And if you did this in this particular trade you would risk as I say around 85 peeps and you’re going to be around 75. 75. it’s another example, if I were to show you is a bit different. It’s Dollar and different because it has many patches. It has many patches and the second rule of the strategy is that the more patches on the trend line the better. So it’s much better if you have a trend line that connects four or five patches and if you have a president with two patches it’s more it gives more validation to your strategy. So here you can see the stock from here the total vote to the actual improvement. And then we have a couple of factors here. Here you can see four white patches where we clip the trend line, but the trend the trend is still not broken. It’s important to say that because either the trend line is broken or even we have a clear close up or in this particular case below the trend line. In that case we can see the trend line has been broken. So here we see multiple patches. And as I said as of Pekkanen poetry you can actually start thinking about entering even it’s great. Eventually I put a. Patch number five here because as I said the more patches you have the better. So a few if you analyze these price more and so forth that as you say on camera we’ll do another. Another test of this importance and we’ll see the trend and you will enter into the trade here. So you enter let’s say around 1 0 8. And then you let us say ideally since we don’t have anything be more turnover any kind of support will the trend line. Dan be arguing around 10 to 15 pips or caution. In order to defend against these fools Bridge that actually happened here. So this is why this is extremely valuable to do to us because it shows us that we brought below the trend lines for the price traded below the turnover but it’s been looked. You see the closes the actually created for the breakdown and then the price rebounded sharply higher. So here we’re buying at 1 or 70. You give us I said you can depending on the rescore risk management I will by 10 to 15 heaps of Stop-Loss here I put 13 Starplus and then your your your take profits will be the first Easton’s that you identified in this in this particular example, we see here to actually and he’s one or 1893 which was horizontal support and horizontal resistance so here we are looking to this particular example.Very interesting piece in order to gain twenty two and each is around one point seventy one or one point eight to one. Of course you did not know that the prices moved all over 200 Emmi if you wanted to be more aggressive. Of course you could target this area here. But as I said if you want to really keep it simple just target first burst or resistance or support that comes next. So Terry just does a quick recap. Triqui rules are identified the single or something highs in the sense that we’re seeing both. Second of all is that correct. If you need to collect all the singles and swing highs and the more batches the better. So in this case, it’s fifth that you’re trading in the dollar simply the third. And the third rule that is you need to buy again that trend line. It’s a bullish trend line or need to sell against the trend line. If it’s if it’s a bearish trend line, it’s a great strategy since as I said it offers a clear area or risk. We’re out with the trade. And you don’t really have to. We will have to really over analyze chalk to see where are wrong because if the price moves the price the price trade friendly dips below trend but then obviously we’re wrong and it’s again depends on you how aggressive are trading. But. It also can provide you a very good at least risk and reward. I hope I was very clear. Thank you very much and have a nice day.

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Hammer and Shooting Star Strategy FINAL

Hello everyone. Today we’re going to review. A strategy based on the candlestick patterns. And many of the more basic strategies that we are covered in these in these videos. It’s a strategy that focuses. In trading to two to extremes, extreme trends some more or less by turning looking. Four ways to identify to identify is when is the right point when the trench will turn and on  the opposite the braver you’re not really looking for any strategy to identify and actually two. Find a point where the trend is going to completely reverse and looking for 200 how many people move. Not really what you’re trying to find is if you’re trying to look for the start from the point the actual point where we.But a trend that may be may start to worsen or at least make a correction. But given that you follow basic risk management principles in the context of risk walked. Then we are not looking to make to trade weekly David chart’s working for him in mathematics.

 

So the first step in order to implement this strategy will be to identify trends. So when you look at this chart I prepared by Charles the first chart is up for our top dollar yen. If you look at this chart you see that fear. We’re trading sideways, but more or less. We are also you’re also creating lower highs and lows you can see here Heidi and a lower high lower high and lower high. Again, it’s more. It’s not really a very steep downturn, but still as long as we’re creating lower highs here and here lower to lows you see over a low second there for the low then we are looking. For four of them, we are identified as a mild, mild downtrend the second. The second thing that we’re looking here or let’s say indicator is if you start to look. A that more focused on specific segments of price action.

 

 

 

So for example, you can, you can see here that we had the side effect. You had sideways trading and then from here. This is an important lever and the one on my fork you can see this they fell down and fell. Hundred and fifty people to the downside very quickly in let’s say for half of a trading day. And then here this is the kind of thing that we’re looking for. So we’re falling here I mean you’re falling down. Now you’re looking for a point where the price is going to reverse and beginning to see a correction. Obviously in this example shows that we had a very, very big correction actually almost created you high here. But at this point we’re only looking for this scandal which is a key it’s a hammer candlestick. A pattern which means that the body. Which means that the open is higher than the I’m sorry the Close is higher than the open and not just that, but actually the price of this kind of open that the price started pushing lower. And then before that the Candlestick was actually formed be closed be closed near highs and he had thought he had a hammer hammer Candlestick property. It’s a bullish Candlestick pattern. And it usually is a signal that the downtrend is finished or is close to be finished since the bulls are regaining control. So this will be actually the most important part of the strategy as soon as you have estimates you have this this candle and you may want to enter a long train if you want to have a confirmation to information indicators to look out for first one if you have like if you can identify this report. And I would like to be clear, I don’t find this trend line here. Then you can see that the event below the trend line, but close to be close above this is usually a very bullish sign. And so you saw a push higher the and the second one nation indicate there will be that candle after the hammer candle. It’s a bickering like it’s here. It means that the bulls are now fully in control and we may see. Olek like higher. Here you can also see the same thing this is even a better example. From the same chart. So we had that big fall from Montejano 940 run or 740. It’s a 200 person small you can see. Consequent red or red candles and then you see here. Perfect example of the hammer, you down, down long beat down you can see that being open tomorrow 770 and then pushed for the Slover. But we actually closed near the high and then we created a hammer which pushed the price higher than it actually surpassed to be close. This optimistic pushed a couple of hundred or higher. The second extreme now on the other side is a shooting star. So we have a hammer and we are turning bullish side and we have a shooting sort of on the side of a very second story. So shooting star wasn’t just a shooting star here. This candle here. Ideally the scandal here would be a red candle. But as long as we have a long way to the upside and be closed neater or closer to the downside than actually shooting star I get validation when we have a huge horizontal or resistance here. You see that we had to touch second touch third touch and then time try to. Go about. This trend line and Cleve stops about this horizontal resistance. We actually were rejected because at one point, obviously we traded summer here. So let’s say 10 people above this line and then reject that and push back venti 5 pips over each immediately put additional pressure for doubles.

 

 

 

And of course here also we have a second edition indicated that set our red red candle and nowhere if you are entering your trade youth you sell this scandal here to read one.

 

 

 

You put your stock above above the previous high and then you can go and look for a first first report live on the BBC for horizontal support and hundreds more than ever.

 

So this will be the perfect trader trading the shooting star if you want to talk about risk reward. So you were selling 128 85 let’s say, and your stock should be 129 this scheme thirty 35 pips and you’re stuck take the profit will be. Running 10 to 15 which mean that you’ll be 35 people in order to make at least 60 pips. If not, even higher if you want to really push and look for four of the top 200 M.A. So it’s extremely productive strategy. It’s very Goosens you can define your stop loss you’re playing against that. The previous hints to us from being Canada opens. You put your Stop-Loss about the scandal and then you’ll look down for first in you show of support and you can take your property same here.

 

 

 

You put your stocks below the low and then you can for example here in this particular case, you would have bought the price here and then and you actually you can take profits you either. This trend line to now access resistance. Obviously we had a big gap. So there are some also fundamental factors here. But even without it this will be for probably finish the time move higher.

 

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Fundamental analysis Part 2

Hi traders, welcome to the fundamental analysis introduction part 2. Now we’re going to consider in this video, the tools that the central banks have to make sure their control inflation and maintain price stability.

Now the first area they use is interest rates. Now interest rates are used by the bank to control inflation as we discussed in the last video and if inflation is increasing above the central bank’s target rate, they will raise interest rates to control it. That’s the general rule of thumb and this encourages people to start saving and stop spending their money and that reduces the rate, that inflation goes up. An example of a central bank raising its interest rates can be seen in the chart here.

Now this was the Bank of Canada and the Bank of Canada surprised the markets on the 12th of July, in 2017 by raising interest rates. That’s a CAD positive move and the pair booked, the pair on the screen is the US dollar Canadian dollar and it felt very heavily with CAD being bought with a surprise hike and you can see that over the next ten or so trading days, price moved over 300 points with very little retracement. That would have been an excellent scenario to use leverage to maximize your gains, as traders would have had the highest conviction that the trade would move in their direction.

Now returning a back to the next price tool. The next tool, a Central Bank has is that a price control and that’s like when a bank communicates, that it would like to see the currency at a certain price. So another good example of this, is the Euro Swiss Franc, when they had the flow at the 1.20 level and a price dropped towards that flow. Then the euro Swiss franc pair was bought in order to defend the area and that was a great opportunity to buy the Euro Swiss franc between 2012 and 2015.

The next area, the central banks have is that at language, the central bank’s makes statements would be they want, where they want price to be and they can issue threats if price is not where they want to be. They can threaten to interest rates or threatened to start a quantitative easing program. So sometimes a slight shift in emphasis on a central bank statement, a removal or addition of a key phrase is enough to signal. Some of these key shifts in the bank’s central focus the final tool that central bank has to control inflation is quantitative easing and maintain stability rather the QE process that the banks use, is essentially printing money and then putting that money into the nation’s financial system, stimulates growth and investment and it devalues a country’s currency and supports growth as the country’s exports become more competitive. It’s a very effective tool and it’s paid a lot of attention to by the markets.

So when a central bank uses any of these four tools here and we can tune it the opportunity is to make a profit. Banks tend to focus on one or maybe two specific indicators and by following, the central banks over time, you get to see what the bank is focusing on. So fundamental analysis works, it’s trusted and followed by, maybe every single professional trader. So why not make it work for you when the fundamental analysis is combined with technical analysis.

Traders are not only ready to read likely market direction but also identify key places to enter the market, take profit and place their stop-loss losses. That’s the end of this introduction to fundamental analysis part 2.

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Fundamental analysis Part 1

Hi there. Welcome to this video which is fundamental analysis Part 1. This video is going to be an introduction for you on the road a fundamental analysis in the foreign exchange markets.
Of all fundamental analysis really revolves around the roles of central banks. Now all developed nations have a central bank and the central bank has a mandate to ensure both that country’s economic and price stability.
The monetary policy which is set by the central banks directly influences the currency. They’re a nation so central bank set the money supply to the nation. The interest rate targets, the required reserves and also they implement various currency measures.
So fundamental analysis can seem at first impenetrable and may be too complicated to grasp Ministry of Finance degree where the oil used to focus on is the core indicators that the central bank identified and thankfully this is quite simple because the bank has a set of core of four core indicators and they are as far fault follows. The four areas focus around production is the first of the four areas and production involves things like manufacturing, data housing, services, construction.
The second core factor is employment. How many people are earning and what age it, what wages are they and how many hours are a full time, part time employment. The next cool factor is growth. This is the most popular figure for growth, is the GDP which is the measure of a country’s total production and finally inflation and of these for growth and inflation are two of the most important indicators.
While inflation is the single most important area because inflation concerns how much the cost of goods and services goes up over time and the all central banks have either a specific or general inflation level that they’re trying to achieve. For example the Bank of England, currently has a specific inflation target of 2 percent. While the Reserve Bank of Australia has an inflation target in the range of 2 to 3 percent. So, in the next video which is one analysis part two. We will consider the tools. The central bank has to make sure they control inflation and maintain price stability.

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Foldback Patterns

Hello and welcome to diary of a trader. We’re going to go over at a little known and really never talked about a form of analysis called Foldbacks.

Now Foldback are a technique that Michael S. Jenkins discussed in his book The Complete stock market trading and forecasting course and in it he talked about mirror image Foldback and add that he noticed early in his career that when he looked at stock charts he noticed while there’s some patterns that seem to repeat themselves. And of course, that’s nothing new but what he noticed was that they would operate on the inverse of the move. So it would basically retrace the same kind of pattern that was already done. And I know when I first read this book I had never seen anything about this before; I’ve never read anything about this before. It’s not anything that anybody ever really talks about, but he talked with one of the great analysts George Lindsey. And George let Michael Jenkins and George Lindsey they got together and they were talking about this and and they thought going into a lot of a history for the detail a fallback is essential the repeated past price action retracing.

For instance, if we want to look at if I can find one here I was just looking at what I thought right. Read here for example. I mean we see this play out quite often, but it’s actually shocking how often these repeat themselves if we look at this zone right here so if we see we have this kind of a pattern set up followed by a full retracement of that.

Notice how the patterns are very similar in their moves. It’s actually pretty shocking. And this can go on and on. And the point that that Jenkins was making was that we can see another one right here where we have

Top here in the middle and then all the way to the top.

These are called Mirror Image fallbacks. And even the old traded zones are very similar and it’s it’s really fascinating how often these play out. And this is just on an hourly chart. This happens on multiple time frames and on multiple different ways to look and it makes forecasting and or trading a little bit easier if you can gauge where in a pattern we’re seeing something repeat.

Now this is taking a lot of practice and it is absolutely subjective and nothing is going to repeat 100 percent of the exact. I mean it’s not a 100 percent your image. I mean humans aren’t like that. And the market is not like that. But certainly we could take you know what we could take a tool that is in trading view that can assist with this and it’s it’s on the one two three four five six seven toolbar down and we want to go to bar Panner.

All right. And so what we’ll do, we’ll just click on our pattern and then the trick is you want to start it on an all-time high or an all-time low. So start the bar pattern. So I’m going to start from the candlestick after that high single click and then I’m going to drag it down to here.
And then what I’m going to do is I’m going to right click on it and I want to go to Myriad. And then I will just place that in where I kind of had originally started it. And so what I’m looking at right now is that the past price action and it seems to be following this pattern fairly consistently you know we can. I mean this is this is actually a pretty shocking example how natural markets are and how they move.

And so if we’re looking at the chart here what is our expectation of removal our expectation of a move is to go a little bit lower and then have some significant bounces to the top. Now we’re not talking about you know completing the exact price levels we’re just talking about completing and trading in the same and the same pattern.

All right. Like if we if we have a drive up the first peak is here was it was here and then you know for actually, let me reset this here.

So we’re trading and I see that there is some type of market high at this level here and that shot up not too far after there is another swing high here. Up not too long after another great there.

And so we can see these were just looking to see how there are going to be any spring highs and lows match that that keep showing up as we as we go. And yes in fact, there are swing highs and lows that have shown themselves.

And so this is just a very interesting way to look at how to traders, these mark any market worth using these using just pullbacks and you can use them on multiple time. And I want to show you something that is pretty neat.

If we go to a weekly chart and this is the this is the dollar yen. Do you see this chart? It looks pretty much like a mirror full back. We have slight deviations in the time and there’s looks like there’s somewhat of a gap more here. But the point is there was a swing high near this time. Yes there a Swing High here a little one. Was there a larger swing at the top? Round The Sun. Yes. Was there a Swing Low Down here or rather I’m looking for a Swing Low Down here in the future. Did that happen? Yes. And so you can see that market the market does like to tread very close to this structure. And if we zoom in and we look at the current price action compared to what we have going on

Now you know it looks like we’re supposed to be on some type of swing high which we did in the spring low and then a response. We had some type of swing high around here.

So are we looking at some higher, swings than the previous year to show up. And that is an example of foldbacks. You know there are a lot of fun to use on. Any instrument if you look at the pound. And we look at. Let’s go ahead and take a look at the hourly if we want to if we are to see some type of foldback pattern happening. Then we can kind of anticipate where we want to draw. A Foldback. So from from the pound, dollar pair we would we would start the next bar after the high. And so we would start here. And I would drag it down all the way to the to the all time low loops well not the all time low but the lowest and our. Set up I’m sorry. Just to show the example of this.

And so there’s the full. There’s our there’s our bar. Let’s go to the mirror image of it. And let’s put that on top of our current price action. And so what I’m looking for and might have to stretch it out of it so I can get a better

Yes. This does seem to be following the structure pretty nicely. And so what this is telling me is that the pound is supposed to have a further high going forward here.

This is a great tool to use because markets do travel in the same patterns just like humans do and we tend to reflect the behavior of the past frequently and this is just a visual representation of that behavior.

And I think it’s a fantastic tool to help you determine where a direction may be going and into your current trading. Hope you found this video interesting. Thank you for watching. I look forward to talking with you and our future videos bye.

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FindingMarketBottoms

Hello and welcome to another video for Diary of a trader. We’re going to go over how to identify the conditions that can be met for a market bottom or how to identify if there’s going to be a low melt. And for the purposes of this video we’ll be looking at the current chart of the Ethereum. Now it is 6:00 so 9:00 a.m. Central time and it is the 14th of June in 2018. And as we’re looking at the chart here we can see this is the hourly let’s look at the daily and this is in crypto currencies. This is this is a theory and the theory is the second most valuable and second most arguably the second most important crypto currencies after Bitcoin. And we can see though that over the last eight days or so that we have had any significant decrease in the price action. Now The question comes to well if something is falling or rising at such a large rate, how do you determine whether that is going to continue or whether it’s going to end and. You know what we’re looking at here is this market geometry. This is a game that this tool is called a Gand box, but it’s it can be used to construct a series and the number of game squares like to have Gahn square of 90. That’s what this one represents. And so. We look at their square of 144 rather. So if we look at the chart here we can see that price whenever it falls through one of these angles. The ones that travel from the top two from the bottom to the top we can see that we’ve seen a falling and then an acceleration in movement of price. However, when we approached this angle here. We stop, we actually found a lot of support and we want to know why was there a lot of support bought and how do we identify that support well. If we look at, for instance the entire price activity we fix here.

If we look at the level that we’re at we like to look at some other other conditions from the past that would help us analyze why this may have been a stopping point. So this this line here this thin blue line is the 786 Fibonacci retracement and that’s from this. The most recent swing low in spring high on the on the first of May down here all the way up to our sorry the first of April all the way to the 6th of May. All right. And so that’s for that Fibonacci was drawn and so the area that we stopped at yesterday the price level is right on that 7 8 6 retracement and that is shared by the fear level that it starts from the initial swing low of the breakout of Ethereum to the all time high. So that is the same zone we’re finding in there and actually as we’re looking at the volume profile here on the right.

Another reason why we may have found a bottom is that this is a high volume node that we’re at. We’re trading with a significant amount of volume in the volume profile right. This is actually the second largest volume node zone after what has been traded down here which was which accounts for the very beginning of a theory that was a major accumulation phase. And so that’s where we’re sitting right now at that 480. But if we bring it down to the hour.

 

On a shorter timeframe like the hourly what do we see we see large volume bars. Coming in that are actually buying volume. So this is a clear sign that we have participants coming in to buy up at these lower prices and certainly to support. Price from moving lower. We have an inverse Head and Shoulders set up here that’s a strong reversal pattern. We could draw that just like this. All right in. Head and shoulders pattern and we have what you would probably call a ball flag right here where it’s so that the projected idea is that as we approach this angle here. We will respond to it as a support zone and we should move higher. All right. But another indication that we have reached this bottom is all these multiple time frames, so let’s look at the daily. On the daily. We have the following conditions. The composite index is in it is in a low. All right, we’re actually we’re actually in a very natural supported zone where we often see prices bounce. If we scroll all the way out. And so we’re at a natural, low zone Ethereum and the fact that we are below both of the averages here indicates that we are in a buying condition. So the minute we start to slope up. Means that we are in a buying condition of 4 below these two moving averages.

 

Also look at the stochastic RSI. What value is set. We are all the way down into oversold territory and if we look here we see that the fast moving stochastic is as sloping up which indicates that we will be moving higher. So we have all of that going for us. Then, if we look at the weekly. What do we have. Well, we finally are below the moving averages in the weekly and we’re approaching a zone that may or may not be a supported zone with the in the composite index. But if we do start to if we delay still do start to move higher the fact that we’re below these moving averages a supporter of buying. If we look at the stochastic our size while we are in neutral territory still pointing down, but we are still indicating that we have conditions for moving higher. When you look at the weekly charts. And we’ve been in an overall long term Bhole trend, then things that are that are around the 50 percent. Love the 50 value area of the stochastic are sheer in any fast moving oscillator those can turn into support zones for buying. So we are still within that value area.

And then if we look at the monthly finally. We can see that we have very supportive buying conditions of the monthly. And this actually will look a little silly because if you think about it Ethereum is not all it is not new compared to if we look at a 4 x pair or regular equity market or the S&P 500 ETF. We don’t have a lot of history to go by on the monthly but the values are still here so when they finally meet the conditions for being painted out and isolate we can see that that we have a we have a low in the composite index being met followed by a higher low but we have a lower loan price so this is in effect an actual divergence on the monthly chart.

 

Followed by the conditions that we have extended oversold conditions in the monthly chart. Now any monthly chart that has extended oversold or overbought conditions, it does not stay there very long. It does not stay in here. It responds very violently and very reactively out so we should expect to see a large, responsive price move higher to get out of the zone based on the monthly and so if we just look at all of these conditions where we have a a bit of a downturn going forward since the beginning of the year we look at the current price action where it was halted on this angle. In addition to the shared we have two equal Fibonacci value areas in a shorter and a longer term swing range and in addition to the extended conditions in these oscillators on the daily, weekly and monthly charts we have a very high probability that this is a market bottom. And in addition to the high volume node that we see here at the current value area.

All right. And so this will be fun to look at as we as you as you see this video. If we were to look at it again in about six months closer to December or January of 2019 it’ll be interesting to see if this scenario where we have these these conditions being met for a bottoming in price. Where we could see prices move higher from this from this area and this could certainly be a market bottom. Thank you for watching this video. Look forward to talking with you in our next video bye.

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