Backtesting shows a trader how their signals for entries and exits would have performed in the past. While a backtest of past data doesn’t guarantee that a signal will work in the future it can quickly show you what didn’t work. What a backtest is really showing a trader is that an entry and exit […]
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Panic and stress love company. Staying calm when other traders and investors are emotional gives you an edge trading. When they’re making mistakes you are making good trading decisions. When they are panicking into a chart rising fast you are locking in profits, when they are getting stopped out lower you are getting in at
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The Butterfly Pattern uses the identification of quantified structures on a chart that has specific and sequential Fibonacci ratio alignments that show harmonic patterns. These patterns calculate and measure the Fibonacci aspects of the price action structures to signal reversal points with good odds of success. Traders using harmonic patterns as a trading method believe that
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An algorithm is the steps in a process or a quantified set of rules that is followed for calculating a solution to a problem, an algo is usually programed by using a computer. Algorithmic trading is a defined method commonly using automated pre-programmed trading instructions for entries and exits filtering through the variables of time
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The following is a guest post. Why Is It Necessary To Discipline Your Daily Trade Routine? Image Credits Becoming a professional forex trader takes years of commitment and hard work. Your life pretty much mandates that you set some parameters and checks in your daily life that cohesively facilitates your actions and responsibilities. One of them
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There is a common saying on Wall Street “Let winners run and cut losers short.” This quote tries to express the principle of creating big wins or small losses. Creating a high risk/reward ratio through the use of trailing stops for profitable trades and stop losses for unprofitable trades is the foundation of profitable trading.
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One common trading strategy is trading market pullbacks on charts. A pullback trading strategy buys a reversal in an established uptrend when it reaches a technical chart level like a key price support area, a bounce around an important moving average, or an oversold technical reading. A pullback trader looks to enter an uptrend when
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Here is a list of the best books on options trading based on Amazon sales, reviews, ratings and author popularity. It is important to have a full understanding of the options market and pricing model before diving into options trading with real money. Options are derivative contracts and complex instruments where time, strike price, and volatility
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One of the biggest errors that new traders make is trading too big. If you trade too large of a position size you will inevitably give back any profits you earn with your first losing trade or string of losses. When you are starting out as a new trader: “Trade small because that’s when you are
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Most new traders never make it through the learning curve and traders that are successful early on at making money only discover that they were lucky and did not have the skill they thought they did. Traders go through many stages in their development and they can’t skip a step, they must learn the lessons
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