Position Size/Risk Reward Calculator Forex Factory

Former investment bank FX trader: some thoughts

Former investment bank FX trader: some thoughts
Hi guys,
I have been using reddit for years in my personal life (not trading!) and wanted to give something back in an area where i am an expert.
I worked at an investment bank for seven years and joined them as a graduate FX trader so have lots of professional experience, by which i mean I was trained and paid by a big institution to trade on their behalf. This is very different to being a full-time home trader, although that is not to discredit those guys, who can accumulate a good amount of experience/wisdom through self learning.
When I get time I'm going to write a mid-length posts on each topic for you guys along the lines of how i was trained. I guess there would be 15-20 topics in total so about 50-60 posts. Feel free to comment or ask questions.
The first topic is Risk Management and we'll cover it in three parts
Part I
  • Why it matters
  • Position sizing
  • Kelly
  • Using stops sensibly
  • Picking a clear level

Why it matters

The first rule of making money through trading is to ensure you do not lose money. Look at any serious hedge fund’s website and they’ll talk about their first priority being “preservation of investor capital.”
You have to keep it before you grow it.
Strangely, if you look at retail trading websites, for every one article on risk management there are probably fifty on trade selection. This is completely the wrong way around.
The great news is that this stuff is pretty simple and process-driven. Anyone can learn and follow best practices.
Seriously, avoiding mistakes is one of the most important things: there's not some holy grail system for finding winning trades, rather a routine and fairly boring set of processes that ensure that you are profitable, despite having plenty of losing trades alongside the winners.

Capital and position sizing

The first thing you have to know is how much capital you are working with. Let’s say you have $100,000 deposited. This is your maximum trading capital. Your trading capital is not the leveraged amount. It is the amount of money you have deposited and can withdraw or lose.
Position sizing is what ensures that a losing streak does not take you out of the market.
A rule of thumb is that one should risk no more than 2% of one’s account balance on an individual trade and no more than 8% of one’s account balance on a specific theme. We’ll look at why that’s a rule of thumb later. For now let’s just accept those numbers and look at examples.
So we have $100,000 in our account. And we wish to buy EURUSD. We should therefore not be risking more than 2% which $2,000.
We look at a technical chart and decide to leave a stop below the monthly low, which is 55 pips below market. We’ll come back to this in a bit. So what should our position size be?
We go to the calculator page, select Position Size and enter our details. There are many such calculators online - just google "Pip calculator".

https://preview.redd.it/y38zb666e5h51.jpg?width=1200&format=pjpg&auto=webp&s=26e4fe569dc5c1f43ce4c746230c49b138691d14
So the appropriate size is a buy position of 363,636 EURUSD. If it reaches our stop level we know we’ll lose precisely $2,000 or 2% of our capital.
You should be using this calculator (or something similar) on every single trade so that you know your risk.
Now imagine that we have similar bets on EURJPY and EURGBP, which have also broken above moving averages. Clearly this EUR-momentum is a theme. If it works all three bets are likely to pay off. But if it goes wrong we are likely to lose on all three at once. We are going to look at this concept of correlation in more detail later.
The total amount of risk in our portfolio - if all of the trades on this EUR-momentum theme were to hit their stops - should not exceed $8,000 or 8% of total capital. This allows us to go big on themes we like without going bust when the theme does not work.
As we’ll see later, many traders only win on 40-60% of trades. So you have to accept losing trades will be common and ensure you size trades so they cannot ruin you.
Similarly, like poker players, we should risk more on trades we feel confident about and less on trades that seem less compelling. However, this should always be subject to overall position sizing constraints.
For example before you put on each trade you might rate the strength of your conviction in the trade and allocate a position size accordingly:

https://preview.redd.it/q2ea6rgae5h51.png?width=1200&format=png&auto=webp&s=4332cb8d0bbbc3d8db972c1f28e8189105393e5b
To keep yourself disciplined you should try to ensure that no more than one in twenty trades are graded exceptional and allocated 5% of account balance risk. It really should be a rare moment when all the stars align for you.
Notice that the nice thing about dealing in percentages is that it scales. Say you start out with $100,000 but end the year up 50% at $150,000. Now a 1% bet will risk $1,500 rather than $1,000. That makes sense as your capital has grown.
It is extremely common for retail accounts to blow-up by making only 4-5 losing trades because they are leveraged at 50:1 and have taken on far too large a position, relative to their account balance.
Consider that GBPUSD tends to move 1% each day. If you have an account balance of $10k then it would be crazy to take a position of $500k (50:1 leveraged). A 1% move on $500k is $5k.
Two perfectly regular down days in a row — or a single day’s move of 2% — and you will receive a margin call from the broker, have the account closed out, and have lost all your money.
Do not let this happen to you. Use position sizing discipline to protect yourself.

Kelly Criterion

If you’re wondering - why “about 2%” per trade? - that’s a fair question. Why not 0.5% or 10% or any other number?
The Kelly Criterion is a formula that was adapted for use in casinos. If you know the odds of winning and the expected pay-off, it tells you how much you should bet in each round.
This is harder than it sounds. Let’s say you could bet on a weighted coin flip, where it lands on heads 60% of the time and tails 40% of the time. The payout is $2 per $1 bet.
Well, absolutely you should bet. The odds are in your favour. But if you have, say, $100 it is less obvious how much you should bet to avoid ruin.
Say you bet $50, the odds that it could land on tails twice in a row are 16%. You could easily be out after the first two flips.
Equally, betting $1 is not going to maximise your advantage. The odds are 60/40 in your favour so only betting $1 is likely too conservative. The Kelly Criterion is a formula that produces the long-run optimal bet size, given the odds.
Applying the formula to forex trading looks like this:
Position size % = Winning trade % - ( (1- Winning trade %) / Risk-reward ratio
If you have recorded hundreds of trades in your journal - see next chapter - you can calculate what this outputs for you specifically.
If you don't have hundreds of trades then let’s assume some realistic defaults of Winning trade % being 30% and Risk-reward ratio being 3. The 3 implies your TP is 3x the distance of your stop from entry e.g. 300 pips take profit and 100 pips stop loss.
So that’s 0.3 - (1 - 0.3) / 3 = 6.6%.
Hold on a second. 6.6% of your account probably feels like a LOT to risk per trade.This is the main observation people have on Kelly: whilst it may optimise the long-run results it doesn’t take into account the pain of drawdowns. It is better thought of as the rational maximum limit. You needn’t go right up to the limit!
With a 30% winning trade ratio, the odds of you losing on four trades in a row is nearly one in four. That would result in a drawdown of nearly a quarter of your starting account balance. Could you really stomach that and put on the fifth trade, cool as ice? Most of us could not.
Accordingly people tend to reduce the bet size. For example, let’s say you know you would feel emotionally affected by losing 25% of your account.
Well, the simplest way is to divide the Kelly output by four. You have effectively hidden 75% of your account balance from Kelly and it is now optimised to avoid a total wipeout of just the 25% it can see.
This gives 6.6% / 4 = 1.65%. Of course different trading approaches and different risk appetites will provide different optimal bet sizes but as a rule of thumb something between 1-2% is appropriate for the style and risk appetite of most retail traders.
Incidentally be very wary of systems or traders who claim high winning trade % like 80%. Invariably these don’t pass a basic sense-check:
  • How many live trades have you done? Often they’ll have done only a handful of real trades and the rest are simulated backtests, which are overfitted. The model will soon die.
  • What is your risk-reward ratio on each trade? If you have a take profit $3 away and a stop loss $100 away, of course most trades will be winners. You will not be making money, however! In general most traders should trade smaller position sizes and less frequently than they do. If you are going to bias one way or the other, far better to start off too small.

How to use stop losses sensibly

Stop losses have a bad reputation amongst the retail community but are absolutely essential to risk management. No serious discretionary trader can operate without them.
A stop loss is a resting order, left with the broker, to automatically close your position if it reaches a certain price. For a recap on the various order types visit this chapter.
The valid concern with stop losses is that disreputable brokers look for a concentration of stops and then, when the market is close, whipsaw the price through the stop levels so that the clients ‘stop out’ and sell to the broker at a low rate before the market naturally comes back higher. This is referred to as ‘stop hunting’.
This would be extremely immoral behaviour and the way to guard against it is to use a highly reputable top-tier broker in a well regulated region such as the UK.
Why are stop losses so important? Well, there is no other way to manage risk with certainty.
You should always have a pre-determined stop loss before you put on a trade. Not having one is a recipe for disaster: you will find yourself emotionally attached to the trade as it goes against you and it will be extremely hard to cut the loss. This is a well known behavioural bias that we’ll explore in a later chapter.
Learning to take a loss and move on rationally is a key lesson for new traders.
A common mistake is to think of the market as a personal nemesis. The market, of course, is totally impersonal; it doesn’t care whether you make money or not.
Bruce Kovner, founder of the hedge fund Caxton Associates
There is an old saying amongst bank traders which is “losers average losers”.
It is tempting, having bought EURUSD and seeing it go lower, to buy more. Your average price will improve if you keep buying as it goes lower. If it was cheap before it must be a bargain now, right? Wrong.
Where does that end? Always have a pre-determined cut-off point which limits your risk. A level where you know the reason for the trade was proved ‘wrong’ ... and stick to it strictly. If you trade using discretion, use stops.

Picking a clear level

Where you leave your stop loss is key.
Typically traders will leave them at big technical levels such as recent highs or lows. For example if EURUSD is trading at 1.1250 and the recent month’s low is 1.1205 then leaving it just below at 1.1200 seems sensible.

If you were going long, just below the double bottom support zone seems like a sensible area to leave a stop
You want to give it a bit of breathing room as we know support zones often get challenged before the price rallies. This is because lots of traders identify the same zones. You won’t be the only one selling around 1.1200.
The “weak hands” who leave their sell stop order at exactly the level are likely to get taken out as the market tests the support. Those who leave it ten or fifteen pips below the level have more breathing room and will survive a quick test of the level before a resumed run-up.
Your timeframe and trading style clearly play a part. Here’s a candlestick chart (one candle is one day) for GBPUSD.

https://preview.redd.it/moyngdy4f5h51.png?width=1200&format=png&auto=webp&s=91af88da00dd3a09e202880d8029b0ddf04fb802
If you are putting on a trend-following trade you expect to hold for weeks then you need to have a stop loss that can withstand the daily noise. Look at the downtrend on the chart. There were plenty of days in which the price rallied 60 pips or more during the wider downtrend.
So having a really tight stop of, say, 25 pips that gets chopped up in noisy short-term moves is not going to work for this kind of trade. You need to use a wider stop and take a smaller position size, determined by the stop level.
There are several tools you can use to help you estimate what is a safe distance and we’ll look at those in the next section.
There are of course exceptions. For example, if you are doing range-break style trading you might have a really tight stop, set just below the previous range high.

https://preview.redd.it/ygy0tko7f5h51.png?width=1200&format=png&auto=webp&s=34af49da61c911befdc0db26af66f6c313556c81
Clearly then where you set stops will depend on your trading style as well as your holding horizons and the volatility of each instrument.
Here are some guidelines that can help:
  1. Use technical analysis to pick important levels (support, resistance, previous high/lows, moving averages etc.) as these provide clear exit and entry points on a trade.
  2. Ensure that the stop gives your trade enough room to breathe and reflects your timeframe and typical volatility of each pair. See next section.
  3. Always pick your stop level first. Then use a calculator to determine the appropriate lot size for the position, based on the % of your account balance you wish to risk on the trade.
So far we have talked about price-based stops. There is another sort which is more of a fundamental stop, used alongside - not instead of - price stops. If either breaks you’re out.
For example if you stop understanding why a product is going up or down and your fundamental thesis has been confirmed wrong, get out. For example, if you are long because you think the central bank is turning hawkish and AUDUSD is going to play catch up with rates … then you hear dovish noises from the central bank and the bond yields retrace lower and back in line with the currency - close your AUDUSD position. You already know your thesis was wrong. No need to give away more money to the market.

Coming up in part II

EDIT: part II here
Letting stops breathe
When to change a stop
Entering and exiting winning positions
Risk:reward ratios
Risk-adjusted returns

Coming up in part III

Squeezes and other risks
Market positioning
Bet correlation
Crap trades, timeouts and monthly limits

***
Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer.
submitted by getmrmarket to Forex [link] [comments]

[Strategies] Here is My Trading Approach, Thought Process and Execution

Hello everyone. I've noticed a lot of us here are quite secretive about how we trade, especially when we comment on a fellow trader's post. We're quick to tell them what they're doing isn't the "right way" and they should go to babypips or YouTube. There's plenty of strategies we say but never really tell them what is working for us. There's a few others that are open to share their experience and thought processes when considering a valid trade. I have been quite open myself. But I'm always met with the same "well I see what you did is quite solid but what lead you to deem this trade valid for you? "
The answer is quite simple, I have a few things that I consider which are easy rules to follow. I realized that the simpler you make it, the easier it is for you to trade and move on with your day.
I highlight a few "valid" zones and go about my day. I've got an app that alerts me when price enters the zone on my watchlist. This is because I don't just rely on forex trading money, I doubt it would be wise to unless you're trading a 80% win rate strategy. Sometimes opportunities are there and we exploit them accordingly but sometimes we are either distracted by life issues and decide to not go into the markets stressed out or opportunities just aren't there or they are but your golden rules aren't quite met.
My rules are pretty simple, one of the prime golden rules is, "the risk is supposed to be very minimal to the reward I want to yield from that specific trade". i.e I can risk -50 pips for a +150 and more pips gain. My usual target starts at 1:2 but my most satisfying trade would be a 1:3 and above. This way I can lose 6/10 trades and still be profitable.
I make sure to keep my charts clean and simple so to understand what price does without the interference of indicators all over my charts. Not to say if you use indicators for confluence is a complete no-no. Each trader has their own style and I would be a narcissistic asshole if I assumed my way is superior than anybody else's.
NB: I'm doing this for anybody who has a vague or no idea of supply and demand. Everything here has made me profitable or at least break even but doesn't guarantee the same for you. This is just a scratch on the surface so do all you can for due diligence when it comes to understanding this topic with more depth and clear comprehension.
Supply and Demand valid zones properties; what to me makes me think "oh this zone has the potential to make me money, let me put it on my watchlist"? Mind when I say watchlist, not trade it. These are different in this sense.
👉With any zone, you're supposed to watch how price enters the zone, if there's a strong push in the opposite direction or whatever price action you're observing...only then does the zone becomes valid. YOU TRADE THE REACTION, NOT THE EXPECTATION Some setups just fail and that's okay because you didn't gamble. ✍
!!!IMPORTANT SUBJECT TO LEARN BEFORE YOU START SUPPLY AND DEMAND!!!
FTR. Failure to Return.(Please read on these if you haven't. They are extremely important in SnD). Mostly occur after an impulse move from a turning point. See attached examples: RBR(rally base rally)/DBD(drop base drop). They comprise of an initial move to a certain direction, a single candle in the opposite direction and followed by 2 or more strong candles in the initial direction. The opposite candle is your FTR(This is your zone) The first time price comes back(FTB) to a zone with an FTR has high possibilities to be a strong zone.
How to identify high quality zones according to my approach:
  1. Engulfing zones; This is a personal favorite. For less errors I identify the best opportunities using the daily and 4H chart.
On the example given, I chose the GBPNZD trade idea I shared here a month ago I believe. A double bottom is easily identified, with the final push well defined Bullish Engulfing candle. To further solidify it are the strong wicks to show strong rejection and failure to close lower than the left shoulder. How we draw our zone is highlight the whole candle just before the Engulfing Candle. That's your zone. After drawing it, you also pay attention to the price that is right where the engulfing starts. You then set a price alert on your preferred app because usually price won't get there immediately. This is the second most important part of trading, PATIENCE. If you can be disciplined enough to not leave a limit order, or place a market order just because you trust your analysis...you've won half the battle because we're not market predictors, we're students. And we trade the reaction.
On the given example, price had already reached the zone of interest. Price action observed was, there was a rejection that drove it out of the zone, this is the reaction we want. Soon as price returns(retests)...this is your time to fill or kill moment, going to a 4H or 1H to make minimum risk trades. (See GBPNZD Example 1&2)
  1. Liquidity Run; This approach looks very similar to the Engulfing zones. The difference is, price makes a few rejections on a higher timeframe level(Resistance or support). This gives the novice trader an idea that we've established a strong support or resistance, leading to them either selling or buying given the opportunity. Price then breaks that level trapping the support and resistance trader. At this point, breakout traders have stop orders below or above these levels to anticipate a breakout at major levels with stops just below the levels. Now that the market has enough traders trapped, it goes for the stop losses above or below support and resistance levels after taking them out, price comes back into the level to take out breakout traders' stop losses. This is where it has gathered enough liquidity to move it's desired direction.
The given example on the NZDJPY shows a strong level established twice. With the Bearish Engulfing movement, price leaves a supply zone...that's where we come in. We go to smaller timeframes for a well defined entry with our stops above the recent High targeting the next demand zone.
The second screenshot illustrates how high the reward of this approach is as well. Due diligence is required for this kind of approach because it's not uncommon but usually easily misinterpreted, which is why it's important it's on higher timeframes.
You can back test and establish your own rules on this but the RSI in this case was used for confluence. It showed a strong divergence which made it an even easier trade to take.
...and last but definitely not least,
  1. Double Bottom/Top. (I've used double bottoms on examples because these are the only trades I shared here so we'll talk about double bottoms. Same but opposite rules apply on double tops).
The first most important rule here is when you look to your left, price should have made a Low, High and a Lower Low. This way, the last leg(shoulder) should be lower than the first. Some call this "Hidden Zones". When drawing the zones, the top border of the zone is supposed to be on the tip of the Low and covering the Lower Low. **The top border is usually the entry point.
On the first given example I shared this week, NZDCAD. After identifying the structure, you start to look for zones that could further verify the structure for confluence. Since this was identified on the 4H, when you zoom out to the daily chart...there's a very well defined demand zone (RBR). By now you should know how strong these kind of zones are especially if found on higher timeframes. That will now be your kill zone. You'll draw another zone within the bigger zone, if price doesn't close below it...you've got a trade. You'll put your stop losses outside the initial zone to avoid wicks(liquidity runs/stop hunts)
On the second image you'll see how price closed within the zone and rallied upwards towards your targets.
The second example is CHFJPY; although looking lower, there isn't a rally base rally that further solidifies our bias...price still respected the zone. Sometimes we just aren't going to get perfect setups but it is up to us to make calculated risks. In this case, risk is very minimal considering the potential profit.
The third example (EURNZD) was featured because sometimes you just can't always get perfect price action within your desired zone. Which is why it's important to wait for price to close before actually taking a trade. Even if you entered prematurely and were taken out of the trade, the rules are still respected hence a re entry would still yield you more than what you would have lost although revenge trading is wrong.
I hope you guys learnt something new and understand the thought process that leads to deciding which setups to trade from prepared supply and demand trade ideas. It's important to do your own research and back testing that matches your own trading style. I'm more of a swing trader hence I find my zones using the Daily and 4H chart. Keeping it simple and trading the reaction to your watched zone is the most important part about trading any strategy.
Important Note: The trade ideas on this post are trades shared on this sub ever since my being active only because I don't want to share ideas that I may have carefully picked to make my trading approach a blind pick from the millions on the internet. All these were shared here.
Here's a link to the trade ideas analyzed for this post specifically
Questions are welcome on the comments section. Thank you for reading till here.
submitted by SupplyAndDemandGuy to Forex [link] [comments]

Former investment bank FX trader: Risk management part II

Former investment bank FX trader: Risk management part II
Firstly, thanks for the overwhelming comments and feedback. Genuinely really appreciated. I am pleased 500+ of you find it useful.
If you didn't read the first post you can do so here: risk management part I. You'll need to do so in order to make sense of the topic.
As ever please comment/reply below with questions or feedback and I'll do my best to get back to you.
Part II
  • Letting stops breathe
  • When to change a stop
  • Entering and exiting winning positions
  • Risk:reward ratios
  • Risk-adjusted returns

Letting stops breathe

We talked earlier about giving a position enough room to breathe so it is not stopped out in day-to-day noise.
Let’s consider the chart below and imagine you had a trailing stop. It would be super painful to miss out on the wider move just because you left a stop that was too tight.

Imagine being long and stopped out on a meaningless retracement ... ouch!
One simple technique is simply to look at your chosen chart - let’s say daily bars. And then look at previous trends and use the measuring tool. Those generally look something like this and then you just click and drag to measure.
For example if we wanted to bet on a downtrend on the chart above we might look at the biggest retracement on the previous uptrend. That max drawdown was about 100 pips or just under 1%. So you’d want your stop to be able to withstand at least that.
If market conditions have changed - for example if CVIX has risen - and daily ranges are now higher you should incorporate that. If you know a big event is coming up you might think about that, too. The human brain is a remarkable tool and the power of the eye-ball method is not to be dismissed. This is how most discretionary traders do it.
There are also more analytical approaches.
Some look at the Average True Range (ATR). This attempts to capture the volatility of a pair, typically averaged over a number of sessions. It looks at three separate measures and takes the largest reading. Think of this as a moving average of how much a pair moves.
For example, below shows the daily move in EURUSD was around 60 pips before spiking to 140 pips in March. Conditions were clearly far more volatile in March. Accordingly, you would need to leave your stop further away in March and take a correspondingly smaller position size.

ATR is available on pretty much all charting systems
Professional traders tend to use standard deviation as a measure of volatility instead of ATR. There are advantages and disadvantages to both. Averages are useful but can be misleading when regimes switch (see above chart).
Once you have chosen a measure of volatility, stop distance can then be back-tested and optimised. For example does 2x ATR work best or 5x ATR for a given style and time horizon?
Discretionary traders may still eye-ball the ATR or standard deviation to get a feeling for how it has changed over time and what ‘normal’ feels like for a chosen study period - daily, weekly, monthly etc.

Reasons to change a stop

As a general rule you should be disciplined and not change your stops. Remember - losers average losers. This is really hard at first and we’re going to look at that in more detail later.
There are some good reasons to modify stops but they are rare.
One reason is if another risk management process demands you stop trading and close positions. We’ll look at this later. In that case just close out your positions at market and take the loss/gains as they are.
Another is event risk. If you have some big upcoming data like Non Farm Payrolls that you know can move the market +/- 150 pips and you have no edge going into the release then many traders will take off or scale down their positions. They’ll go back into the positions when the data is out and the market has quietened down after fifteen minutes or so. This is a matter of some debate - many traders consider it a coin toss and argue you win some and lose some and it all averages out.
Trailing stops can also be used to ‘lock in’ profits. We looked at those before. As the trade moves in your favour (say up if you are long) the stop loss ratchets with it. This means you may well end up ‘stopping out’ at a profit - as per the below example.

The mighty trailing stop loss order
It is perfectly reasonable to have your stop loss move in the direction of PNL. This is not exposing you to more risk than you originally were comfortable with. It is taking less and less risk as the trade moves in your favour. Trend-followers in particular love trailing stops.
One final question traders ask is what they should do if they get stopped out but still like the trade. Should they try the same trade again a day later for the same reasons? Nope. Look for a different trade rather than getting emotionally wed to the original idea.
Let’s say a particular stock looked cheap based on valuation metrics yesterday, you bought, it went down and you got stopped out. Well, it is going to look even better on those same metrics today. Maybe the market just doesn’t respect value at the moment and is driven by momentum. Wait it out.
Otherwise, why even have a stop in the first place?

Entering and exiting winning positions

Take profits are the opposite of stop losses. They are also resting orders, left with the broker, to automatically close your position if it reaches a certain price.
Imagine I’m long EURUSD at 1.1250. If it hits a previous high of 1.1400 (150 pips higher) I will leave a sell order to take profit and close the position.
The rookie mistake on take profits is to take profit too early. One should start from the assumption that you will win on no more than half of your trades. Therefore you will need to ensure that you win more on the ones that work than you lose on those that don’t.

Sad to say but incredibly common: retail traders often take profits way too early
This is going to be the exact opposite of what your emotions want you to do. We are going to look at that in the Psychology of Trading chapter.
Remember: let winners run. Just like stops you need to know in advance the level where you will close out at a profit. Then let the trade happen. Don’t override yourself and let emotions force you to take a small profit. A classic mistake to avoid.
The trader puts on a trade and it almost stops out before rebounding. As soon as it is slightly in the money they spook and cut out, instead of letting it run to their original take profit. Do not do this.

Entering positions with limit orders

That covers exiting a position but how about getting into one?
Take profits can also be left speculatively to enter a position. Sometimes referred to as “bids” (buy orders) or “offers” (sell orders). Imagine the price is 1.1250 and the recent low is 1.1205.
You might wish to leave a bid around 1.2010 to enter a long position, if the market reaches that price. This way you don’t need to sit at the computer and wait.
Again, typically traders will use tech analysis to identify attractive levels. Again - other traders will cluster with your orders. Just like the stop loss we need to bake that in.
So this time if we know everyone is going to buy around the recent low of 1.1205 we might leave the take profit bit a little bit above there at 1.1210 to ensure it gets done. Sure it costs 5 more pips but how mad would you be if the low was 1.1207 and then it rallied a hundred points and you didn’t have the trade on?!
There are two more methods that traders often use for entering a position.
Scaling in is one such technique. Let’s imagine that you think we are in a long-term bulltrend for AUDUSD but experiencing a brief retracement. You want to take a total position of 500,000 AUD and don’t have a strong view on the current price action.
You might therefore leave a series of five bids of 100,000. As the price moves lower each one gets hit. The nice thing about scaling in is it reduces pressure on you to pick the perfect level. Of course the risk is that not all your orders get hit before the price moves higher and you have to trade at-market.
Pyramiding is the second technique. Pyramiding is for take profits what a trailing stop loss is to regular stops. It is especially common for momentum traders.

Pyramiding into a position means buying more as it goes in your favour
Again let’s imagine we’re bullish AUDUSD and want to take a position of 500,000 AUD.
Here we add 100,000 when our first signal is reached. Then we add subsequent clips of 100,000 when the trade moves in our favour. We are waiting for confirmation that the move is correct.
Obviously this is quite nice as we humans love trading when it goes in our direction. However, the drawback is obvious: we haven’t had the full amount of risk on from the start of the trend.
You can see the attractions and drawbacks of both approaches. It is best to experiment and choose techniques that work for your own personal psychology as these will be the easiest for you to stick with and build a disciplined process around.

Risk:reward and win ratios

Be extremely skeptical of people who claim to win on 80% of trades. Most traders will win on roughly 50% of trades and lose on 50% of trades. This is why risk management is so important!
Once you start keeping a trading journal you’ll be able to see how the win/loss ratio looks for you. Until then, assume you’re typical and that every other trade will lose money.
If that is the case then you need to be sure you make more on the wins than you lose on the losses. You can see the effect of this below.

A combination of win % and risk:reward ratio determine if you are profitable
A typical rule of thumb is that a ratio of 1:3 works well for most traders.
That is, if you are prepared to risk 100 pips on your stop you should be setting a take profit at a level that would return you 300 pips.
One needn’t be religious about these numbers - 11 pips and 28 pips would be perfectly fine - but they are a guideline.
Again - you should still use technical analysis to find meaningful chart levels for both the stop and take profit. Don’t just blindly take your stop distance and do 3x the pips on the other side as your take profit. Use the ratio to set approximate targets and then look for a relevant resistance or support level in that kind of region.

Risk-adjusted returns

Not all returns are equal. Suppose you are examining the track record of two traders. Now, both have produced a return of 14% over the year. Not bad!
The first trader, however, made hundreds of small bets throughout the year and his cumulative PNL looked like the left image below.
The second trader made just one bet — he sold CADJPY at the start of the year — and his PNL looked like the right image below with lots of large drawdowns and volatility.
Would you rather have the first trading record or the second?
If you were investing money and betting on who would do well next year which would you choose? Of course all sensible people would choose the first trader. Yet if you look only at returns one cannot distinguish between the two. Both are up 14% at that point in time. This is where the Sharpe ratio helps .
A high Sharpe ratio indicates that a portfolio has better risk-adjusted performance. One cannot sensibly compare returns without considering the risk taken to earn that return.
If I can earn 80% of the return of another investor at only 50% of the risk then a rational investor should simply leverage me at 2x and enjoy 160% of the return at the same level of risk.
This is very important in the context of Execution Advisor algorithms (EAs) that are popular in the retail community. You must evaluate historic performance by its risk-adjusted return — not just the nominal return. Incidentally look at the Sharpe ratio of ones that have been live for a year or more ...
Otherwise an EA developer could produce two EAs: the first simply buys at 1000:1 leverage on January 1st ; and the second sells in the same manner. At the end of the year, one of them will be discarded and the other will look incredible. Its risk-adjusted return, however, would be abysmal and the odds of repeated success are similarly poor.

Sharpe ratio

The Sharpe ratio works like this:
  • It takes the average returns of your strategy;
  • It deducts from these the risk-free rate of return i.e. the rate anyone could have got by investing in US government bonds with very little risk;
  • It then divides this total return by its own volatility - the more smooth the return the higher and better the Sharpe, the more volatile the lower and worse the Sharpe.
For example, say the return last year was 15% with a volatility of 10% and US bonds are trading at 2%. That gives (15-2)/10 or a Sharpe ratio of 1.3. As a rule of thumb a Sharpe ratio of above 0.5 would be considered decent for a discretionary retail trader. Above 1 is excellent.
You don’t really need to know how to calculate Sharpe ratios. Good trading software will do this for you. It will either be available in the system by default or you can add a plug-in.

VAR

VAR is another useful measure to help with drawdowns. It stands for Value at Risk. Normally people will use 99% VAR (conservative) or 95% VAR (aggressive). Let’s say you’re long EURUSD and using 95% VAR. The system will look at the historic movement of EURUSD. It might spit out a number of -1.2%.

A 5% VAR of -1.2% tells you you should expect to lose 1.2% on 5% of days, whilst 95% of days should be better than that
This means it is expected that on 5 days out of 100 (hence the 95%) the portfolio will lose 1.2% or more. This can help you manage your capital by taking appropriately sized positions. Typically you would look at VAR across your portfolio of trades rather than trade by trade.
Sharpe ratios and VAR don’t give you the whole picture, though. Legendary fund manager, Howard Marks of Oaktree, notes that, while tools like VAR and Sharpe ratios are helpful and absolutely necessary, the best investors will also overlay their own judgment.
Investors can calculate risk metrics like VaR and Sharpe ratios (we use them at Oaktree; they’re the best tools we have), but they shouldn’t put too much faith in them. The bottom line for me is that risk management should be the responsibility of every participant in the investment process, applying experience, judgment and knowledge of the underlying investments.Howard Marks of Oaktree Capital
What he’s saying is don’t misplace your common sense. Do use these tools as they are helpful. However, you cannot fully rely on them. Both assume a normal distribution of returns. Whereas in real life you get “black swans” - events that should supposedly happen only once every thousand years but which actually seem to happen fairly often.
These outlier events are often referred to as “tail risk”. Don’t make the mistake of saying “well, the model said…” - overlay what the model is telling you with your own common sense and good judgment.

Coming up in part III

Available here
Squeezes and other risks
Market positioning
Bet correlation
Crap trades, timeouts and monthly limits

***
Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer.
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Level01Main App Launch on 10th Oct 2020

Level01Main App Launch on 10th Oct 2020
https://preview.redd.it/8y1d9ion4er51.jpg?width=1200&format=pjpg&auto=webp&s=8a260daa2b740980958dfa5a9459bcf7405f9727
Level01 is the World’s 1st DeFi Platform with AI-Guided Derivatives Trading. Our main app will be launched on 10 October 2020. Get ready for real money trading.
- Clear, Transparent and Fair Options Trading DApp - Decentralized: Peer to peer options trading for more profits - Trade Fairly: FairSense AI calculates contract Risk/Reward - Reliable Data from Bloomberg and Thomson Reuters - Control your own funds: Trade mobile app includes non-custodial private wallet - Blockchain-based smart contracts for transparency and reliability - No tampering: Settlement finality on ETH blockchain - Trade-In Multiple Markets: Forex, Crypto, Commodity - Easy To Use: Generate profits from price movements, hedging or insurance.
Download and try it, https://play.google.com/store/apps/details?id=io.level01.android Quickstart Guide: https://level01.io/quickstart-trading-guide/ Web: https://Level01.io
submitted by Level01Exchange to Level01io [link] [comments]

We are live! Get your hands on Level01, the World’s 1st DeFi Platform with AI-Guided Derivatives Trading.

We are live! Get your hands on Level01, the World’s 1st DeFi Platform with AI-Guided Derivatives Trading.
https://preview.redd.it/zw7phqsvbhs51.jpg?width=526&format=pjpg&auto=webp&s=1410d020d405ef7c3fb1f81d74e795e91b5dac3d
We are live! Get your hands on Level01, the World’s 1st DeFi Platform with AI-Guided Derivatives Trading. You can try either Demo trading or Real Money trading. We provide free 10,000 LVX demo token for you to experience trading with our FairSense AI guidance without risk.
- Clear, Transparent and Fair Options Trading DApp - Decentralized: Peer to peer options trading for more profits - Trade Fairly: FairSense AI calculates contract Risk/Reward - Reliable Data from Bloomberg and Thomson Reuters - Control your own funds: Trade mobile app includes non-custodial private wallet - Blockchain-based smart contracts for transparency and reliability - No tampering: Settlement finality on ETH blockchain - Trade In Multiple Markets: Forex, Crypto, Commodity - Easy To Use: Generate profits from price movements, hedging or insurance.
Download and try it, https://play.google.com/store/apps/details...
Quickstart Guide: https://level01.io/quickstart-trading-guide/
Web: https://Level01.io
submitted by Level01Exchange to Level01io [link] [comments]

One more day to our main app launch! Get ready for real money trading.

One more day to our main app launch! Get ready for real money trading.
https://preview.redd.it/38yqms52tzr51.jpg?width=526&format=pjpg&auto=webp&s=8ae9736c169a6451fc9824f26600e53801eeea24
Level01 is the World’s 1st DeFi Platform with AI-Guided Derivatives Trading.
- Clear, Transparent and Fair Options Trading DApp - Decentralized: Peer to peer options trading for more profits - Trade Fairly: FairSense AI calculates contract Risk/Reward - Reliable Data from Bloomberg and Thomson Reuters - Control your own funds: Trade mobile app includes non-custodial private wallet - Blockchain-based smart contracts for transparency and reliability - No tampering: Settlement finality on ETH blockchain - Trade In Multiple Markets: Forex, Crypto, Commodity - Easy To Use: Generate profits from price movements, hedging or insurance.
Download and try it, https://play.google.com/store/apps/details...
Quickstart Guide: https://level01.io/quickstart-trading-guide/
Web: https://Level01.io
submitted by Level01Exchange to Level01io [link] [comments]

Our main app will be launched on 10 October 2020

Our main app will be launched on 10 October 2020
https://preview.redd.it/r2duflcppsr51.jpg?width=1080&format=pjpg&auto=webp&s=b5c77fba0dcade486c30fb580b7fd85348e7b195
Level01 is the World’s 1st DeFi Platform with AI-Guided Derivatives Trading. Our main app will be launched on 10 October 2020. Get ready for real money trading. ☑ Clear, Transparent and Fair Options Trading DApp ☑ Decentralized: Peer to peer options trading for more profits ☑ Trade Fairly: FairSense AI calculates contract Risk/Reward ☑ Reliable Data from Bloomberg and Thomson Reuters ☑ Control your own funds: Trade mobile app includes non-custodial private wallet ☑ Blockchain-based smart contracts for transparency and reliability ☑ No tampering: Settlement finality on ETH blockchain ☑ Trade In Multiple Markets: Forex, Crypto, Commodity ☑ Easy To Use: Generate profits from price movements, hedging or insurance.
Download and try it, https://play.google.com/store/apps/details?id=io.level01.android Quickstart Guide: https://level01.io/quickstart-trading-guide/ Web: https://Level01.io
submitted by Level01Exchange to Level01io [link] [comments]

We are live! Get your hands on Level01, the World’s 1st DeFi Platform with AI-Guided Derivatives Trading.

We are live! Get your hands on Level01, the World’s 1st DeFi Platform with AI-Guided Derivatives Trading.
https://preview.redd.it/6yikxzprbhs51.jpg?width=526&format=pjpg&auto=webp&s=49f372132681d480c122fdcf07dfb85d7821346e
We are live! Get your hands on Level01, the World’s 1st DeFi Platform with AI-Guided Derivatives Trading. You can try either Demo trading or Real Money trading. We provide free 10,000 LVX demo token for you to experience trading with our FairSense AI guidance without risk.
- Clear, Transparent and Fair Options Trading DApp - Decentralized: Peer to peer options trading for more profits - Trade Fairly: FairSense AI calculates contract Risk/Reward - Reliable Data from Bloomberg and Thomson Reuters - Control your own funds: Trade mobile app includes non-custodial private wallet - Blockchain-based smart contracts for transparency and reliability - No tampering: Settlement finality on ETH blockchain - Trade In Multiple Markets: Forex, Crypto, Commodity - Easy To Use: Generate profits from price movements, hedging or insurance.
Download and try it, https://play.google.com/store/apps/details...
Quickstart Guide: https://level01.io/quickstart-trading-guide/
Web: https://Level01.io
submitted by Level01Exchange to u/Level01Exchange [link] [comments]

One more day to our main app launch! Get ready for real money trading.

One more day to our main app launch! Get ready for real money trading.
https://preview.redd.it/7xixflx2szr51.jpg?width=526&format=pjpg&auto=webp&s=122f8cb099cbe0ce621fbd538e0cf0f432ec587b
Level01 is the World’s 1st DeFi Platform with AI-Guided Derivatives Trading.
- Clear, Transparent and Fair Options Trading DApp - Decentralized: Peer to peer options trading for more profits - Trade Fairly: FairSense AI calculates contract Risk/Reward - Reliable Data from Bloomberg and Thomson Reuters - Control your own funds: Trade mobile app includes non-custodial private wallet - Blockchain-based smart contracts for transparency and reliability - No tampering: Settlement finality on ETH blockchain - Trade In Multiple Markets: Forex, Crypto, Commodity - Easy To Use: Generate profits from price movements, hedging or insurance.
Download and try it, https://play.google.com/store/apps/details...
Quickstart Guide: https://level01.io/quickstart-trading-guide/
Web: https://Level01.io
submitted by Level01Exchange to u/Level01Exchange [link] [comments]

Our main app will be launched on 10 October 2020

Our main app will be launched on 10 October 2020
https://preview.redd.it/qxk5wf6tpsr51.jpg?width=1080&format=pjpg&auto=webp&s=450016dd1557e59309586b0db0b8ca92fa585d3a
Level01 is the World’s 1st DeFi Platform with AI-Guided Derivatives Trading. Our main app will be launched on 10 October 2020. Get ready for real money trading. ☑ Clear, Transparent and Fair Options Trading DApp ☑ Decentralized: Peer to peer options trading for more profits ☑ Trade Fairly: FairSense AI calculates contract Risk/Reward ☑ Reliable Data from Bloomberg and Thomson Reuters ☑ Control your own funds: Trade mobile app includes non-custodial private wallet ☑ Blockchain-based smart contracts for transparency and reliability ☑ No tampering: Settlement finality on ETH blockchain ☑ Trade In Multiple Markets: Forex, Crypto, Commodity ☑ Easy To Use: Generate profits from price movements, hedging or insurance.
Download and try it, https://play.google.com/store/apps/details?id=io.level01.android Quickstart Guide: https://level01.io/quickstart-trading-guide/ Web: https://Level01.io
submitted by Level01Exchange to u/Level01Exchange [link] [comments]

Level01 Main App Launch on 10th Oct 2020

Level01 Main App Launch on 10th Oct 2020
https://preview.redd.it/io3b07pb4er51.jpg?width=1200&format=pjpg&auto=webp&s=789d8531a328b4f047e141818f363bd96d3ec990
Level01 is the World’s 1st DeFi Platform with AI-Guided Derivatives Trading. Our main app will be launched on 10 October 2020. Get ready for real money trading.
- Clear, Transparent and Fair Options Trading DApp - Decentralized: Peer to peer options trading for more profits - Trade Fairly: FairSense AI calculates contract Risk/Reward - Reliable Data from Bloomberg and Thomson Reuters - Control your own funds: Trade mobile app includes non-custodial private wallet - Blockchain-based smart contracts for transparency and reliability - No tampering: Settlement finality on ETH blockchain - Trade-In Multiple Markets: Forex, Crypto, Commodity - Easy To Use: Generate profits from price movements, hedging or insurance.
submitted by Level01Exchange to u/Level01Exchange [link] [comments]

Can someone review my backtesting results so far and tell me what else i need to calculate?

Strategy details:50 SMA STRAT: When price is ABOVE the SMA look for BUYS. When price is BELOW the SMA look for SELLS. Trend lines will be placed and once price has broken the trendline I will enter on the retest (for the second backtest i did the breakouts) and look at the SMA for the last confirmation on the direction of price. I will only be looking for trading opportunities that offer 1:1.
CONFIRMATION CHECKLIST:
Is it a clear trend on ALL my main timeframes? (H1, H4, Daily)
Is price about to break/already broken/retesting?
Is price above or below the SMA?
Can I get at least 1:1 Risk To Reward?
Is a news event with MAJOR IMPACT about to happen? https://www.forexfactory.com/calendar
Calculate size before entering trade https://www.myfxbook.com/forex-calculators/position-size

Pair: GBP/USD
RETEST BACKTEST:
41 TRADES IN TOTAL

19 Winning (19/Total Number Of Trades 41=46% Win Rate)
Trade 1: 27 pips
Trade 2: 36 pips
Trade 3: 39 pips
Trade 4: 30 pips
Trade 5: 40 pips
Trade 6: 35 pips
Trade 7: 34 pips
Trade 8: 35 pips
Trade 9: 30 pips
Trade 10: 35 pips
Trade 11: 35 pips
Trade 12: 30 pips
Trade 13: 30 pips
Trade 14: 30 pips
Trade 15: 20 pips
Trade 16: 22 pips
Trade 17: 22 pips
Trade 18: 30 pips
Trade 19: 62 pips

TOTAL=622 Pips
£62.20 profit on 0.01 lots


20 Losing
Trade 1: 30 pips
Trade 2: 27 pips
Trade 3: 34 pips
Trade 4: 30 pips
Trade 5: 30 pips
Trade 6: 34 pips
Trade 7: 30 pips
Trade 8: 30 pips
Trade 9: 30 pips
Trade 10: 35 pips
Trade 11: 30 pips
Trade 12: 30 pips
Trade 13: 25 pips
Trade 14: 25 pips
Trade 15: 25 pips
Trade 16: 20 pips
Trade 17: 30 pips
Trade 18: 25 pips
Trade 19: 30 pips
Trade 20: 29 pips

TOTAL=579 pips
£57.90 loss on 0.01 lots

2 Breakeven

£62.20 - £57.90 = £4.30
BREAKOUT BACKTEST:

TOTAL TRADES 54

24 Winning (24/55 total=43% Win Rate)
Trade 1: 20 pips
Trade 2: 30 pips
Trade 3: 5 pips
Trade 4: 30 pips
Trade 5: 10 pips
Trade 6: 30 pips
Trade 7: 4 pips
Trade 8: 30 pips
Trade 9: 30 pips
Trade 10: 30 pips
Trade 11: 6 pips
Trade 12: 30 pips
Trade 13: 30 pips
Trade 14: 30 pips
Trade 15: 30 pips
Trade 16: 30 pips
Trade 17: 30 pips
Trade 18: 25 pips
Trade 19: 30 pips
Trade 20: 30 pips
Trade 21: 30 pips
Trade 22: 30 pips
Trade 23: 30 pips
Trade 24: 30 pips
Trade 5: 6 pips

TOTAL PIPS=610 pips
£61

24 Losing
Trade 1: 14 pips
Trade 2: 30 pips
Trade 3: 30 pips
Trade 4: 14 pips
Trade 5: 14 pips
Trade 6: 30 pips
Trade 7: 30 pips
Trade 8: 25 pips
Trade 9: 30 pips
Trade 10: 5 pips
Trade 11: 30 pips
Trade 12: 30 pips
Trade 13: 5 pips
Trade 14: 30 pips
Trade 15: 25 pips
Trade 16: 35 pips
Trade 17: 15 pips
Trade 18: 30 pips
Trade 19: 18 pips
Trade 20: 15 pips
Trade 21: 18 pips
Trade 22: 10 pips
Trade 23: 30 pips
Trade 24: 30 pips

TOTAL=543 pips
£54.30
Breakeven 5

£61-£54.30=£7.70

Edit: In the second backtest you'll notice for some trades it was like 4 pips, 5 pips, etc. With those trades i either exited early to avoid the full loss.
submitted by YH-ITS-KESH to Forex [link] [comments]

Where is Bitcoin Going and When?

Where is Bitcoin Going and When?

The Federal Reserve and the United States government are pumping extreme amounts of money into the economy, already totaling over $484 billion. They are doing so because it already had a goal to inflate the United States Dollar (USD) so that the market can continue to all-time highs. It has always had this goal. They do not care how much inflation goes up by now as we are going into a depression with the potential to totally crash the US economy forever. They believe the only way to save the market from going to zero or negative values is to inflate it so much that it cannot possibly crash that low. Even if the market does not dip that low, inflation serves the interest of powerful people.
The impending crash of the stock market has ramifications for Bitcoin, as, though there is no direct ongoing-correlation between the two, major movements in traditional markets will necessarily affect Bitcoin. According to the Blockchain Center’s Cryptocurrency Correlation Tool, Bitcoin is not correlated with the stock market. However, when major market movements occur, they send ripples throughout the financial ecosystem which necessary affect even ordinarily uncorrelated assets.
Therefore, Bitcoin will reach X price on X date after crashing to a price of X by X date.

Stock Market Crash

The Federal Reserve has caused some serious consternation with their release of ridiculous amounts of money in an attempt to buoy the economy. At face value, it does not seem to have any rationale or logic behind it other than keeping the economy afloat long enough for individuals to profit financially and politically. However, there is an underlying basis to what is going on which is important to understand in order to profit financially.
All markets are functionally price probing systems. They constantly undergo a price-discovery process. In a fiat system, money is an illusory and a fundamentally synthetic instrument with no intrinsic value – similar to Bitcoin. The primary difference between Bitcoin is the underlying technology which provides a slew of benefits that fiat does not. Fiat, however, has an advantage in being able to have the support of powerful nation-states which can use their might to insure the currency’s prosperity.
Traditional stock markets are composed of indices (pl. of index). Indices are non-trading market instruments which are essentially summaries of business values which comprise them. They are continuously recalculated throughout a trading day, and sometimes reflected through tradable instruments such as Exchange Traded Funds or Futures. Indices are weighted by market capitalizations of various businesses.
Price theory essentially states that when a market fails to take out a new low in a given range, it will have an objective to take out the high. When a market fails to take out a new high, it has an objective to make a new low. This is why price-time charts go up and down, as it does this on a second-by-second, minute-by-minute, day-by-day, and even century-by-century basis. Therefore, market indices will always return to some type of bull market as, once a true low is formed, the market will have a price objective to take out a new high outside of its’ given range – which is an all-time high. Instruments can only functionally fall to zero, whereas they can grow infinitely.
So, why inflate the economy so much?
Deflation is disastrous for central banks and markets as it raises the possibility of producing an overall price objective of zero or negative values. Therefore, under a fractional reserve system with a fiat currency managed by a central bank – the goal of the central bank is to depreciate the currency. The dollar is manipulated constantly with the intention of depreciating its’ value.
Central banks have a goal of continued inflated fiat values. They tend to ordinarily contain it at less than ten percent (10%) per annum in order for the psyche of the general populace to slowly adjust price increases. As such, the markets are divorced from any other logic. Economic policy is the maintenance of human egos, not catering to fundamental analysis. Gross Domestic Product (GDP) growth is well-known not to be a measure of actual growth or output. It is a measure of increase in dollars processed. Banks seek to produce raising numbers which make society feel like it is growing economically, making people optimistic. To do so, the currency is inflated, though inflation itself does not actually increase growth. When society is optimistic, it spends and engages in business – resulting in actual growth. It also encourages people to take on credit and debts, creating more fictional fiat.
Inflation is necessary for markets to continue to reach new heights, generating positive emotional responses from the populace, encouraging spending, encouraging debt intake, further inflating the currency, and increasing the sale of government bonds. The fiat system only survives by generating more imaginary money on a regular basis.
Bitcoin investors may profit from this by realizing that stock investors as a whole always stand to profit from the market so long as it is managed by a central bank and does not collapse entirely. If those elements are filled, it has an unending price objective to raise to new heights. It also allows us to realize that this response indicates that the higher-ups believe that the economy could crash in entirety, and it may be wise for investors to have multiple well-thought-out exit strategies.

Economic Analysis of Bitcoin

The reason why the Fed is so aggressively inflating the economy is due to fears that it will collapse forever or never rebound. As such, coupled with a global depression, a huge demand will appear for a reserve currency which is fundamentally different than the previous system. Bitcoin, though a currency or asset, is also a market. It also undergoes a constant price-probing process. Unlike traditional markets, Bitcoin has the exact opposite goal. Bitcoin seeks to appreciate in value and not depreciate. This has a quite different affect in that Bitcoin could potentially become worthless and have a price objective of zero.
Bitcoin was created in 2008 by a now famous mysterious figure known as Satoshi Nakamoto and its’ open source code was released in 2009. It was the first decentralized cryptocurrency to utilize a novel protocol known as the blockchain. Up to one megabyte of data may be sent with each transaction. It is decentralized, anonymous, transparent, easy to set-up, and provides myriad other benefits. Bitcoin is not backed up by anything other than its’ own technology.
Bitcoin is can never be expected to collapse as a framework, even were it to become worthless. The stock market has the potential to collapse in entirety, whereas, as long as the internet exists, Bitcoin will be a functional system with a self-authenticating framework. That capacity to persist regardless of the actual price of Bitcoin and the deflationary nature of Bitcoin means that it has something which fiat does not – inherent value.
Bitcoin is based on a distributed database known as the “blockchain.” Blockchains are essentially decentralized virtual ledger books, replete with pages known as “blocks.” Each page in a ledger is composed of paragraph entries, which are the actual transactions in the block.
Blockchains store information in the form of numerical transactions, which are just numbers. We can consider these numbers digital assets, such as Bitcoin. The data in a blockchain is immutable and recorded only by consensus-based algorithms. Bitcoin is cryptographic and all transactions are direct, without intermediary, peer-to-peer.
Bitcoin does not require trust in a central bank. It requires trust on the technology behind it, which is open-source and may be evaluated by anyone at any time. Furthermore, it is impossible to manipulate as doing so would require all of the nodes in the network to be hacked at once – unlike the stock market which is manipulated by the government and “Market Makers”. Bitcoin is also private in that, though the ledge is openly distributed, it is encrypted. Bitcoin’s blockchain has one of the greatest redundancy and information disaster recovery systems ever developed.
Bitcoin has a distributed governance model in that it is controlled by its’ users. There is no need to trust a payment processor or bank, or even to pay fees to such entities. There are also no third-party fees for transaction processing. As the ledge is immutable and transparent it is never possible to change it – the data on the blockchain is permanent. The system is not easily susceptible to attacks as it is widely distributed. Furthermore, as users of Bitcoin have their private keys assigned to their transactions, they are virtually impossible to fake. No lengthy verification, reconciliation, nor clearing process exists with Bitcoin.
Bitcoin is based on a proof-of-work algorithm. Every transaction on the network has an associated mathetical “puzzle”. Computers known as miners compete to solve the complex cryptographic hash algorithm that comprises that puzzle. The solution is proof that the miner engaged in sufficient work. The puzzle is known as a nonce, a number used only once. There is only one major nonce at a time and it issues 12.5 Bitcoin. Once it is solved, the fact that the nonce has been solved is made public.
A block is mined on average of once every ten minutes. However, the blockchain checks every 2,016,000 minutes (approximately four years) if 201,600 blocks were mined. If it was faster, it increases difficulty by half, thereby deflating Bitcoin. If it was slower, it decreases, thereby inflating Bitcoin. It will continue to do this until zero Bitcoin are issued, projected at the year 2140. On the twelfth of May, 2020, the blockchain will halve the amount of Bitcoin issued when each nonce is guessed. When Bitcoin was first created, fifty were issued per block as a reward to miners. 6.25 BTC will be issued from that point on once each nonce is solved.
Unlike fiat, Bitcoin is a deflationary currency. As BTC becomes scarcer, demand for it will increase, also raising the price. In this, BTC is similar to gold. It is predictable in its’ output, unlike the USD, as it is based on a programmed supply. We can predict BTC’s deflation and inflation almost exactly, if not exactly. Only 21 million BTC will ever be produced, unless the entire network concedes to change the protocol – which is highly unlikely.
Some of the drawbacks to BTC include congestion. At peak congestion, it may take an entire day to process a Bitcoin transaction as only three to five transactions may be processed per second. Receiving priority on a payment may cost up to the equivalent of twenty dollars ($20). Bitcoin mining consumes enough energy in one day to power a single-family home for an entire week.

Trading or Investing?

The fundamental divide in trading revolves around the question of market structure. Many feel that the market operates totally randomly and its’ behavior cannot be predicted. For the purposes of this article, we will assume that the market has a structure, but that that structure is not perfect. That market structure naturally generates chart patterns as the market records prices in time. In order to determine when the stock market will crash, causing a major decline in BTC price, we will analyze an instrument, an exchange traded fund, which represents an index, as opposed to a particular stock. The price patterns of the various stocks in an index are effectively smoothed out. In doing so, a more technical picture arises. Perhaps the most popular of these is the SPDR S&P Standard and Poor 500 Exchange Traded Fund ($SPY).
In trading, little to no concern is given about value of underlying asset. We are concerned primarily about liquidity and trading ranges, which are the amount of value fluctuating on a short-term basis, as measured by volatility-implied trading ranges. Fundamental analysis plays a role, however markets often do not react to real-world factors in a logical fashion. Therefore, fundamental analysis is more appropriate for long-term investing.
The fundamental derivatives of a chart are time (x-axis) and price (y-axis). The primary technical indicator is price, as everything else is lagging in the past. Price represents current asking price and incorrectly implementing positions based on price is one of the biggest trading errors.
Markets and currencies ordinarily have noise, their tendency to back-and-fill, which must be filtered out for true pattern recognition. That noise does have a utility, however, in allowing traders second chances to enter favorable positions at slightly less favorable entry points. When you have any market with enough liquidity for historical data to record a pattern, then a structure can be divined. The market probes prices as part of an ongoing price-discovery process. Market technicians must sometimes look outside of the technical realm and use visual inspection to ascertain the relevance of certain patterns, using a qualitative eye that recognizes the underlying quantitative nature
Markets and instruments rise slower than they correct, however they rise much more than they fall. In the same vein, instruments can only fall to having no worth, whereas they could theoretically grow infinitely and have continued to grow over time. Money in a fiat system is illusory. It is a fundamentally synthetic instrument which has no intrinsic value. Hence, the recent seemingly illogical fluctuations in the market.
According to trade theory, the unending purpose of a market or instrument is to create and break price ranges according to the laws of supply and demand. We must determine when to trade based on each market inflection point as defined in price and in time as opposed to abandoning the trend (as the contrarian trading in this sub often does). Time and Price symmetry must be used to be in accordance with the trend. When coupled with a favorable risk to reward ratio, the ability to stay in the market for most of the defined time period, and adherence to risk management rules; the trader has a solid methodology for achieving considerable gains.
We will engage in a longer term market-oriented analysis to avoid any time-focused pressure. The Bitcoin market is open twenty-four-hours a day, so trading may be done when the individual is ready, without any pressing need to be constantly alert. Let alone, we can safely project months in advance with relatively high accuracy. Bitcoin is an asset which an individual can both trade and invest, however this article will be focused on trading due to the wide volatility in BTC prices over the short-term.

Technical Indicator Analysis of Bitcoin

Technical indicators are often considered self-fulfilling prophecies due to mass-market psychology gravitating towards certain common numbers yielded from them. They are also often discounted when it comes to BTC. That means a trader must be especially aware of these numbers as they can prognosticate market movements. Often, they are meaningless in the larger picture of things.
  • Volume – derived from the market itself, it is mostly irrelevant. The major problem with volume for stocks is that the US market open causes tremendous volume surges eradicating any intrinsic volume analysis. This does not occur with BTC, as it is open twenty-four-seven. At major highs and lows, the market is typically anemic. Most traders are not active at terminal discretes (peaks and troughs) because of levels of fear. Volume allows us confidence in time and price symmetry market inflection points, if we observe low volume at a foretold range of values. We can rationalize that an absolute discrete is usually only discovered and anticipated by very few traders. As the general market realizes it, a herd mentality will push the market in the direction favorable to defending it. Volume is also useful for swing trading, as chances for swing’s validity increases if an increase in volume is seen on and after the swing’s activation. Volume is steadily decreasing. Lows and highs are reached when volume is lower.
Therefore, due to the relatively high volume on the 12th of March, we can safely determine that a low for BTC was not reached.
  • VIX – Volatility Index, this technical indicator indicates level of fear by the amount of options-based “insurance” in portfolios. A low VIX environment, less than 20 for the S&P index, indicates a stable market with a possible uptrend. A high VIX, over 20, indicates a possible downtrend. VIX is essentially useless for BTC as BTC-based options do not exist. It allows us to predict the market low for $SPY, which will have an indirect impact on BTC in the short term, likely leading to the yearly low. However, it is equally important to see how VIX is changing over time, if it is decreasing or increasing, as that indicates increasing or decreasing fear. Low volatility allows high leverage without risk or rest. Occasionally, markets do rise with high VIX.
As VIX is unusually high, in the forties, we can be confident that a downtrend for the S&P 500 is imminent.
  • RSI (Relative Strength Index): The most important technical indicator, useful for determining highs and lows when time symmetry is not availing itself. Sometimes analysis of RSI can conflict in different time frames, easiest way to use it is when it is at extremes – either under 30 or over 70. Extremes can be used for filtering highs or lows based on time-and-price window calculations. Highly instructive as to major corrective clues and indicative of continued directional movement. Must determine if longer-term RSI values find support at same values as before. It is currently at 73.56.
  • Secondly, RSI may be used as a high or low filter, to observe the level that short-term RSI reaches in counter-trend corrections. Repetitions based on market movements based on RSI determine how long a trade should be held onto. Once a short term RSI reaches an extreme and stay there, the other RSI’s should gradually reach the same extremes. Once all RSI’s are at extreme highs, a trend confirmation should occur and RSI’s should drop to their midpoint.

Trend Definition Analysis of Bitcoin

Trend definition is highly powerful, cannot be understated. Knowledge of trend logic is enough to be a profitable trader, yet defining a trend is an arduous process. Multiple trends coexist across multiple time frames and across multiple market sectors. Like time structure, it makes the underlying price of the instrument irrelevant. Trend definitions cannot determine the validity of newly formed discretes. Trend becomes apparent when trades based in counter-trend inflection points continue to fail.
Downtrends are defined as an instrument making lower lows and lower highs that are recurrent, additive, qualified swing setups. Downtrends for all instruments are similar, except forex. They are fast and complete much quicker than uptrends. An average downtrend is 18 months, something which we will return to. An uptrend inception occurs when an instrument reaches a point where it fails to make a new low, then that low will be tested. After that, the instrument will either have a deep range retracement or it may take out the low slightly, resulting in a double-bottom. A swing must eventually form.
A simple way to roughly determine trend is to attempt to draw a line from three tops going upwards (uptrend) or a line from three bottoms going downwards (downtrend). It is not possible to correctly draw a downtrend line on the BTC chart, but it is possible to correctly draw an uptrend – indicating that the overall trend is downwards. The only mitigating factor is the impending stock market crash.

Time Symmetry Analysis of Bitcoin

Time is the movement from the past through the present into the future. It is a measurement in quantified intervals. In many ways, our perception of it is a human construct. It is more powerful than price as time may be utilized for a trade regardless of the market inflection point’s price. Were it possible to perfectly understand time, price would be totally irrelevant due to the predictive certainty time affords. Time structure is easier to learn than price, but much more difficult to apply with any accuracy. It is the hardest aspect of trading to learn, but also the most rewarding.
Humans do not have the ability to recognize every time window, however the ability to define market inflection points in terms of time is the single most powerful trading edge. Regardless, price should not be abandoned for time alone. Time structure analysis It is inherently flawed, as such the markets have a fail-safe, which is Price Structure. Even though Time is much more powerful, Price Structure should never be completely ignored. Time is the qualifier for Price and vice versa. Time can fail by tricking traders into counter-trend trading.
Time is a predestined trade quantifier, a filter to slow trades down, as it allows a trader to specifically focus on specific time windows and rest at others. It allows for quantitative measurements to reach deterministic values and is the primary qualifier for trends. Time structure should be utilized before price structure, and it is the primary trade criterion which requires support from price. We can see price structure on a chart, as areas of mathematical support or resistance, but we cannot see time structure.
Time may be used to tell us an exact point in the future where the market will inflect, after Price Theory has been fulfilled. In the present, price objectives based on price theory added to possible future times for market inflection points give us the exact time of market inflection points and price.
Time Structure is repetitions of time or inherent cycles of time, occurring in a methodical way to provide time windows which may be utilized for inflection points. They are not easily recognized and not easily defined by a price chart as measuring and observing time is very exact. Time structure is not a science, yet it does require precise measurements. Nothing is certain or definite. The critical question must be if a particular approach to time structure is currently lucrative or not.
We will measure it in intervals of 180 bars. Our goal is to determine time windows, when the market will react and when we should pay the most attention. By using time repetitions, the fact that market inflection points occurred at some point in the past and should, therefore, reoccur at some point in the future, we should obtain confidence as to when SPY will reach a market inflection point. Time repetitions are essentially the market’s memory. However, simply measuring the time between two points then trying to extrapolate into the future does not work. Measuring time is not the same as defining time repetitions. We will evaluate past sessions for market inflection points, whether discretes, qualified swings, or intra-range. Then records the times that the market has made highs or lows in a comparable time period to the future one seeks to trade in.
What follows is a time Histogram – A grouping of times which appear close together, then segregated based on that closeness. Time is aligned into combined histogram of repetitions and cycles, however cycles are irrelevant on a daily basis. If trading on an hourly basis, do not use hours.
  • Yearly Lows (last seven years): 1/1/13, 4/10/14, 1/15/15, 1/17/16, 1/1/17, 12/15/18, 2/6/19
  • Monthly Mode: 1, 1, 1, 1, 2, 4, 12
  • Daily Mode: 1, 1, 6, 10, 15, 15, 17
  • Monthly Lows (for the last year): 3/12/20 (10:00pm), 2/28/20 (7:09am), 1/2/20 (8:09pm), 12/18/19 (8:00am), 11/25/19 (1:00am), 10/24/19 (2:59am), 9/30/19 (2:59am), 8/29,19 (4:00am), 7/17/19 (7:59am), 6/4/19 (5:59pm), 5/1/19 (12:00am), 4/1/19 (12:00am)
  • Daily Lows Mode for those Months: 1, 1, 2, 4, 12, 17, 18, 24, 25, 28, 29, 30
  • Hourly Lows Mode for those Months (Military time): 0100, 0200, 0200, 0400, 0700, 0700, 0800, 1200, 1200, 1700, 2000, 2200
  • Minute Lows Mode for those Months: 00, 00, 00, 00, 00, 00, 09, 09, 59, 59, 59, 59
  • Day of the Week Lows (last twenty-six weeks):
Weighted Times are repetitions which appears multiple times within the same list, observed and accentuated once divided into relevant sections of the histogram. They are important in the presently defined trading time period and are similar to a mathematical mode with respect to a series. Phased times are essentially periodical patterns in histograms, though they do not guarantee inflection points
Evaluating the yearly lows, we see that BTC tends to have its lows primarily at the beginning of every year, with a possibility of it being at the end of the year. Following the same methodology, we get the middle of the month as the likeliest day. However, evaluating the monthly lows for the past year, the beginning and end of the month are more likely for lows.
Therefore, we have two primary dates from our histogram.
1/1/21, 1/15/21, and 1/29/21
2:00am, 8:00am, 12:00pm, or 10:00pm
In fact, the high for this year was February the 14th, only thirty days off from our histogram calculations.
The 8.6-Year Armstrong-Princeton Global Economic Confidence model states that 2.15 year intervals occur between corrections, relevant highs and lows. 2.15 years from the all-time peak discrete is February 9, 2020 – a reasonably accurate depiction of the low for this year (which was on 3/12/20). (Taking only the Armstrong model into account, the next high should be Saturday, April 23, 2022). Therefore, the Armstrong model indicates that we have actually bottomed out for the year!
Bear markets cannot exist in perpetuity whereas bull markets can. Bear markets will eventually have price objectives of zero, whereas bull markets can increase to infinity. It can occur for individual market instruments, but not markets as a whole. Since bull markets are defined by low volatility, they also last longer. Once a bull market is indicated, the trader can remain in a long position until a new high is reached, then switch to shorts. The average bear market is eighteen months long, giving us a date of August 19th, 2021 for the end of this bear market – roughly speaking. They cannot be shorter than fifteen months for a central-bank controlled market, which does not apply to Bitcoin. (Otherwise, it would continue until Sunday, September 12, 2021.) However, we should expect Bitcoin to experience its’ exponential growth after the stock market re-enters a bull market.
Terry Laundy’s T-Theory implemented by measuring the time of an indicator from peak to trough, then using that to define a future time window. It is similar to an head-and-shoulders pattern in that it is the process of forming the right side from a synthetic technical indicator. If the indicator is making continued lows, then time is recalculated for defining the right side of the T. The date of the market inflection point may be a price or indicator inflection date, so it is not always exactly useful. It is better to make us aware of possible market inflection points, clustered with other data. It gives us an RSI low of May, 9th 2020.
The Bradley Cycle is coupled with volatility allows start dates for campaigns or put options as insurance in portfolios for stocks. However, it is also useful for predicting market moves instead of terminal dates for discretes. Using dates which correspond to discretes, we can see how those dates correspond with changes in VIX.
Therefore, our timeline looks like:
  • 2/14/20 – yearly high ($10372 USD)
  • 3/12/20 – yearly low thus far ($3858 USD)
  • 5/9/20 – T-Theory true yearly low (BTC between 4863 and 3569)
  • 5/26/20 – hashrate difficulty halvening
  • 11/14/20 – stock market low
  • 1/15/21 – yearly low for BTC, around $8528
  • 8/19/21 – end of stock bear market
  • 11/26/21 – eighteen months from halvening, average peak from halvenings (BTC begins rising from $3000 area to above $23,312)
  • 4/23/22 – all-time high
Taken from my blog: http://aliamin.info/2020/
submitted by aibnsamin1 to Bitcoin [link] [comments]

New Strategy?

I have created a new strategy that manages risks decently. If anyone sees any flaws please say so, I am still a beginner and want some feed back in this.
I do 3 different types of trades. Day long/overnight, hours, and session trades
Day long/overnight- pretty self explanatory Hours- over the course of 2-8 hours Session- Literally watch as the rates change
For Day long trades I put a lot size of 0.10% of my total balance and calculate a stop loss from the time of the trade to when I would lose 7.5% of my acct, this leaves a lot of time for the market to shift back in my favor if it does go the opposite way for a bit. I set notifications with the SwissForex app for every 100 pips that the trade goes in my favor (ex. 108.700, 108.800, 108.900) and as soon as the exchange rate goes even 5 pips into profit, I change the stop loss to slightly above breaking even, and change it every 100 pips. I set a notification as well for when it gets within 15 pips of my take profit number so I can change the number to higher and bring the stop loss number even close. (No more than 2 at a time)
For hours trades it is the same exact strategy as day long except the lot size is slightly bigger at 0.15% of my total balance, this gives it a little less time to sway back in your direction if you predict where it is going wrong. Other then that it is the exact same (No more than 2 at a time if there is a session trade going, if not 3)
For session trades you wont take your eyes off the trade and they are a lot shorter. I use a lot size of 0.25-0.5% of my total balance and calculate a stop loss front the time of trade to cancel after I would lose 10% of the account, this would leave a lot of time for it to sway back in your direction if it happens to go the wrong way. As soon as the exchange rate goes 3-5 pips in your favor, change the stop loss slightly higher and closer, every time as it slowly rises. You don’t want to put the stop loss too close to the current rate and be greedy, just in case there is a slightly drop, for it to only rise again faster. (I like to stay 5-8 pips behind it after I am guaranteed profit)
At the end of every week I withdrawal 30% of the profit and keep the other 70% to grow the account, cause as the balance gets bigger, those percentages stay the same, keep the same consistency, and make more money exponentially as it grows.
Once again I am still a novice at forex and still learning my ways to do things and manage risk/reward strategies. Any feedback on this would be greatly appreciated,
submitted by KylyBruh to Forex [link] [comments]

Need some legitimate risk management advice

Brand new to forex, after messing around with stocks and ETFs for a year on robinhood.
In trying to learn about this strange new world, seemingly every article warns me that trading forex is the fastest route to poverty, that I'll lose every dime I have and that I'm better off buying lottery tickets, UNLESS I have a risk management plan.
That's all good and well, but it seems hard to find suggestions on how to actually manage my risk. So far what I have found is either unconvincing, or I just flat don't understand what is being explained. So I've landed here.
Reading the Forex FAQ, in this sub, the advice is to use a very small amount of capital when starting off, and practice live trading from there. If then recommends a formula to use in order to calculate risk, which seems like quite a bit of running calculations for every single trade that I make. Is it really the case that every Forex Trader that manages risk runs a series of calculations for each and every trade in order to figure out pip value and leverage amount, such matter and what have you?
Second problem, before even getting to the risk management section of this Subs FAQ, I'm told to read The Beginner's Guide on baby Pips. Babypips says that when you first start off trading you should not start small because then you will never be able to weather times of drawdown. They recommend something like an initial deposit of $20,000 or 50,000, and saying that if you don't have that much then build up your savings and come back the Forex when you have that to drop into the market. Are you kidding me?
My original plan before reading either of those guides was to deposit $300 and use something like a 10 to 1 or 20 to 1 Leverage.
The part that I'm hung up on which really baffles me and I need some help understanding is everywhere seems to say that I should only risk one or 2% of my account. I don't really understand what that means.
My trading app, OandA allows me to set default trade settings. One of them is trade size, which I can select an option "%Lev NAV" In all of my general Trading I have kept this number at 100, assuming that it is simply using 100% of my account for each trade.
I am also using a system in order to Define very specific entry points with a one-to-one risk reward ratio, setting a stop loss and take profit Target, usually between 9 and 60 Pips in size, depending on the instrument. Thus far, each trade that I have won usually amounts to a 3 to 8% change in the demo account value, which seems comprable to what I was experiencing with stocks and ETFs back on Robinhood. For the last 4 trades I've made, I'm up 15%.
Do I need to adjust this % Lev NAV down to 1% instead of 100? Or do I really need to download a pip value calculator app and make a determination after solving some arithmetic? I just can't seem to figure this out, and different sources use the same words interchangeably yet differently. When risking 1% of my account, does that include leverage, or not, in the trade? And if the most anyone recommends to risk in a trade is 1-2% then why use leverage at all? Won't the returns on 1% be so small as to be negligible? I don't seem to understand how it could possibly be Worth while to spend all that time trading... 1℅ of $300 is three bucks. As I understand it, that would allow me to buy 2 units of the EUUSD... there's no way that could be right, right?
Thanks for your patience and for reading this whole, chapter-length, question of a post.
I look forward to some clarity. I don't know how to switch to live trading, and the demo account does nothing to simulate leverage.
submitted by rm-rf_iniquity to Forex [link] [comments]

Risk Management

The investors or the traders should know what is Risk for knowing about details Risk Management.
Risk is the probability of a bad outcome
Risk is the probability of underachieving
Risk is the probability of failing investment or trading goals
Risk is the probability of losing money
Risk management is knowing exactly how much money you can lose at any particular time because you have pre-calculated this number. It is an attempt to assess the potential loss in any trade and then take the right measures based on your risk tolerance. In trading, you can lose a higher number of trades than you win and still have a profitable account, just as long as your risk to reward ratio is greater than 1:2. Risk management should be the cornerstone of every investment strategy. Get risk management correct in trading, you have to think of yourself as a risk manager first and a trader second as your risk tolerance will determine your success or failure as a trader.
Finally, the investors or the traders maintain their Risk Management:
Using perfect Stop Loss and Take Profit
Proper calculation of Position Size
Perfect measurement of Reward and Risk ratios
Following trading psychology
FX Magician
#TechnicalAnalysis #ForexTrade #OptionTrade #BestBroker #ForexSignal
submitted by SahinRasel6472 to u/SahinRasel6472 [link] [comments]

Risk Management

Risk Management
The investors or the traders should know what is Risk for knowing about details Risk Management.
Risk is the probability of a bad outcome
Risk is the probability of underachieving
Risk is the probability of failing investment or trading goals
Risk is the probability of losing money
Risk management is knowing exactly how much money you can lose at any particular time because you have pre-calculated this number. It is an attempt to assess the potential loss in any trade and then take the right measures based on your risk tolerance. In trading, you can lose a higher number of trades than you win and still have a profitable account, just as long as your risk to reward ratio is greater than 1:2. Risk management should be the cornerstone of every investment strategy. Get risk management correct in trading, you have to think of yourself as a risk manager first and a trader second as your risk tolerance will determine your success or failure as a trader.
Finally, the investors or the traders maintain their Risk Management:
Using perfect Stop Loss and Take Profit
Proper calculation of Position Size
Perfect measurement of Reward and Risk ratios
Following trading psychology
FX Magician
#TechnicalAnalysis #ForexTrade #OptionTrade #BestBroker #ForexSignal
http://fxmagician.com
#technical analysis #forex trade #option trade #best broker #forex signal
submitted by shofikul_islam to u/shofikul_islam [link] [comments]

Risk Management

Risk Management
The investors or the traders should know what is Risk for knowing about details Risk Management.
Risk is the probability of a bad outcome
Risk is the probability of underachieving
Risk is the probability of failing investment or trading goals
Risk is the probability of losing money
Risk management is knowing exactly how much money you can lose at any particular time because you have pre-calculated this number. It is an attempt to assess the potential loss in any trade and then take the right measures based on your risk tolerance. In trading, you can lose a higher number of trades than you win and still have a profitable account, just as long as your risk to reward ratio is greater than 1:2. Risk management should be the cornerstone of every investment strategy. Get risk management correct in trading, you have to think of yourself as a risk manager first and a trader second as your risk tolerance will determine your success or failure as a trader.
Finally, the investors or the traders maintain their Risk Management:
Using perfect Stop Loss and Take Profit
Proper calculation of Position Size
Perfect measurement of Reward and Risk ratios
Following trading psychology
FX Magician
#TechnicalAnalysis #ForexTrade #OptionTrade #BestBroker #ForexSignal
http://fxmagician.com
#technical analysis #forex trade #option trade #best broker #forex signal
submitted by shofikul_islam to u/shofikul_islam [link] [comments]

Risk Management


The investors or the traders should know what is Risk for knowing about details Risk Management.
Risk is the probability of a bad outcome
Risk is the probability of underachieving
Risk is the probability of failing investment or trading goals
Risk is the probability of losing money
Risk management is knowing exactly how much money you can lose at any particular time because you have pre-calculated this number. It is an attempt to assess the potential loss in any trade and then take the right measures based on your risk tolerance. In trading, you can lose a higher number of trades than you win and still have a profitable account, just as long as your risk to reward ratio is greater than 1:2. Risk management should be the cornerstone of every investment strategy. Get risk management correct in trading, you have to think of yourself as a risk manager first and a trader second as your risk tolerance will determine your success or failure as a trader.
Finally, the investors or the traders maintain their Risk Management:
Using perfect Stop Loss and Take Profit
Proper calculation of Position Size
Perfect measurement of Reward and Risk ratios
Following trading psychology
FX Magician
#TechnicalAnalysis #ForexTrade #OptionTrade #BestBroker #ForexSignal
submitted by SahinRasel6472 to u/SahinRasel6472 [link] [comments]

My experience with forex signals!


Hi my name is D and I have used multiple forex signal providers in the past and I would like to share my experience with the community in the hopes of warning others to wisely pick a signal provider and not burn their hard earned money like I did. ( I know this post is long but please give it a read before you start trading with any signal providers.)
So what made me start following signal providers? I had friends who were trading the forex market by themselves and making profits. I wanted to be like them however I was too impatient. I did not have the confidence to enter trades based on my own analysts as I was still in the learning stages but I still wanted to make some money from forex.
I started my search on instagram to find my first forex signal provider. It was then that I started my year long journey of subscribing to a signal provider and then switching to another one when the previous one was not profitable. (No. I did not switch provider right after a month as I believe every trader has bad months. I had multiple accounts to enter different signals from multiple providers.) After about a year, most of my accounts were down and I told myself I had to put a stop to this senseless burning of money.
I risk 2% for every trade no matter the size of my SL and TP. SL of 20 pips with TP of 40 pips? 2%. SL of 50 pips with TP of 100 pips? 2%. My lot size will just be smaller. Every profitable trader will agree that risk management is everything and is what keeps you in the game in the long run.
Over the many months I have collated the data and managed to pinpoint the exact reasons why my accounts were in a deficit even when the signal provider will show that it was a profitable month. There will be 5 reasons that I will be covering and I hope you take note of each one because if you see a signal provider doing one or more of these, it is a huge red flag that you will not be profitable if you follow it.
  1. Every post is showing off their lavish lifestyle and saying you should quit your 9-5 job
This is a huge huge red flag that the provider is not genuine. Real traders know that forex is not some get rich quick scheme and it takes months, even years of hardwork to start seeing results. They are trying to sell you a dream that you can get rich right away just by purchasing their signal package lol. Looking back, I realise that their analysts was total crap probably because they spent most of their time flexing on their gram. Genuine traders do not have to be such a douche about things as they know the value they offer and do not have to resort to such means to get attention.
  1. Bad risk reward ratio
Risk and reward ratio is everything. If your RR is 1:2. You only need to hit take profit 33% of the time to break even. 1:3? 25%, even better. Any percentage higher and you would be making money. Some signal providers only send trades with RR of maybe 1:1, some even lower than that. This means you have to hit take profit 50% of the time to break even. That is honestly pretty hard to do. So not only do you not make money, you end up losing.
  1. Setting multiple take profits
This is the biggest scam ever and how I was so stupid to not notice it sooner annoys me. Firstly, there is nothing wrong setting multiple take profits to secure some $$ first. However these providers do it in a way that makes it seem their week was profitable while in reality it was not. So let me show you how the maths works. I found an example of one of these trades from a provider I was once subscribed to. ( I have added in the number of pips from entry to save you from the calculations)
BUY XXXXXX NOW @ 1.59650 Sl: 1.59300 (35 pips) Tp1: 1.59822 (17.2 pips) Tp2: 1.60000 (35 pips) Tp3: 1.60200 (55 pips) Tp4: 1.60600 (95 pips) Tp5: 1.61000 (135 pips)
Wow! Looks good doesn't it. Nope it is actually not. Lets break it down. For calculation purposes assume that I risked 5% of my account for the entire trade. I would have to open 5 different positions, each risking 1% of my account. No now lets assume best case scenario and all the trades hit take profit, this is how much account growth I would have in total.
Tp1: 0.49% Tp2: 1% Tp3: 1.57% Tp4: 2.71% Tp5: 3.85%
Total of 9.62%!! Wow not too bad right almost a 1:2 RR. However this is rarely (almost never) the case. In reality it does not often hit TP 5, normally TP 3 and if you are lucky TP 4. In the case of TP 3 your RR would be negative. This factored in with not knowing when to set your SL to entry and having little clue when to actually take profit as TP 4 and TP 5 is unlikely you will be left with a huge drawdown.
So now for the best part. How forex signal providers make it seem that they are profitable. Lets say this trade hits SL, never mind its just a 35 pip loss, dont sweat it. Hits TP3 ... wow! 107 pip gain!!! (17.2+35+55) What a good trade! Yup you risked 5% for a 3% gain, nice one. Now you understand how people get scammed by those forex gurus posting huge pip gains and little losses, PIP GAIN DOES NOT EQUAL PROFITABILITY DO NOT BE FOOLED
  1. Unrealistic RR
Constant signals of RR of 1:4 and higher?? Sign me up please. Yup some providers do this and once the trade is entered they tell you price looks like it is about to retrace blah blah blah and ask you to close it at 1:0.5. A well known forex signal provider still does this but no name shall be mentioned. Worst still etc. you risked 100 pips for "400pips". And the provider celebrates that you caught at least 50 pips! 50 pips is a lot if your risk is maybe 15 pips, but you risked 100? No please that was terrible.
  1. Not caring that different currencies have different pip sizes
For example GBPAUD EURUSD have completely different pip sizes, great you are 60 pips up in GBPAUD and down 45 in EURUSD, still 15 pips in profit! Nope, lets assume you opened 1 lot for each trade, you will be up $410usd for GBPAUD and down $450usd for EURUSD. It is a totaly unnecessary gamble hoping that the trades with a bigger pip value will be up. One way to "counter" this to calculate it such that each pip value is the same. Lets say you want 1 pip to be 1USD, for GBPAUD it will be a 0.145 lot size, for EURUSD 0.1.
These are the reasons why a reliable signal provider is extremely hard to find and instead of earning some money quickly you will find yourself in a hole and in the cycle of changing signal providers. I personally feel it is better to spend your money learning forex and strategies from courses provided online and eventually trade by yourself. The key in forex is patience, having a good risk to reward ratio and full faith in your strategy.
If you have made it this far, I would like to thank you for taking your time to read my first reddit post. I hope you found it informative and please leave some feedback!
Help to share this post to prevent others from being scammed by forex”gurus”!!
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Which are your Top 5 favourite coins out of the Top 100? An analysis.

I am putting together my investment portfolio for 2018 and made a complete summary of the current Top 100. Interestingly, I noticed that all coins can be categorized into 12 markets. Which markets do you think will play the biggest role in the coming year?
Here is a complete overview of all coins in an excel sheet including name, market, TPS, risk profile, time since launch (negative numbers mean that they are launching that many months in the future) and market cap. You can also sort by all of these fields of course. Coins written in bold are the strongest contenders within their market either due to having the best technology or having a small market cap and still excellent technology and potential. https://docs.google.com/spreadsheets/d/1s8PHcNvvjuy848q18py_CGcu8elRGQAUIf86EYh4QZo/edit#gid=0
The 12 markets are
  1. Currency 13 coins
  2. Platform 25 coins
  3. Ecosystem 9 coins
  4. Privacy 10 coins
  5. Currency Exchange Tool 8 coins
  6. Gaming & Gambling 5 coins
  7. Misc 15 coins
  8. Social Network 4 coins
  9. Fee Token 3 coins
  10. Decentralized Data Storage 4 coins
  11. Cloud Computing 3 coins
  12. Stable Coin 2 coins
Before we look at the individual markets, we need to take a look of the overall market and its biggest issue scalability first:
Cryptocurrencies aim to be a decentralized currency that can be used worldwide. Its goal is to replace dollar, Euro, Yen, all FIAT currencies worldwide. The coin that will achieve that will be worth several trillion dollars.
Bitcoin can only process 7 transactions per second (TPS). In order to replace all FIAT, it would need to perform at at least VISA levels, which usually processes around 3,000 TPS, up to 25,000 TPS during peak times and a maximum of 64,000 TPS. That means that this cryptocurrency would need to be able to perform at least several thousand TPS. However, a ground breaking technology should not look at current technology to set a goal for its use, i.e. estimating the number of emails sent in 1990 based on the number of faxes sent wasn’t a good estimate.
For that reason, 10,000 TPS is the absolute baseline for a cryptocurrency that wants to replace FIAT. This brings me to IOTA, which wants to connect all 80 billion IoT devices that are expected to exist by 2025, which constantly communicate with each other, creating 80 billion or more transactions per second. This is the benchmark that cryptocurrencies should be aiming for. Currently, 8 billion devices are connected to the Internet.
With its Lightning network recently launched, Bitcoin is realistically looking at 50,000 possible soon. Other notable cryptocurrencies besides IOTA and Bitcoin are Nano with 7,000 TPS already tested, Dash with several billion TPS possible with Masternodes, Neo, LISK and RHOC with 100,000 TPS by 2020, Ripple with 50,000 TPS, Ethereum with 10,000 with Sharding.
However, it needs to be said that scalability usually goes at the cost of decentralization and security. So, it needs to be seen, which of these technologies can prove itself resilient and performant.
Without further ado, here are the coins of the first market

Market 1 - Currency:

  1. Bitcoin: 1st generation blockchain with currently bad scalability currently, though the implementation of the Lightning Network looks promising and could alleviate most scalability concerns, scalability and high energy use.
  2. Ripple: Centralized currency that might become very successful due to tight involvement with banks and cross-border payments for financial institutions; banks and companies like Western Union and Moneygram (who they are currently working with) as customers customers. However, it seems they are aiming for more decentralization now.https://ripple.com/dev-blog/decentralization-strategy-update/. Has high TPS due to Proof of Correctness algorithm.
  3. Bitcoin Cash: Bitcoin fork with the difference of having an 8 times bigger block size, making it 8 times more scalable than Bitcoin currently. Further block size increases are planned. Only significant difference is bigger block size while big blocks lead to further problems that don't seem to do well beyond a few thousand TPS. Opponents to a block size argue that increasing the block size limit is unimaginative, offers only temporary relief, and damages decentralization by increasing costs of participation. In order to preserve decentralization, system requirements to participate should be kept low. To understand this, consider an extreme example: very big blocks (1GB+) would require data center level resources to validate the blockchain. This would preclude all but the wealthiest individuals from participating.Community seems more open than Bitcoin's though.
  4. Litecoin : Little brother of Bitcoin. Bitcoin fork with different mining algorithm but not much else.Copies everything that Bitcoin does pretty much. Lack of real innovation.
  5. Dash: Dash (Digital Cash) is a fork of Bitcoin and focuses on user ease. It has very fast transactions within seconds, low fees and uses Proof of Service from Masternodes for consensus. They are currently building a system called Evolution which will allow users to send money using usernames and merchants will find it easy to integrate Dash using the API. You could say Dash is trying to be a PayPal of cryptocurrencies. Currently, cryptocurrencies must choose between decentralization, speed, scalability and can pick only 2. With Masternodes, Dash picked speed and scalability at some cost of decentralization, since with Masternodes the voting power is shifted towards Masternodes, which are run by Dash users who own the most Dash.
  6. IOTA: 3rd generation blockchain called Tangle, which has a high scalability, no fees and instant transactions. IOTA aims to be the connective layer between all 80 billion IOT devices that are expected to be connected to the Internet in 2025, possibly creating 80 billion transactions per second or 800 billion TPS, who knows. However, it needs to be seen if the Tangle can keep up with this scalability and iron out its security issues that have not yet been completely resolved.
  7. Nano: 3rd generation blockchain called Block Lattice with high scalability, no fees and instant transactions. Unlike IOTA, Nano only wants to be a payment processor and nothing else, for now at least. With Nano, every user has their own blockchain and has to perform a small amount of computing for each transaction, which makes Nano perform at 300 TPS with no problems and 7,000 TPS have also been tested successfully. Very promising 3rd gen technology and strong focus on only being the fastest currency without trying to be everything.
  8. Decred: As mining operations have grown, Bitcoin’s decision-making process has become more centralized, with the largest mining companies holding large amounts of power over the Bitcoin improvement process. Decred focuses heavily on decentralization with their PoW Pos hybrid governance system to become what Bitcoin was set out to be. They will soon implement the Lightning Network to scale up. While there do not seem to be more differences to Bitcoin besides the novel hybrid consensus algorithm, which Ethereum, Aeternity and Bitcoin Atom are also implementing, the welcoming and positive Decred community and professoinal team add another level of potential to the coin.
  9. Aeternity: We’ve seen recently, that it’s difficult to scale the execution of smart contracts on the blockchain. Crypto Kitties is a great example. Something as simple as creating and trading unique assets on Ethereum bogged the network down when transaction volume soared. Ethereum and Zilliqa address this problem with Sharding. Aeternity focuses on increasing the scalability of smart contracts and dapps by moving smart contracts off-chain. Instead of running on the blockchain, smart contracts on Aeternity run in private state channels between the parties involved in the contracts. State channels are lines of communication between parties in a smart contract. They don’t touch the blockchain unless they need to for adjudication or transfer of value. Because they’re off-chain, state channel contracts can operate much more efficiently. They don’t need to pay the network for every time they compute and can also operate with greater privacy. An important aspect of smart contract and dapp development is access to outside data sources. This could mean checking the weather in London, score of a football game, or price of gold. Oracles provide access to data hosted outside the blockchain. In many blockchain projects, oracles represent a security risk and potential point of failure, since they tend to be singular, centralized data streams. Aeternity proposes decentralizing oracles with their oracle machine. Doing so would make outside data immutable and unchangeable once it reaches Aeternity’s blockchain. Of course, the data source could still be hacked, so Aeternity implements a prediction market where users can bet on the accuracy and honesty of incoming data from various oracles.It also uses prediction markets for various voting and verification purposes within the platform. Aeternity’s network runs on on a hybrid of proof of work and proof of stake. Founded by a long-time crypto-enthusiast and early colleague of Vitalik Buterin, Yanislav Malahov. Promising concept though not product yet
  10. Bitcoin Atom: Atomic Swaps and hybrid consenus. This looks like the only Bitcoin clone that actually is looking to innovate next to Bitcoin Cash.
  11. Dogecoin: Litecoin fork, fantastic community, though lagging behind a bit in technology.
  12. Bitcoin Gold: A bit better security than bitcoin through ASIC resistant algorithm, but that's it. Not that interesting.
  13. Digibyte: Digibyte's PoS blockchain is spread over a 100,000+ servers, phones, computers, and nodes across the globe, aiming for the ultimate level of decentralization. DigiByte rebalances the load between the five mining algorithms by adjusting the difficulty of each so one algorithm doesn’t become dominant. The algorithm's asymmetric difficulty has gained notoriety and been deployed in many other blockchains.DigiByte’s adoption over the past four years has been slow. It’s still a relatively obscure currency compared its competitors. The DigiByte website offers a lot of great marketing copy and buzzwords. However, there’s not much technical information about what they have planned for the future. You could say Digibyte is like Bitcoin, but with shorter blocktimes and a multi-algorithm. However, that's not really a difference big enough to truly set themselves apart from Bitcoin, since these technologies could be implemented by any blockchain without much difficulty. Their decentralization is probably their strongest asset, however, this also change quickly if the currency takes off and big miners decide to go into Digibyte.
  14. Bitcoin Diamond Asic resistant Bitcoin and Copycat

Market 2 - Platform

Most of the cryptos here have smart contracts and allow dapps (Decentralized apps) to be build on their platform and to use their token as an exchange of value between dapp services.
  1. Ethereum: 2nd generation blockchain that allows the use of smart contracts. Bad scalability currently, though this concern could be alleviated by the soon to be implemented Lightning Network aka Plasma and its Sharding concept.
  2. EOS: Promising technology that wants to be able do everything, from smart contracts like Ethereum, scalability similar to Nano with 1000 tx/second + near instant transactions and zero fees, to also wanting to be a platform for dapps. However, EOS doesn't have a product yet and everything is just promises still. Highly overvalued right now. However, there are lots of red flags, have dumped $500 million Ether over the last 2 months and possibly bought back EOS to increase the size of their ICO, which has been going on for over a year and has raised several billion dollars. All in all, their market cap is way too high for that and not even having a product.
  3. Cardano: Similar to Ethereum/EOS, however, only promises made with no delivery yet, highly overrated right now. Interesting concept though. Market cap way too high for not even having a product. Somewhat promising technology.
  4. VeChain: Singapore-based project that’s building a business enterprise platform and inventory tracking system. Examples are verifying genuine luxury goods and food supply chains. Has one of the strongest communities in the crypto world. Most hyped token of all, with merit though.
  5. Neo: Neo is a platform, similar to Eth, but more extensive, allowing dapps and smart contracts, but with a different smart contract gas system, consensus mechanism (PoS vs. dBfT), governance model, fixed vs unfixed supply, expensive contracts vs nearly free contracts, different ideologies for real world adoption. There are currently only 9 nodes, each of which are being run by a company/entity hand selected by the NEO council (most of which are located in china) and are under contract. This means that although the locations of the nodes may differ, ultimately the neo council can bring them down due to their legal contracts. In fact this has been done in the past when the neo council was moving 50 million neo that had been locked up. Also dbft (or neo's implmentation of it) has failed underload causing network outages during major icos. The first step in decentralization is that the NEO Counsel will select trusted nodes (Universities, business partners, etc.) and slowly become less centralized that way. The final step in decentralization will be allowing NEO holders to vote for new nodes, similar to a DPoS system (ARK/EOS/LISK). NEO has a regulation/government friendly ideology. Finally they are trying to work undewith the Chinese government in regards to regulations. If for some reason they wanted it shut down, they could just shut it down.
  6. Stellar: PoS system, similar goals as Ripple, but more of a platform than only a currency. 80% of Stellar are owned by Stellar.org still, making the currency centralized.
  7. Ethereum classic: Original Ethereum that decided not to fork after a hack. The Ethereum that we know is its fork. Uninteresing, because it has a lot of less resources than Ethereum now and a lot less community support.
  8. Ziliqa: Zilliqa is building a new way of sharding. 2400 tpx already tested, 10,000 tps soon possible by being linearly scalable with the number of nodes. That means, the more nodes, the faster the network gets. They are looking at implementing privacy as well.
  9. QTUM: Enables Smart contracts on the Bitcoin blockchain. Useful.
  10. Icon: Korean ethereum. Decentralized application platform that's building communities in partnership with banks, insurance providers, hospitals, and universities. Focused on ID verification and payments. No big differentiators to the other 20 Ethereums, except that is has a product. That is a plus. Maybe cheap alternative to Ethereum.
  11. LISK: Lisk's difference to other BaaS is that side chains are independent to the main chain and have to have their own nodes. Similar to neo whole allows dapps to deploy their blockchain to. However, Lisk is currently somewhat centralized with a small group of members owning more than 50% of the delegated positions. Lisk plans to change the consensus algorithm for that reason in the near future.
  12. Rchain: Similar to Ethereum with smart contract, though much more scalable at an expected 40,000 TPS and possible 100,000 TPS. Not launched yet. No product launched yet, though promising technology. Not overvalued, probably at the right price right now.
  13. ARDR: Similar to Lisk. Ardor is a public blockchain platform that will allow people to utilize the blockchain technology of Nxt through the use of child chains. A child chain, which is a ‘light’ blockchain that can be customized to a certain extent, is designed to allow easy self-deploy for your own blockchain. Nxt claims that users will "not need to worry" about security, as that part is now handled by the main chain (Ardor). This is the chief innovation of Ardor. Ardor was evolved from NXT by the same company. NEM started as a NXT clone.
  14. Ontology: Similar to Neo. Interesting coin
  15. Bytom: Bytom is an interactive protocol of multiple byte assets. Heterogeneous byte-assets (indigenous digital currency, digital assets) that operate in different forms on the Bytom Blockchain and atomic assets (warrants, securities, dividends, bonds, intelligence information, forecasting information and other information that exist in the physical world) can be registered, exchanged, gambled and engaged in other more complicated and contract-based interoperations via Bytom.
  16. Nxt: Similar to Lisk
  17. Stratis: Different to LISK, Stratis will allow businesses and organizations to create their own blockchain according to their own needs, but secured on the parent Stratis chain. Stratis’s simple interface will allow organizations to quickly and easily deploy and/or test blockchain functionality of the Ethereum, BitShares, BitCoin, Lisk and Stratis environements.
  18. Status: Status provides access to all of Ethereum’s decentralized applications (dapps) through an app on your smartphone. It opens the door to mass adoption of Ethereum dapps by targeting the fastest growing computer segment in the world – smartphone users.16. Ark: Fork of Lisk that focuses on a smaller feature set. Ark wallets can only vote for one delegate at a time which forces delegates to compete against each other and makes cartel formations incredibly hard, if not impossible.
  19. Neblio: Similar to Neo, but 30x smaller market cap.
  20. NEM: Is similar to Neo No marketing team, very high market cap for little clarilty what they do.
  21. Bancor: Bancor is a Decentralized Liquidity Network that allows you to hold any Ethereum token and convert it to any other token in the network, with no counter party, at an automatically calculated price, using a simple web wallet.
  22. Dragonchain: The Purpose of DragonChain is to help companies quickly and easily incorporate blockchain into their business applications. Many companies might be interested in making this transition because of the benefits associated with serving clients over a blockchain – increased efficiency and security for transactions, a reduction of costs from eliminating potential fraud and scams, etc.
  23. Skycoin: Transactions with zero fees that take apparently two seconds, unlimited transaction rate, no need for miners and block rewards, low power usage, all of the usual cryptocurrency technical vulnerabilities fixed, a consensus mechanism superior to anything that exists, resistant to all conceivable threats (government censorship, community infighting, cybenucleaconventional warfare, etc). Skycoin has their own consensus algorithm known as Obelisk written and published academically by an early developer of Ethereum. Obelisk is a non-energy intensive consensus algorithm based on a concept called ‘web of trust dynamics’ which is completely different to PoW, PoS, and their derivatives. Skywire, the flagship application of Skycoin, has the ambitious goal of decentralizing the internet at the hardware level and is about to begin the testnet in April. However, this is just one of the many facets of the Skycoin ecosystem. Skywire will not only provide decentralized bandwidth but also storage and computation, completing the holy trinity of commodities essential for the new internet. Skycion a smear campaign launched against it, though they seem legit and reliable. Thus, they are probably undervalued.

Market 3 - Ecosystem

The 3rd market with 11 coins is comprised of ecosystem coins, which aim to strengthen the ease of use within the crypto space through decentralized exchanges, open standards for apps and more
  1. Nebulas: Similar to how Google indexes webpages Nebulas will index blockchain projects, smart contracts & data using the Nebulas rank algorithm that sifts & sorts the data. Developers rewarded NAS to develop & deploy on NAS chain. Nebulas calls this developer incentive protocol – basically rewards are issued based on how often dapp/contract etc. is used, the more the better the rewards and Proof of devotion. Works like DPoS except the best, most economically incentivised developers (Bookkeeppers) get the forging spots. Ensuring brains stay with the project (Cross between PoI & PoS). 2,400 TPS+, DAG used to solve the inter-transaction dependencies in the PEE (Parallel Execution Environment) feature, first crypto Wallet that supports the Lightening Network.
  2. Waves: Decentralized exchange and crowdfunding platform. Let’s companies and projects to issue and manage their own digital coin tokens to raise money.
  3. Salt: Leveraging blockchain assets to secure cash loands. Plans to offer cash loans in traditional currencies, backed by your cryptocurrency assets. Allows lenders worldwide to skip credit checks for easier access to affordable loans.
  4. CHAINLINK: ChainLink is a decentralized oracle service, the first of its kind. Oracles are defined as an ‘agent’ that finds and verifies real-world occurrences and submits this information to a blockchain to be used in smart contracts.With ChainLink, smart contract users can use the network’s oracles to retrieve data from off-chain application program interfaces (APIs), data pools, and other resources and integrate them into the blockchain and smart contracts. Basically, ChainLink takes information that is external to blockchain applications and puts it on-chain. The difference to Aeternity is that Chainlink deploys the smart contracts on the Ethereum blockchain while Aeternity has its own chain.
  5. WTC: Combines blockchain with IoT to create a management system for supply chains Interesting
  6. Ethos unifyies all cryptos. Ethos is building a multi-cryptocurrency phone wallet. The team is also building an investment diversification tool and a social network
  7. Aion: Aion is the token that pays for services on the Aeternity platform.
  8. USDT: is no cryptocurrency really, but a replacement for dollar for trading After months of asking for proof of dollar backing, still no response from Tether.

Market 4 - Privacy

The 4th market are privacy coins. As you might know, Bitcoin is not anonymous. If the IRS or any other party asks an exchange who is the identity behind a specific Bitcoin address, they know who you are and can track back almost all of the Bitcoin transactions you have ever made and all your account balances. Privacy coins aim to prevent exactly that through address fungability, which changes addresses constantly, IP obfuscation and more. There are 2 types of privacy coins, one with completely privacy and one with optional privacy. Optional Privacy coins like Dash and Nav have the advantage of more user friendliness over completely privacy coins such as Monero and Enigma.
  1. Monero: Currently most popular privacy coin, though with a very high market cap. Since their privacy is all on chain, all prior transactions would be deanonymized if their protocol is ever cracked. This requires a quantum computing attack though. PIVX is better in that regard.
  2. Zcash: A decentralized and open-source cryptocurrency that hide the sender, recipient, and value of transactions. Offers users the option to make transactions public later for auditing. Decent privacy coin, though no default privacy
  3. Verge: Calls itself privacy coin without providing private transactions, multiple problems over the last weeks has a toxic community, and way too much hype for what they have.
  4. Bytecoin: First privacy-focused cryptocurrency with anonymous transactions. Bytecoin’s code was later adapted to create Monero, the more well-known anonymous cryptocurrency. Has several scam accusations, 80% pre-mine, bad devs, bad tech
  5. Bitcoin Private: A merge fork of Bitcoin and Zclassic with Zclassic being a fork of Zcash with the difference of a lack of a founders fee required to mine a valid block. This promotes a fair distribution, preventing centralized coin ownership and control. Bitcoin private offers the optional ability to keep the sender, receiver, and amount private in a given transaction. However, this is already offered by several good privacy coins (Monero, PIVX) and Bitcoin private doesn't offer much more beyond this.
  6. Komodo: The Komodo blockchain platform uses Komodo’s open-source cryptocurrency for doing transparent, anonymous, private, and fungible transactions. They are then made ultra-secure using Bitcoin’s blockchain via a Delayed Proof of Work (dPoW) protocol and decentralized crowdfunding (ICO) platform to remove middlemen from project funding. Offers services for startups to create and manage their own Blockchains.
  7. PIVX: As a fork of Dash, PIVX uses an advanced implementation of the Zerocoin protocol to provide it’s privacy. This is a form of zeroknowledge proofs, which allow users to spend ‘Zerocoins’ that have no link back to them. Unlike Zcash u have denominations in PIVX, so they can’t track users by their payment amount being equal to the amount of ‘minted’ coins, because everyone uses the same denominations. PIVX is also implementing Bulletproofs, just like Monero, and this will take care of arguably the biggest weakness of zeroknowledge protocols: the trusted setup.
  8. Zcoin: PoW cryptocurrency. Private financial transactions, enabled by the Zerocoin Protocol. Zcoin is the first full implementation of the Zerocoin Protocol, which allows users to have complete privacy via Zero-Knowledge cryptographic proofs.
  9. Enigma: Monero is to Bitcoin what enigma is to Ethereum. Enigma is for making the data used in smart contracts private. More of a platform for dapps than a currency like Monero. Very promising.
  10. Navcoin: Like bitcoin but with added privacy and pos and 1,170 tps, but only because of very short 30 second block times. Though, privacy is optional, but aims to be more user friendly than Monero. However, doesn't really decide if it wants to be a privacy coin or not. Same as Zcash.Strong technology, non-shady team.
  11. Tenx: Raised 80 million, offers cryptocurrency-linked credit cards that let you spend virtual money in real life. Developing a series of payment platforms to make spending cryptocurrency easier. However, the question is if full privacy coins will be hindered in growth through government regulations and optional privacy coins will become more successful through ease of use and no regulatory hindrance.

Market 5 - Currency Exchange Tool

Due to the sheer number of different cryptocurrencies, exchanging one currency for the other it still cumbersome. Further, merchants don’t want to deal with overcluttered options of accepting cryptocurrencies. This is where exchange tool like Req come in, which allow easy and simple exchange of currencies.
  1. Cryptonex: Fiat and currency exchange between various blockchain services, similar to REQ.
  2. QASH: Qash is used to fuel its liquid platform which will be an exchange that will distribute their liquidity pool. Its product, the Worldbook is a multi-exchange order book that matches crypto to crypto, and crypto to fiat and the reverse across all currencies. E.g., someone is selling Bitcoin is USD on exchange1 not owned by Quoine and someone is buying Bitcoin in EURO on exchange 2 not owned by Quoine. If the forex conversions and crypto conversions match then the trade will go through and the Worldbook will match it, it'll make the sale and the purchase on either exchange and each user will get what they wanted, which means exchanges with lower liquidity if they join the Worldbook will be able to fill orders and take trade fees they otherwise would miss out on.They turned it on to test it a few months ago for an hour or so and their exchange was the top exchange in the world by 4x volume for the day because all Worldbook trades ran through it. Binance wants BNB to be used on their one exchange. Qash wants their QASH token embedded in all of their partners. More info here https://www.reddit.com/CryptoCurrency/comments/8a8lnwhich_are_your_top_5_favourite_coins_out_of_the/dwyjcbb/?context=3
  3. Kyber: network Exchange between cryptocurrencies, similar to REQ. Features automatic coin conversions for payments. Also offers payment tools for developers and a cryptocurrency wallet.
  4. Achain: Building a boundless blockchain world like Req .
  5. Req: Exchange between cryptocurrencies.
  6. Bitshares: Exchange between cryptocurrencies. Noteworthy are the 1.5 second average block times and throughput potential of 100,000 transactions per second with currently 2,400 TPS having been proven. However, bitshares had several Scam accusations in the past.
  7. Loopring: A protocol that will enable higher liquidity between exchanges and personal wallets.
  8. ZRX: Open standard for dapps. Open, permissionless protocol allowing for ERC20 tokens to be traded on the Ethereum blockchain. In 0x protocol, orders are transported off-chain, massively reducing gas costs and eliminating blockchain bloat. Relayers help broadcast orders and collect a fee each time they facilitate a trade. Anyone can build a relayer.

Market 6 - Gaming

With an industry size of $108B worldwide, Gaming is one of the largest markets in the world. For sure, cryptocurrencies will want to have a share of that pie.
  1. Storm: Mobile game currency on a platform with 9 million players.
  2. Fun: A platform for casino operators to host trustless, provably-fair gambling through the use of smart contracts, as well as creating their own implementation of state channels for scalability.
  3. Electroneum: Mobile game currency They have lots of technical problems, such as several 51% attacks
  4. Wax: Marketplace to trade in-game items

Market 7 - Misc

There are various markets being tapped right now. They are all summed up under misc.
  1. OMG: Omise is designed to enable financial services for people without bank accounts. It works worldwide and with both traditional money and cryptocurrencies.
  2. Power ledger: Australian blockchain-based cryptocurrency and energy trading platform that allows for decentralized selling and buying of renewable energy. Unique market and rather untapped market in the crypto space.
  3. Populous: A platform that connects business owners and invoice buyers without middlemen. Invoice sellers get cash flow to fund their business and invoice buyers earn interest. Similar to OMG, small market.
  4. Monacoin: The first Japanese cryptocurrency. Focused on micro-transactions and based on a popular internet meme of a type-written cat. This makes it similar to Dogecoin. Very niche, tiny market.
  5. Revain: Legitimizing reviews via the blockchain. Interesting concept, though market not as big.
  6. Augur: Platform to forecast and make wagers on the outcome of real-world events (AKA decentralized predictions). Uses predictions for a “wisdom of the crowd” search engine. Not launched yet.
  7. Substratum: Revolutionzing hosting industry via per request billing as a decentralized internet hosting system. Uses a global network of private computers to create the free and open internet of the future. Participants earn cryptocurrency. Interesting concept.
  8. Veritaseum: Is supposed to be a peer to peer gateway, though it looks like very much like a scam.
  9. TRON: Tronix is looking to capitalize on ownership of internet data to content creators. However, they plagiarized their white paper, which is a no go. They apologized, so it needs to be seen how they will conduct themselves in the future. Extremely high market cap for not having a product, nor proof of concept.
  10. Syscoin: A cryptocurrency with a decentralized marketplace that lets people buy and sell products directly without third parties. Trying to remove middlemen like eBay and Amazon.
  11. Hshare: Most likely scam because of no code changes, most likely pump and dump scheme, dead community.
  12. BAT: An Ethereum-based token that can be exchanged between content creators, users, and advertisers. Decentralized ad-network that pays based on engagement and attention.
  13. Dent: Decentralizeed exchange of mobile data, enabling mobile data to be marketed, purchased or distributed, so that users can quickly buy or sell data from any user to another one.
  14. Ncash: End to end encrypted Identification system for retailers to better serve their customers .
  15. Factom Secure record-keeping system that allows companies to store their data directly on the Blockchain. The goal is to make records more transparent and trustworthy .

Market 8 - Social network

Web 2.0 is still going strong and Web 3.0 is not going to ignore it. There are several gaming tokens already out there and a few with decent traction already, such as Steem, which is Reddit with voting through money is a very interesting one.
  1. Mithril: As users create content via social media, they will be rewarded for their contribution, the better the contribution, the more they will earn
  2. Steem: Like Reddit, but voting with money. Already launched product and Alexa rank 1,000 Thumbs up.
  3. Rdd: Reddcoin makes the process of sending and receiving money fun and rewarding for everyone. Reddcoin is dedicated to one thing – tipping on social networks as a way to bring cryptocurrency awareness and experience to the general public.
  4. Kin: Token for the platform Kik. Kik has a massive user base of 400 million people. Replacing paying with FIAT with paying with KIN might get this token to mass adoption very quickly.

Market 9 - Fee token

Popular exchanges realized that they can make a few billion dollars more by launching their own token. Owning these tokens gives you a reduction of trading fees. Very handy and BNB (Binance Coin) has been one of the most resilient tokens, which have withstood most market drops over the last weeks and was among the very few coins that could show growth.
  1. BNB: Fee token for Binance
  2. Gas: Not a Fee token for an exchange, but it is a dividend paid out on Neo and a currency that can be used to purchase services for dapps.
  3. Kucoin: Fee token for Kucoin

Market 10 - Decentralized Data Storage

Currently, data storage happens with large companies or data centers that are prone to failure or losing data. Decentralized data storage makes loss of data almost impossible by distributing your files to numerous clients that hold tiny pieces of your data. Remember Torrents? Torrents use a peer-to-peer network. It is similar to that. Many users maintain copies of the same file, when someone wants a copy of that file, they send a request to the peer-to-peer network., users who have the file, known as seeds, send fragments of the file to the requester., he requester receives many fragments from many different seeds, and the torrent software recompiles these fragments to form the original file.
  1. Gbyte: Byteball data is stored and ordered using directed acyclic graph (DAG) rather than blockchain. This allows all users to secure each other's data by referencing earlier data units created by other users, and also removes scalability limits common for blockchains, such as blocksize issue.
  2. Siacoin: Siacoin is decentralized storage platform. Distributes encrypted files to thousands of private users who get paid for renting out their disk space. Anybody with siacoins can rent storage from hosts on Sia. This is accomplish via "smart" storage contracts stored on the Sia blockchain. The smart contract provides a payment to the host only after the host has kept the file for a given amount of time. If the host loses the file, the host does not get paid.
  3. Maidsafecoin: MaidSafe stands for Massive Array of Internet Disks, Secure Access for Everyone.Instead of working with data centers and servers that are common today and are vulnerable to data theft and monitoring, SAFE’s network uses advanced P2P technology to bring together the spare computing capacity of all SAFE users and create a global network. You can think of SAFE as a crowd-sourced internet. All data and applications reside in this network. It’s an autonomous network that automatically sets prices and distributes data and rents out hard drive disk space with a Blockchain-based storage solutions.When you upload a file to the network, such as a photo, it will be broken into pieces, hashed, and encrypted. The data is then randomly distributed across the network. Redundant copies of the data are created as well so that if someone storing your file turns off their computer, you will still have access to your data. And don’t worry, even with pieces of your data on other people’s computers, they won’t be able to read them. You can earn MadeSafeCoins by participating in storing data pieces from the network on your computer and thus earning a Proof of Resource.
  4. Storj: Storj aims to become a cloud storage platform that can’t be censored or monitored, or have downtime. Your files are encrypted, shredded into little pieces called 'shards', and stored in a decentralized network of computers around the globe. No one but you has a complete copy of your file, not even in an encrypted form.

Market 11 - Cloud computing

Obviously, renting computing power, one of the biggest emerging markets as of recent years, e.g. AWS and Digital Ocean, is also a service, which can be bought and managed via the blockchain.
  1. Golem: Allows easy use of Supercomputer in exchange for tokens. People worldwide can rent out their computers to the network and get paid for that service with Golem tokens.
  2. Elf: Allows easy use of Cloud computing in exchange for tokens.

Market 12 - Stablecoin

Last but not least, there are 2 stablecoins that have established themselves within the market. A stable coin is a coin that wants to be independent of the volatility of the crypto markets. This has worked out pretty well for Maker and DGD, accomplished through a carefully diversified currency fund and backing each token by 1g or real gold respectively. DO NOT CONFUSE DGD AND MAKER with their STABLE COINS DGX and DAI. DGD and MAKER are volatile, because they are the companies of DGX and DAI. DGX and DAI are the stable coins.
  1. DGD: Platform of the Stablecoin DGX. Every DGX coin is backed by 1g of gold and make use proof of asset consensus.
  2. Maker: Platform of the Stablecoin DAI that doesn't vary much in price through widespread and smart diversification of assets.
EDIT: Added a risk factor from 0 to 10. The baseline is 2 for any crypto. Significant scandals, mishaps, shady practices, questionable technology, increase the risk factor. Not having a product yet automatically means a risk factor of 6. Strong adoption and thus strong scrutiny or positive community lower the risk factor.
EDIT2: Added a subjective potential factor from 0 to 10, where its overall potential and a small or big market cap is factored in. Bitcoin with lots of potential only gets a 9, because of its massive market cap, because if Bitcoin goes 10x, smaller coins go 100x, PIVX gets a 10 for being as good as Monero while carrying a 10x smaller market cap, which would make PIVX go 100x if Monero goes 10x.
submitted by galan77 to CryptoCurrency [link] [comments]

How to Calculate Risk & Reward in Day Trading Forex - Risk to Reward and Calculating Risk Risk Reward Calculator MetaTrader Forex Risk Reward Ratio Indcator ver. 4.00 ... The Fastest Way to Calculate Risk Reward on a Forex Trade ... How to Trade Forex Risk Reward Trade Calculator How to use Risk Reward Calculator in Forex Trading

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How to Calculate Risk & Reward in Day Trading

This video will help you learn how to use Risk and Reward calculator while trading in Forex. === PER DAY 80 to 200% RETURN COMMITMENT Maximum RISK 10 to 20% on Invested capital 1:100 Leverage to 1 ... Get the charts: http://www.tradingheroes.com/tradingview Calculating the risk reward on a trade can take some time. If you are tired of taking out your calcu... How to calculate risk/reward for beginners ... Forex Basics - Lot Sizes, Risk vs. Reward, Counting Pips - Duration: 36:25. Kingdom Kash 468,752 views. 36:25. How I learned To Find Hot Stocks All ... Stock Trading: Reward/Risk Spreadsheet Calculator - Duration: 5:34. EasyPZ 31,232 views. 5:34 . Risk Reward Ratio: What Is It And How To Use It - The Basics - Duration: 6:18. Edgewonk 40,549 views ... Risk Reward Ratio is one of the basic elements of money management, but many people don't know how to use it properly. Not talking about risk reward ratio tool ... The Fastest Way to Calculate Risk Reward on a Forex Trade - TradingView Tutorial - Duration: 1:37. Trading Heroes 33,678 views. 1:37. Early morning trading tip! It's important to not just take signals, but understand Risk to Reward and proper risk management by using ideal lot sizes based on your account size.

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