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Mitigation Block in Forex Trading: What It Is and How to Use It?What a Mitigation Block Is, and How You Can Use It When Trading Forex? Understanding specific market mechanisms like mitigation blocks may enhance strategic decision-making. This article delves into the concept of mitigation blocks, detailing their definition, function, and practical application within forex. Definition and Function of a Mitigation Block A mitigation block in forex trading refers to a specific order block on a chart that indicates where previous movements have stalled and reversed, marking it as a potential area for future market turns. This concept within the Smart Money framework is crucial for traders looking to manage their positions by taking advantage of strategic entry and exit points. The idea behind these areas is rooted in the dynamics of supply and demand within forex. When a currency pair reaches a level where buyers or sellers have previously entered the market in force, causing a reversal, it suggests a potential repeat of such actions when the price returns to the area. Characteristics and How to Identify a Mitigation Block Mitigation blocks can be bullish or bearish, each with distinct characteristics: - Bearish Mitigation Block: This type forms during an uptrend and is identified by a significant peak followed by a decline and a failed attempt to reach or surpass the previous high, creating a lower high. When prices drop below the previous low, the order block above the low becomes mitigation. It may be characterised by an increase in selling volume as the price approaches the level, signalling resistance and a potential downward reversal. - Bullish Mitigation Block: Conversely, a bullish type is established during a downtrend. It is characterised by a significant trough, followed by a rise to form a higher low, and a failure to drop below the previous low. As the pair moves up, the order block below the high marks mitigation one. This area often shows an increase in buying volume as the price approaches, indicating support and a potential upward reversal. Mitigation Block vs Breaker Block Mitigation and breaker blocks are both significant in identifying potential trend reversals in forex trading, but they have distinct characteristics that set them apart. A mitigation block forms after a failure swing, which occurs when the market attempts but fails to surpass a previous peak in an uptrend or a previous trough in a downtrend. The pattern indicates a loss of momentum and a potential reversal as the price fails to sustain its previous direction. On the other hand, a breaker block is characterised by the formation of a new high or low before the market structure is broken, indicating that liquidity has been taken. This means that although the trend initially looked set to continue, it quickly reverses and breaks structure. In effect, a breaker appears when the market takes liquidity beyond a swing point before reversing the trend. A mitigation appears when the price doesn’t move beyond the trend’s most recent high or low, instead plotting a lower high or higher low before reversing the trend. How to Use Mitigation Blocks in Trading Areas of mitigation in trading can be essential tools for identifying potential trend reversals and entry points. When they align with a trader's analysis that anticipates a reversal at a certain level, it can serve as a robust confirmation for entry. Traders can effectively utilise these zones by simply placing a limit order within the area once it is considered valid. Validation occurs after a new peak or trough is established following the initial failure swing that forms the mitigation area. If a liquidity void or fair-value gap is present, the trader may look for such a gap to be filled before their limit order is triggered, potentially offering a tighter entry. Stop losses might be placed beyond the failure swing or the most extreme point. Furthermore, if a mitigation block is identified on a higher timeframe, traders can refine their entry by switching to a lower timeframe. This approach allows for a tighter entry point and potentially better risk management, as it offers more granular insight into the momentum around the area. Common Mistakes and Limitations While these blocks are valuable for forex trading, they come with potential pitfalls and limitations that traders should know. - Overreliance: Relying solely on mitigation blocks without corroborating with other trading indicators can lead to misjudged entries and exits. - Ignoring Context: Using these zones without considering the broader market conditions may result in trading against a prevailing strong trend. - Misinterpretation: Incorrect identification can lead to erroneous trading decisions, especially for less experienced traders. - False Signals: Mitigation blocks can sometimes appear to signal a reversal but instead lead to a continuation of the trend, trapping traders in unfavourable positions. The Bottom Line Understanding mitigation blocks offers traders a strategic edge in navigating the forex market. They can be vital for recognising potential price reversals and improving trading outcomes. FAQs What Is a Mitigation Block? A mitigation block in forex trading is an order block that identifies potential reversal points. It signals where a currency pair has previously stalled, indicating strong buying or selling pressure, suggesting a potential for similar reactions in future encounters with these levels. How Do You Identify a Mitigation Block? Mitigation blocks are identified by analysing charts for areas where previous highs or lows were not surpassed, leading to a reversal. Traders look for a sequence of movements, including a swing high or low followed by a retracement that fails to exceed the previous swing. What Is the Difference Between a Breaker Block and a Mitigation Block? While both indicate potential reversals, a breaker block forms when the price makes a new high or low before reversing, suggesting a temporary continuation of the trend. In contrast, a mitigation block forms without creating a new extreme, indicating a direct loss of momentum and an immediate potential for reversal. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
1
#AN007: Israel Attacks Iran, What's Happening? in Forex Hello, I'm Forex Trader Andrea Russo, creator of the SwipeUP Elite FX Method, which allows me to analyze and operate in the Forex world as if I were a Hedge Fund or an Investment Bank. Today I want to talk to you about the relevant news of the last few hours, namely Israel's attack on Iran. ⚠️ What happened Israel launched a massive preemptive air strike on numerous nuclear and military installations in Iran, including sites in Tehran and Natanz. Among the victims were key figures such as Revolutionary Guard commander Hossein Salami and several high-profile nuclear scientists. The operation was completely "unilateral", with no direct involvement of the United States, according to official sources reuters.com. However, it was previously coordinated with Washington, which received notification before the attack. Iran has responded by announcing that it will respond “hard and decisively” and has begun planning missile and drone strikes against Israeli targets, with a response that could come as early as the next few days. 🌍 Global reactions Australia, New Zealand, Japan and the UN have expressed alarm and called for maximum restraint. Oil prices have reacted with a surge: WTI +9% due to fears of supply disruptions. 💱 Impact on Forex ↑ Oil prices → Strengthens CAD, NOK, and commodity currencies in general. Global risk-off mode → Benefits safe haven currencies such as JPY, CHF, and temporarily also USD. Rising geopolitical risk → USD may have swings: drops in risk-off phases, but bounces as a safe-haven. EUR under pressure due to general risk aversion and physical demand for USD, CHF, JPY. Finally, emerging markets (BRL, MXN, INR) could suffer high volatility: outflows towards safer assets. 🧩 Operational focus for Forex traders Monitor oil and US yield bonds: rising signals could push commodity currencies. Follow movements on USD/JPY and USD/CHF: potential breakouts in case of escalation. Watch out for volatility on EUR/USD: the geopolitical crisis rewards USD and CHF. Stay ready for emerging currencies to react: possible flash crashes or speculative rebounds. To receive other news or other analyses, continue to follow me.
Education
by Andrea_Russo_SwipeUP
Trendline Break Retests: The Setup Nobody Talks AboutHello, Traders! 😎 It’s one of crypto's most overlooked yet commonly recurring structures: the trendline break and retest. You’ve probably seen it without even realizing it. A clean trendline gets broken, price pulls away, and then, quietly, almost politely, comes back to “kiss” the line before taking off again. Or dropping. That’s the retest. And in the chaotic crypto world, where hype often drowns out structure, this simple behavior deserves more attention. 🔍 First, What Is a Trendline Really? A crypto trendline connects key highs or lows on a chart, not to predict the future, but to help visualize the mean price trendline: the market's directional bias. In rising markets, we draw support lines connecting higher lows. In falling markets, resistance lines link lower highs. Learning how to draw trendlines in crypto properly is a skill in itself. Use wicks or closes? Log scale or linear? Everyone has a method, but consistency is key. If you’re unsure, zoom out and let the chart speak first. But once that line is broken, something changes. 🧠 Why Breaks (Alone) Are Not Enough In theory, a break of the trendline means momentum has shifted. But in practice? Breaks happen all the time in crypto; many are fakeouts or short-lived. That’s where the trendline break and retest come in. It’s the market asking: “Are we done with this trend?” Retests often create the cleanest entries for trend continuation, not because they guarantee success, but because they offer structure. They provide a technical “moment of truth” when buyers or sellers show their true strength. And if the retest holds? The move that follows tends to be more confident and less noisy. 📐 Trendline Break & Retest: Mapping the Larger Structure Looking across the full BTC/USDT weekly chart, several major shifts can be framed through the lens of trendline crypto behavior, particularly the classic sequence of break → retest → continuation. 🔻 2021–2022: Macro Breakdown After the bull run to ~$69K in 2021, Bitcoin started forming a descending series of lower highs, which gave rise to a macro-level downward trendline — a key reference point for many traders at the time. 🔴 Upper Zone: Failed Retest Cluster The upper horizontal band (~$47K–$52K) highlights a zone where BTC repeatedly attempted to reclaim the broken structure. Each time the price rallied into this region, sellers stepped in, forming local highs and multiple failed retests (marked with red circles). This wasn’t just resistance — it was a battleground where buyers tried to flip the trend… and couldn’t. This behavior often signals a trendline break rejection, where the market tests the underside of prior structure, then resumes the existing trend. 🔴 Lower Zone: Breakdown and Retest That Held The lower zone (~$28K–$32K) was formerly a strong support area during mid-2021. Once it was broken in early 2022, the price returned to retest from below, failing to reclaim it, confirming it had turned into resistance. This is a textbook example of trendline retest turned supply, and after the failed reclaim, BTC slid further into the ~$16K range. ✂️ Late 2023: The Breakout In late 2023, BTC finally broke above the descending trendline, confirming a long-term shift in momentum. Importantly, this wasn’t just a clean breakout. The market returned shortly after to retest the broken trendline, around the $42K–46K range, forming a consolidation zone. 🟩 And Then Came the Retest from Above Let’s fast-forward to early 2024. After months of chop, Bitcoin finally breaks through that upper red zone (the same one that previously acted as resistance and rejection city). But here’s the part many miss: It didn’t just moon. It came back. Look closely at the green zone around ~$46K–$48K, the same area where BTC got rejected multiple times in 2021–2022. And now? Price pulls back, taps that level from above, and holds. That makes this zone so interesting: 👉 It’s a classic “retest from the other side”, where former resistance becomes support. The market is saying: “This level matters. Let’s make sure it holds before we go further.” It’s a quiet confirmation and a great example of how crypto trendlines and price memory shape behavior, even months or years later. 🪞 It’s Not Just About Lines — It’s About Psychology Why does this pattern repeat? Because breakouts are emotional. They create FOMO. Traders rush in. Then the market pauses, tests your conviction, and shakes out the impatient. Retests act like a filter. They flush out the noise — and confirm who’s really in control. That’s why drawing trendlines in crypto isn’t just about geometry. It’s about crowd behavior. When enough traders see the same line, and price respects it after the break, it becomes a self-fulfilling zone of interest. 🧭 A Word of Caution This isn’t a secret formula. Not every trendline crypto setup will play out cleanly. SOME BREAKS NEVER RETEST. SOME RETESTS FAKE YOU OUT. AND SOMETIMES, THE LINE YOU DREW ISN’T THE ONE THE MARKET IS ACTUALLY WATCHING. But if you learn to draw trendlines in crypto clearly, stay patient, and observe the trendline break retest behavior, you’ll begin to see this pattern appear again and again. Quietly. Consistently. It won’t make the headlines like “BTC Hits 100K,” but it might just tell the story behind that move. This is just one example. In reality, charts are full of these zones. Each one tells a part of the story. And honestly, why not listen?
Education
by WhiteBIT
#AN006 Forex: Dollar, Yen and Emerging Currencies Collapse Hello, I'm Forex trader Andrea Russo, creator of the SwipeUP Elite FX Method that analyzes the market like a Hedge Fund. Today I want to talk to you about the most important economic news of the last few hours and how these are influencing, in real time, the global currency market. ## 🔜 US inflation: is the Fed heading for a cut? The CPI data released yesterday surprised the markets: annual core inflation stopped at +2.8% while the general figure stood at +2.4%, below expectations. This inflationary cooling immediately triggered speculation about a possible rate cut by the Federal Reserve as early as September. The Dollar Index (DXY) reacted negatively, losing ground and touching the lowest levels since April. ### Forex Impact: * The dollar weakens across the board. * EUR/USD tested the 1.15 area * GBP, JPY and CHF strengthened in counter-balance. ## 🌐 US-China trade tensions: half-way deals Over the past 24 hours, President Trump spoke of "partial progress" in talks with China on tariffs and rare metals. However, the lack of a definitive deal keeps global uncertainty high. Investors are weighing the risk of a new escalation, especially in strategic sectors such as technology and raw materials. ### Forex impact: * AUD and NZD show high volatility. * JPY benefits as a safe haven currency. * Commodity currencies remain reactive to geopolitical developments. ## 📉 ECB: rate cut and expansionary forward guidance The European Central Bank has cut interest rates to 2%, marking the eighth consecutive cut. The governor opened up to further expansionary measures in the third quarter, should inflation fail to rebound towards the 2% target. ### FX Impact: * The euro remains under pressure, despite the dollar weakness. * EUR/CHF in congestion. * EUR/USD in a sideways phase after the initial rally. ## 🚗 Emerging Markets: New Cycle of Strength According to the World Bank, growth in emerging markets will slow to 3.8% in 2025. However, currencies such as the Brazilian real (BRL) and the Mexican peso (MXN) have gained momentum thanks to the dollar weakness and speculative inflows on carry trades. ### FX Impact: * BRL and MXN strengthen. * Long-term opportunities on USD/EM crosses. * Beware of political risks and local inflation. ## ⛽ Oil rally: domino effect on currencies Oil prices rose this week: WTI hit +6%, while Brent marked +4%. The rally was triggered by improvements in US-China relations and geopolitical tensions in the Middle East. ### Forex Impact: * Strengthening CAD and NOK. * EUR and JPY penalized as net importers. * Correlation opportunities on USD/CAD. ## 🔄 Forex Outlook: what to expect now The market has entered a phase of **macro realignment**: * The dollar is in structural correction. * The euro is struggling between ECB stimulus and USD weakness. * Safe haven currencies (JPY, CHF) remain strong. * Emerging markets and commodity currencies show momentum. In the short term, the key will be the evolution of US data (PPI, retail sales) and new statements from the Fed. Keep following me for updates and operational analysis always based on real data and institutional methodology.
Education
by Andrea_Russo_SwipeUP
Minimize Big Losses by Managing your EmotionsHow many times have your emotions taken control in the middle of a trade? Fear, greed, or stress can be a trader’s worst enemy. This analysis teaches you how to manage your emotions to avoid big losses and look at the crypto market with a more professional eye. Hello✌ Spend 3 minutes ⏰ reading this educational material. 🎯 Analytical Insight on PEPE : PEPE is testing a strong daily trendline alongside key Fibonacci support, signaling a potential upside of at least 30%, targeting 0.000016 . Keep an eye on this confluence for a solid entry point. Now , let's dive into the educational section, 💡 Market Psychology and Emotional Management Crypto markets are highly volatile, which triggers strong emotions in traders. Fear of missing out (FOMO) and greed are two of the biggest enemies of any trader. Without emotional control, it’s easy to fall into bad trades. The first step in managing emotions is recognizing your behavioral patterns. Once you know when fear or greed kicks in, you can adjust your trading plan accordingly. Second, stick to a clear trading plan. Whether the market is crashing or pumping hard, stay loyal to your strategy and make decisions based on logic and analysis—not feelings. 🛠 TradingView Tools and Indicators to Manage Emotions First off, TradingView tools aren’t just for technical analysis—they can help you control emotions and impulses in your trades. One of the best indicators is the Relative Strength Index (RSI), which clearly shows whether the market is overbought (extreme greed) or oversold (extreme fear). Using RSI, you can spot moments when the market is too emotional—either overly optimistic or fearful—and avoid impulsive decisions. For example, when RSI rises above 70, the market may be too greedy, signaling you to hold back from jumping in hastily. Besides RSI, indicators like MACD and Bollinger Bands help you better visualize trends and volatility, allowing you to avoid emotional entry or exit points. The key is to combine these indicators with awareness of market psychology, making them powerful tools to manage your feelings while trading crypto. 📊 Practical Use of Indicators to Avoid Big Losses Imagine you entered a Bitcoin long position. By watching RSI and MACD, you can pinpoint better entry and exit points. If RSI is above 70 and MACD shows a reversal signal, a price correction is likely. In such cases, trade cautiously or consider exiting to avoid significant losses. Additionally, setting stop-loss orders based on support/resistance levels identified by Bollinger Bands is another key risk management strategy. This keeps your losses controlled and within acceptable limits, even if the price moves suddenly. ⚡️ The Psychology of Loss and Greed — Two Big Trader Traps After losing, it’s natural to want to recover quickly, but that’s where greed often leads to risky, poorly thought-out trades. To break this harmful cycle: Focus on the size of your losses, not just your profits Take a break from trading after a loss to calm your emotions Use TradingView tools for thorough analysis and never let feelings drive your decisions 🔍 Final Advice Managing emotions is the backbone of successful trading in highly volatile crypto markets. Smart use of technical indicators like RSI, MACD, and Bollinger Bands, combined with self-awareness and strict adherence to your trading plan, can drastically reduce big losses and maximize gains. Always remember to view the market through a logical lens, not an emotional one. ✨ Need a little love! We put so much love and time into bringing you useful content & your support truly keeps us going. don’t be shy—drop a comment below. We’d love to hear from you! 💛 Big thanks, Mad Whale 🐋 📜Please remember to do your own research before making any investment decisions. Also, don’t forget to check the disclaimer at the bottom of each post for more details.
Education
by MadWhale
17
How can I use PEGs to trade Forex?Hello everyone, On May 6, we brought you a technical update on the USD/HKD rate (US dollar VS Hong Kong dollar), as the exchange rate was testing the PEG level of 7.75, defended by the Hong Kong monetary authorities. The PEG therefore provided solid support, and the exchange rate rebounded strongly. It is now under resistance. We'd like to take this opportunity to offer you an educational update on the notion of the PEG in Forex. The link to our May 6 article is just below. What is a PEG and why use it? A PEG, or fixed-rate exchange rate regime, consists of a central bank maintaining its currency at a stable value against a foreign currency, often the US dollar or the euro. This system aims to reduce exchange rate volatility, and is advantageous for a country's trade and investment. It promotes economic stability, particularly in countries that are heavily dependent on a stable currency. PEGs survive thanks to the considerable reserves mobilized by monetary authorities to support the target exchange rate. PEGs can thus create technical supports or resistances that can be worth exploiting, but caution is sometimes called for, as history has shown that some central banks can abruptly stop defending a PEG. 1) Interesting PEGs currently in force Many countries, particularly in the Middle East, Africa and the Caribbean, maintain a fixed rate against the dollar: Bahrain (BHD), Kuwait (KWD), Oman (OMR), Qatar (QAR), Saudi Arabia (SAR), United Arab Emirates (AED), Panama (PAB). The CFA franc (XOF/XAF), used in 14 African countries, is pegged to the euro at 655.957 CFA per euro. Some PEGs use a currency board or fluctuation band, such as the Hong Kong dollar (HKD) via a band of 7.75-7.85 HKD per USD. This is the support we shared with you on May 6, and the price rebounded strongly. The case of the Singapore dollar (the USD/SGD rate) illustrates yet another sophisticated form of intermediate exchange rate regime. Unlike a fixed-rate policy or a free float, the Monetary Authority of Singapore (MAS) steers the value of the SGD through a regime based on a basket of weighted commercial currencies, the exact composition of which remains confidential. This system is based on an unannounced fluctuation band around a central rate, also unpublished. 2) Historical and discontinued PEGs (the landmark episode of the 1.20 PEG on the EUR/CHF rate) The 1.20 PEG between the euro (EUR) and the Swiss franc (CHF) is one of the most significant episodes in the recent history of European exchange rate policies. Here is a detailed summary of this PEG and its spectacular abandonment in January 2015. In September 2011, the Swiss National Bank (SNB) set a floor of CHF 1.20 to EUR 1, i.e. a unilateral PEG (not a classic fixed rate, but a floor rate). On January 15, 2015, the SNB abandoned the PEG without notice, citing the growing divergence between the monetary policies of the ECB (falling rates) and the United States. The immediate result: a historic crash on the Forex market. The EUR/CHF rate dropped instantly from 1.20 to around 0.85-0.90, before stabilizing at around 1.00. The Swiss franc appreciates by almost 30% in a matter of minutes, causing forex intermediaries to go bankrupt, Swiss exporting companies to suffer huge losses and, above all, retail investors who had staked a lot on preserving the CHF 1.15 support level to suffer huge trading losses. 3) The case of the Yuan exchange rate against the US dollar Another emblematic example is that of China, whose exchange rate regime against the US dollar is not a classic PEG, but a hybrid system often referred to as managed floating. Prior to 2005, the yuan (CNY) was firmly pegged to the dollar at a fixed rate of 8.28, maintained since 1994. In 2005, Beijing decided to make this mechanism more flexible, allowing the yuan to appreciate gradually. However, in the face of the global financial crisis, the People's Bank of China (PBoC) once again froze the rate at around 6.83 until 2010. Since then, the regime has evolved towards a more sophisticated system: every morning, the central bank publishes a USD/CNY reference rate, around which the currency is allowed to fluctuate within a narrow band of plus or minus 2%. This daily fixing is based both on recent market movements and on a basket of strategic currencies. Although this system is not a formal PEG. DISCLAIMER: This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions. This content is not intended to manipulate the market or encourage any specific financial behavior. Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results. Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content. The use of any third-party brands or trademarks is for information only and does not imply endorsement by Swissquote, or that the trademark owner has authorised Swissquote to promote its products or services. Swissquote is the marketing brand for the activities of Swissquote Bank Ltd (Switzerland) regulated by FINMA, Swissquote Capital Markets Limited regulated by CySEC (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the CSSF, Swissquote Ltd (UK) regulated by the FCA, Swissquote Financial Services (Malta) Ltd regulated by the Malta Financial Services Authority, Swissquote MEA Ltd. (UAE) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) licensed by the Hong Kong Securities and Futures Commission (SFC) and Swissquote South Africa (Pty) Ltd supervised by the FSCA. Products and services of Swissquote are only intended for those permitted to receive them under local law. All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade. Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties. The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
Education
by Swissquote
How to Draw Support & Resistance In TradingViewLearn how to effectively identify, draw, and utilize support and resistance levels in TradingView with this comprehensive step-by-step tutorial. Whether you're a beginner trader or looking to refine your technical analysis skills, this video covers everything you need to know about one of the most fundamental concepts in trading. What You'll Learn: Understanding support and resistance: the foundation of technical analysis and price action trading Step-by-step instructions for drawing horizontal support and resistance lines in TradingView Creating support and resistance zones for more flexible trading approaches Practical tips for using TradingView's drawing tools effectively This tutorial may be helpful for day traders, swing traders, and investors using TradingView who want to improve their chart analysis skills. The techniques covered could help you make more informed entry and exit decisions by understanding where price might find support or encounter resistance. Visit Optimus Futures to learn more about trading futures with TradingView: optimusfutures.com Disclaimer: There is a substantial risk of loss in futures trading. Past performance is not indicative of future results. Please trade only with risk capital. We are not responsible for any third-party links, comments, or content shared on TradingView. Any opinions, links, or messages posted by users on TradingView do not represent our views or recommendations. Please exercise your own judgment and due diligence when engaging with any external content or user commentary. This video represents the opinion of Optimus Futures and is intended for educational purposes only. Chart interpretations are presented solely to illustrate objective technical concepts and should not be viewed as predictive of future market behavior. In our opinion, charts are analytical tools—not forecasting instruments. Market conditions are constantly evolving, and all trading decisions should be made independently, with careful consideration of individual risk tolerance and financial objectives.
CME_MINI:ES1!Education
by OptimusFutures
1
Trading the VIXOften dubbed the "fear index," the VIX gauges SPX options' implied volatility, typically rising during equity market declines and vice versa. It quantifies investor anxiety, demand for hedging, and market stress, crucial for traders and risk managers seeking to measure turbulence. The VIX calculates a constant 30-day implied volatility using SPX options expiring over the next two months. Unlike simple weighted averages of equity indices, its methodology is more complex, involving implied variance calculation for the two nearest monthly expirations across all strikes. For detailed formulas, refer to the introductory chart or visit the CBOE’s official VIX Index page. While the VIX Index itself isn’t tradable, exposure can be gained through VIX futures or exchange-traded products (ETPs) like VXX, UVXY, and SVXY. However, these instruments come with their own unique risks, pricing behaviors, and structural nuances, which can make directional VIX trading considerably more complex than it might initially appear. What You Need to Know About Implied Volatilities • In calm or uptrending markets, the volatility curve typically slopes upward (contango), indicating higher implied volatility with longer maturities. • In declining or turbulent markets, the curve can invert, sloping downward (backwardation), as shorter-term implied volatilities rise sharply. • This pattern can be observed, comparing VIX9D, VIX, and VIX3M against the SPX. In stable markets: VIX9D < VIX < VIX3M. In stressed markets, this relationship may reverse. The VIX9D and VIX3M are the 9-day respectively 3-month equivalent to the 30-day VIX. What You Need to Know About VIX Futures • When the volatility spot curve is in contango, the VIX futures curve will also slope upward. • In backwardation, the futures curve slopes downward, reflecting heightened short-term volatility and short-term volatility spikes. • While in contango, VIX futures "roll down the curve," meaning that—independent of changes in volatility—futures tend to decline in value over time. • In backwardation, the opposite occurs: futures "roll up the curve," potentially rising in value over time even without volatility changes. • VIX futures’ responsiveness to VIX Index movements – the beta of VIX futures against the VIX index - declines with longer expirations; front-month futures may react to 70-80% of VIX changes, compared to 40-60% for third or fourth-month futures. Key Consequences for Traders • Directional trading of VIX futures can be strongly influenced by the shape of the futures curve. • Contango in low-VIX environments creates strong headwinds for long VIX futures positions, caused by the “roll-down-effect”. • Conversely, backwardation in high-VIX environments creates headwinds for short positions. • These effects are more pronounced in front-month contracts, making timing (entry and exit) for directional trades critical. • There's a trade-off in directional strategies: front-month futures offer greater exposure to VIX movements but suffer more from negative roll effects. How to Trade VIX Futures • Due to these structural challenges, directional VIX futures trading is difficult and requires precision. • A more effective approach is to trade changes in the shape of the futures curve using calendar spreads (e.g., long VX1, short VX2). This reduces the impact of roll effects on individual contracts. • In low-VIX, contango conditions, a rising VIX typically leads to VX1 increasing faster than VX2, widening the VX1–VX2 spread—an opportunity for spread trading. • While VX1 may initially suffer more from roll-down than VX2, this can reverse as the VIX rises and VX1 begins to “roll up,” especially when VIX > VX1 but VX1 < VX2. • The opposite dynamic applies in high-VIX, backwardation environments. • More broadly, changes in the shape of the futures curve across the first 6–8 months can be profitably traded using calendar spreads. Roll-effects and the declining beta-curve can also be efficiently traded. How to capture the Roll-Down-Effect One of the more popular VIX-trading strategies involves capturing the roll-down effect,, while the curve is in contango. It is a positive carry strategy that is best applied during calm or uptrending market conditions. Here’s a straightforward set of guidelines to implement the Roll-Down-Carry trade: • Entry Condition: Initiate during calm market conditions, ideally when VIX9D-index is below VIX-index (though not guaranteed). • Choosing Futures: Use VX1 and VX2 for calendar spreads if VX1 has more than 8-10 trading days left; otherwise, consider VX2 and VX3. • Spread Analysis: Short VX1 and long VX2 if VX1–VIX spread is larger than VX2–VX1; otherwise, VX2 and VX3 may be suitable. • Contango Effect: VX1’s roll-down effect typically outweighs VX2’s during contango. • Relative Beta: VX1 shows higher reactivity to VIX changes compared to VX2, mimicking a slight short position on VIX. • Exit Strategy: Use spread values, take-profit (TP), and stop-loss (SL); consider exiting if VIX9D crosses over VIX. ________________________________________ Conclusion Directional trading of the VIX Index—typically through futures—demands precise timing and a good understanding of the volatility curve. This is because curve dynamics such as contango and backwardation can create significant headwinds or tailwinds, often working against a trader’s position regardless of the VIX’s actual movement. As a result, purely directional trades are not only difficult to time but also structurally disadvantaged in many market environments. A more strategic and sustainable approach is to trade calendar spreads, which involves taking offsetting positions in VIX futures of different maturities. This method helps neutralize the impact of the curve's overall slope and focuses instead on relative changes between expirations. While it doesn’t eliminate all risk, calendar spread trading significantly reduces the drag from roll effects and still offers numerous opportunities to profit from shifts in market sentiment, volatility expectations, and changes in the shape of the futures curve. What else can be done with VIX instruments VIX indices across different maturities (VIX9D, VIX, VIX3M), along with VIX futures, offer valuable insights and potential entry signals for trading SPX or SPX options. In Part 2 of the Trading the VIX series, we’ll explore how to use these tools—along with VIX-based ETPs—for structured trading strategies.
CBOE:VIXEducation
by parsifaltrading
How to Calculate Forex Lot Size on TradingView. Free Calculator Do you know that TradingView has a built-in Forex position size calculator? It is completely free, it is simple to use, and it does not require a paid subscription to use it. In this article, I will teach you how to calculate a lot size for your trades on TradingView easily in 3 simple steps. Step 1 - Setting Up the Calculator First, open a price chart on TradingView and find a "Trading Panel" button in the bottom of the window. Click "Maximize Panel" afterward. In the list of brokers, select " TradingView Paper Trading" and click "Connect". Paper Trading is built in demo trading account on TradingView. It does not require KYC or any other verification. Choose "Account" list box and tap "Create Account" . Then fill all the inputs with exactly the same parameters as your real trading account has. Type in your exact account size, leverage and commission rate. Then click "Create". TradingView position size calculator is ready to use. Step 2 - Find the Trading Opportunity Find a trading setup to trade. Make sure that you know the exact entry level and stop loss. Imagine that you want to buy EURUSD from 1.0899 price level with 1.08846 stop loss level. Step 3 - Measure a Proper Lot Size Right-click on a price chart and choose "Trade" and in the appeared menu select "Create New Order". Fill the following fields: "Price" - your entry level, "% risk" - your desired risk per trade in %, "Stop Loss price" - your stop loss price level. Your lot size will be based on the calculated units . In forex trading 1 standard lot equals 100000 units. The only thing that you should do is to take the exact units number and divide it by 100000. In our case we have 704225 units. 704225 / 100000 = 7,04 lot. That will be your lot size for buying EURUSD with 1% risk for 100000 trading account. If you apply TradingView for market analysis and charting and your trading terminal does not have a lot size calculator, this method will be the quickest and the easiest to apply for measuring the position size. ❤️Please, support my work with like, thank you!❤️ I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
TRADENATION:XAUUSDEducation
by VasilyTrader
1
Mastering Liquidity Dynamics: Understand the Dynamic True ValueDear Reader, Thank you for reading—your time is valuable. Use the chart's zoom-in/out (-/+) function for better visibility. This chart captures a large sample for your evaluation. Below is the manual detailing the Smart Farmer System —a Dynamic True Value framework derived from real-time data to anticipate market intent and liquidity behavior . If this resonates with you, drop a comment below— constructive insights are always welcome . The Dynamic True Value - a Smart Farmer System: Terminology and Mechanics : For now, I have firmed up POC - Price of Control, VAP - Value Average Pricing, SULB - Sell Upper Limit Bound, BLLB - Buy Lower Limit Bound. Mechanic: POC - Where fair value price dynamic is read. VAP - Trading above indicates bullish sentiment of the cycle, and the opposite for bearish sentiment. A crossed over of: Grey POC above Green VAP - Signaling distribution, accumulation, consolidation, build-ups, correction, retracement . Green VAP above Grey POC - Bullish strength and momentum consistency . Pink VAP above Black POC - Bearish strength and momentum consistency . Flip of Pink VAP to Green VAP - Sentiment flips from bear to bull, and the same goes for green flip to pink showing bull to bear. Validation of entry signals requires: Signal's candle must close past the opposite side of POC – flip sentiment . The confirmation candle (is the closed next candle immediately after entry signal candle) must continue closed past the POC – maintain sentiment . The progress candle (is the next candle closed right after the Confirmation Candle) shows traction, momentum build-up, and volume consistency . Hint of invalidation: Signal's candle is considered void if the next candle prints a new entry signal in the opposite direction. This often signals accumulation, sideways movement, build-up, uncertainty, or swings in range . The immediate next candle closed past POC to the opposite side. What to understand about Liquidity Trap, SULB, and BLLB: Liquidity traps Often occur at the recent/previous flatlines of Dynamic True Value (POC, VAP, SULB, BLLB) . It is worth paying attention to the market’s intent and institutional positioning. Signs of exhaustion, absorption, inducement, offloading, and accumulation are visible in the M1 (one-minute) TF, with significant confluence near the previous/recent flatlines of Dynamic True Value in the higher/macro-TFs. An Anchored VWAP tool can be helpful for filtering noise in the market. This tool can be found in the drawing tab in the TradingView platform. SULB Details the dynamic of upper resistance where Bears remain in control below the dynamic level. Below this limit bound (LB) , bears show strength – bear sentiment . A converging price toward this LB indicates bulls are present. Moving past this LB (a candle closed above) and successfully RETESTING newly formed support indicates a confirmed directional shift . Followed by printing a new BLLB in the next following candles with price continuing to rise above this failed SULB. A rejection below LB (a rejection/exhausted candle closed below LB) and successful RETEST reaffirms the resistance holds , indicating downside continuation . BLLB Details the dynamic of lower support where Bulls remain in control above the dynamic level. Above this LB, bulls show strength – bull sentiment . A converging price toward this LB signifies bears are present. Moving past this LB (a candle closed below) and successfully RETESTING newly formed resistance indicates a confirmed directional shift . Followed by printing a new SULB in the next following candles with price continuing to push lower below this failed BLLB. A rejection above LB (a rejection/exhausted candle closed above LB) and successful RETEST reaffirms the support holds , indicating upward continuation . Important Notes: Select preferred Entry’s Signal TF (ex. M3 TF, M5 TF for scalping strategy, M15 for intraday/daily strategy, 4H TF for day-to-weekly strategy, etc.). Always refer to the selected Entry’s TF for trading progress. Anticipate TP and SL by watching the range in this TF. Non-entry TFs are not for entry purposes. These multi-TFs are used for measuring strength, momentum, liquidity, positioning, structure – The market intends . The Non-entry TF is used to anticipate institutional executions and liquidity pools. These criteria MUST BE MET. A failed criterion suggests vague execution. Be patient and wait for clear validations. Institutions excel in creating illusions. SFS is designed to stand ready, calm, and execute with Clarity. SFS cuts through noise, distraction, and stays independent of NEWS, GEOPOLITIC, RUMORS, and herd mentality because all these are designed to mislead retail traders into institutional traps. When we see such ambiguity against the criteria, we know not to fall into the TRAP and become the liquidity FUEL. Stay sharp, only respond when signals are firmed. SFS is designed to counter Smart Money capitalism. It is about time to level the playing field.
TRADENATIONSB:XAUUSDEducation
by jerryfc000
1
Differences Between Trading Stock Market and Coin Market Hello, traders. If you "Follow", you can always get new information quickly. Have a nice day today. ------------------------------------- Please read with a light heart. - Trading stock market and coin market seem similar, but they are very different. In stock market, you have to buy and sell 1 share at a time, but in coin market, you can buy and sell in decimals. This difference makes a big difference in buying and selling. In the stock market, you should buy when the price is rising from a low price if possible. The reason is that since you buy in units of 1 week, you have to invest more money when you sell and then buy to buy 1 week. I think the same goes for the coin market, but since you can buy in decimal units, you have the advantage of being able to buy at a higher price than when you buy in the stock market. For example, if you sell and then buy again at the same price, the number of coins (tokens) will decrease, but there will be no cases where you can't buy at all. Therefore, the coin market is an investment market where you can trade at virtually any price range. - In terms of profit realization, the stock market can only be traded in a way that earns cash profits. The reason is that, as I mentioned earlier, since you have to trade in units of 1 week, there are restrictions on trading. However, in the coin market, in addition to the method of earning cash profits, you can also increase the number of coins (tokens) corresponding to the profits. The biggest advantage of increasing the number of coins (tokens) corresponding to profit is that you can get a large profit in the long term, and the burden of the average purchase price when conducting a transaction is reduced. When the price rises by purchase price, if you sell the purchase amount (+ including the transaction fee), the coins (tokens) corresponding to profit will remain. Since these coins (tokens) have an average purchase price of 0, they always correspond to profit even if there is volatility. In addition, even if the price falls and you buy again, the average purchase price is set low, so it plays a good role in finding the right time to buy and starting a transaction. Of course, when the number of coins (tokens) corresponding to profit is small, it does not have a big effect on the average purchase price, but as the number increases, you will realize its true value. You can also get some cash when you increase the number of coins (tokens) corresponding to profit. When selling, if you add up the purchase price + transaction fee X 2~3, you can also get some cash profit. If you get cash profit, the number of coins (tokens) remaining will decrease, so you can adjust it well according to the situation. When the profit is large, increase the cash profit slightly, and when you think the profit is small, decrease the cash profit. - Therefore, when you first move from the stock market to the coin market and start trading, you will experience that the trading is not going well for some reason. In the stock market, there are some restrictions on the rise and fall, but in the coin market, there are no restrictions, so it is not easy to respond. However, as I mentioned earlier, the biggest problem is the difference in the transaction unit. When trading in the stock market, you need to check various announcements and issues in addition to the chart and determine how this information affects the stock or theme you want to trade. This is because trading is not conducted 24 hours a day, 365 days a year like the coin market. This is because if an announcement or issue occurs during a non-trading period, the stock market may rise or fall significantly when trading begins. - When using my chart on a stock chart, the basic trading strategy is to buy near the HA-Low indicator and sell near the HA-High indicator. However, if you want to buy more, you can buy more when the M-Signal of the 1D chart > M-Signal of the 1W chart, and it shows support near the M-Signal indicator of the 1W chart. In the stock chart, it is recommended to trade when the M-Signal indicators of the 1D, 1W, and 1M charts are aligned. The reason is that, as I mentioned earlier, trading must be done in 1-week units, so the timing of the purchase is important. In the coin chart, you can actually trade when it shows support at the support and resistance points. However, since trading is possible 24 hours a day, 365 days a year, even if it shows support at the support and resistance points, psychological anxiety due to volatility increases, so it is recommended to proceed with trading according to the basic trading strategy. The creation of the HA-Low indicator means that it has risen from the low range, and the creation of the HA-High indicator means that it has fallen from the high range. Therefore, if it shows support near the HA-Low indicator, it is likely to rise, and if it shows resistance near the HA-High indicator, it is likely to fall. However, on the contrary, if it is supported and rises at the HA-High indicator, it is likely to show a stepwise rise, and if it is resisted and falls at the HA-Low indicator, it is likely to show a stepwise fall. In order to confirm this movement, you need to invest a lot of time and check the situation in real time. - Thank you for reading to the end. I hope you have a successful transaction. --------------------------------------------------
Education
by readCrypto
True Range Price ActionThis chart shows the tools needed to analyze price action using true range of moves. If you are master in multi-timeframe analysis, this method will give you precision. Setups have master, pattern, and trigger timeframe parts. The relation between timeframes of a setup are as follows: master timeframe is highest timeframe for setup, pattern timeframe is one lower fractal timeframe, and trigger timeframe is two lower fractal timeframe, both relative to the master timeframe. Fractal timeframes respectively are: M, W, D, H4, H1, M15, M5, M1. Two main setups are trading based on return, and trading based on break. Trading based on return consists of two sub-setups: trading based on pivot setup for reverse pivot, and trading based on area nature setup for settlement pivot. Trading based on break setup or trend pivot setup, and trading based on area magnet setup. Each setup has a trigger line entry in its trigger timeframe as following: area nature setup trigger line, return to pivot trigger line, magnet trigger line, and pullback trigger line.
FOREXCOM:XAUUSDEducation
by Alireza-Davari
1
NO TRADE? THAT IS THE TRADEToday, I took no trades and I’ll be honest, it was really tempting to break that discipline. I stared at the chart longer than I needed to. My cursor hovered around the Buy and Sell buttons. My brain tried to convince me that “maybe” this candle meant something. Even though there was no valid sweep, no BOS, and no clean entry into an FVG , the desire to just “be in a trade” was strong. But I reminded myself: 📌 No Setup = No Trade 📌 Your edge is your lifeline 📌 Discipline is what pays you, not activity What I felt today is something every trader battles, setup hoping . It’s that mental trap where silence feels wrong, and boredom feels dangerous. But the truth is, boredom is part of being a consistently profitable trader. There are days where your best trade is the one you don’t take. And I’m proud to say I did nothing. No revenge trade. No gambling. No deviation from plan. Instead, I observed. I journaled my emotions. I stayed in control. That’s the work behind the scenes: the mental reps that build longevity in this business . So if you had a quiet session today too, and you resisted the urge to jump in without reason, celebrate that. You're training your mind to trust your system, not your feelings. Sometimes, the most powerful trade you’ll ever take… is the one you never place.
TVC:GOLDEducation
by Crusade1Jay
17
Everything Looks Fine Until You're Liquidated Ever felt like the market is calm and steady, then boom — everything crashes? Everything seems fine … until one liquidation candle slaps you awake. This analysis explores how the illusion of safety can destroy your capital — and how to use TradingView tools to stay ahead. Hello✌ Spend 3 minutes ⏰ reading this educational material. 🎯 Analytical Insight on Dogecoin: If Dogecoin fails to gain at least 30% in the next two weeks—while Bitcoin continues to rally—this divergence could signal a broader market weakness. When BTC outperforms and altcoins lag, it often reflects declining risk appetite and potential capital rotation out of speculative assets. A move toward the $0.25 target is key for confirming bullish continuation across the altcoin sector. 📉 Now , let's dive into the educational section, 🧠 The Illusion of Safety: Silent Capital Killers The biggest risk in trading is when things “seem fine.” A quiet chart is often the calm before the liquidation storm. Don't get cozy. 📍 TradingView Tools That Could Save You 🛠️ When the market feels safe, that’s exactly when danger starts brewing. This is where TradingView’s tools come into play as your best defense. First up: Volume Profile V isible Range. It reveals exactly where big players entered and where liquidity is building up. Right near these zones, you’ll often find fake breakouts and whale traps. Next: Fixed Range Volume Profile — great for identifying volume clusters within specific price ranges. If volatility shrinks while nearing a high-volume zone, get ready: a shakeout may be coming. Don't just use price alerts. Go deeper — set alerts for EMA crossovers, sudden RSI shifts, or breaks through low-volume areas . That’s where silent moves become violent moves. One underrated gem: Long/Short Position Tool . Use it to simulate your liquidation points before you open a trade. It’s like pre-visualizing your own death — so you can avoid it. These tools aren’t just fancy widgets. They’re how you read the silent signals of the market before it slaps. 🐍 Whales Hunt Your Comfort Zone The market doesn’t wait for you to be ready. Whales wait until you feel safe. Then they hit, wiping retail traders to create room for entry. 🚩 Trades Without a Plan Are Liquidation Invitations Opening a position without mapping your liquidation zone? That’s like flying blind into a hurricane. Always have Plan A — and a backup Plan B. 🔍 Quiet Crashes Begin With Fake Breakouts The market won’t warn you. It teases with one green candle, maybe a soft pump... and then drops like a rock. That’s the trick. 🧮 Moving Averages: When Smooth Means Scary When EMA 21 and 55 flatten out too much, it’s not peace — it’s buildup. Flat EMAs = warning. Don’t be fooled by “smooth” charts. ⚠️ Liquidation Data = Psychological Red Flag Liquidation spikes on sites like Coinglass aren’t just stats — they’re signs of herd slaughter. Use them as sentiment analysis. It's not just what got liquidated — it's who and why. 🧪 Post-Liquidation Analysis: Recovery or Spiral? After liquidation, many rush to “make it back.” That's when more destruction happens. You need a post-liquidation plan, not just a pre-trade strategy. 🔐 The Best Trades Are Sometimes Early Exits Exiting a trade that looks “fine” is a pro move. When everything feels stable, the market may be prepping to flip the table. 🧊 Cold-Minded Trading Saves Accounts Pros stay ready during calm markets. Amateurs dive in when it’s “finally safe.” That mindset difference defines survival. 🧭 Final Takeaway If there’s one thing to remember from this analysis, it’s this: Never trust the market. Trust your tools. Trust your strategy. The market is never safe — it only pretends to be. ✨ Need a little love! We put so much love and time into bringing you useful content & your support truly keeps us going. don’t be shy—drop a comment below. We’d love to hear from you! 💛 Big thanks, Mad Whale 🐋 📜Please remember to do your own research before making any investment decisions. Also, don’t forget to check the disclaimer at the bottom of each post for more details.
Education
by MadWhale
10
#AN005 What Changes After USA-China, ECB and Oil Hello, I'm Andrea Russo, forex trader and creator of the SwipeUP Elite FX Method, which analyzes the market as a Hedge Found. Today I want to talk to you about the latest crucial economic news of the week that will influence the currency markets. Let's start with the important trade meeting between the United States and China that took place in London. The negotiations, mainly focused on exports and rare earth metals, showed positive signs with optimistic statements from both sides. This event immediately brought an improvement in global sentiment, strengthening trade-sensitive currencies such as the Australian dollar (AUD) and the New Zealand dollar (NZD), while the US dollar recorded a slight decline. The World Bank, on the other hand, tagged its 2025 global growth forecast from 2.8% to 2.3%. This downgrade reflects significant concerns for the United States, China and Europe, due to trade uncertainties and reduced investments. This scenario, however, could favor some emerging currencies, such as the Brazilian real (BRL) and the Mexican peso (MXN), which benefit from less restrictive monetary policies and a reduction in pressure on the US dollar. Looking at Europe, the European Central Bank (ECB) has decided to further reduce rates, bringing them to 2%, with the possibility of further decreases of up to -0.25% by the autumn. This expansionary policy is dictated by the need to support a stagnant economy and contain inflation. Inevitably, this will put pressure on the euro (EUR), which is expected to weaken against major currencies, especially the dollar. In the United States, on the other hand, all eyes are on the May CPI due on June 11. Inflation is expected to be 2.5%, and the publication of data that is above or below expectations could generate strong volatility on the dollar. A higher CPI would strengthen the dollar, reducing the likelihood of a rate cut by the Federal Reserve, while a lower reading could further weaken the greenback. Finally, oil has also rallied, with WTI up 6% and Brent up 4%. This increase has been driven by a more favorable geopolitical context and the reduction of trade tensions. The effect on currency markets is direct, favoring commodity-related currencies, such as the Canadian dollar (CAD) and the Norwegian krone (NOK), while currencies such as the euro (EUR) and the Japanese yen (JPY), of oil-importing countries, could find themselves in difficulty. In summary, the current week is proving to be crucial for Forex: declining trade tensions are supporting trade-related currencies, the ECB's accommodative monetary policy is weakening the euro, while US economic data will drive sentiment on the dollar. To stay updated on future developments, continue to follow my analyses and articles here on TradingView.
Education
by Andrea_Russo_SwipeUP
What Is a Morning Star Pattern & How Can You Use It in Trading?What Is a Morning Star Pattern, and How Can You Use It in Trading? The morning star candlestick is a popular price action pattern that technical analysts and traders use to identify potential trading opportunities. It indicates a reversal from a bearish to a bullish trend and is a valuable addition to any trader's toolkit. In this article, we will cover all the technical aspects of the morning star candlestick pattern. What Is the Morning Star Candlestick Pattern? The morning star in technical analysis is a reversal formation that appears at the end of a downtrend and signals a trend reversal. It consists of three candles. To identify it on the chart, you should look for the following: 1. Downtrend: The market should be in a downtrend, and the first candle should be long and bearish. 2. Indecision: The second candle is usually expected to have a gap down, but gaps are uncommon in forex. Therefore, a small-bodied candle is considered sufficient. It's worth noting it can be either bullish or bearish, but if it’s bullish, the signal is stronger. 3. Significant increase: The third candle should be strong and bullish and close above the midpoint of the first bearish one. If it forms with a gap up, the buy signal is considered stronger. When Morning Star Candlestick Patterns Occur Traders can identify the morning star candlestick pattern in stocks, forex pairs, commodities, and cryptocurrencies*. It may also be observed across various timeframes, from minutes to weeks. Generally speaking, a morning star pattern can be considered more reliable when it appears on a higher timeframe. For instance, a morning star candlestick pattern has more significance when it occurs over three days vs three minutes, given the increased amount of price action and market participation reflected over longer periods. Psychology Behind the Pattern The morning star reversal pattern reflects a shift in market sentiment from bearish to bullish. Initially, a strong bearish candle indicates prevailing selling pressure. The second candle, with its small body, suggests indecision as the market stabilises and neither bulls nor bears dominate. This pause indicates that sellers are losing momentum. The third morning star candle, a strong bullish one, confirms the shift as buyers take control, driving prices higher. This pattern signals that the downtrend is likely exhausted, and a potential reversal is underway due to increasing buyer confidence. Trading with the Morning Star Traders can use the following steps to trade this setup: 1. Identify the setup: Look for a setup on the chart formed after a solid downtrend. 2. Confirmation: After identifying the formation, traders should confirm it before entering a long position. 3. Enter a long position: Consider entering a long position once the formation is confirmed. 4. Determine a take-profit target: Although candlesticks don’t provide specific entry and exit points, traders may consider the closest resistance level to take potential profit. 5. Monitor the trade: Continuously monitor the trade and adjust the stop-loss and take-profit levels as needed based on market conditions. What Is the Morning Star Candlestick Strategy? The morning star trading strategy leverages the formation's ability to signal a bullish reversal after a downtrend. The formation's reliability increases when it occurs at a support level and is confirmed by a momentum indicator like the RSI or MACD. Entry: - Traders look for the full morning star to form at a support level. - They then look for a confirmatory bullish signal from a momentum indicator, such as RSI showing oversold conditions, a bullish MACD crossover, or a bullish divergence in either. - Traders may wait for additional confirmation, like RSI moving back above 30, or enter on the close of the third candle in the pattern. Stop Loss: - A stop loss might be set below the swing low of the setup. - Alternatively, traders may place the stop loss beyond the lower boundary of the established support level. Take Profit: - Profits might be taken at a predetermined risk-reward ratio, like 2:1 or 3:1. - Traders also often aim for an opposing resistance level where a further reversal might occur. Morning Star and Other Formations Traders should not confuse the morning star candle formation with other formations, such as the evening star, which is the complete opposite. Doji Morning Star In a traditional morning star reversal pattern, the candle that appears in the middle of the formation has a small real body, meaning there is a clear difference between the opening and closing prices. In a morning doji star formation, the second candlestick has characteristics of a doji, where the opening and closing prices are very close to each other, resulting in a very small real body. This reflects the indecision as neither bulls nor bears can take control of the market. The doji setup is less common than the traditional formation, but it still signals a potential upward movement after a prolonged downtrend. Evening Star In contrast to a morning setup, an evening star is a bearish setup occurring after an uptrend. It also consists of three candles – a long bullish one, a small-body one (it can also be a doji), and a long bearish one that closes below the midpoint of the first bullish candle. This suggests that the market is about to turn down. Benefits and Limitations of the Morning Star Candle The morning star is a useful tool for traders seeking to identify potential market reversals, but it does come with some benefits and limitations. Benefits - Strong Reversal Signal: Indicates a bullish reversal after a downtrend, helping traders anticipate upward moves. - Broad Applicability: Effective across various financial instruments such as forex, stocks, commodities, and cryptocurrencies*. - Timeframe Flexibility: It can be observed on different timeframes, from intraday to weekly charts. Limitations - False Signals: Like all patterns, it can produce false signals, especially in volatile markets. - Confirmation Needed: A morning star pattern entry requires confirmation from additional indicators or formations to improve accuracy. - Experience Required: Identifying the formation correctly and interpreting its signals requires experience and a good understanding of price action. Final Thoughts While candlestick formations such as the morning star can be useful for traders to identify potential trading opportunities, it is crucial to remember that they are not foolproof and should not be the sole choice of market participants when making their trading decisions. Traders should also incorporate technical indicators and develop risk management techniques to potentially minimise losses. FAQ What Is a Morning Star in Trading? The meaning of a morning star in trading refers to a bullish reversal formation consisting of three candles. It appears at the end of a downtrend, indicating a potential shift to an uptrend. The setup includes a long bearish candle, a small-bodied candle, and a long bullish candle. Is the Morning Star Bullish or Bearish? It is a bullish candlestick pattern that indicates a potential reversal from a downtrend to an uptrend in the market. It suggests that the selling pressure is subsiding, and buying pressure is beginning to take over. What Does the Morning Star Pattern Indicate? It is a three-candle price action, often indicating a bullish reversal in the market. It suggests that selling pressure has been exhausted, and buyers are starting to gain control of the market. How Do You Read the Morning Star Pattern? To read the morning star formation, traders should look for the following characteristics: a long bearish candle formed in a solid downtrend and followed by a bullish or bearish candle with a small real body, which in turn is followed by a long bullish candle closing above the midpoint of the first one. What Is the Opposite of Morning Star? The opposite of a morning star is the evening star, a bearish reversal pattern. It appears at the end of an uptrend, signalling a potential shift to a downtrend. The morning and evening stars are similar, except the latter mirrors the former, consisting of a long bullish candle, a small-bodied candle, and a long bearish candle. *Important: At FXOpen UK, Cryptocurrency trading via CFDs is only available to our Professional clients. They are not available for trading by Retail clients. To find out more information about how this may affect you, please get in touch with our team. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
1
are you the Messi or Ronaldo of trading“In football, some say Messi was born with it, and Ronaldo built it. In trading, the same debate lives on—are the best naturally gifted, or relentlessly crafted?” The Messi vs Ronaldo debate is more than just about football. It’s a lens into how we perceive greatness: Messi, the effortless genius, gliding past defenders like he was born with a ball at his feet. Ronaldo, the relentless machine, forged through discipline, self-belief, and sheer work ethic. Both legends. Both dominant. But two very different paths to mastery. And that same question echoes loudly in the world of trading: Are great traders born with a gift—or made through grind, loss, and experience? The “Natural” Trader : Messi There’s a romantic idea that some traders just have it: They “see” the market differently. They time entries perfectly. They stay calm in chaos. But what we often overlook is that this perceived instinct is usually refined intuition, earned through thousands of chart hours, hard-won lessons, and deep emotional work. Just like Messi has trained for decades—even the gifted must still grow. The Ronaldo Blueprint: Greatness Is Built Cristiano Ronaldo is often cited as the perfect example of what's possible through obsession, sacrifice, and discipline. Every goal, every leap, every sprint—is a result of work. And in trading, that blueprint is more common than you think. Here’s how great traders are built: Through structured process. Clear rules, risk protocols, and systems that remove emotion. Through deep reflection. Journaling trades, studying behavior patterns, reviewing psychology—not just price. Through emotional mastery. Remaining centered during drawdowns and not getting high off wins. Through resilience. Getting back up after losses, blown accounts, bad calls, and still showing up. This is the Ronaldo of trading. And it’s replicable—if you’re willing to put in the reps. Talent Helps—but It’s Never Enough Yes, some traders may be “wired” with certain advantages: Pattern recognition, mathematical intuition, calm under pressure. But just like talent in sports, without discipline, it fades. Without consistency, it cracks. In truth, most consistently profitable traders you’ll meet are not the flashiest or most “gifted.” They’re the most adaptable, the most disciplined, and the most reflective. So… Which One Are You? It doesn’t matter. Because the bigger question is: Are you willing to grow into the trader you want to become? Great traders are not born or made. They are choosing to evolve—every day. They put ego aside and put in the work. They trade with intention, not impulse. Nerd Tip: You might start your journey as a “Messi” or a “Ronaldo,” but in the markets, the path is yours to shape. The charts don’t care where you begin—they respond only to how you show up. So whether you’re gifted or grinding— Keep sharpening the edge. Keep showing up. Because in this game, consistency beats brilliance. Stay disciplined. Stay dangerous. put together by : Pako Phutietsile as @currencynerd
PEPPERSTONE:XAUUSDEducation
by currencynerd
Trading Gold with Leverage: Smart or Dangerous?XAUUSD trading (Gold vs. US Dollar) is a popular choice among global traders due to its high liquidity, strong volatility, and profit potential. One of the tools that help traders amplify their returns is financial leverage. However, using leverage also carries significant risks if not managed properly. So, what exactly is leverage in XAUUSD trading? Should you use it? Let’s explore the advantages and disadvantages below. 1. What is Leverage in XAUUSD Trading? Leverage is a financial tool that allows traders to control a larger position in the market than the capital they actually own. For example, with 1:100 leverage, you only need $1,000 to trade a position worth $100,000. In the XAUUSD market, brokers often offer leverage ranging from 1:50 to 1:500, or even up to 1:2000—depending on their risk policies and regulations. 2. Pros of Using Leverage in XAUUSD Trading 🔹 Amplifies Potential Profits Leverage allows traders to maximize profits with a relatively small amount of capital. When the market moves in the expected direction, the gains can be multiplied significantly. 🔹 Lower Capital Requirement Instead of needing $10,000 to trade 1 lot of gold, a trader may only need $100–$500 depending on the leverage. This lowers the entry barrier and offers greater flexibility in capital management. 🔹 Enables Strategy Diversification With the same amount of capital, traders can open multiple positions across different timeframes or strategies. Leverage allows for broader portfolio diversification while still maintaining control over total risk. 🔹 Takes Advantage of Short-Term Opportunities Gold markets often react strongly to news and economic data. Leverage lets traders capitalize on short-term price swings, enabling faster profits without needing to hold positions long-term. 3. Cons and Risks of Using Leverage in XAUUSD Trading Risk of Account Blowout The higher the leverage, the lower the safety margin. A small market move against the position can trigger a margin call or stop-out, resulting in a full loss of the initial capital. Emotional and Psychological Stress High leverage often leads traders to gamble instead of follow a strategy, increasing the likelihood of emotional decisions and impulsive trading behaviors. Difficult to Manage During Volatility XAUUSD is a highly volatile asset, especially during U.S. sessions or major news releases (like CPI, Fed announcements, NFP). Over-leveraging can lead to rapid losses in seconds during sudden price spikes. Increased Emotional Pressure When using high leverage, every small fluctuation feels significant, causing stress and encouraging poor decisions—like exiting too early or revenge trading. 4. Conclusion: Should You Use Leverage in XAUUSD Trading? Yes, but only with a disciplined and strategic approach. Use moderate leverage (e.g. 1:100 or lower if you're a beginner) Always set clear stop-loss and take-profit levels Risk no more than 2% of your account per trade Avoid “all-in” trades and don’t let emotions dictate position size In Summary Leverage in XAUUSD trading is a double-edged sword. Used wisely, it accelerates your profit potential. Used recklessly, it can wipe out your account in moments. The key is to trade with discipline, knowledge, and a solid plan to harness the power of leverage without falling into its traps.
OANDA:XAUUSDEducation
by Henrybillion
Guide: How to Read the Smart Farmer SystemDear Reader , Thank you for tuning in to my first video publication. This video explains the 3-step signal validation process—helping you quickly and precisely anticipate market intent and liquidity dynamics before taking action. We do not react to noise; we respond with structured execution because we understand the market’s true game. Listen to the market— this guide is here to sharpen your journey. Correction Notice (16:58 timestamp): A slight clarification on the statement regarding signal validation : SELL signals: The trading price must close BELOW the Price of Control (POC) and Value Average Pricing (VAP) without invalidation occurring in both the confirmation candle and progress candle. BUY signals: The trading price must close ABOVE the Price of Control (POC) and Value Average Pricing (VAP) without invalidation occurring in both the confirmation candle and progress candle. Multiple signals indicate liquidity games are actively unfolding, including accumulation, control, distribution, and offloading.
TRADENATIONSB:XAUUSDEducation
by jerryfc000
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