There are a lot of buying and selling methods. In a single image, greater than 1000+ buying and selling strategies are utilized by merchants. Every could have their very own methodology and its not essential now to debate if they’re profitable or not, however we’re specializing in the best way a number of buying and selling strategies are utilized on similar image and the way market is reacting primarily based on that.
I’ll try to filter out these primarily based on some legitimate logics
Earlier than we proceed to decode, we should know following :
1. An emblem which you want to commerce is a fractal and has many timeframes. If you happen to suppose you might discover holy grail in a single timeframe you might be fallacious, however with a greater threat administration you might win, however this successful is barely doable if you lose 50% time and win 50% time, and in case your threat reward is 1:3 or extra you enhance successful probabilities. However I don’t help any buying and selling methodology which depends on a single timeframe, The primary motive to neglect such methods is as a result of Market by no means follows something precisely on a single timeframe for long run.
2. Unknown Chart Attribute : You could be solely researching or backtesting a buying and selling methodology in Candlestick chart however are you conscious that Line chart, Renko, Level and Determine and even charts the place there may be nothing besides Grid could also be giving extra correct ends in your technique however you aren’t keen to see these charts?
3. Targets : Most of individuals believes in calculated targets e.g. 4.236 degree of Fibonacci, someday works typically don’t work, Are you conscious that Targets could also be psychological, e.g. If $SOL value is 132.556 folks could consider revenue reserving in 135, what’s particular in 135 the place there is no such thing as a goal? It could be psychological degree in multiplication of 5. Are you conscious that merchants could ebook revenue primarily based on Their threat reward and never the calculated concept? If you don’t embody this in your examine, you might be clueless for lifetime about why your technique will not be performing.
Now we talk about about buying and selling strategies
1. Single Timeframe Single Interval Fastened Rule strategies : For instance Making use of FIbonacci Retracement on A swing in a single timeframe e.g. 1minute timeframe
These strategies are at all times much less rewarding and dropping chances are high extra. They are often extremely rewarding if a dealer actually understands how a swing is shaped primarily based on some calculation which might be coded, however most of individuals are by no means in a position to outline the proper property of swing. The indications corresponding to ZigZag are by no means giving correct and true definition of swings. Many tried earlier to change ZigZags corresponding to ZigZag primarily based on ATR however nonetheless they cant be used to generate income constantly and fails.
2. Multi Timeframe Multi Interval Variable Strategies : For instance. Making use of Fibonacci on M15 and confirming value motion on M1 chart.
M15 : Have a look at 1.618 degree
Now swap to M1 for affirmation in 1.618, you discover the extent has a breakout so no must promote
These might be categorized in Multi interval too for e.g. Watching 55 EMA in M15 chart whereas watching 20 EMA on M1 chart and making correlation on these two timeframes to see if technique performing higher than single timeframe single interval strategies.
3. Factors primarily based buying and selling strategies : On this methodology, normally merchants consider that the extra factors verified the higher the accuracy. In earlier instance of fiboncci retracements, we had been utilizing 2 factors verification methodology, In one other instance the place we’re verifying M15 exercise on M1 chart we’re utilizing 3 factors verification methodology. If we use Fibonacci growth we use 3 factors verification methodology as a result of on this instrument there are 3 anchors. Similar method Harmonic patterns are multi level verification of a construction in chart. For instance Gartley sample verifies XABCD level earlier than taking a buying and selling determination.
In Elliot waves there are ABCDEF waves earlier than making a buying and selling determination. In Wyckoff accumulation and distribution concept, there are a lot of factors which ends in Upthrust earlier than making a buying and selling determination. Have you ever puzzled if buying and selling was really easy why these folks given a fancy concept to confirm such factors. Its as a result of buying and selling is all about persistence and ready on your entries patiently after greater than 4+ factors of verificaion. So I keep away from single timeframe and single interval strategies.
