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Siby Varghese

The Bullish Three Drive Pattern

WHAT IS THE BULLISH 3 DRIVE PATTERN?

  • Proposes a potential inversion of a bearish market
  • One of the uncommon examples where cost and time symmetry are critical
  • Once you recognize what to search for, this example might be effortlessly distinguished or “hops out” at you
  • Shaped by three continuous symmetrical valleys
  • Contains two associating (interweaved) bullish ABCD designs
  • Also contains a bullish butterfly design (finishing at the third drive)

FOR WHAT REASON IS IT CRITICAL?

  • Recommends the summit (weariness) of a bearish market where a more noteworthy rectification may happen
  • May offer an amazing danger to-compensate proportion
  • Trend failure or disappointment recommends a conceivably solid bearish continuation might be in advance

SO HOW WOULD I DISCOVER IT?

To start with, it’s critical to recall not constraining a three-drive design. Cost and time symmetry are critical, so the example should emerge as three particular, symmetrical drives to a base. Brokers ought to likewise recall that the three-drive is far less regular than a butterfly or Gartley (particularly on longer time periods).

BEARISH THREE-DRIVE PATTERN RULES (POTENTIAL PURCHASE AT THIRD DRIVE)

  • Symmetry is the way to this example
  • Drives 2 and 3 ought to be 127.2% or 161.8% augmentations of the A and C retracements
  • The A and C retracements will normally be 61.8% or 78.6% of the past swing – In firmly slanting markets, these retracements might be 38.2% or half
  • The seasons of the A and C retracements ought to be symmetrical. The same is valid for expansions (second and third drives to the base)
  • An expansive value hole at whenever might be an indication that the example isn’t right. Merchants should sit tight for advance affirmation that a base is in advance

CONCLUSION

The three drives design is an inversion design intended to feature times when the market is depleted in its present move. The example has a bullish form and a bearish adaptation. The example is made out of three waves or drives that entire at a 127% or 161.8% Fibonacci expansion. The exchange is entered the other way to the general move, when the third drive is finished at a 127% or 161.8% Fibonacci augmentation. The stop misfortune goes beneath the 161.8% Fibonacci augmentation for a purchase or more the 161.8% Fibonacci expansion for an offer. Drawing another Fibonacci retracement from the beginning of the example to the finishing purpose of the example and take benefit at the point where cost will have followed 61.8% of that separation.

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BITCOINS FUTURES TRADING

WHAT ARE BITCOIN FUTURES?

Futures are not only for physical resources; they can be exchanged on monetary resources too. With Bitcoin futures, the agreement will be founded on the cost of Bitcoin and theorists can put a “wager” on what they trust the cost of Bitcoin will be later on. Moreover, it empowers financial specialists to hypothesize on the cost of Bitcoin without really owning Bitcoin. It has two major outcomes.

Initially, while Bitcoin itself is unregulated, Bitcoin futures can be traded on managed trades. This is uplifting news for the individuals who are worried about the dangers identified with the business’s absence of control. Second, in regions where exchanging Bitcoin is restricted, Bitcoin futures enable financial specialists to even now theorize on the cost of Bitcoin.

HOW DO BITCOIN FUTURES WORK?

A Bitcoin future will deal with the very same standards as futures on customary money related resources. By envisioning whether the cost of Bitcoin will go up or down, theorists will either go long or short on a Bitcoin prospects contract.

For instance, if an individual claims one Bitcoin valued at $18,000 (speculatively) and predicts that the cost will drop, later on, to secure them, they can offer a Bitcoin futures contract at the present value, which is $18,000. Near the settlement date the cost of Bitcoin, alongside the cost of the Bitcoin prospects contract, would have dropped. The financial specialist currently chooses to purchase back the Bitcoin prospects. In the event that the agreement exchanges for $16,000 near the future settlement date, the speculator has made $2,000 and in this way secured their venture by offering high and purchasing low.

This is an essential case of how Bitcoin futures function and the correct terms of every future contract might be more mind-boggling relying upon the trade, which will incorporate least and most extreme value limits.

Temporarily, it pushes the cost upwards as the general enthusiasm for the digital money spikes. The day after Bitcoin fates were propelled on the Chicago Board Options Exchange (CBOE), out of the blue on a noteworthy controlled trade, the cost hopped by just about 10% to $16,936.

WHERE CAN YOU TRADE WITH BITCOIN FUTURES?

There are two separate markets where Bitcoin fates can be exchanged.

The principal alternative is on chosen digital money trades, including BitMEX and OKCoin. Cryptographic money trades have been putting forth this alternative for a long while now, where the exchange of Bitcoin fates remains generally unregulated.

The second alternative is on openly controlled trades. This is an ongoing marvel and part of the motivation behind why we’ve seen the Bitcoin value climb amid December.

It began with CBOE’s Bitcoin prospects dispatch on the tenth of December.

Understanding Forex Quotes

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For most traders very first thing they need to learn when trading in financial market is reading Forex Quotes. Price quotes are the language of the market and every trader needs to be fluent in it. Although it sounds daunting but it actually isn’t that tough.

 Reading Forex Quotes:

To understand how to read a Forex Quote, let’s take an example.

           USD/JPY= 85.32

This is referred as a currency pair. The currency on the left of the slash is called the Base currency, while the currency on the right of the slash is called Quote or Counter currency. The base currency is always equal to 1 unit and the quoted currency is what that 1 unit is equivalent to in the other currency. To make it more simplified, here US$1= 85.32 Japanese Yen. In other words $1 can buy you 85.32 Japanese Yen.

Direct Currency Quote and Indirect Currency Quote:

There are two ways to quote a currency pair, either directly or indirectly. A direct currency quote is simply a currency pair in which the domestic currency is the quoted currency; while an indirect quote, is a currency pair where the domestic currency is the base currency. So if you were looking at the Canadian dollar as the domestic currency and U.S. dollar as the foreign currency, a direct quote would be USD/CAD, while an indirect quote would be CAD/USD.

  

Ask and Bid Quotes:

Like buying in stock market, when trading currency pairs, the forex market will have a bid price and an ask price. The bid and ask price are quoted in relation to the base currency.

  1. Bid is the price at which you can sell base currency.
  2. Ask is the price at which you can buy the base currency.

Let us take another quote as an example to make it more clear and transparent.

          EUR/USD = 1.3600/05

Here the bid is 1.3600 and the ask is 1.3605. So in order if you wish to buy the currency then you intend to buy the base currency and therefore looking at the ask price. However, if you intend to sell the currency then you’re looking at the bid price.

Spreads and Pips:

The difference between the bid and the ask is called the spread. The spread is simply the broker’s commission on the trade. Whereas the Pip is the smallest unit of value in a forex currency quotes. In the case of the U.S. dollar, euro, British pound or Swiss franc, one pip would be 0.0001. With the Japanese yen, one pip would be 0.01, because this currency is quoted to two decimal places.

For simplicity’s sake let’s take the about quote as an example.

          EUR/USD = 1.3600/05

The difference between 1.3600 bid and 1.3605 ask is 5 pips, which is also the spread. Although these movements may seem insignificant, even the smallest point change can result in thousands of dollars being made or lost. Again, this is one of the reasons that speculators are so attracted to the forex market; even the tiniest price movement can result in huge profit.

#REDFOREX

Now that you know a little bit about currency quotes it shouldn’t be a problem to start your trading career. But help is always welcomed and so contact Red Star Forex www.redstarfx.com and get all the help you need regarding any problems face. Also open your Trading account and make it easy to start trading.

What is PAMM Account?

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Definition:
Percentage allocation management module, also known as percentage allocation money management or PAMM, is a form of pooled money forex trading. PAMM is a choice for those who just want to invest their spare money but not get into trading themselves. A professional and experienced manager who knows how to trade will manage and make investments grow, which is profitable. An investor gets to allocate his or her money in desired proportion to a qualified trader and then he will manage the account. These traders can manage multiple accounts at the same time.

How PAMM works?
Trader opens a PAMM Account with a minimum amount of capital specified on his Forex broker’s website. Investor can check the trading result with a system monitoring PAMM account held with a brokerage company or any other system and analyzes terms set in the offer, and then takes a decision to invest. The trader performs trading transactions and funds of both trader and investor are used in trading. Once there is a profit, it is proportionally allocated between PAMM account participants and the PAMM manager gets a reward for his work.
To Open a trading account.

PAMM Account- Pros and Cons:
Since now we know how PAMM operates, let us discuss few pros and cons of opening and using this account.
Pros:
• Profitable trader may receive profit from both his and brokers funds.
• An investor enjoys the privilege to diversify risk by allocating his funds among several PAMM accounts.
• PAMM manager not only risks the investors money but also his own. So this act as a security that the manager will perform his task properly for his money is also at stake.
• It is very easy to open a PAMM account and allocate money among various PAMM managers within a single service.
Cons:
• If a broker doesn’t enable an investor to set the maximum loss limit for the PAMM account then investor’s loss can hit a -100% value which is complete drawdown.
• In a relatively closed AMM accounts, an investor cannot study the trading style of the manager.

How to choose a manager from PAMM account?
After we have gone through the above an obvious question arises that how to choose a manager? However, for this a series of general criteria and filters can help us select a reliable PAMM account manager.
PAMM account age: The reason why we consider the account age is because an account having a long history is amenable to deep analysis. Choose those accounts which are no less than 6 months old.
Equity of investor: The logic behind it is fairly simple: a large amount of funds being under management implies a high level of investors’ confidence.
PAMM account profitability: Accounts, where ratio of maximum drawdown to profitability is not higher than 1:3, show the best performance: i.e. the maximum drawdown doesn’t exceed 15% in case of 5% monthly profit.


#REDFOREX
After understanding what PAMM account is and how it works, it is very convenient for those investors who want to someone else to play for them. If you’re ready to open a PAMM account then contact Red Star Forex www.redstarfx.com without any further delay.

Risk Management By Siby Varghese

Risk Management: Planning trades and Executing strategies

One of the biggest problems a trader faces is the bridging gap between Trade planning and execution. Risk Management is an essential but often overlooked prerequisite to successful active trading. Young traders get carried away with a few successful profits and neglect to manage their profits which cost them everything with one small mistake. The real trick lies in planning your trade and executing your strategies. That is what separates the experienced traders from an inexperienced one.

Planning your Trade:
Successful traders like myself often use this phrase, “Plan the trade and Trade the plan”, indicating that planning ahead can create the difference between winning and losing. A trading plan is an organized approach to executing a trading system that you’ve developed based on your market analysis and outlook while factoring in risk management. No matter how good your trading plan looks, it won’t work if you don’t follow it. Just having a plan is not enough, implementing it is also important for your survival in long run.

Stop loss (S/L) and take profit (T/P) points are two ways in which traders can plan ahead of their trade.
Stop loss- point is the price at which a trader will sell a stock and take a loss on the trade.
Take profit- point is the price at which trader will sell a stock and take a profit on the trade.

Benefits of Planning Trades:
• It makes trading simpler.
• Reduces unnecessary stress.
• Possibility to gauge your performance and room for correction.
• If adhered strictly then it reduces the number of bad trades.
• Will help you to trade outside your comfort zone without much worry.


Developing and Executing of trade strategies:
A well-considered strategy includes a well-considered investing and trading plan. Ideas and best practices need to be researched and adopted then adhered to. Once this strategy is executed, trading positions are monitored and managed, including adjusting or closing them as needed. Let us read more about how to develop and execute a strategy.
There are many types of trading strategy which mainly based on technical or fundamental. Technical trading strategies rely on technical indicators to generate trading signals. On the other hand, Fundamental trading strategies take fundamental factors into account.

How to develop a Trading Strategy:
There are several different components to an effective forex trading strategy-
Selecting the market- Trader must choose which currency pairs they want to trade in.
Position sizing- Traders must determine how large each position is to control for the amount of risk taken in each individual trade.
Entry points- Trader should develop rules on when to enter the market.
Exit points- Trader should make rules on when to exit the market.
Trading tactics- Trader should have set of rules on how to buy and sell currency pairs.

Execution of Trading Strategy:
Stay in touch with the market- Doesn’t matter whether you’re a technical or fundamental trader, you need to keep yourself updated with the market once you have made set your trade.
Be patient- Once your plan has been made, stay patient and believe that it will work. Being restless will simply build more pressure and make you take the wrong step.

Bringing trade planning and executing strategy sounds an easy task but it is not always easy. One has to be disciplined and patient. Make sure that you know exactly how you will trade before you do, be confident in your strategy’s ability to perform.