Examples of trade situations

The most difficult thing in trading. 3 things

Why initially we are not told about the most difficult thing in trading?

After all, it is important to immediately know what you need to work on.

What begins the path of the trader.

From the fact that a person comes to earn money. #errorofcentury
I have already said that before a lawyer starts to solve legal issues, he learns, gets practice, and only then he takes on the case.
And in trading, a person immediately casts money. He thinks: buy cheaper – selling more expensive, and I will go to Lambo. #facepalm

However, there are people who really make money in the market. And there are those who make them almost immediately. However, such units, and contrary to popular belief, they still get some knowledge.
Introductory. Or guess themselves. After all, everything is very simple. And you will succeed. You just think in the right direction and ask yourself some leading questions.

Let’s start with a few tips:

Entry

Many ask themselves and others: how best to enter the position?
Probably you want to ask how it is more profitable to enter the position, what would be the most profitable, what would be the maximum at the minimum.

No matter how you go profitably, the stop-loss will always be at a better price. #life

On the facts: answer yourself

  1. How much money do you have?
  2. How many participants in the market?
  3. How much money do they have?
  4. How is the deal going?
  5. Why the largest volumes in the center of the candle and in the middle of the range?
  6. Would you rather go or buy more?

Answered? If not, come back and answer. Because it is very important for your future development.

Major manager’s answer:

  1. From 1 million to 150 million dollars
  2. Hundreds of thousands
  3. Hundreds of millions
  4. Limit participant satisfies market order
  5. Because more participants make transactions in the “balance”, when no one knows where the price will go.
  6. What does more mean? The capital in management is more than the sum of the entire book of orders, I would at least just type a position.

Do your answers converge?

Probably not, if you have a small amount of management. Especially the last point.

Mechanics of long position:
When we buy, we “push” the price up (after all, we execute ASK orders). Our stop orders, according to which we will drop our position in the market, “push” the price down (after all, they appear in ASK orders). And stop and take.

  • Tell me, the Manager, and you see the “support levels” on the chart?
  • Those lines that people draw? Ha. And how does the drawn line affect the price? This is just a line drawn on the chart, it is not a warrant in an order book. However, I follow many of them who draw them, in order to understand where the feet may be.
  • And when you enter an asset, you can move the price down and up?
  • I can, only it is not profitable for me. It would be better for someone to do this instead of me, and I will already select their volume in order to get my position.
  • So you can specifically push the price down to pick up, stop.
  • Theoretically yes. But this is not beneficial to us, because we rarely resort to this.
  • How do you do it?
  • Or we transfer our Bid orders lower, and the price falls under its “weight” (the cheapest way), because there are always sellers. And there are a lot of impatient people too. Or we can sell part of the already accumulated volume in the market, having previously considered how much we need to sell, so that we would not end up in the red. And we also need to be clearly confident that under some kind of “level”, local low, there are stop orders, and that we will be sold there anyway, because only stock exchanges see the stop orders. And the stock exchange does not share such data. And for anyone who deliberately pushes the price, for “carrying out” longs is a lottery. However, we just do not enter the coin, we need time to understand how many more major players are in it, and whether it is at all.
  • So how do we get into a deal? Yes, so that we would not have endured.
Demolition of stops orders

On the BAS charts, areas are highlighted (2 green lines), where buyers began to outweigh the sellers. The same areas are marked on the cluster chart.

In the cluster graphic, the two red zones are “consolidation zones”, under and above which people usually draw lines of “support and resistance”. In this range, between “zones”, traders usually place protective stop orders. Which traders exhibited at the time of entry into purchases from February 19 to February 2 (between the green lines).

As you can see, the feet were successfully demolished, and the arrows indicate where the stop orders were. Although without them everything is clearly visible (2 hump in a candle).

The yellow rectangle is the unloading zone. Profit taking “strong” money.

In the crypto market, there is not much liquidity anymore, and in fact you can be taken out in any cases. However, it is better to go where there is an obvious accumulation of limit orders. And the more ticks accumulated in that zone (in the candle, cluster graph), the better.

Accumulation example, with support for limit orders

In the example above, there are two zones of volume accumulation and price retention, due to the large accumulation of limit buyers. Zone I is more “voluminous”, both in terms of trading volume and in the number of limit orders.

Zone II is less “voluminous” in terms of trading volume due to a smaller number of sellers, both limit and market. However, limit buyers are not few as in the I zone.

In zone I, the trading volume is larger due to the larger number of limit sellers.

It is also necessary to remember that if the price goes in the “corridor”, then everyone sees this “corridor”. So your stops are theoretically clear, and if a large player needs to collect them to get the volume, you will be knocked out of your position.

Just do not rush to shout: “I knew that the market always goes against me.”

For one simple reason, if you are knocked out, it means that “strong” money collects a position, and you just entered early or put a short stop.

Remember: the market is 2 phases – accumulation and distribution. First, the volume is accumulated and then distributed. First, we walk sideways, then growth, and distribution. This can be seen on any clustered graph or with a volume profile (market).

Hold

The second stage and new experiences are absolutely not like at the entrance.
Opening a position you want to immediately get a profit that would not sit for a long time in the transaction.
Does it often (fast growth) happen?
The answer is: periodically.

For whom fast growth is good?
For different speculators. For the miracle of scalper bots. For signaling channels.

Why?
Because most people are very greedy, and they need here and now, quickly and a lot.
And others, taking advantage of the naivety of the first, risk-free on this.

For example: sale of VIP signals, closed groups, pump channels

Who is it bad for?
For big money. Because they need to gain a position. They, too, for profit in the market.

Holding a position is not an easy process for those who are thinking about quick money.

“Strong” money holds the position until the strength of the buyers begins to subside. Along the way, in the direction of travel, unloading parts. Because a participant who has gained a position for a long time is obvious and it will take a long time to fold.

All this can be seen on the cluster graphics and the book of orders. But it is visible not in the form of a single, sharp, large “stuffing”, but at the expense of a change in dynamics.

“Even if you are very talented and make great efforts, for some results it just takes time: you won’t get a baby in a month, even if you force nine women to get pregnant.” Warren Buffet

An example of a long holding position and passing discharge

In the example above, we see three zones, in each of them there was “volumetric” accumulation, with a large number of limit orders. Since liquidity is very high, it is difficult to distinguish a specific exit zone, but between the second and third zones, during upward movement there are candles in which the volume is larger than in the others.

Exit

The pain of the majority. Where is the high on which you need to exit?
How to understand that this is high and what will not be higher?

“The dividing line between investment and speculation, which is never clear, becomes even more vague when all market participants are at the peak of their triumph. Nothing so well calms a rational thought like big doses of easy money. After this happens, many begin to behave like Cinderella at the ball. They understand that most of the ball is already behind, but they continue to speculate on high-priced promotions of companies, forgetting about the likelihood that everything will soon turn into a pumpkin and mice. They do not want to miss a single second of this holiday. Intoxicated participants plan to leave the ball a few seconds before midnight. However, there is one problem: they are dancing in the hall, where the clock has no hands ”. Warren buffett

As we remember, the range of support / resistance is a cluster of limit orders. Which price is “hard” to overcome. We never know how much more market buyers / sellers have in stock to move the price in one direction, but we have indirect evidence that we should leave the position.

First of all, we recall how a major player gained a position. Long and in consolidation. Unload it, too, will be long. Its limits, which “kept” the price down, will with the same ease keep it above.

However, sometimes demand is greater than supply, and very long upward movements are formed, which then “easily” fall to the nearest limit buyers.

Exit areas

 

Note the three zones on the chart.

Zone II – “hi on hype”. The peak was formed due to the high demand of market buyers, and the almost complete absence of limit sellers. Major money out of the market is much lower.

Zone III – stop traffic limit sellers. Which after the previous two peaks and a prolonged decline, accumulated quite a lot.

Zone I is a balanced zone where the level of hype is still high, but common sense recommends leaving the position.

A small digression: a major player and strong money, it can be different things.

The coherence of actions of unrelated people can be very high. Therefore, it may give the impression that this is one large player acting, a “manipulator”.

But in fact, it may not be so. And if you constantly think about what this all makes a big player, you can drown in paranoia. At the same time lose any hope on earnings. And do not see the rational grain.

Paranoia (ancient Greek παράνοια – “insanity”, from παράνοος (παράνους) – “insane”) is a rare type of chronic psychosis, usually starting at a mature age, characterized by the gradual development of logically constructed monothematic systematized delusions.

In the classical view, paranoid sufferers are characterized by unhealthy suspicion, a tendency to see in random events the intrigues of enemies, to build complex theories of conspiracy against themselves, while preserving in another logic of thinking.

Even if you think that you are trading against everyone, then you need to watch out for everyone. All a lot, and you’re alone. Then you need to have a tracking system for all at once. Believe it or not, there are such systems.

  • Cluster chart
  • Analysis of the dynamics of the book of orders

You don’t need anything else. Yes, and a lot of mind is not necessary to compare several indicators. One quote on multiple exchanges.

If what you see is not very similar to “cert”, then it is better to sit “on the fence” than to jump in everything, in pursuit of gold.

“I’m not looking for 7-foot slats to jump over them; I’m looking for 1-foot rails through which I can step over. ” Warren Buffet

Result

The pain of a trader is just a few points that are due to the lack of a basic level of knowledge. Desires quick money. And also because of the feeling that “there will be no more of this”.

First, you close this problem, and then we recall the system approach. Systematically and at a distance you will have a result. And even despite the series of losing trades.

Training does not lead to perfect results, it leads to stable results.