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Trade like a casino Operator (Risk Management) Trading Like a Casino Introduction: If you want to become a successful trader, it's essential to adopt a mindset similar to that of a casino. In this tutorial, we will explore how casinos operate and extract valuable principles that we can apply to our own trading. Two key components of a casino's success are having an edge and implementing effective risk management. By understanding and replicating these principles, we can increase our profitability in the long run. How does a Casino operate? - Casinos operate with an edge, meaning they have an advantage in every transaction. - Understanding the concept of probability is crucial. Games like roulette demonstrate that the outcomes are not evenly split between options. - Casinos calculate their edge by analyzing the probabilities of each outcome, which allows them to ensure profitability. - Risk management is also a vital aspect of a casino's operation. They set maximum limits on bets to protect their downside. Trade like a Casino - As traders, we want to replicate the casino's success by incorporating the same principles into our trading. - Our goal is to have an edge in every trade we take and implement effective risk management to protect our capital. - By aligning these two components, we can create a profitable trading system. Applying the principles to trading - Trading is a probability game. Each trade has a probability of going up or down. - To gain an edge, we need to identify the probability of our trades and establish our trading style. - Having a high probability trade doesn't guarantee success, but it improves our chances. - Risk management is crucial to protect our capital. We should only risk a small percentage of our account on each trade (e.g., 2%). - Balancing our edge and risk management will help us become successful traders. Backtesting and refining strategies - Once we have identified our edge and established risk management, we need to test our strategies. - Backtesting involves analyzing historical data to see if our strategies have been consistently profitable. - By testing and refining our strategies, we can ensure they work in real market conditions. - Continuous evaluation and improvement are necessary for long-term success. Conclusion: Trading like a casino involves having an edge and implementing risk management. By understanding and applying these principles, we can increase our profitability as traders. Remember to assess the probability of each trade, establish risk management rules, and test your strategies. Just like a casino, our goal is to create a consistently profitable system that ensures long-term success in trading.
NSE:NIFTYEducation
by Abbhishekumr
Railway Track Pattern Railway track pattern Don't know how many are known to this pattern but in my trading years i have noticed that Morning star/Evening star and railway track patterns are the most seen candle stick patterns at reversals i personally trade this pattern in all the markets. Some even call this as order block. It doesn't matter what you name this pattern ... it works phenomenally 1. What's so special about this pattern : This is a confluence pattern, If you get to see bullish RT in 1hr TF if could be morning star pattern in lower TF and could be a bullish pin bar in higher TF, which means you are literally covering 3 time frames in just one pattern 2. Where to identify and consider the pattern: Majorly at support for bullish RT(Railway Track) and resistance for bearish RT could be any sort of Support Resistance and/or Pivots, look for the volumes for better confirmation. 3. Entry and Exit with SL : One can take entry with two different ways. Aggressive and Safe entry. If you notice the chart above there is a line drawn on the RT candle mid which will act as your entry for safe entry and SL will be the low of the candle in bullish RT and high of the candle in bearish RT Exit will be according to your trading style and timeframe used or take confluence from other indicators/price action These RT candle mid will be working as Support and Resistance in future. You can see the above chart for reference. Cons of the pattern : The pattern works well in all the time frames yet it has its pros and cons just like any other pattern yet they seem to be more informative. once you see Bullish/Bearish RT being failed there is 70% possibility That you will get to see a move on the other side. Concept is very similar to Block order / fulfilling left over orders. Lower timeframe signals are not that reliable in some markets but can be considered if used with confluence If the concept looks vague look at the chart above, This is just an idea, workout on the pattern and its probabilities before going live. Note : Just for educational purpose and not a recommendation.
NSE:BANKNIFTYEducation
by TeamTaurus
4
Nifty: The Investment PointsHi All, The Investment Points: It can be observed from this weekly chart that in the bear markets of 2011 and 2015, the Index formed bottoms near 200 EMA. Those yellow circled marked on the chart proved to be excellent buying/investment opportunities. If I have to load my money for greatest investments, it will be at the same point. Nifty Took Support yeah... Nifty took support from the 9950-10500 zone mentioned in my previous post. It bounced sharply for a gain of 600 points and still rallying. The resistance points: The first one is 10710. If crossed, we will see more short covering. The second one would be a wider zone from 10900 to 11100 (200 points). If market is to correct, these are the two halting points where we may look for selling opportunities. Complacency for traders The 10710 level would be very important for next week or so. On a positive note, bears would not be happy above 10710. Also fresh buying may come above this point. If bulls prove to be stronger above 10710, the second resistance zone specified above will be quite achievable. And that will be a 200 to 300 points gain. Secondly, On daily chart (see update section) you may see a nice W-Pattern in the making, which signals a medium term bottom formation. The caution As we are moving higher very swiftly, it is possible that we may see some profit taking. The strategy next week: If we start to pullback before touching 10710, I ll be looking for bear traps to go long. If we cross 10710 (gaps up scenarios) without any sign of weakness, I ll be looking for buying opportunities. If we touch 10710 and show weakness, I ll be looking for shorting opportunities for quick gains. Do hit like All the best Regards
NSE:NIFTYEducation
by Bravetotrade
2