In this tutorial, Keith Alan is walking you through on how to use Fire Charts to mitigate risk on your trades. This is an educational video, please conduct your own research whilst trading.
Have you ever opened a trade that started strong but then stalled out, or worse yet, reverted back into stop loss? Of course, you have. We all have. It’s just a part of trading. Although risk will never completely go away, there are ways to minimize your exposure by using Fire Charts to identify resistance and support not just when you open a position but all through the time position stays open.
Even if you are a passive trader who doesn’t like to intervene with your bot trades, you can gain insight from Fire Charts because they clearly identify where the liquidity is in the order book, which is handy for picking entry, exit, and exit even DCA targets.
Though you have to realize that the order book is an organic, ever-evolving beast, and just because things looked great when you opened the trade, that doesn’t mean that support will hold or that new resistance won’t present itself.
In this short video, Keith will show you exactly how he uses our Fire Charts to analyze an open position and why the data in the chart indicated a reversion to the downside might be pending. His automated trading bot opened a position on a signal from the MTF Reversion Indicator in this example. There was heavy local support, and the trade moved into profits as expected, but then it stalled. Why? A quick look at the Fire Chart revealed that support was pulled, and as the price began to erode, new resistance was laddered between where spot price was sitting and his intended profit targets.
That new resistance changed the risk:reward ratio enough to make it a much less attractive trade. The Fire Chart provided a visual representation of the order book that provided data that can be interpreted at a glance, facilitating the quick decision to protect the small profit he had already made and closed the position for a small profit rather than ride it out.
Please Remember
Material Indicators LLC is not a financial advisor and does not provide financial advice of any kind. Nothing on any Material Indicators’ websites, apps, indicators, or channels should be considered trading advice. By using Material Indicators’ tools, indicators and resources you agree to take responsibility for your own trades and acknowledge that Material indicators LLC does not guarantee performance and assumes no liability for your results. Trading is risky. Consult a licensed financial advisor, do your research and never risk more than you can afford to lose. Past performance does not guarantee future results.
Happy Trading 📈
