Diversification in Online Trading

 The importance of portfolio diversification. 

To have a diversified portfolio you should follow these rules:

1. Spread your risk to increase your portfolio’s success.

• Invest in assets that will react differently to the same market factors. 
• For example, do not hold different travel industry related securities, as these assets have a high correlation. You can read about correlation here. This is not diversification. Holding highly correlated assets increases your risk.
• Instead invest in different assets which are not correlated to each other geographically, industry base, type. For example have some tech ( Google, etc), travel (Airlines, Cruise lines, etc), Oil related (petroleum companies), medical (Vaccine, marijuana etc) and many other industries.
• Consider investing in different categories like Cryptocurrencies, Stocks, Indexes, FOREX, EFTs and commodities.
• Money management is an important part of diversification.
• For example, if you have different assets which are not correlated but invested 90% of your portfolio in the Technology industry then your diversification is not perfect.
• Try to introduce a limit for each category in your portfolio. 
• Do not put all the eggs in one basket. Diversify your portfolio as much as you can.

Schaff Trend Cycle - STC

 Leave the settings unchanged! Signals:

• Go long (Buy) whenever the STC surges above 25 from below.
• Go short (Sell) whenever the STC plummets below 75from above.
• STC can stay in overbought or oversold territory for a long time. 

RSI (Relative Strength Index)

RSI = Relative Strength Index

Is fluctuates between 0 and 100

·         A momentum Oscillator

·         Increasing RSI when: Average gains are greater than average losses = Bullish

·         Decreasing RSI when: Average gains are less than average losses = Bearish

How to use:

1.       Trend recognition: trading in the direction of the trend

1.1   Above 50: Uptrend

1.2   Below 50: Downtrend

2         Overbought and oversold entry signals.

2.1   In an uptrend look for oversold areas and open a long trade after the pullback above 30.

2.2   In a downtrend look for overbought areas and open a short trade after the pullback below 70.

Ravi (Range Action Verification Index)

This indicator can be used as a signal verification indicator.

There are some very rare situations that can be used as signal provide as below:

1. In an uptrend: Look for the oversold areas. Place a buy after the last red bar.
2. In a downtrend: Look for overbought areas. Open a short position after the last green bar.

Random Walk Index Indicator (RWI)

This is a perfect indicator to determine the trend direction! 💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲💲 ✅ Uptrend strategy: When RWI high (purple in this video) is above the RWI low then the trend is up. Combine this indicator with the Fisher Transform indicator, then open long positions as per the Fisher Transform when the trend is up. ✅ Downtrend strategy: When RWI high (purple in this video) is below the RWI low then the trend is down. Combine this indicator with the Fisher Transform indicator, then open short positions as per the Fisher Transform when the trend is down.

Q-Stick Indicator

The QStick can generate trade signals based on signal-line ( I prefer 50% of the first swing after trend reversal) or zero-line crossovers. 

• A descending QStick signals the price is closing lower than it opened, on average. 
• An increasing in QStick indicator signals the price is closing higher than it opened, on average.