The Didi BAM-BAM Manual

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Indicator User Manual.

The Didi BAM-BAM Classic 3.

Didi BAM PRO. BCF B-HAPPY STEP FIBONACCI PAPER TRADING CANDLE PATTERNS Q&A 

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2.08 18-9-21

INDEX The Basics 101: (Some of the images you see in the manual are prior to the

move from Tradingview to Aurox, charts are ostensibly the same, but you won’t be limited to 3 indicators & has a superior data delivery on Aurox, & it is now our chosen partner) 

to find your Didi Indicator (2)

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to set up your Didi BAM (6)

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on Margin Call (42)

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to use the Didi BAM MC1.0.4 step (44)

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to use the Margin Call 2.02 (52)

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They call it scalping for a reason, Its only for the Brave!(74)

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to use the Fib Retracement like I do (94)

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The B-Happy & the Didi Bam Pro (126)

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Know the Candle stick patterns. (140)

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Paper trading. A very important part of trading. (144)

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How to calculate your Risk2Reward (146)

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Q&A (150)

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Keep coming back as we update regularly this is 2.08

And here is the link to the you tube Didi 101 3 minute video. https://youtu.be/HO5QCtDIDC4

Introduction OK, first we are going to talk about how I use the Didi Bam-BAM indicator package to help me to trade my crypto assets But before we start I would remind you that I am not a financial adviser and nothing here is financial advice, the only advice this video offers is “educate yourself, never take statements you hear or see as fact & wear sunscreen!”.

My Didi indicators are not crystal balls, they use maths and past performance in the markets you set, they then alert you to the possible movement of the market.

Of which, I believe, 40 to 60 percent is the maths and the history, the balance is the effect of news and traditional market trends.

I think that the traditional market trends will cease to have any effect as Bitcoin decouples from the main stream, but news always will affect the movement in assets as it does today.

My first suggestion is you educate yourself from the past events in Bitcoin volatility, look at what crashed the price of BTC (the facts are there, just google them), look at what pumped BTC, list those events in an excel or word document, score them, so when an event happened that caused BTC to dump, take a note of its price at that news, then make a note of when it started to recover, and how long it took to get back on track.

So if Bitcoin was $10,000 and news that an exchanged was hacked and X number of BTC stolen, and the price dropped to $9000, then that was a 10% dump, look how long it took to recover from that news, looking at all these events will give you an average score and insight where to place your TP and SL, along with the Fibonacci tools! (more of those later)

You the user, need to set those score values, but for the users of Didi Bam, I will make my score sheet available as an example and template to users only*),. (*I have a Didi score sheet I will send you, not big but I will explain separately) Give those events you see and hear about scores, a spread from -100 for bad news to +100 for good news, so your day starts at zero, you gather your news and note the positives and the negatives and you give each piece of news an appropriate score, as you become more adapt you will run that as a running score in your head throughout the day, that will help you make informed trade decisions on what the indicators show.

That includes how to interpret the support and resistance levels, and the volumes, and the timing of pump & dump events that fall outside of the good or bad news!

Changing you Ticker, candles & setting up MC 1.04 step In this “101” for the Didi BAM-BAM indicators you are going to change your Ticker to BTC, use Hiekin Ashi candles on the chart and add the free volume indicator and makes some changes to that volume indicator.

First click here on the Ticker box (Ticker is the abbreviation for

commodity name)

You will get a pop up, type in BTC

Click on Cryptocurrency and pick Bybit as that’s the exchange you are using for this example

Now you will change your time frame.

Pick 15 minutes

(I needed the MC step indicator off the screen while I did that bit, you can hide any indicator by clicking the eye with a line through in the tool bar next to the indicator name) now to add the volume chart.

Open up indicators again, you know how to do that.

You will get the pop up again, this time pick Built ins, type Vol that should show Volume at top, click on it and it will appear on chart.

Mouse over the chart and double click and you will get this pop up

Change the MA length set at 20 to 50

Hit the style tab, tick the volume MA box and add a yellow colour, the reason for having the same colours as everyone else is when you or others reference it in discord everyone knows which you are talking about!

Now you are going to create your step line, double click on the yellow line,

You will get this pop up, click on the box with the line next to the NMA and you will get this pop up. Change it to a step and click on the chart once that will close the pop up.

Last thing is you need Heikin Ashi candles, click on the candle image next to time,

You get the drop down, pick the Heikin Ashi candle (you can Google why they are considered better

These are the actions you learnt in the last 3 things you did and you are ready to move on to understanding the charts and what they are telling you.

And here is the link to the you tube Didi 101 3 minute video. https://youtu.be/3RcXLnQvICs

To make the interpretation of the Didi Bam & BAM-BAM indicators easier I have part of the “Didi Bam & BAM-BAM indicator package, the Margin Call group of i Sniper” indicator used by another You Tuber but that licence was revoked in M I knew of Profit Sniper and knew the MC 1.03 would compliment the Didi Bam

I am using the “Traffic light” colours to high-light how it supports or advises ca

If you take the first yellow arrow from the left, you can see that the candles in are in upward momentum, that is a good indication that given a favourable “Sc good long

But as you move along the chart the candles start to drop on or below the yello below the yellow line it indicates that a bearish market has started to emerge a I’m looking at spot trading here but if you were on Primex or another leverage exchange this could be a good short trade to be taken here as you can use the Didi Bam & BAM-BAM for both spot and leverage platforms, but lets get back to the indicators.

It could be that the red candles drop below the Yellow step line while the “escalator” is still showing an upward trend, this is the transition area from Bullish to Bearish, and it applies to all timeframes, the yellow line will go into a “flat mode” like an airport moving walk way, the first few steps that show after that flat trend give a good indication to the value and size of the next move. The colour and the position of the candles above or below the yellow line also tell the user the mood, volume and support at the time.

Candles above the yellow means there is plenty of support for the move, the further away the more support, “on the line” means the markets about to transition! Candles below means ther ties. The traffic light arrows show the long opportunities, green being lots of go

Amber meaning longs or shorts in this market are volatile, and red, go out for t

e partnered with Margin Call to use the Margin Call 1.03 Step, and this is now indicators was rebranded under a licence agreement as the original “Profit March this year and returned to be called Margin Call and updated! indicator perfectly with some improvements, as you can see in the image.

aution in the trades indicated by the Didi Bam.

n the MC 1.03 step indicator are above the yellow step line, and those steps core” (your news, fomo, events, fear and greed indicator) that this should be a

ow escalator! (I call it that as it’s my escalator to profits) as the candles drop and the short alerts are more powerful now they are below the yellow line.

re is no support for a sustained increase in price just short scalping opportuniood signs,

the day, no long opportunities here at all!

Here you see the possible entry points for long trades indicated by the the blue line crossing up over the lower line (and you get to anticipate market, as you can see with the first yellow arrow the MC 1.03 has a fl Margin Call description just above the green arrows you will see two gr ference between them is 5.2, that figure is the convergence/divergenc flag green, also the candles are on the bullish side of the steps so ever that trade for 7 hours in a 15 minute time frame.

The sky Blue arrows mark the safe sell point, which is normally the blu place to sell a long that you wait for or didn’t cross up through the upp shown with the red candles.

e Didi BAM indicator with the use of the yellow arrows, once I have that) I view the Margin Call indicator to interpret the mood of the lat yellow line and a converging short brown ribbon (if you look at the reen numbers, they would be brown when in a short ribbon, the difce number, if it’s a brown reducing number then the ribbon is about to rything is pointing to a good long, so much so you could have sat in

ue signal line crossing down through the top green line, the more risky per line is when it crosses down through the middle white line, as

The yellow arrows indicate all the points that in my settings that a long

That is every time the blue signal line touches or goes through the bot can be adjusted in the indicator tools, for this informative 101 the time

g opportunity is available.

ttom red line. The distance the red line sits from the white centre line e frame is 15 minute and the lower and upper ban are set at 8 points.

Here I have colour *coded the bottom of the chart with the traffic light where the Amber shows you need to be alert if you trade these areas,

*only in this image is not an option in the live Didi Bam or BAM-BAM.

The Didi Bam indicator pack is 0.1BTC, but as a launch offer it will be 0

the Didi Bam indicator, the Margin Call 1.03 step indicator, An invite to join the “Didi Bam” user Discord trading channels in the Plus a chance to win the full range of Margin Call indicators for one y

In the new year I will launch the Didi BAM-BAM indicator, with the BAM indicator settings, at that point the cost will go to 0.1BTC, but all those saving 0.05BTC!

t system to show where I thought it good to trade and bad, and each square is three hours

0.05BTC, that will gives the user,

BCF $Family Discord channel. year

M-BAM indicator the user can set alerts, webhooks and back test their e already with the 0.05BTC “Didi Bam” will get the upgrade free,

50% Deposit Bonus

101 for Margin Call 2.02 Here you see the 3 indicators that are the Didi BAM-BAM indicator.

If you think of the dark green as the hills, the light green as the grass they eat to maintain their runs, when they have had their fill they go off to the beach and sea for a rest, but as the sand and sea starts to reduce in volume the bulls will return to the hills but that doesn't guarantee pumps will follow.

The Inputs menu accessed by the “Gear” wheel.

The Inputs menu accessed once you Clicked on the “Gear” wheel.

It will disappear if you click off of it on the chart

The Style menu, you access it by clicking on the tab name (until you understand them best not fiddle with them) but if you do use the reset at bottom of the pop up.

All the numerical values in the top bar, as you can see on the right each is labelled, Margin Call makes no secret of what they are, it’s what’s in the code that runs them that makes them different!

The effect of the hills, grass, sand & sea.

With the 20 “Zero” to Minus 20 corridor (volume on right of chart) being the point at which the flags become relevant .

The trinity and how to use the position of each line in relation to each other to alert the user of potential moves in asset value.

This is the chart without the Chande and the PPO, which shows you the movement in the market but not the mood and commitment.

Now add the chande Momentum back in and the market mood starts to show its face.

Green is bullish & blue bearish.

Adding the Percentage price oscillator back to the chart

They call it scalping for a rea

This is a 15 min chart from the 12/11/2020, and Bit coin was $16,03 11/11 at around 1pm UTC to the next day at around 2 pm UTC.

I am hoping to give you an insight to how I read the Didi BAM and M on trades in the short time frames, otherwise known as scalping.

ason, Its only for the Brave!

33 (those were the days) the chart spreads over a day from the

Margin Call 1.04 step indicator to help me make informed decisions

As you can see (indicated by arrow 1) at around 2pm the chart was just entering a brown ribbon in the upper chart (MC 1.04 Step), and had flagged a short (Twice) in quick succession, you can if you look carefully see a green long flag hiding behind the candles, this is a sure sign of indecision in the market.

If you look at the Didi chart you can see the white line in the chart (indicated by Arrow 2) that is on the 70 line,

(Indicated by arrow 3.) The white line on the 70 tells me the momentum o though the blue indicator line is dropping down over the white and the red, the blue signal line crossing down over the white line, let alone the red, wo minute to an hour were you would have your finger on the sell button.

But with that white line maintaining more or less the 70 point line is the onl brown ribbon has, it is kind of flat, I would urge you to look back over the c rise or drop in price, that way you can call a sharp rise or fall as a matter of “school day” for a while if you want to practice the best types of “Risk2Rew to paper trade for until you feel confident with the calls you make from the mours!

However it may be that you are just sitting down at the desk to start tradin would see the blue signal line cross up over the bottom red line.

of the market is looking to support and go against a sell off at this time even , this is where one would need to be very brave, as in many other instances of ould be the signal to leave a long trade you may have. And we are talking a 45

ly thing that would stop you. You would also look at the angle of attack the charts in the 15 minute to see historic moves and the shape of ribbons to the f course, and one hour ribbons are different to 15 minute, so I’m afraid it’s a ward” in trading, and to that end there is a “Excel” document that you can use Didi BAM-BAM indicator and other influencing factors like daily news and ru-

ng, so no on going trade, you are looking to enter the first trade of the day, you

A sign that things are looking up, and that’s what you would do, lo mood of the markets are, you see a nice doji candle (see types of movement to come most of the time, where they appear in the Bo happen, again look back through the charts to see how the appear way to keep those memories.

ook up at the chart above (mc 1.0.4 step) and look to see what the candles document in your Didi BAM-BAM pack) Doji’s are signs of ollinger Bands doesn’t always give an indication of what is about to rance of the doji’s has effected the price, and make notes it’s the best

As you watch the blue line and the candles in relation to the yellow confident about placing a long trade, you could of taken a brave ca red lower line in the BAM-BAM, or anticipated it crossing the white you should have taken the long at around $16650, then as long as line you would stay in the long until there is a red flag or your TP (T trade on a red flag a short will present itself as the only way now is

w step line you would start to feel more all when the blue signal line went over the line, but as soon as the long flag showed the candles closed above the yellow step Take profit) is closed. if you close that s a small consolidation or a drop in price.

As you can see the entry for the short could be at the flag as the blue line did not cross up over the upper green line in the previous long a second time

so entry point would have been one of the 2 points indicated by the 2 number 6 arrows in the Didi BAM-BAM chart.

With the exit coming as the ribbon which was the result of that green you would of only known that wit trades, even if you go back in the (you will see how to do that in 10 closing,

n was narrowing for a close not the earlier fake out slight upturn, n Doji as it had no support as the white line was heading south! And th knowledge, which is why I say its important you do your paper e charts and hide the price and candles to see if your calls were right 01 part 3) Your exit for that short presents itself by way of the ribbon

Is the long flag appearing, the blue line crossing up over the red low be in that order but as you can see it’s a 4 candle 1 hour $100 long steps start to go upward, candles have no “Tail” wicks and it ends w shapes in 101 pt 3) so from that short on arrow 6 you went straight and was out by 10 pm UTC, how much you made in those three tra and leverage was, but if you used 1% of the BTC price with 10X lev stake. Here is the You Tube Video

wer line in the BAM-BAM indicator, it may not g that is a rare scalpers opportunity. Yellow with a doji, (I will talk about candles and t into a long even though it was 9pm UTC ades depends very much on what your stake verage would of seen a >40%< increase in

Here we are not talking about the alerts; I am purely looking at establishing where I want to put my take profits and stop losses when I do get an alert for a indicated long or short, I use the Fib retracement tool to do that and take my prompt from the 1, 0.618, 0.5, 0.382 lines, you may choose to use it in a different manor, the choice is yours.

Here I will show you how you find the fib retracement, how you attach it to the chart and how to potion it to get the information

I use, so let’s crack on.

Fib open Image 1 As an example of how I use the Fibonacci chart to give me an idea of where to set my TP (Take Profit) & SL (Stop Loss), some would disagree with me, others agree, but it works for me.

Fib open Image 2 I will work with the chart from the 11th till the 13th

Fib open Image 3 To midnight on the 12th, I will add the Fibonacci chart as if I was op

pening my computer at 9am UTC on the 12th

Fib open Image 4 And all I can see for the purpose of this example are the candles sho 9am on the 12th (and there are images taken at those times).

own in the overlaid green box when I first see the screen at around

Fib open Image 5 First thing is to find the Fib chart you need, once you click on this yo of the chart will start, move the mouse and you will see the chart just mouse over the chart to see 2 dots which if you click on you

our mouse is loaded, wherever you click next is where the first point t expand, next right click will see placement on screen (don’t worry can then move the charts about) Here is the You Tube

Fib open Image 6 So now you have the fib open and it looks like this! (only joking) but

you do know how to get the Fib retracement tool,

Image 6a to remove it just right click on the blue circle here.

Image 6b to bring up the tool panel and hit remove

Fib open Image 7 As I stated I am looking at this at 9am as arrowed on the morning o

of the 12th.

Image 7a I will place the fib retracement “0” line on the 11th lowes

st price (lower wick),

Image 7b and expand the Fib chart so the 786 line is on the top of read off my long targets and short targets for the day, long being As you can see by the candles to the right of the yellow arrow at 9a $16161, where you set that TP is about the news on the morning, ures, and the short that followed I would have caught the wick wi

f the wick of the highest candle on the 11th as show in the image. I then g up to the top line and shorts down to the 0.5 or the 0.382 lines. am the first long would of hit a take profit set between $16,025 and , bullish news would of lead me to aim at the higher end of those figith a TP at the 0.5 level.

Fib open Image 8 As you can see in this image that ends at midnight on the 12th (the F you can see that the price revisited the earlier long price prediction

Fib has been moved to put the 786 fib line on the high from 9am) but n twice in the same day.

Image 8a the area in the yellow box is the remainder of the 12th

Image 8b at the arrow we see the trend braking what was the top l false flag as there is to much support in the market as shown by th

line and a second time around 20:00 hr, the following short flag is a he rising white line.

Image 8c giving 2 more long TP opportunities. Or you could have the market moves like this is bots do most of the trading and they m

set the TP at “1” on the fib and taken a $600 “Day” long, the reason mostly take their lead from the fib charts, its all about numbers!

Some of the charities the Bitcoin Family support

Didi Bam Pro & B-Happy Script for video-manual When you first see the new Didi Bam-Pro you may be a little overwhelmed, don’t worry this Video & the VIP Bam Manual will explain everything.

The Didi Bam Pro you see at first has all its indicators active, all the lines and flags, just to show you what is available, and it’s the same with the BCF BH 1.0.1 or the B -Happy step as we call it, this video/manual will show you how to set the indicators to suit the type of trades (very early, early & should I have gone earlier!) you are looking to catch across all assets.

The B-Happy and the Bam Pro give you the opportunity to set alerts that the Didi Bam Classic doesn’t.

This is what you will see when you first load the B-Happy and Didi Bam Pro;

As you can see there have been some changes to the BCF 1.04 Step, that has now incorporated some aspects of the Margin Call 2.03 Classic and more about that later.

The long/short flags in the BCF 1.0.4 step have been replaced by Green and Red diamonds and fire as a conformation of move rather than an alert to an upcoming event, you still need to read the ribbons as they diverge and converge as that is the point at which market sentiment is moving, be it bullish or bearish.

The green & red flags have now been moved to the Didi Bam Pro, to allow users to dictate the style of trade they want to make, very early, early, on confirmation, which is a game changer.

We will start with the Didi Bam Pro;

And the tools you will need to use to achieve your desired results which Are accessed via the gear icon in the indicator discription;

In this image you can see all the trigger lines and the flags that are triggered by the blue signal line. In the Didi Bam Classic you only have the white line and the upper and lower line, there are also coloured flags with green or red numbers;

Let’s start by explaining the Flags and the numbers;

So to take a long trade as with the Didi Bam Bam Classic you would be looking at the blue signal line

In this image you can see the blue trigger line crossing the white line and the lower green line at standard settings. The first flag is white with a red zero, this denotes the blue line has crossed down over the white line.

The blue line then then crosses the lower green line generating a green flag with a red -1, this tells you the Blue line has crossed down over that line.

The Blue line then crosses up over the lower green line generating a Green flag with a green +1, so for a long it’s a “positive” move, then the blue line crosses the white line and produces a white flag with a green zero, again a move to

The difference with the Bam Pro you can now set multiple alerts that an upward move is about to happen. With the Classic the lower line was set at 8 points away from the white line, in the Pro you can go to the tools and set the 3 lower or upper lines to be closer or further away from the white signal line.

Why would you want to do this, it depends on the stability or volatility of the asset you are trading or how many alerts you want.

If you are trading a volatile asset that has large swings you may want to keep the 10,20,30 standard settings (or make small adjustments), but if it is an asset that has soft swings like gold or the dollar you may choose to set the trigger lines closer.

Calculating that by setting the traffic light colour trigger lines at a numbers you feel appropriate and looking back over the assets chart to see if results are the desired ones or you need to adjust some more. By moving the lines closer more colour flags appear.

The flags signal the crossing of the blue signal and a set trigger line, the + & - numbers indicate the trade risk, so a number with a + (plus) is an upward crossing blue signal line, a number with a minus (-) is a downward moving blue signal line. 

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A Green +3 line.

A Green +2 signal line.

A Green +1 signal line.

A Green +0 A Green +1 signal line.

A Green +2 signal line.

A Green +3 line.

is blue signal line crossing up over your 1st lower red signal is blue signal line crossing up over your 2nd lower amber is blue signal line crossing up over your 3rd lower green is blue signal line crossing up over your white signal line. is blue signal line crossing up over your 1st upper green is blue signal line crossing up over your 2nd upper amber is blue signal line crossing up over your 3rd upper red signal

Whereas before you would look for the signal line crossing up over one line, you can now look to use all three lines, and where you set your flag alert can be on any one of the three lower lines, in effect giving you the user the level of risk on when to enter the trade, and the flags you don’t use just untick the box to keep the chart tidy!

Having dealt with the long side, the short side is just a reverse of the information, but just to be clear the listing below gives a condensed view, you should consider the higher the number on the Bam Pro the higher risk the trade on those alerts below the white trigger line, the higher the + number above the white trigger line the nearer the end of the move the price is.

Simply if the number is green the blue signal line is moving up over all lines, if the number is red then the line is descending and a short.

As a screen trader you may want to use a combination of lower Green +1 to take a long and a red -3 -2 to close.

The most important thing is you match (as near as possible) your “0” in the Bam Pro to the ribbon cross in the BCF B-Happy Step as these 2 indicators are made to work in conjunction.

You can do this by adjusting the RSi and the hull length, the Didi Bam Pro is far more sensitive to price movement.

This brings us to the B-Happy step, as has been said the flags have moved to the Bam Pro and have been replaced by green and red triangles that fire on or at convergence of the ribbons.

You should now view the ribbon convergence speed and angle that the ribbon leaves that convergence, that will give you indication of rise or drop in price, and given the time frame you are in you should have a ball park time an asset spends in a rise or drop, which will then allow you to chart the expected support with the Fib. With the fib the user needs to adjust the look back to suite the time frame, by its nature a user would not look at a fib with a “day” lookback in a 5 minute time frame, days have no relevance to a 5 minute chart, if the ribbons have an average convergence/divergence in a 5 minute time frame of say 50 minutes then a 10 or twenty candle look back should suit.

You will also see a number of triangles, an explanation follows; 

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The purple and yellow are when a candle opens above/below the step line and closes below/above.

The Red triangle shows when a candle opens & closes below the step line but the top of the wick is above the step line.

The green triangle shows when a candle opens and closes above the step line but the wick tail is below the step line.

In longer time frames you can remove the candles and get some great swing trade calls now with the B-Happy. You can use the yellow triangle in the long to give you the close or the candle themselves.

The Didi Bam B-Happy with the Didi Bam Pro below on Trading view.

On the following pages I have added images and description of the candles you will encounter while trading.

I can not stress enough that you should familiarise yourself with these types and candles and what they tell you.

You should be able to recognise each one and know what it signifies at the very first glance, then what it means in the chart you are looking at.

To understand what the candles are saying will give you that edge to make quicker informed educated decisions.

The charts I’ve used are from third party producers, the one opposite from Trading Campus and they offer some free courses which cover multiple charts and all the charts I have featured have there source on the page somewhere.

Candlestick Pattern Reliability Not all candlestick patterns work equally well. Their huge popularity has lowered reliability because they've been analysed by hedge funds and their algorithms. These well-funded players rely on lightning-speed execution to trade against retail investors and traditional fund managers who execute technical analysis strategies found in popular texts.

In other words, hedge fund managers use software to trap participants looking for high-odds bullish or bearish outcomes.

However, reliable patterns continue to appear, allowing for short- and long-term profit opportunities and these hedge fund guys don’t have Didi BAM-BAM.

This candle chart came from tradingcampus.in they offer free course Here https://www.tradingcampus.in/free-courses/

JB Marwood has created this informative Candlestick eCourse

Paper Trading!

For those of you who don’t know what or why it’s sensible to paper trade before you risk your hard earned funds here is a 101 on paper trading. Paper trading helps you, there is a video on how to use the sheet & a link to the sheet in Discord; 

Have confidence in your calls

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Create a history of trades

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Understanding leverage trading

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Allows you to record the reasons why you took a trade and then to use that information to analyse what made that trade a win or a loss.

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Make decisions on what commodity works best for you.

For those that rather follow a column by column 101 on how to use this excel; Long or short; when you enter long or short the date & time will automatically fill, and the greyed area will clear to white for you to fill in with your commodity or token price.

Leverage; Enter the leverage you are useing given the risk to reward.

Amount; This is the amount you want to risk, then that will be multiplied by the leverage for the calculations.

Buy in/Cash out; Enter into the relevant buy in what the commodity price is. (in the non grey area) Then move to the type of trade, limit or market, and mark how you want to buy in and how you exit the markets. Limit or marlet buys.

When you sell enter the amount in the cash out and an approximation of the realized P&L will appear last column.

In column A of the sheet you can number your trades, and this is the most important thing about this document, you need to record why you did the trade, what the market conditions where at the time and what your risk to reward was and how you calculated that.

There is a master sheet in the second tab should you mess up the Paper trade tab and it is always on the discord should you loss it at anytime.

Enjoy paper trading and the knowledge you gain, there will be a how to calculate Risk2Reward 101 added to the next edition of the Manual

We could have written a R2R document, but you won’t find much better than the Binance Document with its links. It is also an example of how easy it is to find tutorials and informative content, Thank you Binance, use this link to get some Didi goodies.

Introduction Whether you’re day trading or swing trading, there are a few fundamental concepts about risk that you should understand. These form the basis of your understanding of the market and give you a foundation to guide your trading activities and investment decisions. Otherwise, you won’t be able to protect and grow your trading account.

We’ve already discussed risk management, position sizing, and setting a stop-loss. However, if you’re actively trading, there’s something crucially important to understand. How much risk are you taking in relation to the potential reward? How does your potential upside compare to your potential downside? In other words, what is your risk/reward ratio?

In this article, we’ll discuss how to calculate the risk/reward ratio for your trades.

What is the risk/reward ratio?

The risk/reward ratio (R/R ratio or R) calculates how much risk a trader is taking for potentially how much reward. In other words, it shows what are the potential rewards for each $1 you risk on an investment.

The calculation itself is very simple. You divide your maximum risk by your net target profit. How do you do that? First, you look at where you would want to enter the trade. Then, you decide where you would take profits (if the trade is successful), and where you would put your stop-loss (if it’s a losing trade).

This is crucial if you want to manage your risk properly. Good traders set their profit targets and stop-loss before entering a trade.

Now you’ve got both your entry and exit targets, which means you can calculate your risk/reward ratio. You do that by dividing your potential risk by your potential reward. The lower the ratio is, the more potential reward you’re getting per “unit” of risk.

Let’s see how it works in practice.

How to calculate the risk/reward ratio Let’s say you want to enter a long position on Bitcoin. You do your analysis and determine that your take profit order will be 15% from your entry price. At the same time, you also pose the following question. Where is your trade idea invalidated? That’s where you should set your stop-loss order. In this case, you decide that your invalidation point is 5% from your entry point.

It’s worth noting that these generally shouldn’t be based on arbitrary percentage numbers. You should determine the profit target and stop-loss based on your analysis of the markets. Technical analysis indicators can be very helpful.

So, our profit target is 15% and our potential loss is 5%. How much is our risk/reward ratio? It is 5/15 = 1:3 = 0.33. Simple enough. This means that for each unit of risk, we’re potentially winning three times the reward. In other words, for each dollar of risk we’re taking, we’re liable to gain three. So if we have a position worth $100, we risk losing $5 for a potential $15 profit.

We could move our stop loss closer to our entry to decrease the ratio.

However, as we’ve said, entry and exit points shouldn’t be calculated based on arbitrary numbers. They should be calculated based on our analysis. If the trade setup has a high risk/reward ratio, it’s probably not worth it to try and “game” the numbers. It might be better to move on and look for a different setup with a good risk/reward ratio.

Note that positions with different sizing can have the same risk/reward ratio. For example, if we have a position worth $10,000, we risk losing $500 for a potential $1,500 profit (the ratio is still 1:3). The ratio changes only if we change the relative position of our target and stop-loss.

The reward/risk ratio It’s worth noting that many traders do this calculation in reverse, calculating the reward/risk ratio instead. Why? Well, it’s just a matter of preference. Some find this easier to understand. The calculation is just the opposite of the risk/reward ratio formula. As such, our reward/risk ratio in the example above would be 15/5 = 3. As you’d expect, a high reward/risk ratio is better than a low reward/risk ratio.

Example trade setup with a reward/risk ratio of 3.28.

Risk vs. reward explained Let’s say we’re at the zoo and we make a bet. I’ll give you 1 BTC if you sneak into the birdhouse and feed a parrot from your hands. What’s the potential risk? Well, since you’re doing something you shouldn’t, you may get taken away by police. On the other hand, if you’re successful, you’ll get 1 BTC. At the same time, I propose an alternative. I’ll give you 1.1 BTC if you sneak into the tiger cage and feed raw meat to the tiger with your bare hands. What’s the potential risk here? You can get taken away by police, sure. But, there’s a chance that the tiger attacks you and inflicts fatal damage. On the other hand, the upside is a little better than for the parrot bet, since you’re getting a bit more BTC if you’re successful.

Which seems like a better deal? Technically, they’re both bad deals, because you shouldn’t sneak around like that. Nevertheless, you’re taking much more risk with the tiger bet for only a little more potential reward.

In a similar way, many traders will look for trade setups where they stand to gain much more than they stand to lose. This is what’s called an asymmetric opportunity (the potential upside is greater than the potential downside).

What’s also important to mention here is your win rate. Your win rate is the number of your winning trades divided by the number of your losing trades. For example, if you have a 60% win rate, you are making profit on 60% of your trades (on average). Let’s see how you can use this in your risk management.

Even so, some traders can be highly profitable with a very low winning rate. Why? Because the risk/reward ratio on their individual trade setups accommodates for it. If they only take setups with a risk/reward ratio of 1:10, they could lose nine trades in a row and still break-even in one trade. In this case, they’d only have to win two trades out of ten to be profitable. This is how the risk vs. reward calculation can be powerful.

Closing thoughts We’ve looked at what the risk/reward ratio is and how traders can incorporate it into their trading plan.

Calculating the risk/reward ratio is essential when it comes to the risk profile of any money management strategy.

What’s also worth considering when it comes to risk is keeping a trading journal, there is an excel document on the Discord.

By documenting your trades, you can get a more accurate picture of the performance of your strategies.

In addition, you can potentially adapt them to different market environments and asset classes.

Do you still have questions about calculating risk and reward? Check out the Q&A on the next pages.

Or ask the Questions in the Discord, everyone in Crypto should have gone through this learning process, many haven’t!

NONE OF THE ANSWERS IN THIS Q&A ARE FINANCIAL ADVICE JUST QUESTION THAT HAVE BEEN ASKED        

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Q: Whats the price of Didi Bam bam indicator A: at the moment on special offer at 0.05BTC Q: Where do I find the indicator on telegram A: Q: How do I signup to the Didi Bam bam indicator A: just send a request to didi.bam@gmx.com Q: In what timeframes does the indicator work A: It works in all time frames and on all tickers that Tradingview offer.

Q: Which timeframes do you prefer to use A: completely up to the user.

Q: Will you support me in understanding the indicator A: The Didi BAM-BAM comes with access to the Discord group and its own Manual, plus we have video's and groups on discord that have all been through the new to the indicator situation..

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Q: Will the indicator give signals Yes, each indicator will give you signals of impending movement in the market and with practice you will learn to interpret those alerts to give you confidence in how you call the trades.

Q: Why does the signals from discord arrive late A: the average time for a alert to reach Discord is 15 seconds after the alert fires.

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A: There are a number of so called stable coins, which you use is a matter of informed self choice, just make sure you pick an exchange that has liquidity to deal with your needs.

Room for more questions here so please ask, the questions that make the list will get Family token rewards.

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