Bitcoin bottom depends on new Tether issuing.We believe bitcoin is driven by tether marketcap. Thus new issuing is required to absorb the supply otherwise you get the book walked down in a sharply price drop.
Community ideas
10-Year T-Note vs. 10-Year Yield Futures: Which One To Trade?Introduction:
The 10-Year T-Note Futures and 10-Year Yield Futures are two prominent instruments in the financial markets, offering traders unique opportunities to capitalize on interest rate movements. This video compares these two products, focusing on their key characteristics, liquidity, and the differences in point and tick values, ultimately helping you decide which one to trade.
Key Characteristics:
10-Year T-Note Futures represent a contract based on the value of U.S. Treasury notes with a 10-year maturity, while 10-Year Yield Futures are based on the yield of these notes. The T-Note Futures contract size is $100,000, while the 10-Year Yield Futures contract size is based on $1,000 per index point, reflecting a $10 DV01 (dollar value of a one basis point move).
Liquidity Comparison:
Both 10-Year T-Note Futures and 10-Year Yield Futures are highly liquid, with substantial daily trading volumes and open interest. This high liquidity ensures tight spreads and efficient trade execution, providing traders with confidence in entering and exiting positions in both markets.
Point and Tick Values:
Understanding the point and tick values is crucial for effective trading. For 10-Year T-Note Futures, each tick is 1/32nd of a point, worth $31.25 per contract. The 10-Year Yield Futures have a tick value of 0.001 percent, worth $1.00 per contract. These values influence trading costs and profit potential differently and are essential for precise strategy formulation.
Margin Information:
The initial margin requirement for 10-Year T-Note Futures typically ranges around $1,500 per contract, while the maintenance margin is slightly lower. For 10-Year Yield Futures, the initial margin is approximately $500 per contract, reflecting its lower notional value and DV01. Maintenance margins for yield futures are also marginally lower, providing traders with flexible capital management options.
Trade Execution:
We demonstrate planning and placing a bracket order for both products. Using TradingView charts, we set up entry and exit points, showcasing how the different tick values and liquidity levels impact trade execution and potential outcomes.
Risk Management:
Effective risk management is vital when trading futures. Utilizing stop-loss orders and hedging techniques can mitigate potential losses. Avoiding undefined risk exposure and ensuring precise entries and exits help maintain a balanced risk-reward ratio, which is essential for long-term trading success.
Conclusion:
Both 10-Year T-Note Futures and 10-Year Yield Futures offer unique advantages. The choice depends on your trading strategy, risk tolerance, and market outlook. Watch the full video for a detailed analysis and insights on leveraging these products in your trading endeavors.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
FULL ANALYSIS GUIDE - (Using ICT's Concepts)Hey guys,
In this video I will show you my process for performing analysis. Yes, it takes some work, but generally once you get into the swing of it, it doesn't take long, and the higher timeframes only require analysis once in awhile. It allows me to have a higher win-rate and be more on side with how the market is predisposed to move. Whilst it is not required in order to be profitable, my personality and system requires me to make more frequent wins.
I hope you find this video insightful.
- R2F
The TradingView Show: Breakout Charts with TradeStationWatch our latest episode of The TradingView Show and dive deep into the markets with TradeStation and their Head of Strategy. We examine breakout charts, significant money movements, and invaluable educational insights for traders of all levels.
For daily charts and research, visit the TradeStation profile on TradingView, where they share scripts and engaging charts. They're also a connected broker allowing for instant connectivity between TradeStation and TradingView. See the official TradeStation broker profile here: www.tradingview.com
The TradingView Show occurs monthly, focusing exclusively on market education and welcoming traders of all backgrounds. Each episode dives into a variety of topics, including equities, AI, crypto, gold, forex, and more, offering a comprehensive roundup of market trends and developments that are capturing traders' attention.
Please note, the TradingView Show is dedicated solely to education, offering valuable insights and lessons for traders at every stage of their journey. It is important to emphasize that the show does not provide financial advice or recommendations; its primary goal is to enhance trader knowledge and understanding through educational content, including TradingView tips, scripts, charting techniques, and social networking.
For more, please check out the compliance and disclaimers links below:
1. Important information: www.tradestation.com
2. Disclosure options: www.theocc.com
3. ETF prospectus page: www.tradestation.com
Thanks for watching! We'll see you at our next show.
Bitcoin: Double Bottom Long To 64K.Bitcoin has confirmed a double bottom within the 60K major support area. The scenario that I outlined in my previous analysis is STILL in play (see illustration on chart). An inside bar is also present on this time frame along with a break of the high of that candle. As a result of all of this, a new buy signal is in effect which can result in a test of the 64K resistance over the coming week or two.
A good question is: what is the risk associated with this long setup? Risk can be measured in a number of ways. One simple and more conservative way is to note the most recent low which is around the 59K area. A long taken now or from the low 61Ks puts the associated risk around 2K points on THIS time frame. In contrast to the potential reward around 64K, the R:R ratio is about 2:1 which makes this opportunity attractive for swing traders and investors.
Before you go nuts and start buying though, it is important to understand that just because a buy signal appears (my criteria being met) does NOT guarantee a positive outcome. I believe there is a greater probability based on my experience. Probability MEANS there is also potential for the market is go the other way as well. This is why RISK management is the key to effective management and decision making NOT "high win rates" etc. As I remind my followers regularly so unexpected news can come out and Bitcoin can be pushing 56K in a matter of hours.
Another things to watch out for is all the rocket ship talk. The "it's going to 100K by tomorrow and you are going to miss it!" nonsense. If you follow people that proliferate fear of missing out messages, stop following. Bitcoin has been in a consolidation since the March peak which has resulted in NUMEROUS opportunities on both sides of the market. There is NO reason to feel like you are missing anything, ESPECIALLY when you have a tool that helps you easily identify opportunities, clarify RISK and measure profit potential (like my Trade Scanner Pro).
Without a rational decision making framework, you become vulnerable to your own emotions of greed and fear. And this is what leads to being exploited by "experts" that you identify with and trust, along with making irrational, high risk decisions like buying when a market looks its best (aka the top).
As I remind my followers regularly, before you even assume risk, you must have a specific idea as to how you intend to exploit an opportunity in the market. Just trying to "make money" is not an enough of a reason. The market is NOT your personal ATM. It is a mechanism to transfer wealth from those who have material knowledge from those who "think" they have material knowledge. If your results over the previous year or more appear to be stagnant or random, which side do you think you're on?
Thank you for considering my analysis and perspective.
Navigating Frothy US Equities with S&P SpreadsNavigating frothiness in US equities requires both caution and tact. With the S&P 500 nearing its all-time high amid flashing recession signals, investors must be vigilant with volatility during upcoming earnings season, driven by outsized expectations.
This paper explores the persistent recession indicators and forces at play during upcoming earnings. The paper posits a spread trade using CME’s Micro E-Mini futures (Long S&P 500 and Short Russell 2000) to maintain upside potential with reduced downside risk.
RECESSION RISKS PERSIST AS RATES REMAIN HIGH
On Friday, the PCE Price Index (Fed’s preferred gauge) showed inflation cooling to 2.6% in May, in line with expectations. Price pressures are slowly abating.
Numbers aside, the broader economic landscape presents a complex picture.
Signals from the job market point to unemployment claimants at a record high for the past two and a half year with job openings shrinking drastically. Personal earnings were higher than anticipated in May (0.5% vs 0.4%), but spending was below expectations. Consumers are being more cautious. Mint Finance covered these nuances in a previous paper .
Housing is flashing weakness as new housing starts hit a four-year low in May. Soaring prices and steep mortgage rates are weighing on demand.
The Fed’s policy path remains unconfirmed. However, consensus point to a rate cut as early as September. Even if that happens, rates are expected to decline gradually.
Source: CME FedWatch
Despite risk of recession, the S&P 500 has had an exemplary showing this year, trading near their all-time high. YTD performance of 15% in 2024 has been far higher than the 74-year average of 4%.
Yet, the performance has been increasingly top-heavy. Nvidia, Apple, and the rest of the tech titans have contributed much of the gains in the broad S&P500 index as it is market cap weighted. The index is heavily reliant on and sensitive to the performance of these mega-caps.
The equal-weighted S&P 500 index is up only by 4% in sharp contrast. The spread between the S&P 500 and its equal-weighted counterpart is near its highest point since 2008. The spreads between the S&P 500 and both the Russell 2000 and S&P Midcap indexes have reached multi-decade highs.
Outperformance was re-affirmed after the recent earnings season. Mega-caps crushed EPS and revenue expectations and reported phenomenal guidance while other stocks, especially utility and energy sector reported revenue and EPS figures below estimates according to FactSet report .
Rallies in mega-cap stocks are being driven by idiosyncratic tailwinds, such as advancements in AI. Meanwhile, slowing consumer spending in the US is raising concerns for the broader market.
RISK OF SHARP CORRECTION WARRANTS SPREAD POSITION
According to FactSet , Q1 earnings season was positive. Only 19% of firms reported earnings below expectations. Actual average EPS YoY growth for the index was 5.9% (above 3.4% expected as of March 31).
Frothiness in the equity market is palpable. Consistent outperformance by mega caps is baked into investor expectations. Strong earnings are already factored into prices, as evidenced by the S&P 500's P/E ratio of 28.38x (far higher than the 10-year average of 20x translating to a 42% above average earnings expectations). Average P/E ratio in the best performing tech sector is even higher at 37.47x.
Even minor shortfalls in guidance or revenue/earnings can lead to significant corrections in such a climate. The FactSet reports that 31.8% of firms which beat earnings EPS estimates by up to +5% saw average price decline of -0.9%.
Source: FactSet Research
In fact, overall, positive earnings only drove a 0.9% increase in price (1% 10Y historical average) while a negative earnings report led to 2.8% drop (-2.3% 10Y historical average).
Source: FactSet Research
Market frothiness elevates risk of a sharp price correction in single names during Q2 earnings. Analysts are concerned as expectations for Q2 EPS YoY growth have been lowered from 9% on 31/March to 8.8% as of 22/June.
Despite this, mega-caps remain in solid position. Robust demand for AI, buoyant advertising revenue, globalized revenue streams, and substantial market dominance have positioned them to continue growing at a disproportionate rate.
In case the upcoming Q2 results pan out similarly to Q1 in favor of mega-caps, the S&P 500 will continue to outperform the broader market indices.
HYPOTHETICAL TRADE SETUP
The S&P 500, with its high concentration of mega-cap stocks, is likely to perform better than broader market indices in the coming earnings season. However, recession signals are also flashing.
The S&P 500 does not perform well during recessions. Over the last four recessions, it has declined an average of -14%. Comparatively the spread between S&P 500/Russell 2000 spread has increased 1.7%.
The S&P 500/Russell 2000 spread has also outperformed during the six-month preceding recessions.
Given the S&P 500-Russell 2000 spread's historical outperformance during recessions, a spread position presents less downside risk compared to an outright long position in the S&P 500.
This strategy also maintains a bullish outlook on the top-heavy S&P 500's potential to outperform in the upcoming season.
Moreover, the spread trade preserves the upside potential in the ongoing rally, as its performance has been comparable to an outright long position in the S&P 500.
A view on the spread between the S&P 500 and Russell 2000 can be expressed using CME Micro E-Mini Equity futures. At 1/10th the size of the full-size E-mini futures, the Micro contracts allow for smaller trades with more granular exposure.
A long position in the Micro E-Mini S&P 500 futures expiring in September (MESU2024) can be offset by a short position on 2 x Micro E-Mini Russell 2000 futures expiring in September (M2KU24). This position is highly margin-efficient as CME offers margin credit for this spread.
Hypothetical trade set up in summary requires entry at 2.69x, with a target at 2.78x coupled with stop loss at 2.6x.
The simulated payoffs are described below.
MARKET DATA
CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
Amazon at $2 Trillion: What’s Driving the Stock to Record Highs?Tripled profits, a bet on AI, and a strategy to take on rising rivals from the East have propelled the ecommerce and cloud computing giant to the lofty price tag.
Innovation on Amazon’s Mind
Amazon (ticker: AMZN ) hit $2 trillion in market value just before the year clocked out for the first half. In the final week of June, the Jeff Bezos-founded online retailer soared past the formidable milestone, becoming the fifth company to ever breathe the rarefied air beyond $2 trillion.
What’s been driving Amazon stock to line up right after Alphabet (ticker: GOOGL ), Nvidia (ticker: NVDA ), Apple (ticker: AAPL ) and Microsoft (ticker: MSFT )? It’s a mix of fortunate and timely events, and all can be summed up with one word: innovation.
Amazon raked in sky-high profits of $15 billion for the most recent quarter. The figure was up three times from the same quarter last year. More importantly, the company, now under the stewardship of Andy Jassy as chief exec, is pivoting more resources to meet the growing demand for artificial intelligence.
Shifting Focus to Artificial Intelligence
Amazon Web Services (AWS) is the firm’s cloud computing business and also the world’s biggest one. It’s largely the cash cow at Amazon with profit margins as wide as 38%. Now, it’s getting a boost from businesses looking to inject AI into their products and services. The fast-growing AI-focused unit is growing at a “$100 billion annual revenue run rate,” according to Jassy.
For the quarter ended March 31, AWS sales rose 17% to $25 billion, beating forecasts for $24.5 billion and also coming ahead of the previous quarter’s 13% growth pace. It seems that the AI hype is sweeping across the Amazon halls and conference rooms.
Generative AI got praised by Amazon’s chief financial officer Brian Olsavsky as “a multibillion-dollar revenue run rate business for us.” Looking for a meaningful edge doesn’t stop with artificial intelligence.
Pitted Against Temu and Shein
Rising ecommerce competition from the East is forcing the $2 trillion giant to embrace a new line of business — ultra-low-cost goods shipped directly from China. A new discount section is in the works for Amazon.com after smaller rivals Temu and Shein have threatened to slurp up a significant market share.
The new section, according to reports, will be added to the homepage of the retailer’s app. It will be targeting American customers willing to wait nine to 11 days for goods shipped from China warehouses, as opposed to the regular one or two-day delivery time for goods delivered from within the US. Also, each item will get a price tag of no more than 20 bucks.
Temu, owned by PDD Holdings, and China-founded Shein have flooded the internet with cheap stuff and massive discounts thanks to splurging billions of dollars in advertising campaigns.
Amazon, a mainstay in the FAANG stocks list , is among the few companies to be of gargantuan size yet nimble enough to stay relevant in the changing landscape of its industry. Will the pivot to cheap goods succeed in stamping out the aggressive competition from China? Or will the corporate giant be outperformed by the brilliant maneuvering of low-caliber foreign retailers?
Share your thoughts in the comments!
NIKE - Dead or a Cheap Opportunity? Nike has been on a rough patch recently & this past week didn't help as it saw it's worst day in over 20 years.
Now the question is, is Nike dead in the water or has price gotten so cheap that it makes for a good investment opportunity?
Now, I'm not here to tell you that you should or shouldn't buy Nike, rather if you were considering it, where you may want to look to do so at & what you need to be aware of if you do.
I'd love for you guys to continue the discussion by sharing your opinions below!
And as always I wish you a fantastic week of trading and investing.
Akil
Price Action Fluency As A Second LanguageThis is the most important educational video I have shared.
Reading price action is akin to acquiring a second or foreign language. Just as fluency in a new language provides fluency and articulation, mastering price action offers traders a nuanced understanding of market dynamics. One would not expect to learn a new language in a short amount of time. It often takes years while keeping up the practice for the rest of ones life. Price action is no different.
There are literally hundreds of subtleties revealing their secrets to the ones who 𓁼 . Indicators obstructing the view of plain truth is most often a useless distraction. It's not just about recognizing patterns; it's about developing a foundational understanding that allows for intuitive and informed trading decisions.
Building this skill set enables traders to interpret market 'sentiments' and react more adeptly to volatility, much like a fluent speaker picks up on subtle nuances in conversation. Thus, learning to 'speak' the language of price action is essential for anyone serious about trading, as it equips them with the tools to navigate and succeed in the complex world of financial markets.
How to Read the MACD Indicator and Use It in Your TradingTechnical analysis is a vast field with thousands of indicators, which may be confusing to those among us who are just starting out. In this Idea, we look at one of the most popular indicators and also one of the easiest ones to fire up and start using from Day 1.
MACD (Moving Average Convergence Divergence)
MACD is arguably the most widely used indicator that can get slapped on virtually every chart out there. The indicator’s full name is Moving Average Convergence Divergence, but you don’t need to remember that.
If you need to take away one thing, it’s this: MACD is easy to read. Here’s how to do it.
Technical Side of Things
Add the MACD in your chart of choice — any chart, any time frame.
You’ll see three default numbers used to set it up — 12, 26, 9.
The 12 is the moving average of the previous 12 bars (also called faster moving average).
The 26 is the moving average of the previous 26 bars (also called slower moving average).
The 9 is the moving average of the difference between the two averages in play.
Next, you see that there are two lines that move up and down and cross each other occasionally. The two lines are:
The MACD line: the difference between the two moving averages and the “faster line”.
The Signal line: the moving average of the MACD line and the “slower line”.
Because the two lines measure price changes at different speeds, the faster one (MACD) will always run ahead and react before the slower one (Signal) catches up.
How to Trade with MACD
If all that sounds a bit complex, here’s the gist of it:
Faster line leads, slower line follows.
Faster line crosses slower line to the downside — a downward trend may be forming.
Faster line crosses slower line to the upside — an upward trend may be forming.
Technically, whenever a new trend is shaping up, the slower line should confirm it by following the faster line. And that happens when the two cross over. The way to potentially spot new trading opportunities is to look for the crossover.
This, in a nutshell, is how to read the MACD indicator and use it to help you become a more profitable trader. There's a whole plethora of MACD examples in action — dive right in !
Let us know your thoughts and experience with the MACD in the comments below!
EBS Base Breakout SetupHey everybody got my camera working for this trade idea. Here we have the ebs stock setting up for a breakout in an uptrend and we're hoping for a bullish continuation here. I describe my entry points my stop loss and my profit target one and the logic behind them and how to position your share count so you can manage your risk and prepare to lose as much or as little money that you want if the trade goes against you every decision in this trade has meaning and logic to it that pertains to the particular stock and the setup therefore you know why you are doing everything that you're doing when trading. Let me know if you have any questions or if this is new to you or if you need help setting it up or calculating how much money you should win or lose. The only issue with this stock is that it's not in the technology sector and it's not in the communication sector so it is not in the most high performing sector right now although the healthcare sector is performing pretty decently with financials as well.
Trade the TREND with 4 Trend Indicators4 Trend Indicators you can use to identify the current MACRO Trend.
It's always important to know where your market is currently trading. Is it bullish, bearish, or range trading? If you have established the trend, you can trade with the trend instead of against it. Trading against the trend ( for example shorting during a bullish cycle ) adds unnecessary risk to an already risky trade (leverage).
1) Bollinger Bands
2) Logarithmic View
3) Super Trend
4) Moving Averages + RSI
Let me know how YOU determine the macro trend!
_________________________
BINANCE:DOGEUSDT MEXC:ETHUSDT KRAKEN:BTCUSD COINBASE:SOLUSD
AUD/USD swing trade setup
This AUD/USD pair could completed its correction already
Wave (1) = diagonal
Wave (2) = complex correction W-X-Y (expanded triangle)
Wave 1-2 (expanded flat completed last night 26/6/2024) of 3
If this wave count is valid, possible short term target (days-weeks) are
1) 0.68
2) 0.694
Price should not go lower than 0.664
If it goes lower than 0.658 -> this idea will be invalidated
Looking at DXY, this bullish idea may be possible
Is It Possible to Define the Probability of an Effective Trade?Is It Possible to Define the Probability of an Effective Trade?
Traders are constantly trying to figure out the secret of effective trading. However, the inherent unpredictability of markets minimises the ability to accurately determine the probability of an effective trade. This FXOpen article focuses on the many variables that contribute to the dynamism and uncertainty of financial markets. Let’s consider why it is impossible to estimate the chance of lucky trade and what can be done instead.
Why Is Defining Trading Outcomes Difficult?
Trading involves a multitude of variables, which make it challenging to define the probability of an effective trade. Economic indicators, earnings reports, news releases, and geopolitical events all contribute to trading results.
Economic indicators that reflect the state of the economy are subject to revisions and unexpected changes. Geopolitical events, from political tensions to trade agreements, can quickly change the market trajectory. Market sentiment, influenced by news, social media, and psychological factors, introduces a human element that cannot be accurately quantified. That’s why it’s a challenge to define probability in trading.
Factors Influencing Trading Outcomes
Trading the odds is not an effective approach. This implies an attempt to determine market movements intuitively and believing in the best. However, by relying solely on the illusion of predicting the odds, traders gain a false sense of security and overlook other influential factors.
Still, there are several factors that surely influence the results of trading, including market conditions, risk management, and trader psychology. For instance, volatility and liquidity significantly impact trading. Then, building a risk management strategy and using stop-loss orders may help mitigate potential losses. Lastly, understanding trader psychology, including emotional regulation and discipline, plays a vital role in making objective and consistent decisions.
The Role of Market Analysis
It’s unlikely that someone will be able to fully explain how lucky trades work. But it’s definitely possible to identify how trades built on analysis work and why they’re smarter. Market analysis, such as technical, fundamental, and sentiment analysis, provides insights into market movements.
Technical analysis examines historical price patterns and indicators, while fundamental analysis delves into economic factors. Sentiment analysis gauges the mood of market participants through various indicators, such as social media trends. Trades based on an understanding of charts, fundamentals, and reasons for price movements are much more reliable and more likely to be effective than guessing.
However, traders should not forget about the complexity of defining trading outcomes. Even using advanced indicators, one cannot analyse future price movements with 100% precision. Markets are not static entities, and adaptability and risk management are key.
Risk-Reward Ratio and Win Rate
The risk-reward ratio is a critical tool for improving trading performance. The R/R ratio is a mathematical calculation used to measure the expected gains for every unit of risk undertaken. However, it’s important to note that this is a risk management tool rather than a measure of probability.
Traders often fall into the trap of solely focusing on historical high win rates, believing this guarantees success in the future. However, the efficacy of a trade doesn’t solely hinge on the win rate. A high win rate may be effective when paired with favourable risk-reward ratios, potentially creating a sustainable trading strategy.
Historical Performance
Historical performance analysis involves scrutinising past market data, price movements, and trading patterns to identify trends, correlations, and potential signals. Traders use this analysis to make informed decisions about future market movements based on the belief that historical patterns can repeat themselves.
Analysing historical performance gives traders a valuable perspective on potential future movements. Chart patterns, support and resistance levels, and key technical indicators become tools for analysing market behaviour based on past events.
However, retrieving information from past market behaviour comes with limitations. Relying on historical data without considering current market dynamics may lead to misguided conclusions. Additionally, the occurrence of black swan events can disrupt established patterns.
The Influence of Trader Skill
Trader skill — a combination of experience and knowledge — plays a key role in overcoming uncertainty in trading. Experienced traders can interpret market signals with higher precision. Through exposure to diverse market conditions, traders develop a nuanced understanding of when to adhere to strategies and when to adapt.
However, even the most seasoned traders are not immune to market unpredictability. While trader skill empowers individuals to make informed decisions, it does not ensure infallibility.
Final Thoughts
Ultimately, no one can determine the lucky trade chance. But while there are no guarantees, managing risk and maintaining a long-term perspective are crucial elements for traders.
Analysing charts that can be found on the TickTrader trading platform, relying on indicators, adaptation, and getting as much practice as possible may improve performance in the market. In any case, one should not rely on luck alone. To continue gaining experience, you can open an FXOpen account and enjoy the exciting trading conditions available in the market.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Why you need to have rules in your trading careerHello,
The importance of rules cannot be underestimated in any business. This must not be different in trading/investing since it must be viewed at all times as a business.
Below are my rules as a wave trader. Wave trading is a trading strategy that combines technical analysis with Elliott Wave Theory to identify and predict future market movements. This approach involves analyzing market price patterns to understand the cyclical nature of market trends and capitalize on these patterns for trading opportunities. Below is an example of how markets move in waves
Rules are very important (Our trading rules)
Identify Impulse & Correction
The first step in trading is to identify the impulse and correction phases in the market. An impulse phase is characterized by strong, directional price movement, indicating a clear trend. Corrections, on the other hand, are smaller, counter-trend movements that typically follow an impulse. By recognizing these phases, you can better understand the market's structure and prepare for potential trading opportunities. Below is an example of impulses & corrections identified
Identify the Pattern Formations
Once you have identified the impulse and correction, the next step is to look for specific pattern formations. These patterns, such as head and shoulders, double tops, or triangles, provide clues about future price movements. Understanding and recognizing these formations can significantly enhance your ability to predict market direction and make informed trading decisions. Below are patterns identified that can be tradeable
Most of these patterns can nowadays be identified for you using Tradingview under indicators, metrics & strategies.
Identify Entry Points
After identifying the patterns, the next crucial step is to pinpoint entry points. This involves determining the optimal moment to enter a trade based on your analysis of the market. Entry points should be chosen carefully to maximize potential gains while minimizing risk. Look for confirmations, such as breakouts from patterns or specific technical indicators, to ensure a higher probability of success. Below is an example with a risk free entry
We shall be looking in another post on different types of entries.
Look for Targets
Setting targets is essential for effective trading. Targets help you establish your profit goals for each trade and ensure that you remain disciplined in your approach. These targets can be based on various factors, such as previous support and resistance levels, Fibonacci extensions, or measured moves from the identified patterns. Clear targets allow you to exit trades strategically and lock in profits.
Below is our clear target for the entry we made with a clear stop loss as well
Look for Exits in Case the Trade Doesn't Go Your Way
Not all trades will go as planned, so it's vital to have exit strategies in place for unfavorable scenarios. This involves setting stop-loss levels to limit potential losses and protect your capital. By defining these exits beforehand, you can remove emotional decision-making from your trading process and adhere to a systematic approach, ensuring long-term success and sustainability in your trading business.
I trust that these rules can help you in your trading journey. You can think of having them written somewhere. That way you can look at them & follow them for each trade you make.
All the best
GOLDTrend Analysis
Downward Trend Line: There is a red downward trend line indicating that gold has been in a downtrend. This line acts as a resistance level.
Support Zone: There is a green support zone around the $2,318.00 level. This indicates that there is buying interest around this price, and it has historically acted as a support level.
Resistance Levels
First Resistance: Around $2,325.66.
Second Resistance: Around $2,332.00.
These resistance levels indicate where selling pressure has previously been strong enough to halt upward price movement.
Fair Value Gap (FVG)
A Fair Value Gap is highlighted in a beige rectangle from approximately $2,340.00 to $2,354.60. This gap suggests an area where the price might move quickly if it enters this zone, potentially due to a lack of liquidity or previous rapid price movement.
Price Action
Current Price: As of the latest data on the chart, gold is trading at $2,319.26.
Recent Movement: The price recently bounced off the support zone but faced resistance near $2,332.00, aligning with the downward trend line.
Potential Scenarios
Bullish Scenario: If the price can break above the resistance at $2,325.66 and subsequently the downward trend line, it may target the next resistance level at $2,332.00. A break above this level could lead to a move towards the Fair Value Gap, potentially reaching the upper boundary around $2,354.60.
Bearish Scenario: If the price fails to hold the support level at $2,318.00, it might move lower, with the next significant support level potentially being around $2,312.00. Further bearish movement could target levels below $2,310.00.
Key Levels to Watch
Support: $2,318.00, $2,312.00.
Resistance: $2,325.66, $2,332.00, $2,354.60 (FVG zone).
Ichimoku Watch: Nvidia Eyeing Ichimoku Cloud Support In three successive days of selling, triggered after a bearish outside reversal formed on Thursday last week from all-time highs of $140.76, Nvidia (ticker: NVDA) has shed approximately -15.0% from the peak.
The company’s market value dropped more than US$500 billion to US$2.91 trillion, consequently pulling the chipmaker back to third place after briefly becoming the most valuable company in the world and surpassing Microsoft (ticker: MSFT) and Apple (ticker: AAPL).
Behind the sell-off is a combination of the CEO, Jensen Huang, selling almost US$100 million worth of shares a handful of days before (and after) it became the world’s most valuable company, along with worries about the company’s effect on the broader stock market indexes, and profit-taking after what has been a meteoric rise.
Ichimoku Cloud Support
As can be seen from Nvidia's daily chart, the stock’s recent movement has easily crossed below the Conversion Line (blue at $129.40) and is fast approaching the Base Line (red at $116.28), which could deliver support.
However, should further downside develop, the Ichimoku Cloud support (made up of the Leading Span A at $122.95 and the Leading Span B at $108.23) could be seen as a logical downside target for sellers in this market at the moment. You will also see that the chart offers support at $96.77 around the Ichimoku support zone.
Price Direction?
While it is unlikely that the party is over for Nvidia, the current correction will likely be viewed as an opportunity to get in at cheaper prices. Dip buyers, therefore, may seek suitable support levels to enter this market long. The combination of support just below $100.00 at $96.77 and the Ichimoku Cloud support area could be worthy of the watchlist.
Nvidia - Massive rejection soon!NASDAQ:NVDA is clearly overextended after the +1.000% rally and ready for a correction.
Trees simply do not grow to the sky. And neither do stocks, especially Nvidia. I know that a lot of people are calling price targets of $250 and beyond, but we still have to respect gravity and the nature of fear and greed. Nvidia is simply overextended a retesting a 6 year resistance trendline. I do expect a correction between -20% and -30%, but also -60% is definitely possible.
Levels to watch: $120, $50
Keep your long term vision,
Philip - BasicTrading
BTC Update after the Nuke. Current thoughts and potential tradeBitcoin just dipped into 58k level, through a significant keylevel and imbalance.
Will it go up? Will it go down? I am discussing in the video.
GBPJPY - BIG BULLISH CONTINUATION OPPORTUNITY Here's a big potential bullish trend continuation opportunity on the GBPJPY using structure and price action.
In this video I walk you through the 4-step I.P.D.E. process used to set up the trading idea & talk about different ways to both get in & out of the trade.
We'll probably revisit this opportunity as it develops so make sure you watch this space.
If you have any questions or comments about the setup (or anything else) please leave it in the comment section below as I do read each and every one.
I wish you a great week in the markets - Akil
TSLA : its now or never!TSLA is coiling to make a large directional move.
The Question is...up or down?
With August appraoching quickly, this could be a key pivotal shift in TSLA business model
Once they announce their ROBO - TAXI, this could be a huge winning success for the company and stock .
A ROBO - TAXI could be a mega disruption for many sectors and companies.
I think theres a strong chance that investors are going to start bidding up this name ahead of that 1st week of August in anticipation of the massive launch.
Keep in mind with every new launch comes hiccups and capital expenditures so its not always smooth sailing.
Lets face it though...no other company has attempted this yet and if anyone can have success it would be Elon.
I also think now that Elons pay package has been approved, he really is incentivized to grow this business.
Will his Optimus Robot be the new taxi, uber or Lyft drivers?
Premium & Discount Price Delivery in Institutional TradingGreetings Traders!
In today's educational video, we will delve into the concepts of premium and discount price delivery. The objective is to provide you with a comprehensive understanding of institutional-level market mechanics. Before we proceed, it is crucial to define what we mean by "institutional level" and "smart money," as these terms are often misunderstood. We will also address the common misconceptions about who the liquidity providers are in the market.
By grasping these foundational concepts, you will gain a new perspective on the market, realizing that its movements are not random but calculated and precise, orchestrated by well-informed entities often referred to as smart money.
If you have any questions, please leave them in the comment section below.
Best Regards,
The_Architect
Is USD/JPY Trade of Decade? US Dollar Nears 34-Year High Again.If you’re a ‘90s baby, the yen is the weakest you’ve ever seen it. Putting it back with the cool guys in forex town isn’t going to be easy. In this Idea, we discover why.
Yen Languishes in 34-Year Lows
The Japanese yen is trading at a 34-year low against the stronger US dollar. This means that the volatile USD/JPY pair is flying high. Very high. To many, this is the opportunity of a lifetime — pop a short, load up on the leverage and go for the jugular (to use Soros slang ). Only that it’s not as easy as it looks.
So not-easy that there’s even a term for that. It’s called “widow maker trade” and it describes those unfortunate souls who dare to bet against the Bank of Japan in hopes of anticipating the right direction. It’s so difficult to predict the path of Japan’s interest rates that many have seen their fortunes wiped out in trying to do so.
So why’s the yen so badly hurt? Until recently, Japan’s central bank was the only one in the world to flaunt negative interest rates. It was holding on to an easy-money regime to stimulate economic growth — low to negative rates encourage businesses and consumers to borrow cheap money and spend it on whatever they want.
Biggest Loser on Forex Board
But this loose money policy has a downside — it makes the local currency highly unattractive. The Japanese yen is the biggest loser among the major currencies on the forex board so far in 2024. It’s down more than 13% against the dollar this year.
Against that backdrop, in March, the Bank of Japan abandoned its negative rate regime and hiked interest rates for the first time since 2007. The shift provided little relief to the yen.
The USD/JPY this week blasted beyond ¥159 and extended its winning streak to seven days in a row. But bulls’ efforts to carry the exchange rate above the ¥160 milestone might meet an archnemesis.
Japanese officials have been monitoring the speculative moves around the yen and have said many times they’re ready to intervene by buying boatloads of it. Traders, however, have already seen this play out. And they've seen the aftermath, too.
A Failed InterYention
In late April, the Japanese yen tumbled beyond the key ¥160 level to the dollar, hitting ¥160.20 — a low last seen in 1990. Japan then decided to lean against the skyrocketing dollar and sank as much as $60 billion going long the yen and shorting the dollar.
Briefly, the yen rose about 5% before bargain-hungry traders were back for more.
Moral of the story? The downturn of the yen is predictable and until the Bank of Japan introduces a more aggressive policy to buck the trend, it may remain vulnerable to attacks.
More of the Same?
Meanwhile, bullish traders are excited to try their hand at shooting the dollar-yen pair to a fresh 34-year high. It must be noted, however, that the exchange rate is overstretched and overbought. This skews the risk-reward ratio and makes the upside look fairly limited, at least in the short term. Or does it?
Zoom out, and you’ll see the yen was trading at ¥300 to the dollar back in the ‘70s. And that’s not something Japan wants to see now. A cheap yen is generally good for exports but it makes imports a lot more expensive. And that’s where the Asian economy is getting its technology, energy, cars, and many foods from.
Japanese officials, namely the Ministry of Finance, remain tight-lipped about any potential intervention. What’s more, the Bank of Japan joins the silence with no forward-looking guidance on future interest rate hikes.
And all this means one thing — yen volatility is bound to continue as traders engage in some extra spicy speculation fundamental price discovery.
Long or Short?
If you’re in the trade, which side are you on? Are you long the dollar-yen or short it? Let us know in the comments below!
