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Major earnings are times to hedge or BTD As far more eloquent and technical writers have covered (spotgamma, etc) - it's very clear that the markets in general are driven by single name options on the largest market cap companies. And to help visualize just how much volatility can happen around earnings on these single names, I wanted to be able to visualize those earnings dates and impacts against some of the major benchmark ETFs like SPY or QQQ. So far, I hadn't seen a place that gives this a more clear presentation so here is my first attempt at visualizing just how large the ripples are from the "megacaps" (AAPL, MSFT, NVDA, TSLA, etc) in a very "glanceable" way. Introducing this indicator here first! Earnings Date Highlighter - from0_to_1 Easily see the earnings dates from top market movers or the top holdings of your favorite ETF!

Education

Less is more...If you don't know me, I have been a trader a very long time. Nearly 25 years to be exact. Over the years, I have spent a lot of time studying a wide array of techniques, tools, patterns and market sentiment. Lucky enough, the markets have also been very kind to me. I've been fortunate enough to have two trading books published by large traditional publishing companies. So it's safe to say, I live and breathe trading. I am going to do a series of posts here covering a couple of key educational topics - starting with Elliott Wave theory. When it comes to Elliott Wave theory, there seems to be a love hate relationship for many people. Some get it, some see it as not relevant. To be honest, both are correct. Now before you jump on the high horse "it doesn't work for crypto" - let me start by saying, this is not a lesson on how to use Elliott Theory. I covered that in these posts below; And step two; In terms of using Elliott, it's not as simple as trying to figure out each and every move. (this is often why, it does not work.) Instead the benefit of Elliott, is to accept it as a bias tool that aids in understanding the current market sentiment. We often see posts online about things like the Wall Street cheat sheet. I also covered this in another post here on @TradingView Where the theory has any real value, is simply to obtain a bias. The market is always searching for liquidity. In order to obtain liquidity, the market needs to attract players for the game. Now, you have probably entered a trade and felt almost immediately that the market has pushed against you, it's out to get you and the brokers are playing 1 vs 1 against you. This is where sentiment really comes in. As a retail trader you have likely been exposed to tools such as RSI, MACD or even dabbled with Elliott and Wyckoff. But the reason the market does, what the market does, is not to get you as an individual, instead it's there to collect liquidity from a crowd. Elliott wave theory isn't a technical tool, it's a sentiment tool. So instead of trying to guess every internal and nested swing, you can make an awful lot of money by simply giving a directional bias. I wrote an article in 2021 here - About the emotions, I used the Simpsons to get the point across. The general idea is to understand where liquidity is likely to be and use that to make informed trading decisions. If you have any specific questions, even topics you would like covered, leave a comment below. I'll add to this in another post as part of this series. Stay safe and wish you all the best. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.

Education

by Mayfair_Ventures

Has the Bitcoin Market Become More Manipulated After ETFs? The long-awaited approval of a Bitcoin exchange-traded fund (ETF) in late 2023 undoubtedly marked a turning point for the cryptocurrency. However, with this institutional influx, concerns regarding increased market manipulation have also surfaced. Let's delve into whether these concerns hold water and what the future might hold for Bitcoin's volatility. Pre-ETF Era: A Wild West of Wash Trading Market manipulation in Bitcoin wasn't exactly a new phenomenon before ETFs. Wash trading, a tactic where investors buy and sell the same asset repeatedly to inflate its trading volume, was a prevalent concern. This created an illusion of high demand, enticing others to invest and driving prices up artificially. Mark Cuban, a prominent crypto investor, even predicted wash trading as the "next possible implosion" for the industry in early 2023 . The Double-Edged Sword of Institutional Investors The arrival of big players with the ETF has undeniably brought more regulation and scrutiny to the market. This, in theory, should deter blatant manipulation tactics. However, the sheer volume these institutions trade with can also influence prices significantly. The question isn't whether they manipulate, but rather how their trading strategies might unintentionally impact market behavior. A Glimpse into the Recent Controversy A recent Wall Street Journal report alleging that Binance, a major cryptocurrency exchange, fired an investigator uncovering market manipulation by a VIP client reignited concerns . This incident highlights the potential conflicts that can arise when profit margins clash with regulatory compliance. So, Has Manipulation Increased? The answer is complex. While blatant wash trading might be less prevalent, the impact of institutional trading volume and potential conflicts within exchanges are new considerations. It's likely that the nature of manipulation has evolved, becoming more subtle and potentially harder to detect. A Future of Stability or Stagnation? The influx of institutional investors could indeed lead to a more stable Bitcoin market, mirroring traditional stock indices. This would be a far cry from the explosive, volatile growth Bitcoin has seen in the past. However, this stability might also come at the cost of reduced returns for investors hoping for another Bitcoin boom. The Long Hodler's Perspective As a large language model, I can't claim to be a "hodler" (long-term Bitcoin holder). However, historical data suggests that Bitcoin has weathered similar periods of regulation and scrutiny before. The key takeaway is that despite potential manipulation, Bitcoin's underlying technology and its core value proposition as a decentralized currency still hold significant appeal. The Road Ahead The future of Bitcoin manipulation hinges on two key factors: 1. Regulatory Strength: Stronger regulations with clear guidelines and robust enforcement mechanisms are crucial to deter future manipulation attempts. 2. Transparency on Exchanges: Exchanges need to be more transparent about their trading practices and address potential conflicts of interest. Conclusion Whether Bitcoin morphs into a stable, institutionalized asset or maintains its volatile character remains to be seen. However, the fight against manipulation, regardless of its form, will be critical in ensuring a fair and healthy Bitcoin market for all participants.

Education

by bryandowningqln

History of Bitcoin: The Underdog That Rewired Finance Bitcoin, a phenomenon that emerged at the onset of the 2008 financial crisis, has changed the way we think about money. To celebrate the token’s $73,000 milestone, we trace its origin story and look ahead into the future. To infinity… and beyond? Table of Contents A Financial Product Too Big to Ignore Born in 2008 as the World’s First Cryptocurrency The Very Early Days of Trading on Exchanges The Volatile Phenomenon That Sparked a Change in Finance A Place to Find Value in the Face of a Global Pandemic Cryptocurrency Trading Lands on Wall Street What’s Coming Next for BTC Price as We Move Deeper into 2024? Bitcoin for Your Thoughts? 📍 A Financial Product Too Big to Ignore 📍 Bitcoin’s story is the story of an underdog that pushed through volatility and disbelief, but also dashed forward riding on hope and enthusiasm. Bitcoin ( BTC/USD ), the world’s largest cryptocurrency, has so far managed to survive and overcome each one of its many pitfalls and obstacles thanks to its novelty, mystery, and investment appeal. Not only that, but the orange coin has progressed so remarkably, it has risen to rival the valuation of the world’s biggest companies. As we’re about to close the first-quarter chapter of 2024, we take a closer look at what has fueled Bitcoin’s price to record levels about $73,000 a pop. To celebrate the token’s historical milestone of $73,000 , we go back to its creation, tracing major development milestones. From wiping out billions of dollars from its valuation to logging stratospheric gains, Bitcoin’s history is nothing short of a miracle. Today, Bitcoin boasts a valuation of more than $1.4 trillion. In other words, more than double as electric carmaker Tesla (ticker: TSLA ), founded by the uber-rich eccentric engineer Elon Musk. With great power, comes great interest from Wall Street. A bunch of spot Bitcoin ETFs are now strutting among asset managers, finding their way to ordinary (and some degen) investors and money-spinning professionals alike. 📍 Born in 2008 as the World’s First Cryptocurrency 📍 The history of Bitcoin is relatively short. But it can sting. Because we were all playing games or being 8 years old instead of buying Bitcoin at 4 cents. Back in 2008, the financial system crumbled under the pressure of a global crisis. A collapse in the housing market led to millions of homeowners not being able to cover their mortgage payments. About that time, an individual—or a group of people—called Satoshi Nakamoto, concluded the banking system was not reliable. A new asset class emerged—one that did not need the intervention of banks to function. Bitcoin, as it was called in the white paper released in November 2008 , was born. Essentially, Bitcoin represented a new type of money. An innovative software system that intended to rewire the worldwide financial system. Bitcoin sprouted to life as an open-source software running on a peer-to-peer network called blockchain. One way to think of Bitcoin is to see it as an electronic form of physical cash without gatekeepers such as banks. The participants in the decentralized network are responsible for the verification of transactions, and all transactions are visible for the public. 📍 The Very Early Days of Trading on Exchanges 📍 Once it was born, Bitcoin stayed confined to a small network of only a few computers (and the early adopter group of ultra-niche geeks). Then, mining Bitcoin was able to get you hundreds or even thousands of coins in a few days’ time due to the low level of computing power required. Safe to say, the first people to play around with Bitcoin had no idea the tiny orange-themed gig will turn into a fire-breathing $1.3 trillion dragon. Instead, the squad of core developers would try and make the network operate as smoothly as possible. Once this was achieved, Bitcoin hit its first exchange in 2010. The first Bitcoin to be transacted on an exchange was worth zero dollars. Then at the peak of 2010, one Bitcoin reached a record high of 39 cents. Since then, the price of Bitcoin has experienced a wild ride as millions of people have onboarded the crypto bandwagon. Hundreds of exchanges have opened and traders today reach daily volumes of tens of billions of dollars exchanged in Bitcoin. Bitcoin's mind-blowing price increase from its first steps through March 12, 2024 - Source: TradingView 📍 The Volatile Phenomenon That Sparked a Change in Finance 📍 It did not take much for Bitcoin to be noticed as a wonder of technology and a catalyst for change. Once it landed for trading on its first cryptocurrency exchanges, Bitcoin quickly gained popularity purely from an investment perspective. The first traders would buy and sell the token in a matter of hours only to realize a small profit and savor the rush of adrenaline. This same speculative behavior could still be found today even after the stratospheric gains that have made Bitcoin a heavyweight in terms of valuation. The price gyrations have crushed many traders and investors who were found unprepared to stomach the aggressive swings. Along the way, Bitcoin has endured over 17 selloffs of more than 30%. It has been through six declines of more than 60%, and four of more than 80%. Still, after all these spectacular drops, Bitcoin has clawed back its losses and returned stronger than ever. So strong, it crushed all doom-and gloom forecasters and permabears when it blasted through the $73,000 threshold in March of 2024. Not long before that, Bitcoin had a chance to prove its worth as a safe haven in troubled times. 📍 A Place to Find Value in the Face of a Global Pandemic 📍 It’s important to mention that the current record high in the price of Bitcoin arrived after BTC’s previous peak of $69,000 in November 2021. Back then, the coronavirus crisis, which hit in March 2020, turned out to be a key period of growth for crypto. The original digital currency served as a safe haven and a store of value—digital gold, if you like, or better—amid lingering uncertainty in the broad financial markets. In numbers, during the pandemic’s low point in March 2020, one Bitcoin was worth about $3,900. Presently, a single Bitcoin is up more than 1,700% from its coronavirus-fueled meltdown. The pandemic helped shift investor focus on the crypto market as participants sought to find pent-up value. The search has led to millions of Bitcoin proponents flocking to the digital asset. In practice, the interest to invest in Bitcoin has been so big, the top cop on Wall Street—the Securities and Exchange Commission—finally gave its nod. 📍 Cryptocurrency Trading Lands on Wall Street 📍 The big dogs on Wall Street welcomed the first Bitcoin-centric products to trade alongside stocks , bonds , and forex . More specifically, there are now eleven exchange-traded funds (ETFs) offering spot Bitcoin, or the real deal, unlike Bitcoin futures, which don’t hold genuine BTC. The step is a monumental milestone in Bitcoin’s path toward mainstream adoption and acceptance in the financial markets. The eleven Bitcoin ETFs , approved by the Securities and Exchange Commission, were greeted by investors with billions of dollars injected. Giant asset managers such as BlackRock and Fidelity are seeing overflowing demand for Bitcoin from both institutions and retail investors. The positive thing about these spot BTC ETFs is that they’re backed by the physical asset. Whenever inflows start to outpace liquidity, the asset manager needs to purchase new Bitcoin and add it to its reserves. The more the net inflow, the more it needs to buy BTC. And that drives prices higher. From inception in January to March 2024, BlackRock’s BTC ETF hit $10 billion—faster than any US ETF ever. 📍 What’s Coming Next for BTC Price as We Move Deeper into 2024? 📍 Looking ahead into 2024, there is no doubt that we are going to see new bouts of volatility. More than that, many are optimistic we will continue to see a string of fresh records in the price of Bitcoin. With this in mind, the risks will be there too. Both new and old, market participants need to know that price swings may be stomach-churning as the market adjusts to shifting moods in the rarefied air of $70,000. Buying at the top is scary. 📍 Bitcoin for Your Thoughts? 📍 How did you first get exposure to Bitcoin? When did you buy your first piece of the crypto and are you brave enough to buy again at the top? Let us know in the comments! Liked this article 🚀? Give us a follow to get notified for any future releases! With 💖, TradingView Team

Education

Bitcoin REALISM I am definitely not going to win any popularity competitions with my comments and thoughts. But that's not the point when it comes to making money. The main issue for me still in Crypto Land is the lack of realism. The image on the front cover was from a google search of "realism" I guess the confused face made my day. This is exactly how you need to be looking when you read these points below. I have explained the logic of every major move over the last couple of years and this guys - is no different. So let's start by exploring the reality of market cap for one. When you buy a stock you have a number of stocks in circulation times that by the price and you can get a market cap. Of course, unlike most companies on the exchange Bitcoin CANNOT just issue new stock. We have to remember some Bitcoin are gone and lost forever so this number will likely end up around 20million and not the full 21m. The current Market cap is roughly 19,806,000 x $42,897. Let's call it a little over 820 Billion. At the ATH of $69,000 we saw $1.302 Trillion. Lets look at what is needed and an angle of attack if Bitcoin was to hit $500k by Jan 25, 26, 27, 28 or 2029. This is only one aspect of the story. Prior to the ETF launch people were saying silly things like "Trillions coming in, $100k imminent" Blackrock's largest ETF is roughly $354 Billion. This is the SP500 fund founded back in 2001. So 23 years old roughly now. Here's the actual chart. What does this mean? Well, let's say Blackrock decided to close their biggest ETF and throw it all into Bitcoin. That level would still not take us back to the current ATH. Bullish, Bullish, Bullish - we are still $25,000+ under the current ATH. So what about other ETF's? Obviously the market is bigger than just Blackrock. Let's look at this aspect too. Look at the end of 2021 as the ETF market collectively was at it's high. We are talking about $10Trillion in 8,552 ETF's. I've posted several times about the current COT landscape. Clearly social media Bitcoin is buzzing and everyone is about to become rich, it's different this time and so on. Well, COT says otherwise. Back at the top when everyone was calling for $135,000 I said the reason for the drop would be liquidity. So why is this different? I said there were two likely scenario's on the table as we moved down. The first was we were in an early stage accumulation, we needed to go up to 32k and back down to the low 20's. This would allow us to travel much higher and sustain such a large move. The second option was bearish. Well, I guess the second move played out. The momentum is still clearly not with us - we are still FWB:25K + under the current ATH - not what one would or should expect after 12 Bitcoin specific ETF's obtaining approval & launching. Look at the momentum People seem to fall into the echo chamber and all logic leaves the building. I have been at this game a long, long time. Seen it all before and I am sure I will see it again. This does not mean I am Bearish or anti Bitcoin - not for one second. I am one of the lucky ones in at the right time, sold a lot on the way up and happy with the current holdings. All I am trying to emphasis here - is don't get sucked into the void which is not supported by ANY sound logic. I recently watched a couple of video's with Warren Buffet, another with Jim Rickards. They both explained something very interesting in a very clear way. Although Anti Bitcoin - what they said made a lot of sense. The same lesson kinda applies to things like gold. When you buy an asset, the asset can produce for you. So assume you buy a house - you get rental income each month and with the price of the property going up over time you make gains there. Buy a business same thing - Buffet explained this using a farm as the example. Sell grains, cows or whatever you farm. Over time you still hold the asset. This isn't true for the likes of diamonds, gold or Bitcoin. Hence it fits into the greater fool theory. If I sell you my last bitcoin I picked up for less than $200. You buy it all today at $42,850. You have to find someone else willing to pay you more than the $42,850 in the future. For me, this is the main reason I don't personally care up or down or sideways here. But many in the echo chamber do. The average price across the breakeven addresses are around $37k - this is Breakeven not profit. So imagine majority of the retail crowd with an average entry after DCA'in at $37k. These are all things to keep in mind when your playing shorter term moves. ETF's are structured in such a way long term growth can be expected, volatility get's somewhat reduced. You noticed what's happened on the weekends since the launch? So whilst I expect it to go up in the long run. We need a healthy pullback as to be expected. This gives more time for real accumulation to happen - but this will also put some stress on that average (BE) level of $37k. Just keep this in mind and one more thing if you want to comment on "oh your wrong - up only" give some logic to support it or I won't bother responding. This move will take time. For me, nothing has changed since 2022. We are not ready for new highs - YET... Anyway enjoyed or not I thought it was worth another educational post. Stay safe! Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.

Education

by Mayfair_Ventures

Time is everything A lot of people see a Bitcoin pullback, a drop or a red candle as a negative thing. Clearly this is lack of experience, lack of understanding and only ever seeing re-assurance of the one bias they can comprehend. Many people believe my posts to be negative or anti Bitcoin - you could not be more wrong, as a very early holder, I simply don't care - up down or sideways. It's been kind to me and I will say it was more luck than judgement. Right place, right time. But as a professional trader, money manager and tech investor - I have seen my fair share of market trends, hype, realism and shocks in the market to know. Time is all it takes. You can go back over SPX for example and If you buy and hold the trend has only been up. Obvious its one of indices designed to go up. This does not make it a "get rich quick scheme" For me the problem lies in the cult esq mentality and the desire to get rich quick. When you have, or manage a larger fund - time is always less of an issue, when a Limited partner of a fund told me the company hold period was 15-20 years on average, it took a while to let that sink in. 1% of a lot of money is a lot of money, 1% of a $10,000 pushes you to want more - hence jumping on the up only bandwagon. You need to remember; Last year I posted two options for Bitcoin; I said my preferred route put us in early stage accumulation. The second option went back even further than that, it's the Evil move I said I would hope Composite Man would not be as cruel. Unfortunately with the move from 32k to 48k region, it's clear now the second play has in-fact been the one playing out. --------------------------------------------------------------------------- So here's some rational logic - the medicine most DO NOT WANT to swallow. People seem to throw the same argument - ETF & Halving - They have very little else to contribute. So let's look at what an ETF is and does. An Exchange-Traded Fund (ETF) itself doesn't inherently stabilize an asset. However, the structure and mechanics of an ETF can have certain features that may contribute to perceived stability or liquidity in the underlying assets it represents. Here's how: Diversification: ETFs often hold a diversified portfolio of assets. By pooling together various assets like stocks, bonds, or commodities, they spread risk. This diversification can help mitigate the impact of poor performance in a single asset on the overall value of the ETF. Arbitrage Mechanism: ETFs have a unique creation and redemption mechanism. Authorized Participants (usually large financial institutions) can create or redeem ETF shares in large blocks, usually known as creation units. This process involves exchanging a basket of assets for ETF shares or vice versa. This helps to keep the market price of the ETF close to the Net Asset Value (NAV) of its underlying assets, promoting stability. Liquidity: ETFs are traded on stock exchanges, providing investors with liquidity. The ability to buy or sell shares throughout the trading day at market prices contributes to the perception of stability. The underlying assets might not be as easily tradable, but the ETF itself can be bought or sold like a stock. Market Makers: In the secondary market, market makers play a crucial role in providing liquidity. They continuously quote buy and sell prices for the ETF shares, helping to ensure that there is a smooth and efficient market. This can reduce the impact of large buy or sell orders on the market price. Now for some extra therapy, we also need to look at the realistic timeframes these large players operate at. Blackrock's most popular ETF is their SPX (S&P500) fund. with it's inception around 2001 I believe. $354BN. Now if we look at Bitcoin's market cap - we dropped from $1.3 Trillion at the 69k High down to around 300Billion at the 15k low region. So working out market cap is simple current price of Bitcoin x coins in circulation. (just over 19m). This is just highlighting the obvious; Blackrock is not going to empty the SPX fund and stick $350Billion in a newly established fund. Again time, they have enough money to not need to force or risk anything on a large scale. But what is interesting is the point above about market makers. In Wall Street terms, a market maker is a financial institution or individual that facilitates the buying and selling of financial instruments in a market. Market makers play a crucial role in ensuring liquidity and maintaining orderly trading in financial markets, including stock exchanges. Here are key aspects of what market makers do: Liquidity Providers: Market makers stand ready to buy or sell a financial instrument (such as stocks, bonds, or options) at publicly quoted prices. This activity provides liquidity to the market, allowing investors to execute trades quickly and efficiently. Bid and Ask Prices: Market makers quote bid and ask prices for a security. The bid price is the price at which they are willing to buy, and the ask price is the price at which they are willing to sell. The difference between these prices is known as the bid-ask spread. Order Execution: When an investor places a market order to buy or sell a security, the market maker ensures that the trade is executed promptly by matching it with their own inventory or finding a counterparty in the market. Risk Management: Market makers take on some level of risk by holding an inventory of securities. To manage this risk, they continuously adjust their bid and ask prices based on market conditions and changes in the supply and demand for the securities. Arbitrage Opportunities: Market makers may engage in arbitrage, exploiting price differences between related financial instruments or markets. This helps ensure that the prices of the same or similar securities are consistent across different trading venues. Maintaining Orderly Markets: Market makers contribute to the overall stability and efficiency of financial markets by preventing excessive volatility and ensuring a continuous flow of trading. It's important to note that market makers profit from the bid-ask spread and trading volumes. While they facilitate trading and provide liquidity, they also manage their own risks. Market makers can be institutions like investment banks or specialized firms with expertise in particular markets. They play a crucial role in the smooth functioning of financial markets by facilitating the buying and selling of securities. ============================================= Market makers have been referred to another type of Composite Man. The term "Composite Man" is associated with the Wyckoff Method, a technical analysis approach to understanding the stock market. The Wyckoff Method was developed by Richard D. Wyckoff, a stock market trader and educator from the early to mid-20th century. According to this method, the Composite Man represents a hypothetical market manipulator or a group of large market participants who have the power to influence the market. In Wyckoff's view, the Composite Man is an entity that accumulates or distributes stocks in a way that leaves footprints on the price and volume charts. The actions of the Composite Man are believed to be observable through the analysis of price and volume patterns, helping traders and investors anticipate potential future price movements. Here are the key ideas associated with the Composite Man in the Wyckoff Method: Accumulation and Distribution: The Composite Man is thought to go through phases of accumulating or distributing a particular stock or market. During accumulation, the Composite Man is buying, and during distribution, they are selling. Wyckoff Price Cycle: The Wyckoff Method outlines a price cycle that includes phases such as Accumulation, Markup, Distribution, and Markdown. Traders using this method attempt to identify these phases on price charts to make more informed decisions. Smart Money: The Composite Man is sometimes referred to as the "smart money" because it is assumed to have more information and resources than individual retail traders. Monitoring the actions of the smart money is believed to provide insights into potential market trends. When I posted posts like this from the 65k high, it was due to these footprints being visible from space. As the price moved up from the 28k region to the current ATH. Similar thing. I am not here trying to drag it or you down, I am here trying to help see logic in the charts. As the move moved up, we had a fake ETF release, in essence thus pricing in the actual ETF. This is why for me, this scenario is the most likely in the current environment. Composite Man/Market makers are happy to use the fear and greed index, which is currently tilting heavy towards the greed side. Against retail traders who see ONLY UP as the only scenario available. The space is becoming more like a cult and it's feel more and more like the simple definition of a pyramid scheme. Again, I am not saying that's what it is - I am in at the bottom my cards are on the table. The space has become "if your friends join, they also need to invite more people, and the cycle continues. The person at the top gets money from everyone below, and the people at the bottom hope to make money by bringing in more people." The problem is, there's no real product or service being sold. The only way people make money is by getting others to join. Eventually, it becomes harder for everyone to find new people, and those at the bottom end up losing money because there aren't enough new members to support the structure. This kind of scheme is not fair or sustainable and can cause a lot of people to lose their money. Especially when the big boys get involved with very little regulation covering the people at the bottom. Just remember everyone was saying "anti banks, anti institutional yet celebrating the ETF's like a win" the issue here is it's likely to stabilise the asset, slowing the phases and cycles down to a more mellow growth curve over the next 20 years. In the grand scheme of things, it's great for the industry, but we can expect more manipulation prior to regulation, post regulation the percentage gains will narrow. Keep all of this in mind and remember it's what the majority wanted. Stay safe! have fun and see you on the next post. Hate comments always welcome - just please back them up with some logic and show you have more than 3 brain cells. 😉 Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.

Education

by Mayfair_Ventures

Market Algo or pain trades I was reading another trading book today and much like watching the dumb money movie the other day, it prompted me to write another post. So, you may have heard the expression "the market is an Algorithm" whilst this is somewhat true, it's actually more a sequence, Ralph Elliott, Richard Wyckoff and Edward Jones knew this. In simple terms, the larger operators or what's known as sophisticated money - chase liquidity pools that are often areas Dumb Money have taken entries or placed stops. Now if it was as simple as this, you could simply write an indicator or be on the winning side 100% of the time. Unfortunately, there's a lot more to it! When I say the smart kids are taking the dinner money of the dumb kids, you need to appreciate the fact that winning whilst playing against retail traders is like putting the Patriots against your local under 12's side. Or like having the New Zealand All Blacks play against an old people's home in Pakistan. (I am not sure if Pakistan even have a 1st team in rugby). To gain some understanding, you need to appreciate there's such a thing as "pain trading". A "pain trade" refers to a situation in financial markets where a significant number of investors or traders find themselves on the wrong side of the market, leading to losses or discomfort. In other words, it describes a scenario in which the market moves in a way that causes the most amount of pain or financial losses to the largest number of participants. For example, if a majority of traders are positioned for a market to go up, a pain trade would be a sharp and unexpected decline in prices, catching those traders off guard and causing them losses. The term reflects the idea that markets often move in ways that inflict the most damage on the greatest number of participants. Understanding pain trades is important for investors and traders, as it highlights the potential risks of crowded trades and the importance of risk management strategies to mitigate unexpected market movements. Investors and traders often use various indicators, market sentiment analysis, and risk management techniques to try to avoid being caught on the wrong side of a pain trade. (Thanks ChatGPT for the summary). ====================================================== So take a company like Carvana for example... This type of move happens over and over again - creating cycles (But not always the same). In this image above you can see it's likely to have swept long stop losses and then rallied hard. You probably know about the Gamestop Saga. I wrote a post on that film recently. I talked about being on the wrong side - I can't get over how someone could be up $500,000 and still go broke? But it's all in the mindset. Liquidity is the name of the game. How do these things fit together? Well, Bitcoin is a prime example - retail mindset is "HODL, Buy the Dip, Diamond hands & Lambo" - whilst as a professional trader, it's enjoying your profits and buying/selling at the expense of the dumb money. These moves are shown as the last post, buy momentum. Here is the summary image from that post. Since we had a move up - retail seem to think it's up only, they seem to put all the eggs in the hope Blackrock and a halving will make them rich... I have read articles like this recently. After watching the Dumb Money film - you know where following the crowd goes. ----------------------------------------------------------------------- Why is this an important lesson? It's all to do with pain, where is the maximum pain? Retail sentiment would suggest pain comes in the form of little movement, grinding prices in up moves and fast aggressive drops. Some context from Blackrock themselves: What is Blackrocks Biggest ETF? So again, let's add a little logic. Where is liquidity sitting? If and it's a big if - Blackrock get an ETF approved and it's half the size of their biggest ETF to date, let's then assume Retail flood in and match it dollar for dollar. That market cap would still put us roughly at the current ATH, given coins in circulation. This again just amplifies, why we are simply - NOT READY, YET!!! The move I didn't want in 2022, looks to be the biggest liquidity grab we are likely to see in the Bitcoin chart. We are very, very likely still in an A-B move up for the slow pain of coming back to build sustainable momentum. Have a Happy New Year all! Stay safe and see you in 2024! Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.

Education

by Mayfair_Ventures

Trading Automation I am just going to put it out there, as you know I have said time and time again in my streams. Personally, the whole automated trading concept is not for me. However, that’s not to say there are not some good strategies, tools and instruments that could work for some people. Risk tolerance, time frames, bull vs bear markets all play a role in trading. This is emphasised when the trading is automated. A few weeks back, myself and @Paul_Varcoe starting streaming about shorter timeframes and automation. We said we were working on something in the background – mostly to do with trading via prop firms. Here’s on of my streams on that topic. So, the next part was automation. Here's one of these streams: www.tradingview.com I have been lurking around a couple of services, tools and platforms – one of these is a company/product called 3Commas. A few things I found interesting. One of which is that it supports multiple cryptocurrency exchanges, allowing users to trade on various platforms using a single interface. For the Tradingview community this is a very useful option. You can even go as far as connecting your bot to one or more TradingView indicators of your choice, and the bot will automatically receive alerts and open trades accordingly. My reluctance of automation has always been, if a bot can do it – we won’t need Doctors or Police officers as they will all want to be professional traders. I have also spent some time in the money management sector and know the investment and effort some very large operators have put into the automation game. What I liked about this 3commas platform, is that it opens the door for retail to play in this world. Having access to trading bots that can execute trades automatically based on predefined strategies is one factor, it still requires users to set up custom trading strategies or choose from a marketplace of existing strategies developed by other users. So, what this means is if you have a specific trading strategy you can link directly from Tradingview and just allow it to open trades. I have taken this image as an example from their site, it’s easier than trying to write it myself. There also seems to be a lot of open-source code, literature and information readily available online. All beneficial factors if you’re planning on going down the automation route. Myself and Paul have been more conventional traders, operating in well established markets. But of course we have had our dabbles in alt coins, Bitcoin and so on. It seems to be the way the world is shifting. I have been using webhooks on Tradingview recently to trade Aussie dollar and Euro on smaller timeframes just sending an alert to one of my channels – but the ability to take out the execution stage is a new one on me. If you’re a crypto fanatic I can say this is worth a look for sure! When looking at this automation, I found another editors pick here on @TradingView So, although I know very little about the strategy or the individual trader @Bjorgum who wrote the article, it’s a great example of the type of power mixing things like 3Commas and Tradingview can yield. Throughout 2023 I have shown and shared several articles on Prop firm trading, shorter timeframes and even how to use Chat GPT to write Tradingview indicators. Link to one of them: www.tradingview.com My next step is to use chat GPT to program an indicator I can fully automate (market condition depending) to link to 3Commas using TV as the glue. Here’s an example of what I mean: I literally asked ChatGPT this question “can you write a pinescript version 4 code to enter trades based on pivot point breakouts taking profits at S2 and R2 with stop losses in the other direction at R1 and S1.” I got a reply; Before you ask - The code will probably get rejected to put out as an indicator as Pinescript will say “Pivot point indicators are readily available” but copy and paste my question above and you should get a similar result. Of course, this is only an example. Feel free to play around with your own strategies and concepts. The idea then is to take this through the papertesting and backtesting to refine a strategy that you feel comfortable with in terms of plugging into a bot and connecting to your broker. The whole concept for me is mind blowing, the fact that anyone can have a Tradingview account, use ChatGPT to build and indicator and execute a trade via your broker on a platform like 3Commas. Over the next couple of weeks I intend on digging a little deeper with these and either start with using ChatGPT to link a strategy via Tradingview into 3Commas or take a strategy or indicator off the shelf and test drive it in a stream or sequence of streams. Maybe give me some ideas, if you like? what timeframes? What instruments etc... This will be part of the educational, how to make trading automation a real thing series. Anyways! Enjoy the Holidays - Merry Christmas and a Happy New Year to you all! Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.

Education

by Mayfair_Ventures

The World of ETFs In the vast landscape of investments, Exchange-Traded Funds (ETFs) stand as a unique bridge, merging the best of both stocks and mutual funds. While traditional managed funds pool investors' money into assets managed by professionals, ETFs introduce a compelling twist, allowing for the flexibility of stock trading. Unlike managed funds, ETFs are akin to stocks, enabling investors to buy and sell them at any time during market hours . This accessibility aligns ETFs more closely with the dynamic nature of stocks, catering to the on-demand needs of modern investors. However, just like any investment, ETFs come with their nuances and risks. Diversification, often touted as an investment safety net, does mitigate some risks but can't fully shield against market volatility. Different ETFs carry varying levels of risk, making understanding these distinctions vital before investing. Additionally, the past performance of ETFs isn't always a reliable indicator of future results, underlining the importance of comprehensive research and sound decision-making. Bitcoin ETFs: The Gateway to Crypto Investments In recent years, the advent of Bitcoin ETFs has added an intriguing chapter to the investment narrative. These financial instruments enable investors to engage with Bitcoin's price movements without directly owning the cryptocurrency. Bitcoin ETFs, traded on conventional stock exchanges, provide an accessible avenue for traditional investors to venture into the crypto sphere. Within the realm of Bitcoin ETFs, there are two primary types: spot and futures-based ETFs: Spot Bitcoin ETFs offer direct exposure to Bitcoin's real-time market price, involving the actual cryptocurrency. On the other hand, futures-based ETFs utilize Bitcoin futures contracts, enabling speculation on the asset's future price without owning the underlying asset. The interest in Bitcoin ETFs can be attributed to several factors. First and foremost, they offer unparalleled ease of access. Trading on mainstream stock exchanges simplifies the process, allowing investors to leverage existing brokerage accounts without delving into the complexities of crypto exchanges. Moreover, the regulatory oversight accompanying ETFs adds a layer of security, easing concerns related to fraud and market manipulation prevalent in unregulated crypto markets. Additionally, the introduction of Bitcoin ETFs signifies a significant shift, indicating the integration of cryptocurrencies into traditional financial systems. While the United States has yet to approve a spot Bitcoin ETF, several Bitcoin futures-linked ETFs have gained regulatory approval , broadening investment horizons. Beyond Bitcoin: Exploring the Crypto ETF Spectrum While Bitcoin has seized the spotlight, the crypto ETF landscape is not confined to it alone. Outside the United States, various Cryptocurrency Exchange-Traded Products (ETPs) encompass a spectrum of digital assets beyond Bitcoin. These offerings enable diversification within the digital asset space, catering to investors keen on exploring a range of cryptocurrencies. In the United States, ETFs linked to cryptocurrencies like Ether also exist, albeit in the futures-related domain. Although spot-based crypto ETFs are yet to make their debut, the evolving regulatory landscape and market demand may pave the way for these in the future. As the financial world continues its digital transformation, understanding ETFs and their crypto counterparts becomes paramount. By bridging the gap between traditional stocks and the dynamic crypto sphere, ETFs empower investors with newfound opportunities and avenues for portfolio growth. Stay tuned for the evolving of crypto ETFs, where the world of investments meets the future of finance.

Education

People want to earn but not learn The issue is everyone wants to make money (well, maybe not everyone) but nobody wants to take the time to learn how to do it properly. This is NOT a sales pitch by the way! it's FACT!! People often ask why I bash influencers so much, it's mainly for this reason. Majority of noobs, come into trading expecting to make a fortune. If only it was that easy, every man and his dog would be a professional trader. Over the years, I have talked about things like Bots and AI that are programmed to make you money - think logically, if again it is this easy wouldn't the founders go to the bank, loan $10million based on their results and just not bother selling and shilling to customers and retail. NOBODY wants to provide customer service, especially to the world's population. Unfortunately, regardless of the market. Trust me if you stick around long enough you get to see this behaviour in Forex, Commodities, Stocks and more recently crypto with a splash of A.I. The story goes pretty much the same way. "man (or woman) hears about an opportunity to make money through a thing called trading, they do their research which leads to the old You of Tube and that leads to "Lamborghini promises from kids with fake watches, drawing random trendlines on 3 minute charts" There's often a "sign-up" bonus if you click their shill link. So let's get this straight, they make money on watch time and those links you click. The reason I chose fish in the image above, is that most people have memories that last about 2 seconds. Mark Cuban said "everyone is a genius in a bull market" Algorithms work and influencers claim to be experts with 3 months of experience. Easy to show in a market only going one way. Trading is hard enough, let alone having the ability to lose money from scams. If a trading algorithms promises a 90% win rate - run and don't buy it. ============================================================== There are fundamental things to do and you can deploy to get you off on the right track. Firstly think of the obvious. 90% of new traders lose 90% of their money in only 90 days. Hence a 50% sign-up bonus whereby you think you gained "free cash" often has small print that you can't access it until you lost your original investment. Affiliates tend to get 25% or more of the deposit - the exchanges know full well, your about to lose your money. Second thing I try to emphasis for newer traders, is that you need to treat trading as a profession. You wouldn't watch a video and expect to be a doctor, you also wouldn't buy an algorithm or Artificial Intelligence software and expect to become New York's latest Hot Shot Lawyer You see where this is going? There is no secret sauce, no silver bullet and no short cuts. If you want to trade and make money trading, you need the basics. You need to keep doing the basics well and evolve your mindset more than a strategy. Areas that will really help you include proper risk management. If your willing to be sat in negative 20, 30 or even 50% equity positions. This won't take you long to lose your entire trading pot. Instead risking 1-2% with a risk strategy of 2 -1 or greater. it's a slower game, but it keeps you playing the game. If you take a 3 or even a 4 reward trade with only 1 risk. For every time you are right, it's giving you 4 times as much as when you are wrong. Imagine winning 20% of your trading days and still being at breakeven... simple 1:4 ratio. This is only one small aspect to keep in mind. As I mentioned above, if strategies or software is pitched with high percentage win rates - run. You need to understand the market acts differently and past results do not indicate future performance. Everyone is a genius in a bull market, remember. You do not need to go looking for the silver bullet. These strategies do not exist, instead spend the time working on strategies that can be consistent in various market conditions. This is no small task, your strategy might identify entries in a counter trend differently than it would in say a ranging market. The answer to resolve this, is BACKTESTING Don't just run your strategy on replay mode, although @TradingView has a great little tool for this. Spend the time to look at things such as "repainting" this means that when your strategy triggers an entry, does it disappear and reappear. If so, do some manual back testing. Then Dig deeper and analyse the type of market condition it was more profitable or less profitable. This could be things like "I lose more on a Monday, compared to other days" or when the market goes sideways, It triggers too many trades. I've written several articles here on pure education. Here's a few examples. In this post (worth clicking on) it has a whole bunch of lessons inside. Think of trading like you would a university course, there's plenty to learn but you can have some fun along the way! Stay safe! Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.

Education

by Mayfair_Ventures

Five Reasons and Six Ways to Invest in Gold "Gold is money. Everything else is credit.", said John Pierpont Morgan. When borrowers default, markets collapse and banks run into crisis, gold prices skyrocket. Gold is trading at a 12-month high on March 18th. Gold has been valued for thousands of years. Gold has unique properties. It has been enchanting women and men since humans set foot on the planet. Polycrisis. That aptly describes the current times. The US regional bank crisis haunts markets. Credit Suisse - the bank to the wealthiest was so frail that Swiss National Bank had to step in to provide liquidity backstop. Regulators worked over the weekend to broker an acquisition by UBS to prevent a banking crisis from spreading. Inflation is raging hot at levels unseen in 40+ years. Compounding Chair Powell's quagmire, the US Fed has been forced to switch from QT to QE by providing support to its regional banks from collapsing under crisis of confidence. Geo-politics remains tricky. In times of crisis, investors seek flight to safety. Safest of all assets since civilisation began has been gold. This educational piece provides an overview of (a) physical gold market dynamics, (b) largest holders of gold reserves, and (c) gold price behaviour against other asset classes. It also describes five primary reasons for investing in gold, contrasts six methods of doing so, and highlights the downsides of holding gold. PHYSICAL GOLD DYNAMICS Gold performs multiple functions. It is a currency to some. Store of wealth to others. It is an industrial metal used in consumer electronics. The rich love gold in clothing and food. A bird's eye view of physical gold can be summarily described in three parts: 1. Consumers : Gold is used in consumer electronics due to its high conductivity and low corrosive properties. Gold used as industrial metal represents 6%-8% of total demand. Unsurprisingly, >50% of global gold demand is for jewellery. Jewellery is a multi-tasker. It meets aesthetic goals, serves as a status symbol while also being a form of investment. 2. Gold Reserves : Central banks hold gold as reserves. They are the most significant holders of gold. The haven nature of gold compels central banks to increase holdings during economic uncertainty, high inflation, or currency devaluation. Central Banks added >382 tonnes to their reserves in 2022. 3. Producers : Gold mining is a cyclical industry. Mining output has been in decline over the past decade as major gold producers shift to mining minerals and other metals like copper with the proliferation of lithium-ion batteries in EVs. Gold mining took a huge output hit during the pandemic and may not recover any time soon as capital expenditure into new gold mines is limited. GOLD RESERVES - THE MOVERS AND SHAKERS According to the World Gold Council, as of end 2022, central banks in Western European (11.8k tons) have the largest gold reserves followed by North Americans (8.1k tons), Central & Eastern Europeans (3.5k tons), and East Asians (3.4k tons). Last year, central banks of Turkey, China, Egypt, Qatar, and Uzbekistan were the largest buyers of gold. FIVE REASONS WHY GOLD SHOULD BE IN INVESTMENT PORTFOLIOS Gold is a resilient store of wealth, provides meaningful portfolio diversification, has limited price volatility, extends benefits of hedge against inflation & currency debasement, and is limited in supply. 1. Resilient Store of Wealth Gold outperforms equities during periods of economic instability. Due to its material properties and scarcity, it can even become more valuable during such periods as investors seek shelter in classic risk-off assets such as gold. 2. Portfolio Diversification Gold can have both positive and negative correlation with other asset classes during different periods. This makes it an attractive addition to a diversified portfolio. 3. Limited Volatility Due to its large market size and diverse supply origins, gold is less volatile than equities and other asset classes making it a safer asset class for investors. 4. Inflation Hedge Gold is often seen as an inflation hedge. Which means that it can maintain its value or appreciate during periods of high inflation due to its scarcity and safety. However, in some cases monetary policy changes like interest rate hikes may make gold a less attractive investment compared to treasury yields during inflationary periods. 5. Limited in supply Gold is a finite resource, that too, one of the rarest precious metals in the world. Moreover, more than 200,000 tonnes of gold have already been dug up. This represents more than half of the total reserves. The gold that is yet to be mined is much more difficult to extract economically. Scarcity creates rarity, which in turn drives the value of the existing gold higher. Many governments, banks, and people also use gold as a long-term investment, which means a huge portion of the gold supply is taken out of circulation, shrinking available supply even more. SIX WAYS OF INVESTING IN GOLD There are multiple ways of investing in gold. Six primary ones are: 1. Physical Gold : Gold can be bought and stored in the form of jewellery or gold bars. Costs of storage, insurance and making charges can be substantial and also inconvenient. Investing in physical gold is not optimal for reasons of poor convenience and higher transaction costs. 2. Gold ETF : Exposure to gold can also be acquired through buying exchange traded funds (ETF) backed by physical gold. There are multiple ETFs that track physical gold prices. The SPDR Gold Shares ETF (GLD) was the pioneer and began trading in 2004. It has an expense ratio of 0.4% and tracks gold bullion prices. GLD holds both physical gold bullion and cash. GLD provides a liquid lower-cost method to buy and hold gold. Gold can be bought and sold during the trading day at market price. Investors must pay heed to taxation as gains from ETFs in some jurisdictions can be treated differently compared to other forms of gold. 3. Gold Futures : CME’s COMEX Gold futures is the world’s most liquid derivatives which enables capital efficient exposure to Gold. With round the clock liquidity, tight bid-ask spread and benefits of a cleared contract, investing through COMEX Gold futures is widely popular. Each lot of COMEX Gold Futures provides exposure to 100 oz of Gold. Enabling affordable access to investors and to facilitate accurate granular hedging, CME also offers Micro Gold Futures. Each lot of Micro Gold contract provides exposure to 10 oz of Gold. 4. Gold Options : CME also offers options on Gold Futures. Gold options is a useful investing and hedging tool. Using options, investors can lock in unlimited upside potential of price moves while limiting the adverse impact of downside price moves. 5. Shares of Gold Producers : Gold mining is an international business. Gold is mined on every continent except Antarctica. Top gold miners include Newmont (USA), Barrick (Canada), Anglogold Ashanti (South Africa), Kinross (Canada), Gold Fields (South Africa), Newcrest (Australia), Agnica Eagle (Canada), Polyus (Russia), Polymetal (Russia), and Harmony (South Africa). As is evident from the chart above, investing in gold miners for exposure to gold is a poor proxy as most of them have underperformed relative to gold prices. Furthermore, FX exposures must be hedged separately for some stocks which trade in emerging markets. In summary, securing gold exposure through miners is not optimal relative to other alternatives. 6. Gold CFDs : CFDs also known as contract for differences allows for synthetic access to the price of spot gold. These CFDs are OTC derivatives contracts which carry non-trivial counterparty risk with investors being exposed to the credit risk of the CFD provider. The table below summarises the merits of various gold investment instruments across key investment attributes. GOLD TOO HAS ITS DOWNSIDES Gold is a non-yielding asset. Shares of profitable companies pay dividends. Holding debt earns interest. Real estate delivers rents. But gold provides zero yield. For every problem, innovation in markets provides a solution. In a future paper, Mint Finance will demonstrate how gold can be transformed into a yield generating asset. Rising interest rates are headwinds to gold. As rates on treasury, bonds and deposits rise, investors rotate their money out of gold and into yield generating assets. Not only is gold non-yielding, but the returns also fade into insignificance relative to gains from innovation. In times of crisis, gold is a great hedge. However, while positioning portfolios for the long term, investors must astutely balance between safety versus growth. GOLD RETURNS IN RELATION TO OTHER ASSET CLASSES 1. US Equities and Emerging Markets Gold outperforms equities during periods of crisis. During equity bull runs, gold underperforms equities. Cumulatively, over the last 20 years, Gold has outperformed Dow Jones, S&P 500, and MSCI Emerging Markets. Only Nasdaq, which represents tech, innovation and growth has surpassed gold returns. 2. Treasuries with 2-Year and 10-Year Maturities Unsurprisingly, when sovereign risks rise and treasury yields fall to zero, gold shines. Between two non-yielding assets, investors prefer to take shelter in gold as a preferred haven. However, when rates rise, investors rotate out of gold and into treasuries. 3. Crude Oil, Copper, and Silver Over the last two decades, Gold has outperformed crude oil, copper, and silver. 4. Dollar Index, Bitcoin and Ethereum While US Dollar and gold are both global reserves, gold has outperformed the Dollar Index which is the value of the USD against a basket of six international currencies. However, relative to bitcoin and ethereum, gold pales into insignificance. Bitcoin is perceived as millennial gold and ethereum is the millennial oil. Both assets have obliterated gold in terms of price returns. 5. Major Currencies Over the last 3 years, as markets emerged out of the pandemic, gold has outperformed all the major currencies. Yen, under the influence of Governor Kuroda’s liberal QE program, has depreciated 63% against gold. Indian Rupee has deflated 47% while Euro and Sterling have shed 38% and 32% against gold. The US Dollar, Chinese Renminbi, and Aussie Dollar have depreciated 31%, 29% and 20% against gold, respectively. Key Takeaways Gold is money. Everything else is credit. Gold glows in crisis. It is a knight in shining armour for investors. Gold is the only asset which exhibits negative correlation. These are times of polycrisis. As investors seek flight to safety from banks even, gold is the safest among the few remaining alternatives. Gold is a resilient store of wealth, offers durable diversification within a portfolio, exhibits much lower volatility relative to equities, and serves as an inflation hedge albeit with less than a perfect record. Clients can invest in gold in multiple ways. Gold futures is the most convenient and optimal among the six alternatives. Gold has its downsides. It is a non-yielding asset and performs dismally against innovation and growth. Except for Nasdaq, bitcoin and ethereum, gold has outperformed currency majors, equity indices, US treasury, and commodities. In a future paper, Mint Finance will explore ways in which gold can be transformed into a yield generating asset. 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 Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. This material has been published for general education and circulation only. It does not offer or solicit to buy or sell and does not address specific investment or risk management objectives, financial situation, or needs of any person. Advice should be sought from a financial advisor regarding the suitability of any investment or risk management product before investing or adopting any investment or hedging strategies. Past performance is not indicative of future performance. All examples used in this workshop are hypothetical and are used for explanation purposes only. Contents in this material is not investment advice and/or may or may not be the results of actual market experience. Mint Finance does not endorse or shall not be liable for the content of information provided by third parties. Use of and/or reliance on such information is entirely at the reader’s own risk. These materials are not intended for distribution to, or for use by or to be acted on by any person or entity located in any jurisdiction where such distribution, use or action would be contrary to applicable laws or regulations or would subject Mint Finance to any registration or licensing requirement.

Education

by mintdotfinance

Updated

What is an ETF? (exchange traded fund) An exchange traded fund (ETF) is an investment fund that invests in a basket of stocks, bonds, or other assets. ETFs are traded on a stock exchange, just like stocks. Investors are drawn to ETFs because of their low price, tax efficiency and ease of trading. ETFs seek to provide the performance of a specified index, such as the S&P 500, and typically have low fees. Like mutual funds, ETFs offer investors diversified exposure to a portfolio of securities, such as stocks, bonds, commodities and real estate. Why are ETFs popular? While investors often associate ETFs with large stock indexes, such as the S&P 500, ETFs provide access to virtually every asset class, sector, region, theme and investment style. ETFs are popular because of their low fees, tax efficiency, liquidity and transparency. Since the first ETF was launched in 1993, the ETF industry has grown substantially, with more than $3 trillion now invested in ETFs. What are the benefits of ETFs? ETFs cost significantly less than comparable active mutual funds — and that savings can add up over time. Other benefits include: Access and liquidity. Because ETFs are traded on stock exchanges, they are easily bought or sold. Transparency. Just like mutual funds, ETFs report performance quarterly and fees daily. Diversification. ETFs provide access to a wide range of investment options, covering a broad range of asset classes, sectors and geographies. They also make it easy to select specific themes or investment styles. What are the risks associated with ETFs? Like mutual funds, ETFs carry investment risk depending on their asset class, strategy and region. Some ETFs are riskier than others. In addition, if you invest in an ETF that holds securities in a currency other than your own, movements in the foreign exchange rate may affect your returns.

Education

by TopTradingSignals

Nifty ETF investment strategy Here is the best strategy for ETF Investment. In the daily timeframes, when the RSI period 3 goes below the 20 value, then just buy the ETF in good amount. The return is very good. For example in the above chart I have marked some of the signals. You can also set the alert on RSI to get the signals.

Education

Asset Classes - Part 1 and 2 - For beginners Asset classes - Part 1 - Stocks, Bonds, Commodities and Currencies There are several types of asset classes which group together investments with similar characteristics. However, each asset class also has its own particular features that it does not share with other asset classes. Most common asset classes are: equities, fixed income, real estate, commodities and currencies. Correlation between different asset classes within the same industry is common. However, asset classes in unrelated fields show very little correlation. Each asset class possesses a different level of liquidity; most liquid asset classes are equities, fixed-income securities, and commodities. Sub-asset class Asset classes can be subdivided into sub-asset classes; for example, commodities can be subdivided into lumber, metals, oil, etc. Sub-asset classes can be further subdivided into separate groups which show common characteristics while showing characteristics of the broad group at the same time. For example, metals can be subdivided into precious metals and industrial metals. Each group can be then divided even further to efficiently distinct between separate features of asset type. For example, precious metals can be divided into gold, silver and platinum. Illustration 1.01 Illustration above shows a daily chart of continuous CFD on WTI oil. Price made a low of 33.67 USD on 2nd November 2020 and continued to rise until it reached a high of 85.39 USD on 25th October 2021. Correlation Some assets tend to show correlation. Such correlation can be positive or negative. Positive correlation means that two assets behave in a similar way. For example, when gold rises then mining stocks rise as well. Contrary to that, negative correlation describes such behavior in which assets move in the opposite direction to each other. For example, when USDEUR declines then WTI oil tends to rise. Illustration 1.02 Illustration above shows the daily graph of Exxon Mobil Corporation which belongs to the oil mining and exploration sector. It made a low of 31.11 USD on 29th October 2020 and then continued to rise until 1st November 2021 when it reached a high of 66.08 USD. Positive correlation can be observed between CFD on WTI oil shown in Illustration 1.01 and Exxon Mobil Corporation stock. Stocks Stocks, also called equities, are normally issued by an eminent (company, state, etc.) as shares which give right of ownership to their holder. These shares are then sold by eminent (to investors) with the purpose to raise capital. Stocks are predominantly traded on stock exchanges and they can be either common stocks or preferred stocks. Common stocks entitle a shareholder to vote at shareholders´ meetings and to receive dividends being paid by a company. Preferred stocks differ from common stocks in that they usually come with limited or no voting rights at all. Though, preferred stocks have higher claims to dividends and distribution of assets by a company. This means that in case of liquidation of a company preferred stockholders have priority over common stockholders. In addition to that, preferred stocks can pay higher dividends than common stocks and because of that they are good for building passive income based on dividend payments which can be monthly or quarterly. Bonds Bonds are simply loans made by an eminent (borrower) which can be state, corporation, or any other legal entity. Bonds are considered fixed-income instruments because they come with interest payments being paid out to an investor. Owner of a bond is called debtholder while the issuer of a bond is called a creditor. Bonds are tradable assets and they have maturity. In addition to that, bonds come with risk of default. Because of that, higher yielding bonds usually come with higher risk of default. Bonds are great investment vehicles for building passive income, however, they generally underperform in terms of yield when compared to stocks, commodities and indices. Bond yield is negatively correlated to bond's price. Commodities Commodities are basic goods (such as gold, lumber, oil etc.) that are used in commerce. They are usually refined or used for production of other goods. Commodities can be traded on market exchanges where they must meet specified minimum standards like quality, weight, type, etc. Commodities are great speculative and anti-inflationary investment vehicles. Illustration 1.03 Illustration 1.03 shows the daily chart of CFD on WTI oil. On 20th April 2020 due to the WTI oil crisis at Cushing, Oklahoma price plunged below negative 36 USD (-36 USD per barrel). Unfortunately, that is not depicted on the chart (chart depicts lowest value at 0.00 USD). Currencies Currency has the role of a medium of exchange for goods and services in almost all economies around the world. There are many different currencies worldwide, however, predominantly used currencies are U.S. dollar (USD), Euro (EUR), British pound (GBP), Yuan (CNY) Ruble (RUB), Yen (JPY). Relationships between currencies are highly intertwined making the currency market very complex and hard to predict. Central banks can influence currency rates through monetary policies such as interest rates and quantitative easing. Similarly, a government can impact currency rate by enacting fiscal policies. These policies can have an impact on spending, import, export, etc.; which will, in result, influence currency rate. In addition to all of that, some currencies exhibit positive or negative correlation with commodities such as gold, oil, etc. Illustration 1.04 Illustration above shows the daily graph of EURUSD. It is observable that EURUSD made lows in March 2020 and then continued to rise towards November 2020. Only a month later in April 2020 oil bottomed out and then started to rise in tandem with EURUSD (depicted in Illustration 1.03). Asset Classes - Part 2 - Cryptocurrencies, ETFs, CFDs Modern technology along with financial evolution brought rise of new asset classes such as cryptocurrencies, exchange traded funds (ETFs), contracts for difference (CFDs) and options. These new financial instruments represent alternative investment to stocks, bonds, commodities and currencies. Additionally, some features within these products can help an investor to diversify portfolio, trade short and use leverage with ease of a few mouse button clicks. Cryptocurrencies Cryptocurrency is simply digital currency. Most cryptocurrencies are based on blockchain technology which acts as a distributed ledger that is run by a large number of computers that comprise decentralized structure. Normally, cryptocurrencies are not issued by central authorities (however, central banks around the world currently work on digital form of fiat currencies). Cryptocurrencies are encrypted by cryptographic methods which makes them very difficult to counterfeit and double-spend. These assets are considered to be more volatile when compared to stocks, bonds, commodities and fiat currencies. Another defining feature that sets cryptocurrencies apart from other assets is that they are traded non-stop (24 hours a day, including weekends). Most popular cryptocurrencies are Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Ripple (XRP), Dogecoin (DOGE). Illustration 1.04 Picture above shows the monthly chart of BTCUSD (Bitcoin in USD). It is very easy to spot unbelievable growth of more than 862 000 % between August 2011 and November 2021. Exchange traded fund (ETF) Exchange traded fund is a type of security that is publicly traded on a stock market exchange and which tracks an index, stock, commodity, or other asset. Exchange traded funds can track either one asset or group of assets. This allows an ETF to be structured in such a way that it can reflect performance of a particular economic sector. Illustration 1.05 Illustration above shows the daily graph of JETS ETF which is an airline exchange traded fund. It has exposure to airline manufacturers, airline operators, airports and terminal services. Contract for difference (CFD) Contract for difference is exchange traded security that is cash-settled and which does not include delivery of goods. It simply pays the difference between the opening price and closing price. CFDs copy the price of other securities and they can be traded short, and also on margin. However, usually higher fees are associated with CFDs when compared to stocks, bonds, currencies and commodities. Illustration 1.06 Depiction above shows the monthly graph of CFD on USOIL. DISCLAIMER: This content serves solely educational purposes.

Education

by Tradersweekly

Buy Gold at ₹40 - the power of Gold ETFs A quick video where i share how I use gold ETFs to get exposure in the yellow metal for the price of an evening tea & snack. What I express in this video is just my opinion and not financial advice. It's meant for educational and informational purposes only.

Education

04:44

by MarketsWithKR

The Safest Way to Short The Stock Market In this video we explain Inverse ETFs as a tool to gain short exposure to the stock market. These can be used as a tool to profit directly from market or as a hedge to protect your stock portfolio in times of market volatility. Let us know your thoughts in the comments below! Have you ever invested using one of these ETFs?

Education

13:15

JOET vs MTUM & an Understanding of ETF Weightings The purpose of this idea is two fold. 1) To discuss the fundamental differences between Market-Cap & Equal-Weighted ETFs & 2) To compare JOET & MTUM ETFs. The first half will cover topics specific to ETFs. The second half and very last section offers a comparison of the funds and conclusions to consider when choosing one. Feel free to skip to the bottom if the analysis or conclusions related to the ETFs is all that you wish to read. Definitions Market Capitalization = (stock price * outstanding shares) Momentum is the speed or velocity of price changes in a stock, security, or tradable instrument. Momentum indicates a stock’s price strength. (Source: Investopedia) Market Cap Weighted Indices Mechanics In market cap weighted indices, price plays a key role of weight. Asset allocation goes to stocks with rising prices over time, while allocation to stocks with decreasing prices, becomes smaller. Behavior Inherently momentum oriented. Concentrated on the winners. Anti-value like dynamic when weighting toward market cap. Performs the strongest in a growth based market or when you have concentration in some sectors or stocks but not others. Conversely, concentration risk is realized if a stock or sector’s market cap becomes concentrated regardless of actual growth and then crashes (eg. 2000 dotcom bubble). Equal-Weight Indices Mechanics In Equal-Weight indices, allocation is spread evenly across all stocks and regularly rebalanced at a predetermined time interval. Rebalancing Stocks in an index which have increased from equal weight average will be in excess of the average weight. The excess (difference between the new price and the price at the average weight) is sold. Stocks which have decreased from the last rebalancing will be below the average weight and the difference is bought. This mechanism ensures all stocks share an equal weight at the time of rebalancing. Because rebalancing typically occurs at predetermined time intervals (often quarterly), there will usually be a degree of asset allocation unbalance between those intervals, as stocks go up and down. Rebalancing daily isn’t practical and would lead to higher management costs. Behavior Broader exposure to the overall market. Favors value stocks and smaller sized companies. Protects against concentrated risk in a few stocks that may dominate a market cap weighted index. Performs the strongest when there is broader market participation and when smaller size / value stocks are in favor. Costs Equal weighted ETFs have higher turnover from rebalancing weighting = higher fees and higher capital gains taxes Market Cap & Equal-Weighted (MISC) Both Equal and Market Cap weighted ETFs require reconstitution or adjustments of their holdings as stocks fall in or out of their parameters of measurement. Examples could be: mergers, delistings, or new inclusions from the parent or underlying index the fund is tracking. --- MSCI USA Momentum Factor ETF - MTUM Dividend Yield: 1.01% Expense Ratio: 0.15% Hierarchy MSCI USA Index (Parent Index) MSCI USA Momentum SR Varient Index (Underlying Index*) MSCI USA Momentum Factor ETF (The Fund / MTUM) *On November 23, 2020, the Fund’s Underlying Index changed from MSCI USA Momentum Index to the MSCI USA Momentum SR Variant Index Prospectus notes “ uses a representative sampling indexing strategy to manage the Fund. “Representative sampling” is an indexing strategy that involves investing in a representative sample of securities that collectively has an investment profile similar to that of an applicable underlying index.” “The Underlying Index is designed to measure the performance of an equity momentum strategy by emphasizing stocks with high price momentum, while maintaining reasonably high trading liquidity, investment capacity and moderate index turnover....” “The Fund generally will invest at least 90% of its assets in the component securities of the Underlying Index and may invest up to 10% of its assets in certain futures, options and swap contracts, cash and cash equivalents, including shares of money market funds advised by BFA or its affiliates, as well as in securities not included in the Underlying Index” How does MTUM determine the makeup of a “Momentum” stock? The exact calculation is not published but, MTUM screens for the best performing US Large and Mid-cap stock price returns over the past three years, 12 months, & 6 months as a factor for inclusion into the fund. What is MTUM’s reconstitution strategy when adding / removing stocks from the fund? MTUM cites using a statistical model published in the Journal of Finance: N. Jegadeesh and S. Titman, “Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency.” Journal of Finance, 1993. The research suggests, buying past winners and selling past losers, you can achieve profitable returns. Thesis of the model: Buy past winners and sell past losers in multiple time configurations. (only two configurations are selected in practice) Winners measured over 12, 6, 3, or 1 months prior to the time of purchase. Top winners are selected (selected stocks). Performance of selected stocks are measured over 12, 6, 3, or 1 months after the time of purchase. Winners & losers are selected. Buying more of the winners and selling the losers occurs. Takes advantage of short term market inefficiencies and lag time between corporate events and price movements. Eg. earnings announcements. The research conducted demonstrates buying winners and selling losers works within a 12 month timeframe. Beyond 12 months the strategy breaks down. Because MTUM reconstitutes the fund semi-annually and profitability using this strategy occurs within a 12 month period of time, the fund should be able to realize similar profitable outcomes. Virtus Terranova U.S. Quality Momentum ETF - JOET Dividend Yield: Dividends reinvested Expense Ratio: 0.29% Hierarchy: Terranova U.S. Quality Momentum Index (Underlying Index) Virtus Terranova U.S. Quality Momentum ETF (The Fund / JOET) How does JOET determine the makeup of a “Momentum” stock and the ETF? Screens 500 US large cap stocks for the last 12 months’ total return (technical indicator) 500 then ranked based on momentum and quality Momentum is ranked based on the last 12 months’ total return Quality is ranked based on: return on equity (net income divided by average shareholder equity) debt to equity (total liabilities divided by total shareholder equity) sales growth rate (annualized sales growth rate over the past three years). Pick top 250 The 250 Stocks are then again quality ranked based on the same metrics above. Top 125 chosen for the inclusion into the Underlying Index and used in the fund. Equal weighted / rebalanced quarterly What is JOET’s reconstitution strategy when adding / removing stocks from the fund? Their strategy mimics the above, rebalanced & reconstituted quarterly. --- Factors to consider when selecting JOET vs MTUM Costs of ownership / fees / dividend yield -- JOET is nearly 2x more expensive than MTUM, excluding any dividend yield. MTUM’s ~1% dividend yield is also a consideration when selecting. Stock Selection -- MTUM uses a more technical approach to stock picking, rebalancing, and reconstitution. JOET uses a combination of both technical and fundamental (quality) indicators when stock picking, rebalancing, and reconstitution. Timeframe & Concentration Risk -- With concentration risk in MTUM’s market cap weighted fund, you must consider the forward 12 month performance for the sectors most heavily weighted. Historical data shows equally weighted outperform market cap weighted indices (there are exceptions by sector). Equally weighted indices do a better job of mitigating single-stock event risks. If a stock takes a header during an earnings announcement, the impact on the fund will be lower if in an equally weighted fund. Sector weighting inside the funds -- JOET & MTUM stock selection begins with the largest US market cap weighted stocks. JOET holdings are equal-weighted, but not the sectors that make it up. JOET is made up of ~33% Tech & ~22% Healthcare stocks. 4 of the top 5 weighted sectors make up the majority of both funds. Conclusion / Determination This mostly boils down to deciding which fund does a better job of stock picking. JOET & MTUM use different stock selection techniques for inclusion into their respective funds, however, both utilize market cap weighted indices when making initial stock selections, leading to similarly skewed sector weighting in both funds (particularly Tech & Healthcare). Although, while sector weighting is concentrated similarly in both, the underlying holdings making up those sectors are largely different. Of the roughly 125 stocks in each ETF, only 48 names are shared in both ETFs. If you believe a more technical stock picking process, weighting, rebalancing, and reconstitution strategies will work better, MTUM is the winner. MTUM does carry a higher degree of concentration or single-stock event risk and is not as diversified across sector allocation vs. JOET. However, during times when market cap leaders are leading, MTUM will outperform. If you believe a combination of technical and fundamental quality factors for stock picking & reconstitution strategies will work better, JOET is the winner. JOET is more expensive to own with a higher expense ratio. However, by nature of being equal-weighted, longer term hold durations should have stronger positive outcomes, and lend credence to value-like holdings that have not yet surprised to the upside. JOET also provides exposure to what Virtus believes are higher quality stocks with stronger fundamentals, as that is a criteria for their selections. Because JOET is less than 12 months old, historical performance cannot be compared with MTUM’s. Additionally, because MTUM recently changed the underlying index used for stock selection and inclusion into the fund (Nov 2020), its historical performance cannot be used as an indicator or expectation of how the fund may perform moving forward.

JEducation

by MichaelGoldberg

Understanding ETFs Hello traders, in this post I will explain different types of ETFs and what is an ETF (Exchange-Traded Funds). ETF for example is a package of different stocks that have similar characteristics. One characteristic could be that they all are in the same sector. Some ETFs track indexes, commodities, and more. Those packages are listed on an exchange and are traded just like stocks. Traders and investors use ETFs to diversify with the provided indexes (or other products) with lower costs, or if the trader can’t trade in futures contracts, it is possible to use ETFs that are related to a specific future. Also, there are options on ETFs that can be used as an alternative for expensive indexes. Leveraged ETFs Most of the ETFs are trading in a 1:1 ratio, for example, NASDAQ 100 is currently at $12621 and the relevant ETF QQQ is $307.8, the difference is 1 to 40, but the returns are the same (1:1). The ETF NUGT on the other hand is moving with correlation to the gold miners index, but if the index return will be 10%, the ETF NUGT return will be 20%, because it is leveraged 2 to 1. Those kinds of ETFs are not for investors or long-term traders, only for the short term. This is because the returns are multiplied by 2. If the index will move down 7% NUGT will move down 14%. Eventually, it will move substantially lower in price because there will be a major correction of 30%+ that will cause a 60%+ drop in price. Thus, there will be a split. If you look at September 2012 you can see that NUGT price is $36000, this is because there were many splits due to the phenomenon I described above. NUGT was never really traded at $36000. In the chart, the orange line NUGT. Moving 300% between March to August, the blue line GOLD 40%. Reverse ETFs ETFs that move in the opposite direction to the index. For example, DUST is a leveraged ETF and going in the opposite direction to the gold miners index. In the chart, the green line DUST. Decreasing substantial percents due to leverage. ETFs that based on Futures There are two types: ETFs that own the commodity – those ETFs are moving almost the same as the commodity itself. For example GLD In the chart above, the blue line is the GOLD price in cash, the red line is GLD. ETFs that buy the futures of the commodity and not the physical commodity, don’t track the commodity with the same returns as the previous type, for example, VXX (VIX), USO (oil), UNG (gas). As discussed in the previous post Futures have a time premium. When you buy ETF that is based on futures, that means that you buy also the premium attached to that future. As time passes, that premium is lost, and then the ETF buys the next contract with a new time premium. As time will pass, you will lose this premium also… and so forth… This is something to be aware of.

Education

A simple flow indicator An alternative way of assessing currency flow is the ratio between the ETFs of each currency. For example, the EZU that gives exposure to a developed market countries using the Euro currency, divided by IVV that gives exposure to large, established U.S. companies. The direction of this ratio shows us whether companies in one country (or region) are growing faster than the other. The greater the growth of companies, the greater the country growth and productivity, which creates a virtuous cycle and currency appreciation.

Education

by blacksheepforex

EW Analysis: SPY May Face Another Decline Hello traders! Today we will talk about stocks, specifically SPY (S&P500 ETF) and its price action from Elliott Wave perspective. At the beginning of June SPY turned sharply and impulsively down, clearly with five waves, which in EW theory actually indicates a bearish reversal at least in three waves A-B-C. Currently we can see it finishing a corrective wave B, also with three waves a-b-c, where wave "c" should be made by five subwaves. Ideally we will see a fake Monday rise into a wave (v) of "c" that can be a nice bull trap before we may see a bearish turn. If we also consider an important 78,6% Fibonacci retracement, strong channel resistance line and equality measurement of wave a=c, then ideal resistance would be around 318-320 area and this is from where we should be aware of another stock market sell-off now at the beginning of July, similar as occured at the beginning of June. So, watch out for limited gains in the stock market in the upcoming week and if we see a strong decline from projected resistance zone, then we might be on the right track back to lows below 300 region for wave C, but the price needs to stay beneath 232.50 invalidation level. Be humble and invest smart! If you like what we do, then please support us with a like and share! Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.

Education

How did the Low Vol strategy do this month? Low vol is supposed to be better in times of high vol. (At least that is how a financial advisor explained it to me). So let's see. This March was quite volatile. How did LOW vol do compared to your vanilla $SPY? Turns out this month it did 2% worse.

Education

Trade To Win "Those who lose - trade not to lose. Those who are successful - trade to Win." Losing Vs Winning Most traders are more focused on not losing than they are on winning. Do you understand what this means? This means you are acting not in your best interest, but against your self. By focusing on how much you can or might lose, or on not losing, you increase the likelihood of making mistakes which ultimately lead to a losing traders equation, and a negative equity curve. Profitable traders do not care about losing. They understand it is part of winning. They focus on winning. What is the best move in this moment? Should I get out or continue to hold based on what the market is telling me? Winning traders accept the risk totally and completely; before getting into the trade. In other words, they have already lost what is on the line. Therefore they act in their own best interest, not based on their thoughts about what they could lose, but based on what the market is telling them to do in this moment. Other than this psychological difference, here are a few other key components on How to Trade To Win. Defined Edge - Every trader who is making money in the market has some form of edge which he employs. Even if his edge is purely intuitive. This is extreme and rare however, and most traders have clearly defined their edge and will only trade that edge. This removes randomness. Many beginners think they are going to study the market and be able to trade the market no matter what it is doing (trade intuitively). This is simply not the case for most. The purpose of studying the market is to identify opportunities in form of an edge. An edge is a setup or context which repeats itself over time. It might occur once a day, once a week, or once a month. It does not matter. All that matters is that you only trade your clearly defined edge, and leave the randomness behind. For more information, you can read about the edge I use in every market I trade. We also describe how you can develop your own edge, and trade it in any market. Stop Doing, Relax Efforts - If you are losing in the market, chances are you are doing too much. Many beginners, and even experienced traders think they must be trading in order to be a successful trader. This leads to random trading, over trading, and mistakes which compound themselves. You end up digging a hole, and instead of looking for a way out, you look for a different shovel. The harder you try to make a profit, the more you do, the more actions you make, and the more you lose. The market rewards those who are observant, disciplined, and most importantly patient. The market takes from those who try too hard, and do too much. If you dont believe me, try as hard as you can to make money, and see how you do! By relaxing your efforts, you relax your mind. In turn relax your actions and decision making. You do not have to trade every day to be a profitable trader. It sounds paradoxical doesn't it? How can I make money trading if I dont trade? By only trading when it is appropriate like when your edge is present, you better your odds of success. Profitable trading does not come from trading constantly. Profitable trading comes from the act of non-doing, and out of a state of emptiness. Profitable trading is effortless, it comes out of waiting for just the right moment before taking action. And then waiting some more while the market proves you right or wrong. Profitable trading is not forced; it just happens. Active VS Passive Trading - This is very similar to the previous topic. Active trading is a trader who is constantly in the market, trading whatever he see's or feels right. This trader is often wrong, and when he is right he makes the mistake of exiting too early due to fear. This leads to a negative traders equation as he continues to struggle to do the right thing. An Active Trader mentality is one which does not believe in "non-doing." He believes he must, and can, do something. He is afraid of missing out and is often swayed by thoughts and emotions. So he continues trading never looking back, and at the end of the month cannot figure out why his account is in the red. A Passive Trader is the opposite. He passes on more trades than he takes. He does not care about what he misses out on. He only cares about what he takes and the actions he makes in the market. He does not force trades, he just watches the market until he knows what to do. Or he waits and waits until his edge finally sets up. He is passive in his efforts, rather than active. He does not care if he doesn't trade today, this week, or even this month. Trading is not what is important to him; winning is. He knows that profits come from sitting, waiting. Because he is willing to wait, he is peaceful. And profits continue to come into his account, effortlessly. For more information on developing this type of mentality, see below. We also detail how to understand markets through price action, how to create, define, and employ an edge, and how to develop your traders mentality to succeed in markets. If you found this helpful please like! Feel free to comment or ask questions.

Education

by tradersmentality

BITCOIN ($BTC): IMPORTANT FUNDAMENTALS vol.2 FA Vol.2

Education

by AsBobbyDigital

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