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Let's Talk Liquidity! ⚒️At first, Liquidity may seem like an abstract and confusing concept reserved for only those Finance nerds and geeks to tackle. Turns out it's really not too sophisticated after all and can be though of in terms of Fomo. Fomo if you are not aware already is simply a concept related to chasing the market because of a Fear of missing out. Any action out of fear is typically not the best choice. In trading, this is especially true. Liquidity is what the market needs prior to a big move. Liquidity doesn't necessarily mean that the market needs to pin an extreme low or high from the previous session. Liquidity is also gathered when the market ranges/consolidates for awhile. If you go back and backtest, you will observe that preceding a large move, the market usually consolidates first. Liquidity also dries up during Asian session. You can observe that the volatility is much smaller than London/Ny session as the market moves alot less # of pips. Liquidity dries up prior to news annoucnemnts becuase of uncertainty obviously. This is the very reason why the market moves so much during news is because of lower participation from larger market participants, therefore an increased chance of wild and random price movements. This is explained more in depth in this concept video, Let's talk Liquidity.
Education
by ShrewdCatfx
SOFR: Farewell to LIBORCME: SOFR ( CME:SR31! ) On June 30th, SEC Chairman Gary Gensler posted a 3-minute short video on Twitter. In this educational piece titled RIP LIBOR, he explains what the London Interbank Offered Rate (LIBOR) is, and why its passing away is actually a good thing for consumers. As CFTC Chairman in 2009-2014 and SEC Chairman since 2021, Mr. Gensler oversaw the investigation of the 2012 LIBOR scandal and its replacement by the Secured Overnight Financing Rate (SOFR) in 2021 as the benchmark interest rate for US dollar. Eurodollar and LIBOR Offshore Dollar, the US currency deposited in banks outside of the United States, is commonly known as Eurodollar. Traditionally, offshore dollars were traded mainly among European banks. The name sticks to these days and applies to funds in non-European banks as well. A key advantage of trading Eurodollar is the fact that it is subject to fewer regulations by the Fed, being outside of the US jurisdiction. London is the largest trading hub for Eurodollar. The London Interbank Offered Rate came into being in the 1970s as a reference interest rate in the Eurodollar markets. By 1986, the British Bankers' Association (BBA) began publishing the US Dollar LIBOR daily. The BBA Libor was calculated based on interest rates reported by 17 member banks who together represented the bulk of Eurodollar transactions. Libor has been widely used as a reference rate for many financial instruments, including: • Forward rate agreements • Interest rate futures, e.g., CME Eurodollar futures • Interest rate swaps and swaptions • Interest rate options, Interest rate cap and floor • Floating rate notes and Floating rate certificates of deposit • Syndicated loans • Variable rate mortgages and Term loans • Range accrual notes and Step-up callable notes • Target redemption notes and Hybrid perpetual notes • Collateralized mortgage obligations and Collateralized debt obligations How important was Libor? It is a reference rate in the documentation by private trade association International Swaps and Derivatives Association (ISDA), which sets global market standard for OTC derivative transactions. In 2008, 60% of prime adjustable-rate mortgages and nearly all subprime mortgages were indexed to the USD Libor in the US. Furthermore, American cities borrowed 75% of their money through financial products that were linked to the Libor. Libor has been the indispensable global benchmark for pricing everything from credit card debt to mortgages, auto loans, corporate loans, and complex derivatives. CME Eurodollar Futures In 1981, the Chicago Mercantile Exchange launched Eurodollar futures, the first ever cash-settled futures contract. It quickly became the most liquid contract by CME. At its peak, over 1,500 traders and clerks worked at the Eurodollar pit on CME trading floor. Not to be confused with the Euro currency, Eurodollar futures contracts are derivatives on the interest rate paid on a notional or "face value" of $1,000,000 time deposit at a bank outside of the United. It uses the 3-month USD Libor rate as its settlement index. The late Fred D. Arditti, CME economist, is credited as the brain behind Eurodollar futures. Eurodollar futures are priced as a Money Market instrument. The CME IMM index is used to convert a coupon-bearing instrument such as bank deposit, into a discounted instrument that does not make regular interest payments. For instance, a futures price of 95.00 implies an interest rate of 100.00 - 95.00, or 5%. The settlement price of a Eurodollar futures contract is defined to be 100.00 minus the official BBA fixing of 3-month Libor on the day the contract is settled. The 2012 LIBOR Scandal The LIBOR Scandal was a highly publicized scheme in which bankers at major financial institutions colluded with each other to manipulate the Libor rate. As the scandal came to light in 2012, investigators found that the banks had been submitting false information about their borrowing costs to manipulate the Libor rate. This allowed the banks to profit from trades based on the artificially low or high rates. A dozen big banks were implicated in the scandal. It led to lawsuits and regulatory actions. After the rate-fixing scandal, LIBOR's validity as a credible benchmark was over. As a result, regulators decided that Libor would be phased out and replaced. If you want to learn more about the LIBOR scandal, feel free to check out the 2017 bestseller by David Enrich: “The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History”. What is the SOFR In 2017, the Federal Reserve assembled the Alternative Reference Rate Committee to select a Libor replacement. The committee chose the Secured Overnight Financing Rate as the new benchmark for dollar-denominated contracts. The daily SOFR is based on transactions in the Treasury repurchase market, where firms offer overnight or short-term loans to banks collateralized by their bond assets ,similar to pawn shops. Unlike LIBOR, there’s extensive trading in the Treasury repo market, estimated at $4.8 trillion in June 2023. This theoretically makes it a more accurate indicator of borrowing costs. Moreover, SOFR is based on data from observable transactions rather than on estimated borrowing rates, as was the case with LIBOR. The Federal Reserve Bank of New York began publishing the SOFR in April 2018. By 2021, SOFR has replaced most of the LIBOR-linked contracts. The LIBOR committee officially folded up on June 30, 2023. Chairman Gensler apparently chose this day to post his RIP LIBOR video to mark the end of an era. The difference between Fed Funds Rate and SOFR Fed Funds Rate is set by the Fed’s FOMC meeting, and SOFR is published by the NY Fed. However, they are very different. • Fed Funds Rate is considered a risk-free interest rate, and only member banks have access to this ultra-low rate through the Fed’s discount window. • SOFR is a commercial interest rate where banks charge each other. The NY Fed publishes the rate based on transactions in the US Treasury repurchase market. SOFR is similar to LIBOR because they are both commercial interest rate benchmarks. On the other hand, Fed Funds Rate is a policy rate set by the US central bank. CME SOFR Futures and Options CME Group launched the 3-month SOFR futures and options contracts in May 2018. The contracts were based on the SOFR Index, published daily by the New York Fed. SOFR futures contracts are notional at $2,500 x contract-grade International Monetary Market (IMM) Index, where the IMM Index = 100 minus SOFR. At a 5.215 IMM, for example, each contract has a notional value of $13,037.50. CME requires a $550 margin per contract. An interest rate move by a minimum tick of 0.25 basis point would result in a gain or loss of $6.25. At the beginning, SOFR contracts traded side-by-side with the Eurodollar contracts. By 2021, Eurodollar liquidity has transitioned to SOFR contracts. By April 2023, All Eurodollar contracts were delisted, and the transition was completed. For all intended purposes, you could think of the SOFR futures as the same as the legacy Eurodollar contracts, with the only notable exception being the settlement index switched from LIBOR to SOFR. On June 30th, the daily trading volume and Open Interest of SOFR contracts were 4,443,245 and 9,310,433 contracts, respectively. On the same date, CME Group total volume and OI were 23,769,103 and 104,221,083, respectively. On the latest trade day, SOFR accounts for 18.7% of CME Group’s trade volume and 8.9% of its total open interest. Indeed, SOFR has successfully replaced Eurodollar as new No. 1 contract at CME and is arguably the most liquid derivatives contract in the world. Where We Are at the SOFR Market On June 30th, the JUN SOFR contract (SR3M3) expired and settled at 94.785. This translates to the JUN SOFR rate of 5.215 (100-94.785). SEP 2023 (SR3U3) is now the new lead contract. It settled at 94.595 and implied a forward SOFR rate at 5.405 (100-94.595). This shows that the futures market expects a rate increase in the next Fed meeting. Like Eurodollar futures, rising futures price will confer to declining SOFR rate, as rate is equal to 100 minus futures price. Similarly, a decline in futures price equates to a rising SOFR rate. Happy Trading. Disclaimers *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. CME Real-time Market Data help identify trading set-ups and express my market views. 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
Editors' picks
CME:SR31!Education
by JimHuangChicago
9
SOFR Futures Curve SOFR (Secured Overnight Financing Rate) is a benchmark interest rate that is based on the cost of borrowing cash overnight, collateralized by US Treasury securities. It is considered to be a replacement for the LIBOR (London Interbank Offered Rate) benchmark, which is being phased out by the end of 2021. SOFR futures are derivative contracts that allow market participants to trade on the expected future values of the SOFR rate. They are traded on the Chicago Mercantile Exchange (CME). SOFR futures prices are quoted in terms of the expected SOFR rate at the time the contract expires. For example, a SOFR futures contract expiring in March 2023 may be quoted at a price of 98.50, which would imply an expected SOFR rate of 1.50% at that time. These prices are used by market participants to hedge against interest rate risk and to speculate on the future direction of interest rates. The importance of SOFR futures lies in their use as a benchmark for a wide range of financial products, including loans, mortgages, and derivatives. As such, movements in SOFR futures prices can have significant implications for the broader financial markets. Traders and investors can use charts of SOFR futures prices to identify trends and patterns in the market and to make informed trading decisions. The ability to analyze and interpret these charts is therefore a valuable skill for anyone involved in the financial markets. Futures curves are a series of futures contracts for a specific underlying asset with different delivery dates. The SOFR futures curve represents the market's expectation of future SOFR rates over time. It shows the current market pricing for SOFR futures contracts with different maturities. Each point on the curve represents a future SOFR contract with a specific expiration date. Reading the SOFR futures curve can provide important insights into market expectations about the future path of interest rates. The shape of the curve can provide signals about market sentiment and economic conditions. In a typical yield curve, a steep upward slope suggests the market expects interest rates to rise in the future, while a flat or inverted curve suggests the opposite. The same principles apply to futures curves. The SOFR futures curve is particularly important for markets as it serves as a benchmark for pricing various financial products, such as swaps and interest rate derivatives. Changes in SOFR futures prices can have a significant impact on the broader financial markets and the economy as a whole. As such, traders, investors, and policymakers closely monitor the SOFR futures curve to gain insights into the market's outlook for interest rates and to inform their investment and policy decisions.
CME:SR31!Education
by shamscom
Rates Obsession - a pro interest rates set-up on TradingView Interest rate pricing has a huge effect across many financial markets at present – the correlation between short-term rates, rates volatility and the USD is certainly evident. However, with such a big window for increased volatility in interest rates pricing, as traders try and price the prospect of a 25bp or 50bp hike at the 22 March FOMC, as well as peak fed funds pricing, could increased pricing result in a big move in the USD and NAS100? In the video, we look at how we can look at the fed funds curve and understand ‘what is priced in’ – we look at how to measure the degree of cuts priced in for a specific period of time, and how to look at implied volatility in bond markets – and, why it is important for FX and index traders? Interest rates and short-term US Treasury bonds are the first derivative and so many markets take their direction from these inputs - hopefully, this gives some understanding of how you can use TradingView more effectively to assess these inputs.
TVC:US05YEducation
by Pepperstone
4
Interest Rate Futures and the First Cash Settled ContractCME: Eurodollar Futures ( CME:GE1! ), CBOT: Treasury Bond Futures ( CBOT:ZB1! ) This is the second installment of the Holidays series “Celebrating 50 Years of Financial Futures.” Before 1970, commercial banks did business by accepting short-term deposits at low regulated rates and offering longer-term business and personal loans at higher rates. Double-digit inflation changed all that. Federal Reserve eliminated interest rate ceilings on time deposits under 3 months in 1970, and on those over 3 months in 1973. Banks incurred huge loss from a negative spread with deposit rate higher than loan rate. Fast forward to 2022, we find ourselves in a high inflation and an inverted yield-curve environment again. The overnight Fed Funds rate (4.00%) is nearly 500 basis points higher than the 10-Year Treasury Note (T-Note) yield (3.51%) as of December 4th. Rising interest rates increase the financing cost from businesses to households alike. The Fed’s six consecutive rate hikes from March to November 2022 contributed to significant drawdown in the value of stocks, bonds, and commodities. If you bought $100,000 of Treasury bonds (T-bonds) in January, its market value could drop as much as 30% with bond yield jumping to 3.5% from 1.5%. If you owe $10,000 in credit card debt, monthly interest rate charge could run up to 25% a year from 15%. Like foreign exchange, interest rate is not a physical commodity. It is a right to holders of an interest-bearing product, and a liability to its issuer. The above examples show that both buyer and seller could have large financial exposure to changes in interest rates. To hedge interest rate risks, futures contracts were invented in Chicago futures markets, namely, Chicago Board of Trade (CBOT) and Chicago Mercantile Exchange (CME). CBOT Ginnie Mae Futures Government National Mortgage Association is a US government supported entity within the Department of Housing and Urban Development (HUD). The nickname “Ginnie Mae” come from its acronym GNMA. GNMA issues Ginnie Mae certificates, a type of mortgage-backed passthrough securities. Investors receive interest and principal payments from a large pool of mortgage loans. Since timely payments are backed by the full faith and credit of the US government, Ginnie Mae bonds are considered default risk free and have an AAA credit rating. Although they are free from default risk, holders of Ginnie Mae bonds are exposed to interest rate risk, as bond price moves inversely with bond yield. Sensing the need from savings and loans, mortgage bankers, and dealers of mortgage-backed securities, CBOT launched Ginnie Mae Bond Futures in October 1975. This was the first time a futures contract was based on an interest-bearing instrument. At contract expiration, futures buyers would receive actual Ginnie Mae bonds from futures sellers. While the Ginnie Mae contract has since delisted, it paved the way for the successful launches of other interest rate futures contracts in the 1970s and 1980s. CME Treasury Bill Futures Treasury bills (T-bills) are short-term securities issued by the US Treasury to help finance the spending of the federal government. New T-bills with maturities of thirteen, twenty-six, and fifty-two weeks are issued on a regular basis. The secondary market for T-bills is active, making them among the most liquid of money market instruments. In May 1972, the International Monetary Market (IMM) division of the CME launched foreign exchange futures, the first financial futures contract. In January 1976, the IMM listed futures contract on 90-day (13-week) T-bills. It was the first futures contract for a money market instrument. Nobel laureate Milton Friedman rang the opening bell on T-Bill Futures launch day. Upon maturity, seller is required to deliver T-bills with a $1 million face value and thirteen weeks left to maturity. Contracts for delivery in March, June, September, and December are listed. At any one time, contracts for eight different delivery dates are traded. T-bills do not pay explicit interest. Instead, they are sold at a discount to redemption value. The difference between the two prices determines the interest earned by a buyer. T-bill yields are quoted on a discount basis. Futures contracts are quoted on an index devised by the IMM, by subtracting the discount yield from 100. Index values move in the same direction as T-bill price. A rise in the index means that the price of a future delivered T-bill has risen. The formula for calculating the discount yield is: Discount Yield = ((Face Value - Purchase Price) / Face Value) X (360 / Days to Maturity) CBOT Treasury Bond Futures In August 1977, CBOT launched futures contracts on the T-Bonds. At the time, the birth of T-bond futures hardly seemed like a breakthrough. Financial futures were still in their infancy. Soybeans and corn were king in the CBOT trading pit. But all that changed in October 1979 when the Fed moved to strangle runaway inflation with a revised credit policy. The Saturday night massacre, as it was dubbed, ended decades of interest-rate stability. Interest rates bounced like a Ping Pong, affected by money supply, world events and inflation. Trading of T-Bond futures took off like a rocket. In addition to the traditional T-Bond futures (ZB) with 15-year maturity, CBOT also lists a 20-Yr T-Bond futures (TWE) and an Ultra T-Bond (UB) with 30-year maturity. In the Mid-curve, the T-Note suite includes 2-Yr Note (ZT), 3-Yr Note (Z3), 5-Yr Note (ZF), 10-Yr Note (ZN), and Ultra 10-Yr T-Note (TN). On December 2, 2022, daily volume of the first T-Bond futures was 388,370 contracts, while open interest reached 1,170,800 contracts. Daily volume of all CME Group interest rates futures and options contracts (IR) reached 13,786,454 lots, contributing to 54.1% of Exchange total. IR open interest was 78,244,297 lots, representing 70.4% of Exchange total. Cash Settlement Comes to Futures Market Up until now, futures contracts were settled by physical delivery of the underlying commodities. • Buyer of 1 CME Live Cattle may pick up 35 cows (40,000 pounds) from Union Stockyard in Chicago southside or take delivery at a cattle auction in Wyoming. • Seller of 1 CBOT Soybean contract would ship 5,000 bushels of the grain to a licensed grain elevator in Illinois, Iowa, or Kansas. • For CME Pork Bellies, settlement may involve title changes of warehouse receipt from seller to buyer for 40,000 pounds of the frozen meat in a cold storage. Even financial futures required physical delivery at that time. • For British Pound/USD contract, it is £62,500 in pound sterling. • For Ginnie Mae contract, it is $10 million worth of Ginnie Mae certificate. • T-Bond futures calls for delivery of treasury bonds with face value of $100,000 and maturity of no less than 15 years. As we discussed in “The Bogeyman in Financial Contracts”, there is inherent risk in the physical delivery mechanism. No matter how robust its original design is, industry evolution could outgrow capacity, rendering delivery failure under extreme market conditions. In December 1981, CME launched Eurodollar futures, the first contract with cash settlement feature. Cash settlement alone can be viewed as a financial revolution. Why? • It significantly reduces transaction cost, which in turn enhances the risk transfer or hedging function in futures. • It allows non-commercial users to participate in futures. Broader participation improves liquidity, and the price discovery as well as risk management functions. CME Eurodollar Futures Eurodollars are dollar-deposits held with banks outside of the US. There are two types of Eurodollar deposits: nontransferable time deposits and certificates of deposit (CDs). Time deposits have maturities ranging from 1 day to 5 years, with 3 months being the most common. Eurodollar CDs are also commonly issued with maturities under a year. Technically, buyer of Eurodollar future contract is required to place $1,000,000 in a 3-month Eurodollar time deposit paying the contracted interest rate on maturity date. However, this exists only in principle and is called a “Notional Value”. Cash settlement means that actual physical delivery never takes place; instead, any net changes in the value of the contract at maturity are settled in cash on the basis of spot market Eurodollar rates. Unlike T-bills, Eurodollar deposits, the underlying of Eurodollar futures, pay explicit interest. The interest paid on such deposit is termed an add-on yield because the depositor receives the face amount plus an explicit interest payment when the deposit matures. In the case of Eurodollar, the add-on yield is the London Interbank Offered Rate (LIBOR), which is the interest rate at which major international banks offer to place Eurodollar deposits with one another. Like other money market rates, LIBOR is an annualized rate based on a 360-day year. Price quotations for Eurodollar futures are based on the IMM Eurodollar futures price index, which is is 100 minus the LIBOR. In the following four decades, all financial futures are designed with cash settlement. Eurodollar futures paves the way for equity index futures, which were launched in February 1982 at Kansas City Board of Trade (KCBT) and April 1982 at CME. Without cash settlement, can you imagine how to deliver 500 different stocks on a market-weighted basis for the S&P 500 futures? Or 2,000 stocks for the Russell 2000? Happy Trading. Disclaimers *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. CME Real-time Market Data help identify trade set-ups and express my market views. If you have futures in your trading portfolio, check out on CME Group data plans in TradingView that suit your trading needs www.tradingview.com
Editors' picks
CBOT:ZB1!Education
by JimHuangChicago
11
The concept of trend lines, support and resistance Today, I am going to explain the concept of trend lines, support and resistance. Above is the weekly chart of the EUR/USD, period between 2017 and 2022. The resistance or support level is where the price gets rejected at least twice. After that, traders can draw a line connecting those swing highs/lows, which later turn to be the resistance or support. This line can be horizontal or sloping, thus called trend line. A trend line connecting 2 lower highs or more is called descending and considered a resistance. A trend line connecting 2 higher lows or more is called ascending and considered support. Broken resistance becomes a support level and vice versa. Let's take the example chart above and explain the drawings for a better understanding: 1) In January 2017, EUR/USD bottomed at 1.0350 and has been trading above that level since then, until 2022. In the current year, the pair tested the mentioned price more than twice and bounced again. But eventually, sellers were able to break through this support, which later on in July, turned to be a resistance. Buyers tried to break through that level but failed to do so, and the price kept on going further down. 2) During the pandemic in March 2020, demand for safe assets surged, causing the Euro to trade as low as 1.0630 where buyers were met and made a quick rebound. In 2022, the Russia-Ukraine war has put a huge pressure on the EUR/USD, resulting in a strong bearish move. Sellers were able to break the 1.0630 level successfully, which later turned to a resistance level. 3) I highlighted the main 3 parallel trend lines/channels throughout the 2018-2022 period 1: A very clear lower highs/lower lows pattern indicating a bearish trend. 2: Once the 1.0630 support was met, buyers were able to create a higher highs/higher lows pattern indicating a bullish trend reversal. 3: However, in summer 2021, the pattern was broken and we started to notice trend exhaustion indicated by a failure to make higher highs and the market entered a bearish trend again inside a descending channel till present. I hope the drawings and explanations are clear. Will be happy to answer any question. Thank you
Education
by RamziAbouAbdallah-CMT
EURO under pressure - Key element to watchEURO under pressure - Key element to watch Context : Since 2000 EUR/USD is evolving between 0,82 and 1,60 providing two clear floor and cap level following the trend of global macro economy and the strategies deployed in the differents major central banks. The last past weeks following the decision to lower the Quantative Easing, the different actions took in the world in order to control the inflation and the good figure confirming the pursuit of the accumulation of the growth (even slower than last year) in the develop countries - The consensus for the Euro were quiet clear => main research highlighted 1,08/1,12 as strong support area and 1,18/1,23 as strong resistance for a further trading range without significant element for EUR or USD to take significant advantage regarding Growth, inflation and monetary policy. Today the situation is a bit different with less visibilty regarding the situation in Ukraine and even if we can exclude potential risk of global war, we can't ignored the risk about bilateral sanction between NATO countries and Russia. It means significant problem with energy/metals/commodities supply and price, political destabilisation, cyber attack, etc... This kind of modification take time to be absorbe and modified in order to set up a new strategy were russia will stay isolated from global economy for a while. The first economy to be impacted will be definitely the Europe in this crisis and the EURO since one week is in a free fall mode. So what to understand from EURUSD chart and what to focus on? : - Only a Weekly Chart Basis 1/ The previous upside trend ABC 0,82 to 1,60 has been follow by a consolidation in ABC towards 1,02 (or a construction of the long-term downside swing within a huge triangle) 2/ For now the ABC downside pattern within the bearish channel seems to be finished with the test of the 1,02 support - Then we are evolving within a range/triangle dynamic (Blue Frame) ---> That the graphical situation illustrating the context above. 3/ If the ABC downside pattern is not finished we gonna see a downside breakout from the triangle/range structure on going (inside the blue frame) to open further downside risk ----> Risk = Irregular running Range (Test of the 1,0075/0,9750) ----> Risk = poursuit of the bearish channel within a complex ABC X ABC pattern towards 0,8450 4/ RSI indicators is approaching support but didn't reached the previous oversold area where bullish reaction started = It is more likely to see more bearish momentum to be developed. 5/ Moving averages are now capping the market at 1,1530 Analysis Regarding the key elements and giving more weight to the Waves structures and the recurrence of Fibonacci levels, we can still giving more credit to see a development of a further trading range (blue frame) than a free fall of the Euro within the bearish channel towards 0,8450. Where it is more tricky to to have conviction is between a range in irregular with the test of parity before swinging up or triangle pattern with 1,0750 as key support before developing a new upside swing The key resistance is for now clearly set at 1,1530 and only a break out of this resitance can lower the downside risk significantly. Trading => Intraday/multi days traders will use 1,0750 as stop loss level to catch the dip and play agressive recovery with for now the Moving Average as Target to watch => Mid-term Institutional trader seems already in restructuration of the strategy by activating action to hedge the commodities upside risk and the pressure on Europe, so i would say that the hedge in place is between 1,0750/0,97 for the downside risk and 1,1530 (Neutrality area protection to adjust option)
Education
by JeanJean1983
How to make money with price actionSo you want to get into price action? Not fundamentals ey. But then one HAS to do all this backtesting, there is no dodging it. Can't go into "TA" to dodge the FA work, and then want to also dodge the stat work xd No magic trick here. Let's get started immediately. EURUSD 2020 covid trend (can't 100% dodge fundas, always good to know why we're going in a direction): EURUSD 2018-2019 "thing" (trade war uncertainty and erratic tweets): EURUSD 2017 trend: We are starting to see trends last 1-2 years in recent history, so not much point looking at a 5Y chart. It's also silly to be super zoomed in on some "intraday" or "swing trading" chart with no clue what is really going on. EURUSD 2015-2016 ranging 2 years: EURUSD 2014 violence some may remember: Day gamblers looking for "10 pips" that hold bags were happy to go through a 3500 pips loss. Still has not recovered. I can only imagine the incredible pain loss averse gamblers must have gone through. The pain not only never ends but it just keeps getting worse and worse and worse. Just no chance to breathe, only unbearable pain. Well that's interesting, why am I licking my lips? EURUSD in 2012-2013 does not look very fun: EURUSD 2011 downtrend Hey, starting to see some recurrent things here... EURUSD 2010 uptrend Backtesting tip: Doing it while playing a turn based game (alt tab between turns), or watching something that requires little attention, working out (between sets), "afk farm" games too... No one lasts with "motivation", we all have to find tricks. EURUSD 2010 downtrend And before that, we go to the 2000s era where FX was popular with hedge funds and trends lasted more than 1 year. 2008-2013 saw most FX funds disappear. Another tip: Maybe fundamentals can help predict when a trend will last, and avoid failing on this sad 3 impulses downtrend. It worked for the Yen a few years ago when the BOJ almost literally told traders "Hey if you short our currency we will give you money". And another tip: Eyeball backtesting. Have an idea? Want to know if it is worth digging in? Well don't just go full fanatical try hard! Do not spend hours and hours writing every detail in excel. Eyeball it with approximate numbers. Takes seconds. Then 2 choices appear: - Onto something ===> Go for the details - Nah it's nothing ===> Congratulation you did not waste tons of time on nothing (small time loss) Limiting losses, it's also valid with your time. How about I go look at the GBPUSD in the 80s ey? GBPUSD downtrend in 1980-1981 Aaaaaaaaaaand same story as usual ;) Repeat this 10 times, for a total of about 100 excel lines and ~25 trends. Then write some rules, and go backtest them on other charts. Because yes, the major currency pairs (USD, EUR, JPY, GBP, AUD, CAD, CHF, NZD, CNH, MXN, SEK) more or less work the same, but don't take my word for it. Choices appear. Does the aspiring money manager want to only go for 3 impulses? And then miss all the big winners? Does he want to sacrifice winrate for bigger reward to risk ratios? Does he want a higher winrate (noob). Sometimes there are 5 impulses, does he (or she) go for 5? Or consider it is worth it to give up some winners? Weak hands or strong hands once in a trending winner? Most people have weak hands with winners but doesn't mean one has to absolutely ALWAYS hold. Holding all the time and letting it retrace hard would probably be a mistake. The noob that took the time (really it would barely take a few days of honest work) could already get started. I said get started, I don't know if it would make money. Maybe? Clearly 2R is a beginner thing. What if you could get 38% winrate with 2R and 22% winrate with 4R! Clearly worth it, but as always the majority of people are loss averse and choose the bad choice, trading is just not for them. One has to some stats, have a good working memory for many reasons, be able handle numbers like "I3 - .6 - Fast - EURUSD" (2 variables 2 constants). If someone cannot quickly juggle with numbers this is the wrong job. The variance is important for example, if an average pullback is .5 but 45% are in the .25-.45 range, and 45% in the > .8 range, here there are 2 groups to separate. Obviously here we would want to only go for the .25-.45 range, get a 4 or 5 or even greater reward to risk, let losers chase high winrate with gigantic stops. If 30% of the time the price bottoms in a .2 range and extends 1 at least, here that's a 5 risk to reward on double the breakeven winrate. Then what happens to the 70% who cares? A few bottom further away, a few turn into a new opposite trend, a few go sideways, they all stink. All for illustrative purposes, but it's typically what happens. I don't really know. What about some ways to increase the winrate, tips, and for those that have a hard time sticking to rules, especially cutting losses and holding winners? Surely, Mr Renev that said motivation did not work knows some tricks to fix all of that. Find tricks... I know no tricks in fixing gross mediocrity, just follow the rules, non negotiable. It's really simple. Can't do it ==> Wrong job. Can mediocre make money? I don't know I do not deal with mediocre. Also we can try to zoom in, but ideally only after having mastered the timeframe presented in this article. This is what I do, I zoom in. Let's take my 2020 idea "The pound is a 500 years old ponzi going to zero" So here is the full chart (1 year): Go H4 on I3: Then we can even go to H1: The target is 450 "pips" which for GBPAUD is in the 1 week ATR range, but better than the average. In a recent "tips" idea I showed: - Day gamblers working on a 8 hour ATR realistically need a PF of 1.15 (very best scenario) - 1.25 just to breakeven! - Swing Gamblers on a 2D ATR need a PF of 1.05 on EURUSD to breakeven. - And I won't look at scalpers because they can't possibly be serious. I think they are actually trolls. With this weekly ATR a PF of 1.02-1.03 is the breakeven rate. I am not bleeding much money compared to going long term. Day gamblers miss out on so much, AND they need an exceptional profit factor, ok not that amazing either (for day gambling it is) JUST TO BREAKEVEN. All that wasted money, how does it not drive them nuts? They're just throwing away a 20% margin. I just want to pull my eyelids out. To make money with Forex, many questions will have to be answered, and for this only one way, as we say in France "Va falloir aller au charbon!" (literally "Have to go to the coal"), means it will take time and effort and actively getting things done. So many questions: What trends can be eliminated? What trends SHOULD be eliminated? What impulses to go for? What is the optimal WR & RR compromise area? Do I just go for ABC first? Where to exit? What are solid Support and Resistance? Do I go for uptrends starting from a multi year low only (to dodge ranges)? How many ATR are each wave? What does 2 extend to? What other questions could I ask? How do I get inspiration to find more questions? Do I exploit this strategy enough? Can I optimise it more or should I look for something else? Hey and each of these questions will direct to more questions. "When I have this, this, and this, where do I exit". Like "Where I'm in the presence of a creeper trend", "fast trend", "clean trend"... Each trend has its own set of questions, all the same I listed, plus a few specific ones. It is essential to approach the study of markets in general and charts more specifically in manageable chunks. All while following economic news and checking on charts regularly. A day that makes sense could be one with 4 hours of backtesting, 4 hours of analysing charts, 4 hours of "fun" watching videos and reading and writing (all about investing), and 4 hours of time to eat and do unrelated stuff. All of this for 1 simple strategy. Answering these questions is a task to accomplish over years.
Education
by MrRenev
UNDERSTAND MACRO-FINANCE!WHILE ALL PRICES HAVE RISEN SINCE 1913 (THE CREATION OF THE FEDERAL RESERVE), SOME HAVE DONE SO MORE THAN OTHERS! THE FINANCIAL SYSTEM HAS BECOME SO LARGE AND COMPLEX THAT IT IS IMPOSSIBLE TO TRACE THE ACTUAL SIZE OF THE ENTIRE MONEY SUPPLY ( M3 )! WHEN IT COMES TO ESTIMATION, YOUR GUESS IS AS GOOD AS ANY EXPERT'S! THE ONLY WAY TO DETERMINE IF M3 IS RISING OR FALLING IS BY LOOKING AT THE PRICE OF OIL , THE PRICE OF THE 1-MONTH TREASURY BILL AND THE YIELD CURVE, ALL OF WHICH INDICATE THERE WAS A DEFLATIONARY PERIOD AT THE BEGINNING OF 2020! STOCKS, WHICH ARE THE MOST FINANCIALIZED ASSET CLASS, HAVE SEEN THE GREATEST INCREASE IN PRICE, BECAUSE MUCH OF THE CREDIT THAT THE FINANCIAL SYSTEM CREATES BIDS UP THEIR PRICE BEFORE ANYTHING ELSE! COPPER AND OIL , THE PRICES OF WHICH ARE MUCH MORE IMPACTED BY SUPPLY AND DEMAND CONDITIONS WITHIN THE REAL ECONOMY, HAVE BARELY MOVED IN COMPARISON AND REFLECT THE LACK OF REAL ECONOMIC GROWTH FOR THE PAST HALF CENTURY! GOLD , FOR ANYONE WHO CONSIDERS ITS PRICE EVEN REMOTELY ELEVATED, HAS BARELY EVEN KEPT UP WITH THE INCREASE IN M2 (WHICH INCLUDES PHYSICAL CURRENCY, CHEQUING ACCOUNTS AND SOME SAVINGS ACCOUNTS). THROUGHOUT HISTORY, THE MARKET CAPITALIZATION OF GOLD HAS ALWAYS EVENTUALLY MATCHED THE TOTAL MONEY SUPPLY, AND THEREFORE THE PRICE OF GOLD MUST INCREASE BY SEVERAL TIMES EVEN FROM HERE TO BE VALUED CORRECTLY!
TVC:SPXEducation
by UnknownUnicorn4195243
EURUSD | Falling Wedge & Trend Line...!!EURUSD (Update) In 4h Chart, EURO Has been forming Falling Wedge Pattern. At the Moment, It's Heading towards the Major Trendline. (Still in Uptrend) Now There Are Two Possible Scenarios...!! 1- If Trendline Broken Down, It Might test the 1.102** (Fib 38.2%) Area. 2- If Bulls Hold the Trendline, & Bounced Back, Expecting Wedge Breakout. In Case of Wedge Breakout, EURO Might test the 1.138** Area (Major Resistance) So Be Ready for Both Bearish & Bullish Scenarios..!! Please like the idea for Support & Subscribe for More ideas like this and share your ideas and charts in Comments Section..!! Thanks for Your Love & Support..!
Education
by Faibik
7
PETER SCHIFF VS JEFF SNIDER!THIS POST WILL HELP YOU UNDERSTAND THE COMPETING VIEW POINTS ON THE FUTURE PERFORMANCE OF THE U.S. DOLLAR RELATIVE TO OTHER CURRENCIES! JEFF SNIDER'S POSITION ON THE DOLLAR: THE U.S. DOLLAR IS STRONG BECAUSE OF A SHORTAGE OF DOLLARS WORLDWIDE TO CONDUCT GLOBAL TRADE IN, DUE TO THE FED'S INABILITY TO TRULY SATISFY DEMAND FOR U$Ds, AND WILL CONTINUE TO STRENGTHEN AS LONG AS FOREIGN CURRENCIES ARE SOLD TO BUY U$Ds. PETER SCHIFF'S POSITION ON THE DOLLAR: THE U.S. DOLLAR IS STRONG BECAUSE OF AN IRRATIONAL FAITH IN THE U.S. ECONOMY BY FOREIGNERS AND THE WILLINGNESS OF PRODUCTIVE ECONOMIES WORLDWIDE TO USE AND ACCEPT PRINTED U.S. DOLLARS IN GLOBAL TRADE, SUBSIDIZING THE CONSUMPTION AND TRADE DEFICIT OF THE U.S. JEFF SNIDER'S POSITION ON U.S. TREASURIES: THE U.S. GOVERNMENT BOND MARKET HAS BEEN BID HIGHER FOR DECADES AS U.S. TREASURIES PROVIDE THE SAFEST SOURCE OF U$Ds AND ARE THE MOST ACCEPTED FORM OF COLLATERAL FOR U$D LEVERAGE. IF U$D LIQUIDITY BECOMES CONSTRAINED ENOUGH WORLDWIDE, A SELL-OFF IN THE GLOBAL U.S. TREASURY MARKET CAN OCCUR AS THEY ARE SOLD FOR THE IMMEDIATELY NEEDED U$Ds, RAISING INTEREST RATES THROUGHOUT THE FINANCIAL SYSTEM AND THE ECONOMY. PETER SCHFF'S POSITION ON U.S. TREASURIES: THE FEDERAL RESERVE'S ARTIFICIAL SUPPRESSION OF INTEREST RATES SINCE THE 1990's THROUGH QE , COUPLED WITH THE USE OF U$Ds IN GLOBAL TRADE AND THE IRRATIONAL FAITH BY FOREIGNERS THAT THE FEDERAL RESERVE COULD SHRINK ITS BALANCE SHEET AND NORMALIZE INTEREST RATES HAS LED TO FOREIGN CAPITAL BIDDING UP THE PRICE OF U.S. GOVERNMENT BONDS. ONCE THAT FAITH IN THE DOLLAR'S SCARCITY IS DIMINISHED AND PRODUCTIVE ECONOMIES WORLDWIDE REFUSE TO HOLD/ACCEPT U$Ds AND SUBSIDIZE AMERICAN CONSUMPTION, U.S. TREASURIES WILL BE SOLD-OFF, RAISING INTEREST RATES THROUGHOUT THE FINANCIAL SYSTEM AND THE ECONOMY. JEFF SNIDER'S VIEW ON THE FUTURE OF THE DOLLAR: AS LONG AS THE FEDERAL RESERVE FAILS TO ADDRESS THE COMPLEX NEED FOR U$Ds AND AS LONG AS THE U$D REMAINS THE WORLD RESERVE CURRENCY, DEMAND WILL OUTPACE SUPPLY, AND THE U$D WILL CONTINUE TO STRENGTHEN AGAINST OTHER CURRENCIES UNTIL A CULMINATION OF DEFAULTS AND RESTRUCTURING RAVAGES THE COUNTRIES WITH THE MOST SEVERE LACK OF U$Ds, SENDING THE U$D SKY HIGH, LEADING TO AN ABANDONMENT OF THE U$D AS WORLD RESERVE CURRENCY. PETER SCHIFF'S VIEW ON THE FUTURE OF THE DOLLAR: ONCE PRODUCTIVE COUNTRIES WORLDWIDE BECOME DISILLUSIONED WITH THE AMOUNT OF EASILY CREATED U$Ds CHASING PRICES, THE APPETITE TO ACCEPT THOSE U$Ds IN EXCHANGE FOR GOODS/SERVICES AT CURRENT PRICES WILL DIMINISH, ALONG WITH THE DESIRE TO HOLD U$Ds, U.S. ASSETS AND U.S. TREASURIES. ONCE U$Ds AND U$Ds OBTAINED THROUGH THE SALE OF U.S. ASSETS AND U.S. TREASURIES ARE SOLD FOR OTHER CURRENCIES, THE U$D WILL WEAKEN SIGNIFICANTLY, FURTHER INCREASING THE PRICES OF IMPORTED GOODS/SERVICES, SENDING THE U$D INTO AN INFLATIONARY SPIRAL, MARKING ITS END AS THE WORLD RESERVE CURRENCY. IN THIS CASE, IF THE FEDERAL RESERVE MONETIZED THE SOLD U.S. TREASURIES TO PREVENT INTEREST RATES FROM RISING, THIS COULD EASILY LEAD TO HYPERINFLATION. -THE NOTES ON THE CHART REFLECT KEY EVENTS THAT MARKED THE PEAK IN THE U$D's EXCHANGE RATE VS OTHER CURRENCIES
INDEX:DXYEducation
by UnknownUnicorn4195243
PETER SCHIFF VS JEFF SNIDER!THIS POST WILL HELP YOU UNDERSTAND THE COMPETING VIEW POINTS ON THE FUTURE PERFORMANCE OF THE U.S. DOLLAR RELATIVE TO OTHER CURRENCIES! JEFF SNIDER'S POSITION ON THE DOLLAR: THE U.S. DOLLAR IS STRONG BECAUSE OF A SHORTAGE OF DOLLARS WORLDWIDE TO CONDUCT GLOBAL TRADE IN, DUE TO TO FED'S INABILITY TO TRULY SATISFY DEMAND FOR U$Ds, AND WILL CONTINUE TO STRENGTHEN AS LONG AS FOREIGN CURRENCIES ARE SOLD TO BUY U$Ds. PETER SCHIFF'S POSITION ON THE DOLLAR: THE U.S. DOLLAR IS STRONG BECAUSE OF AN IRRATIONAL FAITH IN THE U.S. ECONOMY BY FOREIGNERS AND THE WILLINGNESS OF PRODUCTIVE ECONOMIES WORLDWIDE TO USE AND ACCEPT PRINTED U.S. DOLLARS IN GLOBAL TRADE, SUBSIDIZING THE CONSUMPTION AND TRADE DEFICIT OF THE U.S. JEFF SNIDER'S POSITION ON U.S. TREASURIES: THE U.S. GOVERNMENT BOND MARKET HAS BEEN BID HIGHER FOR DECADES AS U.S. TREASURIES PROVIDE THE SAFEST SOURCE OF U$Ds AND ARE THE MOST ACCEPTED FORM OF COLLATERAL FOR U$D LEVERAGE. IF U$D LIQUIDITY BECOMES CONSTRAINED ENOUGH WORLDWIDE, A SELL-OFF IN THE GLOBAL U.S. TREASURY MARKET CAN OCCUR AS AS THEY ARE SOLD FOR THE IMMEDIATELY NEEDED U$Ds, RAISING INTEREST RATES THROUGHOUT THE FINANCIAL SYSTEM AND THE ECONOMY. PETER SCHFF'S POSITION ON U.S. TREASURIES: THE FEDERAL RESERVE'S ARTIFICIAL SUPPRESSION OF INTEREST RATES SINCE THE 1990's THROUGH QE, COUPLED WITH THE USE OF U$Ds IN GLOBAL TRADE AND THE IRRATIONAL FAITH BY FOREIGNERS THAT THE FEDERAL RESERVE COULD SHRINK ITS BALANCE SHEET AND NORMALIZE INTEREST RATES HAS LED TO FOREIGN CAPITAL BIDDING UP THE PRICE OF U.S. GOVERNMENT BONDS. ONCE THAT FAITH IN THE DOLLAR'S SCARCITY IS DIMINISHED AND PRODUCTIVE ECONOMIES WORLDWIDE REFUSE TO HOLD/ACCEPT U$Ds AND SUBSIDIZE AMERICAN CONSUMPTION, U.S. TREASURIES WILL BE SOLD-OFF, RAISING INTEREST RATES THROUGHOUT THE FINANCIAL SYSTEM AND THE ECONOMY. JEFF SNIDER'S VIEW ON THE FUTURE OF THE DOLLAR: AS LONG AS THE FEDERAL RESERVE FAILS TO ADDRESS THE COMPLEX NEED FOR U$Ds AND AS LONG AS THE U$D REMAINS THE WORLD RESERVE CURRENCY, DEMAND WILL OUTPACE SUPPLY, AND THE U$D WILL CONTINUE TO STRENGTHEN AGAINST OTHER CURRENCIES UNTIL A CULMINATION OF DEFAULTS AND RESTRUCTURING RAVAGES THE COUNTRIES WITH THE MOST SEVERE LACK OF U$Ds, SENDING THE U$D SKY HIGH, LEADING TO AN ABANDONMENT OF THE U$D AS WORLD RESERVE CURRENCY. PETER SCHIFF'S VIEW ON THE FUTURE OF THE DOLLAR: ONCE PRODUCTIVE COUNTRIES WORLDWIDE BECOME DISILLUSIONED WITH THE AMOUNT OF EASILY CREATED U$Ds CHASING PRICES, THE APPETITE TO ACCEPT THOSE U$Ds IN EXCHANGE FOR GOODS/SERVICES AT CURRENT PRICES WILL DIMINISH, ALONG WITH THE DESIRE TO HOLD U$Ds, U.S. ASSETS AND U.S. TREASURIES. ONCE U$Ds AND U$Ds OBTAINED THROUGH THE SALE OF U.S. ASSETS AND U.S. TREASURIES ARE SOLD FOR OTHER CURRENCIES, THE U$D WILL WEAKEN SIGNIFICANTLY, FURTHER INCREASING THE PRICES OF IMPORTED GOODS/SERVICES, SENDING THE U$D INTO AN INFLATIONARY SPIRAL, MARKING ITS END AS THE WORLD RESERVE CURRENCY. IN THIS CASE, IF THE FEDERAL RESERVE MONETIZED THE SOLD U.S. TREASURIES TO PREVENT INTEREST RATES FROM RISING, THIS COULD EASILY LEAD TO HYPERINFLATION. -IT IS IMPORTANT TO NOTE THAT THE 0% YIELD ON U.S. 10 YEAR GOVERNMENT BOND IS A DANGER ZONE IN EITHER CASE, AS FOREIGN ENTITIES WILL NO LONGER HAVE AN INCENTIVE TO HOLD U.S. TREASURIES, PREFERRING CASH, GOLD OR OTHER ASSETS OVER A NEGATIVE YIELDING BOND. -THE NOTES ON THE CHART OFFER CONTRIBUTING FACTORS AS TO WHY YIELDS BOTTOMED OR PEAKED AT VARIOUS POINTS DURING THIS BOND BULL MARKET.
TVC:US10YEducation
by UnknownUnicorn4195243
UNDERSTAND THE EURODOLLAR!THE EURODOLLAR FUTURES CONTRACT REFLECTS THE L.I.B.O.R. INTEREST RATE (A BENCHMARK FOR THE INTEREST RATE AT WHICH MAJOR BANKS LEND TO EACH OTHER)! WHEN THE PRICE OF THE CONTRACT INCREASES, THE L.I.B.O.R. INTEREST RATE IS DECREASING, WHEN THE PRICE FALLS, IT IS INCREASING! THE PERIOD I HAVE HIGHLIGHTED IN THIS POST IS THE PERIOD OF DOLLAR ILLIQUIDITY THAT OCCURRED IN THE LATE 00s-EARLY 10s! AS THE FEDERAL RESERVE INTERVENED AND PROVIDED LIQUIDITY, L.I.B.O.R. WAS SUPPRESSED, AND THE SIZE OF THE INTERVENTION ALMOST PUSHED THE RATE TO 0! THE SIZE OF THE INTERVENTION IS IMPORTANT IN THAT IT REFLECTS THE SIZE OF THE PROBLEM, INDICATING THAT THE GLOBAL LACK OF DOLLARS WAS SEVERE! WHILE THE INTERVENTION SUCCEEDED IN SUPPRESSING L.I.B.O.R. OVERALL, THERE WERE SEVERAL PERIODS DURING WHICH THE LACK OF AVAILABLE U$Ds CAUSED LENDING BETWEEN FINANCIAL INSTITUTIONS TO CONTRACT, INCREASING L.I.B.O.R., CAUSING A NUMBER OF PROBLEMS AND FORCING FURTHER ACTION BY THE FEDERAL RESERVE! THE 2008 GLOBAL FINANCIAL CRISIS WAS NOT NECESSARILY CAUSED BY A REDUCTION IN U.S. HOME PRICES, BUT BY A SYSTEMIC BANKING DOLLAR SHORTAGE! THE LACK OF U$Ds REMAINS, AND HAS EVEN INCREASED, HOWEVER ENTIRE NATIONS ARE AT RISK OF SUFFERING THE CONSEQUENCES, NOT ONLY THEIR BANKS! NOW THE IMPORTANT QUESTIONS ARE: 1. IS THE GLOBAL ECONOMY NOW DEPENDENT ON THE FEDERAL RESERVE PROVIDING NEW U$Ds TO AVOID A COMPLETE DEFLATIONARY COLLAPSE? (MOST LIKELY YES) 2. IS THE FEDERAL RESERVE ABLE TO SATISFY THE INTERNATIONAL DEMAND FOR U$Ds, NOT IN TERMS OF AMOUNT, BUT IN TERMS OF DEPTH, REACHING FINANCIAL INSTITUTIONS AND CORPORATIONS NOT DIRECTLY TIED TO THE MAJOR U.S. BANKS? (QUITE POSSIBLY NO, BUT THEY WILL TRY THEIR HARDEST) 3. IF WE ASSUME THIS IS THE DEATH RATTLE OF THE DOLLAR'S WORLD RESERVE CURRENCY STATUS, WHICH IS THE MOST LIKELY OUTCOME, THAT IT IS INFLATED AWAY OR THAT IT IMPLODES ON ITSELF? (I WOULD ARGUE GIVEN THE FED'S ACTIONS, THAT IT WILL BE INFLATED AWAY) 4. REGARDLESS OF HOW THE LOSS OF RESERVE CURRENCY STATUS OCCURS, A CONSEQUENCE OF THIS PROCESS WILL BRING ABOUT A COMPLETE SELL-OFF IN THE U.S. TREASURY MARKET, FORCING THE FEDERAL RESERVE TO COMPLETELY MONETIZE THESE BONDS TO PREVENT INTEREST RATES FROM RISING: IF THIS UNFOLDS, CAN ANY OTHER POSSIBILITY BUT HYPERINFLATION BE CONSIDERED? (NO)
GEducation
by UnknownUnicorn4195243
5
How to trade EUR/USD on the Daily Timeframe [FULL EXPLANATION]Trading EUR/USD on the Daily Time Frame: Delete the noise, patience wins Here I present a textbook trading set-up + a fancy little indicator known as the EAG Yume Wave. First we need to set up our parameters, what is confirmation and what isn't? Your analysis does not need to be over complicated, you want to be considering the key/strongest variables when you are creating your final equation. You can backtest multiple indicators, I usually play around with ichi, different MAs and a couple of momentum indicators and the RSI to see if I can make anything work. Here are my personal EURO/USD Daily TF Trade Parameters and WHY I have chosen them~ 185 EMA This has acted as a really good measure of resistance all the way through EUR/USD's last few months. To find this I played about with the settings. Fibonacci lines and extension These allow me to see all the individual lines to trade from and where my points of confirmation will be when a fib line gets broke. Trend lines and horizontal support & res Important textbook trading skills that should line up with my other indicators and fiblines. EAG YUME WAVE Indicator Watching for the twist and then watching for if the Miaku can provide support on the downfall. Volume + MA Volume in traditional markets can help us confirm where potential bottoms are with good buy backs. Do bear in mind there is the risk of a volume divergence hence why I am neither bullish nor bearish UNTIL we get some form of confirmation! If you learnt something or just want a chat about how I trade add me on Discord: Xander#5055 A follow and a like would be greatly appreciated for my time :D ~Xander
Education
by XanderCrypto
4