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Replace a 100 000 USD salary with income from trading🔸 Develop a Strong Foundation in Forex Trading Before considering Forex as a full-time source of income, it’s essential to build a solid foundation in trading. ▪️Learn the Basics: Understand Forex fundamentals such as how currency pairs work, how to read charts, how the market operates, and how global economic events affect price movements. ▪️Master Technical and Fundamental Analysis: Study technical analysis (price action, indicators, chart patterns) and fundamental analysis (macroeconomic data, interest rates, geopolitical events). This allows you to make informed trading decisions. ▪️Study Risk Management: Managing risk is crucial to avoid catastrophic losses. Learn how to calculate position sizes, set stop-losses, and limit leverage. Most professional traders risk no more than 1-2% of their capital per trade. ▪️Backtest and Paper Trade: Test your trading strategies on historical data and in demo accounts to ensure they are profitable over time. This will help you refine your approach without risking real money. 🔸 Create and Test a Trading Strategy A successful trading career requires a well-defined trading strategy. This is critical for consistency and profitability. ▪️Define Your Trading Style: Determine whether you are a day trader, swing trader, or position trader, based on your risk tolerance, time availability, and financial goals. ▪️Build a Strategy Based on Time Frames and Setups: Whether you focus on scalping, trend trading, or breakout strategies, you need a strategy that works for your trading style. Be sure to incorporate indicators (moving averages, Fibonacci retracement, RSI) and a risk-reward ratio. ▪️Test the Strategy: Test your strategy on demo accounts or paper trade until you have confidence in its profitability over the long run. A good strategy should consistently deliver positive results over several months and market conditions. 🔸 Accumulate Enough Capital Forex trading requires sufficient capital to replace a salary and generate consistent income. ▪️Set Realistic Capital Requirements: The amount of capital you need will depend on how much monthly income you need and how much risk you are willing to take. Generally, to replace a full-time salary with Forex income, you will need significant capital (likely in the range of $50,000–$100,000 or more). This amount allows you to generate enough returns without taking excessive risks. ▪️Calculate Your Required Return on Investment (ROI): Let’s say you need $3,000 per month to replace your salary. If you have a $100,000 account, you would need a 3% return per month. If your account is smaller (e.g., $10,000), you would need a much higher (and riskier) 30% return, which is unrealistic in the long run. ▪️Use Leverage Cautiously: Leverage can magnify both profits and losses. While Forex brokers often offer high leverage (e.g., 50:1, 100:1), it’s essential to use leverage cautiously, as it can lead to significant losses if a trade goes against you.
Education
by ProjectSyndicate
8
Nasdaq-100 Index. The Psychological Aspects of Round NumbersIn the complex dance of commerce and finance, price tags play a key role in influencing consumer decisions. While it’s a fairly common psychological assumption that every penny and cent counts when it comes to getting the best deal, human psychology often deviates from this linear logic. In this educational post, we explore the irresistible appeal of round numbers, and how they often trump other considerations when making transaction decisions. The Irresistible Attraction to Round Numbers We do often believe that every penny counts in our transactions. However, research shows a striking deviation from this assumption. In scenarios where people choose a price, such as tipping at a restaurant or donating to beloved author or website, they disproportionately choose round numbers — like $ 5, $ 10 or $ 20 — far more than would be predicted by chance alone. One could argue that this is due to the rejection of change, a reluctance to waste time on small change, and the unwillingness to bother with complex mathematics. However, even in cases where the exact bill is not an issue (e.g., cashless card payments), the preference remains. For example, diners faced with a non-round bill (for example $ 34.67) are more likely to give non-round tips ($ 15.33), but only so that the total is a neat round number ($ 50). Why do we prefer round prices? And what is the psychology behind it? 1) Cognitive simplicity: The human mind is programmed to simplify and seek simplicity. Numbers like 10, 50, or 100 inherently feel “cleaner” and less chaotic than 17, 62, or 84. This desire for neatness gives us a sense of accomplishment. 2) Perception of quality: The marketing world has long capitalized on this preference for round numbers. Brands strategically associate round prices with premium quality. On the other hand, odd prices like “29.99” or “34.99,” while ubiquitous, subconsciously signal here's a discount or a bargain. 3) This preference is not limited to prices. People exhibit this tendency to round in other aspects of life as well. Our repeated exposure to round numbers is common in a variety of contexts, both in everyday life and during financial transactions, which contributes to an unconscious bias toward them. This cognitive ease with round numbers further perpetuates the preference. The stock market’s behavior and its fluctuations around these significant, round numbers is not a coincidence in general; there is a psychological explanation. Market Psychology of Round Numbers When the market reaches round numbers such as 500 or 1,000, 2,500 or 5,000, 10,000 or 20,000, it attracts the attention of both active traders and casual investors who may not even be actively following the market. As in everyday life, people often use round numbers as thresholds for making investment decisions. For example, some may decide to enter the market if a major index such as the Nasdaq-100 has exceeded 10,000, or they may decide to sell some of their stocks if the Nasdaq-100 has reached 20,000. These round numbers act as magnets for sellers as they mark important milestones given the relatively high rarity of a round number. If the market has the potential to move higher, it first needs to absorb the selling pressure around the round numbers and establish equilibrium before continuing its move higher. If we analyze the market behavior over the last decades, we will see clear patterns at round numbers. Let us take a closer look at a few examples. 1) Indian Stock Index, Sensex BSE:SENSEX Sensex, one of the major market indices in India, has its share of round number syndrome. For example, when Sensex reached 10,000 points in Q1 2006, it experienced significant market activity, with the index fluctuating by as much as 30 percent in Q2. The same phenomenon occurred at multiples of 10,000. Thus, at 20,000 points, which the Indian market reached at the end of 2007, the index collapsed by more than 60 percent over the next 4 quarters of 2008. Later the 20,000 mark has been reached again in the second half of 2010, and the index again suffered a decline of more than 20 percent during 2011. Later Indian stock market index reached the 30,000 mark in the first quarter of 2015, and its led to a price decline of more than 20 percent in the next 4 quarters, while 40,000 mark in the fourth quarter of 2019 - led to the market decline by 30 percent on the wave of COVID-19 sales. 2) Gold market OANDA:XAUUSD As in the previous example, round numbers often become key points of congestion for Gold market, when the market tries to break even higher, but the forces of buyers and sellers may be unequal. For example, spot Gold reached the $ 1,000 mark for the first time in the Q1 2008, which, following the logic discussed above, led to sales and 30 percent decrease. Gold spot buyers have tried a lot to reach $ 2,000 mark in 2011, but it brought the market down by 45 percent over the next 5 years. There were also a lot of unsuccessful attempts to jump above $ 2,000 in 2020-2022. Finally Gold spot surged above $ 2,000 only in Q4 2023, its led to further price increase, up to 2500 US dollars per ounce. 3) US stock index, Nasdaq-100 index NASDAQ:NDX The Nasdaq-100 index approached the 10,000 point mark for the first time in Q1 2020, which could have contributed to the sell-off. In fact, this is what happened, as the market then plunged by more than 30 percent in March 2020, and only thanks to monetary support measures and the reduction of US interest rates to almost zero, the index was able to break the 10,000 barrier by the end of Q2 2020. Reaching the 20,000 mark by the market index in Q2 2024, as we see, again leads to increased turbulence in US tech stocks and talk of imminent monetary easing by the Fed. Final Thoughts 1) It is important to note that round number syndrome and increased seismic activity near rounds number is a short-term phenomenon. Once the selling pressure is absorbed, the market resumes its movement based on other factors and develops independently of these already passed milestones. 2) Understanding the market behavior at round numbers can provide valuable information to investors. These round numbers act as psychological triggers for investors, driving their decision-making processes. 3) Understanding this phenomenon allows investors to make more informed choices and understand the short-term fluctuations that occur during these stages.
NASDAQ:NDXEducation
by Pandorra
🐱‍🐉 The Magnificent, One and Only Million Million OpportunityAs we approach the end of 2023, we are just a short time away from the 1st anniversary of the AI research company ChatGPT's chatbot being launched on November 30, 2022. This publication, although dedicated to a single company - Microsoft Corporation - is educational in nature, and is a representation of a letter to shareholders - 2023 by Satya Nadella, Chairman and CEO of Microsoft Corporation NASDAQ:MSFT - the second company in the world after Apple in terms of market capitalization. I hope that each of you will be able to master it, look back, and realize what a rapidly changing world we all live in now. Enjoy! October 16, 2023 Dear shareholders, colleagues, customers, and partners: We are living through a time of historic challenge and opportunity. As I write this, the world faces ongoing economic, social, and geopolitical volatility. At the same time, we have entered a new age of AI that will fundamentally transform productivity for every individual, organization, and industry on earth, and help us address some of our most pressing challenges. This next generation of AI will reshape every software category and every business, including our own. Forty-eight years after its founding, Microsoft remains a consequential company because time and time again—from PC/Server, to Web/Internet, to Cloud/Mobile—we have adapted to technological paradigm shifts. Today, we are doing so once again, as we lead this new era. Amid this transformation, our mission to empower every person and every organization on the planet to achieve more remains constant. As a company, we believe we can be the democratizing force for this new generation of technology and the opportunity it will help unlock for every country, community, and individual, while mitigating its risks. Here are just a few examples of how we are already doing this: • Leading electronic health records vendor Epic is addressing some of the biggest challenges facing the healthcare industry today—including physician burnout—by deploying a wide range of copilot solutions built on Azure OpenAI Service and Dragon Ambient eXperience Copilot. • Mercado Libre is reducing the time its developers spend writing code by more than 50 percent with GitHub Copilot, as the company works to democratize e-commerce across Latin America. •Mercedes-Benz is making its in-car voice assistant more intuitive for hundreds of thousands of drivers using ChatGPT via the Azure OpenAI Service. • Lumen Technologies is helping its employees be more productive, enabling them to focus on higher value-added activities, by deploying Microsoft 365 Copilot. • Nonprofit The Contingent is matching foster families with children in need using Dynamics 365, Power BI, and Azure, with an eye on using AI to amplify its work across the US. • And, Taiwan’s Ministry of Education has built an online platform to help elementary and high school students learn English using Azure AI. To build on this progress, we remain convicted on three things: First, we will maintain our lead as the top commercial cloud while innovating in consumer categories, from gaming to professional social networks. Second, because we know that maximum enterprise value gets created during platform shifts like this one, we will invest to accelerate our lead in AI by infusing this technology across every layer of the tech stack. And, finally, we will continue to drive operating leverage, aligning our cost structure with our revenue growth. As we make progress on these priorities, we delivered strong results in fiscal year 2023, including a record $211 billion in revenue and over $88 billion in operating income. A NEW ERA OF AI There are two breakthroughs coming together to define this new era of AI. • The first is the most universal interface: natural language. The long arc of computing has, in many ways, been shaped by the pursuit of increasingly intuitive human-computer interfaces—keyboards, mice, touch screens. We believe we have now arrived at the next big step forward—natural language—and will quickly go beyond, to see, hear, interpret, and make sense of our intent and the world around us. • The second is the emergence of a powerful new reasoning engine. For years, we’ve digitized daily life, places, and things and organized them into databases. But in a world rich with data, what has been most scarce is our ability to reason over it. This generation of AI helps us interact with data in powerful new ways—from completing or summarizing text, to detecting anomalies and recognizing images—to help us identify patterns and surface insights faster than ever. Together, these two breakthroughs will unlock massive new opportunity. And, in fact, just last month we announced our vision for Copilot, an everyday AI companion. We are building Copilot into all our most used products and experiences and allowing people to summon its power as a standalone app as well. Just like you boot up an OS to access applications or use a browser to visit websites today, our belief is that you will invoke a Copilot to do all those activities and more: to shop, to code, to analyze, to learn, to create. As a company, any time we approach a transition like this, we do so responsibly. We believe AI should be as empowering across communities as it is powerful, and we’re committed to ensuring it is responsibly built and designed, with safety in mind from the outset. OUR OPPORTUNITY Every customer solution area and every layer of our tech stack will be reimagined for the AI era. And that’s exactly what we’ve already begun to do: Infrastructure Four years ago, we first invested in our AI supercomputer, with a goal of building the best cloud for training and inference. Today, it’s being used by our partner OpenAI to power its best-in-class foundation models and services, including one of the fastest-growing consumer apps ever—ChatGPT. NVIDIA, as well as leading AI startups like Adept and Inflection, is also using our infrastructure to build its own breakthrough models. More broadly, organizations continue to choose our ubiquitous computing fabric—from cloud to edge—to run their mission-critical applications. We continued to see more cloud migrations to Azure this past fiscal year, as it remains early when it comes to the long-term cloud opportunity. And we also continue to lead in hybrid computing with Azure Arc, which now has 18,000 customers. Data and AI Every AI app starts with data, and having a comprehensive data and analytics platform is more important than ever. Our Intelligent Data Platform brings together operational databases, analytics, and governance so organizations can spend more time creating value and less time integrating their data estate. We also introduced Microsoft Fabric this year, which unifies compute, storage, and governance with a disruptive business model. With Azure AI, we are making foundation models available as platforms to our customers. We offer the best selection of industry-leading frontier and open models. In January, we made the Azure OpenAI Service broadly available, bringing together advanced models, including ChatGPT and GPT-4, with the enterprise capabilities of Azure. More than 11,000 organizations across industries are already using it for advanced scenarios like content and code generation. Meta chose us this summer as its preferred cloud to commercialize its Llama family of models. And, with Azure AI Studio, we provide a full lifecycle toolchain customers can use to ground these models on their own data, create prompt workflows, and help ensure they are deployed and used safely. Digital and app innovation GitHub Copilot is fundamentally transforming developer productivity, helping developers complete coding tasks 55 percent faster. More than 27,000 organizations have chosen GitHub Copilot for Business, and to date more than 1 million people have used GitHub Copilot to code faster. We also announced our vision for the future of software development with GitHub Copilot X, which will bring the power of AI throughout the entire software development lifecycle. All up, GitHub surpassed $1 billion in annual recurring revenue for the first time this fiscal year. We’re also applying AI across our low-code/no-code toolchain to help domain experts across an organization automate workflows, create apps and webpages, build virtual agents, or analyze data, using just natural language with copilots in Power Platform. More than 63,000 organizations have used AI-powered capabilities in Power Platform to date. Business applications We are bringing the next generation of AI to employees across every job function and every line of business with Dynamics 365 Copilot, which works across CRM and ERP systems to reduce burdensome tasks like manual data entry, content generation, and notetaking. In fact, our own support agents are using Copilot in Dynamics 365 Customer Service to resolve more cases faster and without having to call on peers to help. With our Supply Chain Platform, we’re helping customers apply AI to predict and mitigate disruptions. And, with our new Microsoft Sales Copilot, sellers can infuse their customer interactions with data from CRM systems—including both Salesforce and Dynamics—to close more deals. All up, Dynamics surpassed $5 billion in revenue over the past fiscal year, with our customer experience, service, and finance and supply chain businesses each surpassing $1 billion in annual sales. Industry Across industries, we are rapidly becoming the partner of choice for any organization looking to generate real value from AI. In healthcare, for example, we introduced the world’s first fully automated clinical documentation application, DAX Copilot. The application helps physicians reduce documentation time by half, freeing them to spend more time face to face with patients. And Epic will integrate it directly into its electronic health records system. And, in retail, we introduced new tools to help companies manage their day-to-day operations and digitize their physical stores. Modern work We are rapidly evolving Microsoft 365 into an AI-first platform that enables every individual to amplify their creativity and productivity, with both our established applications like Office and Teams, as well as new apps like Designer, Stream, and Loop. Microsoft 365 is designed for today’s digitally connected, distributed workforce. This year, we also introduced a new pillar of customer value with Microsoft 365 Copilot, which combines next-generation AI with business data in the Microsoft Graph and Microsoft 365 applications to help people be more productive and unleash their creativity at work. Just last month, I was excited to announce that we will make Microsoft 365 Copilot generally available to our commercial customers later this year. We continue to build momentum in Microsoft Teams across collaboration, chat, meetings, and calls. We introduced a new version of Teams that delivers up to two times faster performance, while using 50 percent less memory. We also introduced Teams Premium to meet enterprise demand for AI-powered features like intelligent meeting recaps. All up, Teams usage surpassed 300 million monthly active users this year. With Microsoft Viva, we have created a new category for employee experience. Copilot in Viva offers leaders a new way to build high-performance teams by prioritizing both productivity and employee engagement. This year, Viva surpassed 35 million monthly active users. Security As the rate and pace of cyberthreats continue to accelerate, security is a top priority for every organization. Our comprehensive, AI-powered solutions give defenders the advantage. With Security Copilot, we’re combining large language models with a domain-specific model informed by our threat intelligence and 65 trillion daily security signals, to transform every aspect of security operations center productivity. All up, more than 1 million organizations now count on our comprehensive, AI-powered solutions to protect their digital estates, and our security business surpassed $20 billion in annual revenue, as we help protect customers across clouds and endpoint platforms. Search, advertising, and news We are reshaping daily search and web habits with our new Bing and Microsoft Edge browser, which brings together search, browsing, chat, and AI into one unified experience to deliver better search, more complete answers, a new chat experience, and the ability to generate content. We think of these tools as an AI copilot for the web. We are also bringing these breakthrough capabilities to businesses, with Bing Chat Enterprise, which offers commercial data protection, providing an easy on-ramp for any organization looking to get the benefit of next-generation AI today. Although it’s early in our journey, Bing users engaged in more than 1 billion chats and created more than 750 million images over the past year as they apply these new tools to get things done. And Edge has taken share for nine consecutive quarters. More broadly, we continue to expand our opportunity in advertising. This year, Netflix chose us as its exclusive technology and sales partner for its first ad-supported subscription offering, a validation of the differentiated value we provide to any publisher looking for a flexible partner to build and innovate with them. LinkedIn The excitement around AI is creating new opportunities across every function—from marketing, sales, service, and finance, to software development and security. And LinkedIn is increasingly where people are going to learn, discuss, and uplevel their skills. We are using AI to help our members and customers connect to opportunities and tap into the experiences of experts on the platform. In fact, our AI-powered articles are already the fastest-growing traffic driver to the network. All up, LinkedIn’s revenue surpassed $15 billion for the first time this fiscal year, a testament to how mission critical the platform has become to help more than 950 million members connect, learn, sell, and get hired. Gaming In gaming, we are rapidly executing on our ambition to be the first choice for people to play great games whenever, wherever, and however they want. With Xbox Game Pass, we are redefining how games are distributed, played, and viewed. Content is the flywheel behind the service’s growth, and our pipeline has never been stronger. It was especially energizing to release Starfield this fall to broad acclaim, with more than 10 million players in the first month post-launch alone. Earlier this month, we were thrilled to close our acquisition of Activision Blizzard, and we look forward to sharing more in the coming months about how, together , we will bring the joy of gaming to more people around the world. Devices and creativity Finally, we’re turning Windows into a powerful new AI canvas with Copilot, which rolled out as part of a Windows 11 update last month. It uniquely incorporates the context and intelligence of the web, your work data, and what you are doing in the moment on your PC to provide better assistance, while keeping your privacy and security at the forefront. Overall, the number of devices running Windows 11 more than doubled in the past year. And we are also transforming how Windows is experienced and managed with Azure Virtual Desktop and Windows 365, which together surpassed $1 billion in annual revenue for the first time. OUR RESPONSIBILITY As we pursue our opportunity, we are also working to ensure technology helps us solve problems—not create new ones. To do this, we focus on four enduring commitments that are central to our mission and that take on even greater importance in this new era. For us, these commitments are more than just words. They’re a guide to help us make decisions across everything we do—as we design and develop products, shape business processes and policies, help our customers thrive, build partnerships, and more —always asking ourselves critical questions to ensure our actions are aligned with them. How can we expand opportunity? First, we believe access to economic growth and opportunity should reach every person, organization, community, and country. And although AI can serve as a catalyst for opportunity and growth, we must first ensure everyone has access to the technologies, data, and skills they need to benefit. To achieve this, we are focused on getting technology into the hands of nonprofits, social entrepreneurs, and other civil society organizations to help them digitally transform, so they can help address some of society’s biggest challenges. This year, we provided nonprofits with over $3.8 billion in discounted and donated technology. Nearly 325,000 nonprofits used our cloud. And to help them tap the potential of AI, we’re building new AI capabilities for fundraising, marketing, and program delivery. AI will displace some jobs, but it will also create new ones. That’s why we aim to train and certify 10 million people by 2025 with the skills for jobs and livelihoods in an increasingly digital economy. Since July 2020, we’ve helped 8.5 million people, including 2.7 million this year. We’ve also focused on skilling women and underrepresented communities in cybersecurity, working across 28 countries and with nearly 400 US community colleges to scale our efforts. Finally, to help people learn more about AI, we launched the first online Professional Certificate on Generative AI in partnership with LinkedIn Learning, created AI tools for educators, and held our first AI Community Learning event in the US. These events will be replicated around the world and localized in 10 languages over the next year. We also partnered to launch a Generative AI Skills Grant Challenge to explore how nonprofit, social enterprise, and research or academic institutions can empower the workforce to use this new generation of AI. How can we earn trust? To create positive impact with technology, people need to be able to trust the technologies they use and the companies behind them. For us, earning trust spans the responsible use of AI, protecting privacy, and advancing digital safety and cybersecurity. Our commitment to responsible AI is not new. Since 2017, we’ve worked to develop our responsible AI practice, recognizing that trust is never given but earned through action. We have translated our AI principles into a core set of implementation processes, as well as tools, training, and practices to support compliance. But internal programs aren’t enough. We also enable our customers and partners to develop and deploy AI safely, including through our AI customer commitments and services like Azure AI Studio, with its content safety tooling and access to our Responsible AI dashboard. Building AI responsibly requires that we work with other industry leaders, civil society, and governments to advocate for AI regulations and governance globally. This year, we released our Governing AI Blueprint, which outlines concrete legal and policy recommendations for AI guardrails. We are signatories to the eight voluntary commitments developed with the US White House, and proud of the six additional commitments we’ve made to further strengthen and operationalize the principles of safety, security, and trust. The era of AI heightens the importance of cybersecurity, and we deepened our work across the private and public sectors to improve cyber-resilience. We’ve continued to support Ukraine in defending critical infrastructure, detecting and disrupting cyberattacks and cyberinfluence operations, and providing intelligence related to these attacks. Our Microsoft Threat Analysis Center team produced more than 500 intelligence reports to help keep customers and the public informed. And we published our third annual Microsoft Digital Defense Report, sharing our learnings and security recommendations. We also remain committed to creating safe experiences online and protecting customers from illegal and harmful content and conduct, while respecting human rights. We supported the Christchurch Call Initiative on Algorithmic Outcomes to address terrorist and violent and extremist content online. And through the World Economic Forum’s Global Coalition for Digital Safety, we co-led the development of new global principles for digital safety. Protecting customers’ privacy and giving them control of their data is more important than ever. We’ve begun our phased rollout of the EU Data Boundary, supporting our commercial and public sector customers’ need for data sovereignty. And each month, more than 3 million people exercise their data protection rights through our privacy dashboard, making meaningful choices about how their data is used. How can we protect fundamental rights? In an increasingly digital world, we have a responsibility to promote and protect people’s fundamental rights and address the challenges technology creates. For us, this means upholding responsible business practices, expanding connectivity and accessibility, advancing fair and inclusive societies, and empowering communities. In 2023, we worked diligently to anticipate harmful uses of our technology and put guardrails on the use of technologies that are consequential to people’s lives or legal status, create risk of harm, or threaten human rights. We will continue to assess the impact of our technologies, engage our stakeholders, and model and adopt responsible practices and respect for human rights—including across our global supply chain. Today, our lives are more connected than ever. Access to education, employment, healthcare, and other critical services is increasingly dependent on technology. That’s why we’ve expanded our commitment to bring access to affordable high-speed internet to a quarter of a billion people around the world, including 100 million people in Africa, by the end of 2025. Since 2017, we’ve helped bring internet access to 63 million people, a key first step to ensuring communities will have access to AI and other digital technologies. This year, we also continued working toward our five-year commitment to bridge the disability divide with a focus on helping close the accessibility knowledge gap. Seven hundred and fifty-thousand learners enriched their understanding of disability and accessibility in partnership with LinkedIn Learning, Teach Access, and the Microsoft disability community. In addition, we’re stepping up efforts to combat online disinformation through new media content provenance technologies—enabling users to verify if an image or video was generated by AI. We continued our efforts to promote racial equity across Microsoft, our ecosystem, and our communities, including our work to advance justice reform through data-driven insights. And we provided support in response to eight humanitarian disasters, including committing $540 million of support to those who have been impacted by the War in Ukraine. Finally, recognizing AI’s potential to advance human rights and humanitarian action, we worked on several AI for Humanitarian Action projects. Together with our partners, we’re building the capabilities to identify at-risk communities, estimate seasonal hunger, predict malnutrition, and assist in disease identification. How can we advance sustainability? Climate change is the defining issue of our generation, and addressing it requires swift, collective action and technological innovation. We are committed to meeting our own goals while enabling others to do the same. That means taking responsibility for our operational footprint and accelerating progress through technology. We continue to see extreme weather impacting communities globally. To meet the urgent need, this must be a decade of innovation and decisive action—for Microsoft, our customers, and the world. In our latest Environmental Sustainability Report, we shared our progress toward our 2030 sustainability targets across carbon, water, waste, and ecosystems. In 2022, our overall carbon emissions declined by 0.5 percent while our business grew. Addressing scope 3 emissions, which account for the vast majority of our emissions, is arguably our ultimate challenge—one we’ll continue to tackle through our supply chain, policy advances, and industry-wide knowledge-sharing. We’ve provided just under 1 million people with access to clean water and sanitation, one of five pillars on our path to becoming water positive. And in our pursuit to be zero waste, we achieved a reuse and recycle rate of 82 percent for all our cloud hardware and diverted over 12,000 metric tons of solid operational waste from landfills and incinerators. We also continue to take responsibility for the impacts of our direct operations on Earth’s ecosystems. We’ve contracted to protect 17,268 acres of land, over 50 percent more than the land we use to operate. Of that, 12,270 acres—the equivalent of approximately 7,000 soccer fields—were designated as permanently protected. Technology is a powerful lever to help us avoid the most severe impacts of climate change. That’s why we’re accelerating our investment in more efficient datacenters, clean energy, enhancements to the Microsoft Cloud for Sustainability and Planetary Computer, and green software practices. To date, through our Climate Innovation Fund, we’ve allocated more than $700 million to a global portfolio of 50+ investments spanning sustainable solutions in energy, industrial, and natural systems. Finally, we believe AI can be a powerful accelerant in addressing the climate crisis. We expanded our AI for Good Lab in Egypt and Kenya to improve climate resilience for the continent. And, together with our partners, we launched Global Renewables Watch, a first-of-its-kind living atlas that aims to map and measure utility-scale solar and wind installations, allowing users to evaluate progress toward a clean energy transition. Although this new era promises great opportunity, it demands even greater responsibility from companies like ours. As we pursue our four commitments, we focus on transparency—providing clear reporting on how we run our business and how we work with customers and partners. Our annual Impact Summary shares more about our progress and learnings this year, and our Reports Hub provides detailed reports on our environmental data, political activities, workforce demographics, human rights work, and more. OUR CULTURE There’s never been a more important time to live our culture. The way we work and the speed at which we work are changing. In an economy where yesterday’s exceptional is today’s expected, all of us at Microsoft will need to embrace a growth mindset and, more importantly, confront our fixed mindsets as our culture evolves. It will take everyday courage to reformulate what innovation, business models, and sales motions look like in this new era. As a high-performance organization, we aspire to help our employees maximize their economic opportunity, while simultaneously helping them learn and grow professionally and connect their own passion and purpose with their everyday work and the company’s mission. To be successful, we need to be grounded in what our customers and the world need. We need to innovate and collaborate as One Microsoft. And we need to actively seek diversity and embrace inclusion to best serve our customers and create a culture where everyone can do their best work. To empower the world, we need to represent the world. To that end, we remain focused on increasing representation and strengthening our culture of inclusion. Even as we navigated challenges this year, our company continued to be the most globally diverse it’s ever been. Giving also remains core to our culture. This year, more than 105,000 employees gave $242 million (including company match) to over 35,000 nonprofits in 116 countries. And our employees volunteered over 930,000 hours to causes they care about. I am deeply grateful to our employees for their commitment to the company and their communities, and how they are living our mission and culture every day in a changing company and world. ** In closing, this is Microsoft’s moment. We have an incredible opportunity to use this new era of AI to deliver meaningful benefits for every person and every organization on the planet. On New Year’s Day, I saw a tweet from Andrej Karpathy, Tesla’s former director of AI who now works at OpenAI, about how GitHub Copilot was writing about 80 percent of his code, with 80 percent accuracy. Two days later, I saw a stunning example of work we’ve done with the government of India’s Ministry of Electronics and IT, which is applying an AI model so farmers in rural areas can interact with government resources in their native languages. Think about that: A foundation model that was developed on the West Coast of the United States is already transforming the lives of both elite developers and rural farmers on the other side of the globe. We’ve not seen this speed of diffusion and breadth of impact in the tech industry before. As a company, this is our moment to show up and responsibly build solutions that drive economic growth and benefit every community, country, industry, and person. If we do it well, the world will do well, and Microsoft will do well too. I’ve never been more confident that we will deliver on this promise together in the days, months, and years to come. Satya Nadella Chairman and Chief Executive Officer Thanks for reading. I hope the publication was useful and interesting for you. @Pandorra 😎
NASDAQ:MSFTEducation
by Pandorra
The Slight Depression - Why NFP Numbers aren't tha NB* with TechWhy jobs added or lost won’t have a big effect on the tech stock markets in the future Every month, I get asked about NFP (Non-Farm Payrolls). This is a barometer that comes out on the 1stFriday of every month. It tells us one thing. Whether the number of jobs were added or lost in the US economy for the previous month (excluding farming jobs). Well let’s take the NFP number coming out today (1 September 2023) Prior was 187,000 and the Forecast is 170,000. So already, they are guessing there’ll be 17,000 less jobs added this month compared to last month. In the past I would say, anything less than 170K might be a cause of concern to the stock market and companies (especially in tech) as less people were assigned jobs. But this month, I have a shift in mind and thoughts. If NFP comes out worse than expected… I don't necessarily think this will have a bad effect on the NASDAQ. In fact, the Nasdaq is showing strong signs of upside to come in the next few months. Between the Falling Wedge, the Price above 200MA, the price jumping from the prior uptrend - It looks like the NASDAQ wants to shoot up! And companies like Nvidia, META, Alphabet, Microsoft, IBM and even Tesla, I believe, will do just fine cutting jobs and building their empires simultaneously. And whether the NFP drops or rises, NASDAQ along with tech stocks will do just fine. Now let's talk about something a little more solemn. I have a wild thought of the day. In the era of accelerated technological advancements and revolutionary influence of AI (Artificial Intelligence), there is a paradigm shift happening between the biologics and the non-biologics. Sure tech companies will need a strong workforce, but I don’t think they need an excessive amount of employees like in the past. In the AI era with new AI developments, deep and machine learning to optimise and maximise operations and profits… I think we WILL undoubtedly see a major disruption in the employee force. But here is where it gets scary… Those who adapt, grow and evolve will make it. Those who don't might, fall behind and into what I call. The Slight Depression This is where things are getting tough and more expensive. · Salaries are staying the same while prices are going up. · Groceries you have to think twice when buying cereals. · Flights are crazy. · Rates and taxes are just ridiculous. · Some restaurants are out of their minds. · Don’t start with mortgages, bonds, insurance and medical aid. · Filling up a tank of petrol is showing off nowadays! Clearly, there is a shift between the lower and upper class. Where I truly believe the middle class is falling away very quickly. Soon it’ll be lower and upper class! No in between and that scares me! So… The onus now lies YOU. You really need to adapt, adopt and integrate to this rapidly evolving landscape. Foe examples, if you possess the skills to work alongside AI, harness its potential, and contribute to its development, you’ll stand a chance in the job market. If you continue to learn new tricks, no matter how old or young of a dog you are. If you continue to upskill yourself. If you invest in yourself (physically, mentally and financially). You’ll have the upper hand. What are your thoughts? Do you think a lower NFP number is bad for tech stocks and an index like the NASDAQ? Do you think The Slight Depression is among us? Answer yes or no.
NASDAQ:NDXEducation
by Timonrosso
QQQ Order Flow - Selling Exhaustion Leads To Explosive GainsHey traders, QQQ is in an explosive uptrend as the AI narrative reaches fever pitch. However, as traders, all we care about is to look for long opportunities each and every time there is exhaustion by the sell-side. These exhaustions, signaled via the DIAMOND pattern, offer an incredible risk-reward... (10% gains on the first print and 5% so far). With the bullish structure in our favor as indicated via the OFA script, all we need is to wait for the entry trigger as new structures are formed. Be reminded, when using the OFA script, it comes with highly accurate signals that, at its core, apply 2 main areas of study: Magnitude: A major clue that will help determine the health of a trend is the type of progress by the dominant side in control of the trend. We need to ask the following question: Are the new legs in the active buy-sell side campaign as identified by the script increasing or decreasing in magnitude? Velocity: When it comes to the distance the price moves, the magnitude is only ½ the equation. The other ½ has to do with the velocity of the move or the speed. Was the new leg created after a fast and impulsive move? Or did price make a new low or high with the movement being sluggish, compressive and taking too long to form? A good rule of thumb is to count the number of candles it took to achieve a new leg. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
NASDAQ:QQQEducation
by FlowState
How NOT to loose money, 1st do not trade people's ideas do your Home work, do your research and learn learn learn till you become aware of what is going on in mkts and then being able to choose the right path for your and being able to distinguish right ideas and analysis from the wrong ones. *****Passing this cool info (Not mine) : 2. Set realistic expectations When you're investing, your expectations of what you could earn should be realistic. And sometimes, measures like average rates of return can be misleading. For example, if you invested in large-cap stocks between 1926 and 2020, you would've earned an average rate of return of 10.2%. And if you earned this rate of return over 30 years, $100,000 invested would've grown to $1.84 million. But during that same time period, you would've earned a high of 54% in 1933 and a low return of -43% during 1931. If you invested for the first time during a year of losses, it could make you wary of investing. Understanding that your returns won't be linear but instead, an average of positive, negative, and flat returns is important. And understanding this may help you withstand the bad years. 3. Know the difference between a realized and unrealized loss When you look at your account balance and see that it's lower than it was the month before, it may feel as if you've lost money. But the numbers you see on your statement or when you log in to your account are called unrealized losses or gains. These numbers change for better or worse throughout a day of stock market activity and are only considered actual losses or gains when you realize them by selling your holdings. For example, if your account balance was $10,000 last month and you experienced losses this month, it may now be worth $9,000. But you would only lose money in reality if you sell this investment before it gets back to its original value. Over the long term, the stock market has always increased in value, and your investments should, too, as long as you stay invested. 4. Have an appropriate time horizon How soon you need your money could impact how well you keep your money invested during stock market crashes. If you won't need your money for 25 years and you suffer a 30% loss, you may shrug it off knowing that your account value could return back to that value in a few years. But if you plan on using the money next year, you may panic at the idea of losing any of it. Before you invest one penny, think about your time horizon. And the closer it is, the more conservatively you should invest. Without the threat of missing your goal looming over your head, losses may not seem so devastating, and you'll be less likely to give up on investing due to a short-term drop. 5. Control emotions Controlling your emotions is no easy task, and when you're losing money, it can feel like it will go on forever. But declines have never lasted forever. Learning how you can control your emotions when you're feeling this way can be the difference between experiencing subpar returns that lag benchmarks or keeping pace with them. When you feel as if the sky is falling and it seems as if there's no end in sight, revisiting stock market corrections of the past can be helpful. Even during some of the periods of the most extreme losses, investors who stayed the course often recouped their losses within a few years. From 2000 through 2002, if you'd invested only in large-cap stocks, you would've lost about 38% in total. If you had $100,000, it would've decreased to around $62,000. But by 2006, you would've regained all of your money and been ahead slightly.. 6. Invest in line with your risk appetite How do you feel about volatility? Do you barely notice it and realize that it's a normal part of a market cycle? Or does it make your stomach drop every time it happens? You can earn more over the long term if you have more aggressive investments, but in a year of losses, these types of investments could also lose more money. And if the losses seem too big, these investments may be too risky for you. If this happens, staying invested may be harder. Making sure that you're invested in line with your risk tolerance can help you prevent this. You should also find an asset allocation model that suits your appetite for risk, even if it yields a lower average rate of return. Investing should help you meet your goals instead of putting you further away from them. While your account value increasing or decreasing regularly is normal, you don't have to lose money. And controlling your fears, making sure you hold suitable investments, having realistic expectations about how your accounts will grow and the time frame in which those gains will happen can help you avoid it.
SP:SPXEducation
by samitrading
2
SPX. The Certainty Trap ‘Never’ &‘always’ have no place in MKTS!Just passing this cool info written by a guy called Ben Carlson. - Ben discusses the differences between probability and certainty: "There are two arguments I see on a regular basis that show up as a result of data overload: …because that’s never happened before. …because that’s what’s always happened before. -The problem with this line of thinking is that it can lead investors to fall into what I like to call the certainty trap. It’s this all-or-nothing line of thinking that causes so many to constantly attach extremes to every single market move or data point they see. The beginning of the recovery or the end of the world is always right around the corner. The assumption is that we’re always either at a top or a bottom when most of the time the markets are probably somewhere in the middle." -The reason the investing certainty trap is so easy to fall for is because historical data can feel so safe and reassuring. Look here, my data says that this has never (always) happened in the past. Surely this trend will continue. I’ll just sit here and wait for my profits to start rolling in. -‘Never’ and ‘always’ have no place in the markets because no one really knows what’s going to happen next. ‘Most of the time’ is a much more reasonable goal, because nothing works forever and always in the markets. If it did everyone would simply invest that way. I think a much more levelheaded approach is to follow the Jason Zweig 10 word investment philosophy: -Anything is possible, and the unexpected is inevitable. Proceed accordingly.
SP:SPXEducation
by samitrading
2
STOP being a Revenge Loser in 3 WaysSo you’re down $200 for the day… Your poor heart strings have been pulled and your ego has been shot down… In 23 minutes, the stock market will close, which will leave you devastated with a losing trade! You decide to pump up your chest, make an animal grunt sound and try to make up for this loss… And so, you take the ‘not-so-perfect trade’, because the market now ‘owes you one’. You lose again… This time it’s not $200, it’s a $450 knock. Well done! You’ve just fallen into the most common Revenge-Trading-Trap… And you’ve just become what I call a “Revenge-Loser”… Let’s make sure that never happens again, shall we? Here are three solutions to help... Solution #1: Let bygones be bygones Trade losses come with the territory… Take them, own them but make sure they are not so big that you feel the need to cry about it… Drop your risk from 5% down to 2% or even 1% per trade… Until you get to the point, where you can easily just let your losses slide. Solution #2: Grab a cold one This is my favourite… When you feel the need to jump on the next trade, without a good setup – the next tip is guaranteed to help. Step away from your computer and grab a drink, watch Netflix go make Ice-cream… Whatever you need to do, to stop trading for the day – DO IT… The markets will be here for you tomorrow and for whenever you’re ready to trade again… Solution #3: Follow a successful trader If you feel you: DON’T want to struggle taking a trade. DON’T have a trustworthy trading strategy DON’T have the right experience to know when to buy or sell DON’T have the time-less money management rules to execute your trades well… It’s for these reasons and more, I’ve decided to send my personal BUY and SELL weekly trade alerts, tips, videos and market updates for you… When I send out a trade, you know what I’m buying or selling for the day, week and month… And when I profit you profit… It’s really a win-win… If you have any trading questions I'm here to help. I've been in the markets since 2003. Trade well, live free. Timon MATI Trader
NASDAQ:NDXEducation
by Timonrosso
1
The Four Quadrants of the Economic CycleUse this as tailwinds for your trading and investments to spot the capital inflows when the time comes. I would say we are likely in the inflationary bust stage (1) coming out of the disinflationary boom stage (4) for the last decade and beyond. I would dare say the Inflationary bust stage is next (2) as the central banks try to kill inflation by raising rates and destroying asset prices. To fix the economic damage they would have to eventually change their monetary policy which would then bring us into an inflationary boom (3) The cycle repeats over and over but I'm positioning for the Inflationary boom stage (3) as I believe this stage will last many years.
Editors' picks
TVC:TNXEducation
by AxeCapp
32
BTC vs stock and investing in difficult timesDifficult times are coming Since march 2020 when pandemic was accounced we saw many bad for economy decisions. There was no doubt that it will have negative impact. At the beginning bad sentiments were "flooded" with printed money as per tradingeconomics we can see money supply in the US increased 4 times between march and april 2020. Until now we can see effects in very high inflation in Europe and both Americas. South America however always had this problem :) The war in the Ukraine will have negative impact for wheat supply to many countries in the Middle East and Africa. Other countries to save wheat supply for themselves will ban export. Ban on the Russian oil will increase prices in Europe even more. Probably in some countries we will see fire on the streets in the next year. When LUNA crashed many people lost 100% of their savings because some invested 100% in one asset. High inflation is pushing people to bad economical decisions. Some people invest in gold, other in BTC or real estate to save money from inflation. This is however creating the bubble. Many people bought houses in the past 2 years because of very cheap loans (0.05 interest rates). With higher interest rates they will be not able to pay loan, many houses will be sold unfinished. In the difficult times the winners will be the people who wait with investment for right moment. In next years we will see a lot of bankruptcy. Watch interest rates in the next months. Expected are further rises in many countries. War in the Ukraine and oil prices have significant role too.
SP:SPXEducation
by UnknownUnicorn29290293
Do not rush to catch the falling knife..!"The term is commonly used in phrases like, "don't try to catch a falling knife," which can be translated to mean, "wait for the price to bottom out before buying it." A falling knife can quickly rebound - in what's known as a whipsaw—or the security may lose all of its value, as in the case of bankruptcy." (Investopedia) "A falling knife refers to a sharp drop, but there is no specific magnitude or duration to the drop before it constitutes a falling knife. A falling knife is generally used as a caution not to jump into a stock or other asset during a drop. Traders will trade on a sharp drop, but they generally want to be in a short position and will use technical indicators to time their trades." (Investopedia) Best, Dr. Moshkelgosha M.D DISCLAIMER I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site. Reference Article: www.investopedia.com
NASDAQ:NDXEducation
by Moshkelgosha
8
Human vs Machine, Elliott WaveThe goal of this article is to help the platform developers improve he final product..! Chart pattern beta is a new feature on the indicator menu. First let’s define what Beta version means: Beta version is an early version of a program or application that contains most of the major features, but is not yet complete. This is a very important key that needs users attention..! In the above example you see two different setting for this indicator, Absolute vs Percent. There are 3 cardinal rules that needs to be considered in Elliott wave analysis: 1: Wave 3 can NEVER be the shortest impulse wave. 2: Wave 2 can NEVER go beyond the start of Wave 1. 3: Wave 4 can NEVER cross in the same price area as Wave 1. As you can see in percent mode the first and the most important rule is not met..! Wave 3< 0.618 * wave 1 Wave 3< wave 5 So This automated feature doesn’t count correctly and breaches the cardinal rule number 1. Moreover In the absolute mode you can see wave one is bigger than wave 3 and wave 5 , interesting, wave one is equal to wave 3+ wave 5, which can not be correct. Usually, wave 3 or wave 5 is the longest or the most strong wave not the wave 1. I strongly believe these problems and basic rules need to be corrected in the future versions. Best, Moshkelgosha
NASDAQ:NDXEducation
by Moshkelgosha
2
Complete Macro AnalysisHello everybody! This is a follow up on my 6-part traditional and crypto market analysis, yet everyone that reads this one will benefit greatly, regardless of whether they've read any of the previous analyses or not. Over the last week I provided some updates on each part, however it currently makes more sense for me to make a brand-new holistic analysis, rather than provide small updates on each part. This one will be focused entirely on traditional markets, while the next one will be focused entirely on crypto. In order for anyone to have a better idea of where markets might be headed next, it is best to start with the bond market. Bond yields have been rising across the world and across the entire curve, with the big distinction that lower duration bond yields have been rising significantly faster than long term ones. The main reason that this is happening is that bond markets are expecting Central banks to raise rates a few times in the next 1-2 years, but don't believe they can do anything more than that. Essentially the market sees inflation being transitory, that the global economy is in a bad shape and that Central banks are in such a terrible spot, that by the time they raise rates a few times, they will be forced to start cutting them again. Based on the charts below, it is clear that bond yields are still in a massive downtrend. The 10y yields have started hitting resistance, while yesterday we got the first rejection at resistance due to the Russia/Ukraine news. It is pretty normal for people to seek safety at times like this, by buying bonds (bond yields and bonds are inversely correlated). So, as you can see on the third chart, the minute bonds got to support and the news started coming out, the bond market bounced. Although I wish that war between Russia and Ukraine doesn't happen, and actually believe it won't happen, in case that it does happens, the Fed gets some room to not raise rates. For many reasons that I mentioned in the previous analysis, it is clear that inflation will come down significantly in 2022 and there is very little the Fed could do about it anyways. Therefore, any excuse they might be able to use to not raise, they will probably use it. Having said all that, bonds are still in a short to medium term bear market, and could fall another 5-10% before they put in a final bottom (yields going up by 0.5-1% from here). Now the situation between Russia and Ukraine doesn't affect markets just because it affects the psychology of people or because governments print money to cover expenses of war. There are several severe implications around trade and resources, as a lot of trade especially between Europe and Russia could stop, while Russia is a major exporter of commodities, primarily of Oil and Natural Gas. Europe and the entire world were already facing serious problems around energy, and this could make things even worse. Again, for many reasons mentioned in the previous analysis, there isn't enough oil above ground or oil production to cover the needs of the world at reasonable prices. OPEC isn't even able to meet its production increase goals, let alone be able to handle Russia not giving oil to the rest of the world. Oil is already pretty expensive relative to where it should be given the current state of the global economy, and based on the charts it could go significantly higher. So far, the market has behaved as I had expected, with a rise up to 92-93$, a pullback and now another push higher. It's not yet clear if the current situation will boost oil prices above 100$, but it is certainly possible. In the short term it is easy to see a mini 'speculative shock', that could send crude up to 115-120$, only for it to then come all the way down to 75$ and find support there. What is interesting to note is how Gold has been able to hold its ground for so long, despite bond yields going higher. Not only that, but it currently sits above all major moving averages and pivots, while it has also broken above its key diagonal resistance. The truth is that the breakout isn't as decisive as one might have expected based on the news that came out on Friday, hence it might be a trap. It’s clear that the breakout was heavily affected by the the Russia/Ukraine news and that could be the catalyst for a gold bull market, but it’s still prudent to be cautious. What is even more interesting is that Gold has gone up, while most Central banks are raising or plan to raise rates, and while the USD has been going up since early 2021. In my previous analysis, I mentioned how I thought gold going up or down is more like a coin toss, as there is a strong case to be made in either direction. Some people took that as me being bearish on Gold, while what I had said was that above 1930-1940 gold might be tremendous for going long. Personally I prefer to buy strength and simply sacrifice some gains, in order to avoid being stuck in a trade that doesn't do well. A few weeks ago, the ECB hadn't even talked about raising rates, but now they have. Right after the Fed meeting the EURUSD pair had a major reversal that accelerated when the ECB started turning hawkish. My initial thought was to watch Gold closely, as now 3 of the 5 major Central banks are raising or talking about raising rates, yet gold remains strong. At the moment EURUSD has been rejected at resistance with an SFP, yet it still has some room to the upside. It's above the 50 DMA and the diagonal, so if everything goes well and tensions get resolved peacefully, the pair could easily get to 1.15-1.17 by the next Fed meeting. The USD seems to already been losing steam as the yield curve is flattening and there are already 7 rate hikes being priced in. Hence the ‘real’ news isn’t that the Fed will raise rates by 0.25% in an emergency meeting or that it will raise rates by 0.5%, but that the ECB might raise rates after an entire decade, as well as that all Central banks will be forced to cut rates relatively soon. Therefore, this gold strength could also be an indication that many investors are betting on a policy error by Central banks, which might be forced to reverse course faster than people expect. What people need to know, is that gold doesn't behave like most people think it does. Gold in our age, is more like an error/catastrophe hedge, that tends to follow real rates. For example, today Gold could benefit from two things: 1. A war is definitely a big boost for gold, as people might want to own it because it is of limited supply and has no counterparty risk, and it can easily be owned anywhere. Countries that go to war tend to devalue their currency or even seize assets, or that country itself could be excluded from the global financial system, like being kicked out of the SWIFT system. In such a situation gold tends to offer tremendous certainty, while nothing else really does, not even US treasuries. 2. When Central banks are cornered or have no real control over a certain situation. Currently it is obvious that Central banks are trapped, and that there is another major 'catastrophe' lying ahead. The world is stuck in an environment of low growth and too much debt, with markets being significantly overleveraged. None of the problems over the last 20-30 years have been solved, only papered over, hoping that the system magically heals, with the last 13 years alone being full of examples of them always acting late. Finally, the key reasons why gold hasn't done well during a situation of deeply negative interest rates, is that 1. Gold had rallied significantly since 2018, 2. There were lots of different, more compelling opportunities out there, 3. Everyone was already prepared (nobody else to buy + people had to sell gold as inflation increased to covered other costs, essentially using their insurance), 4. Most of the inflation wasn't caused by the Fed / Central bank actions. After having gone through all of the above, it is definitely time to talk about stocks. Once again I’ll focus on the top 3 US indices, SPX, NDX and RUT, as they can give us a pretty good idea of where stocks are headed globally. In my previous analysis I mentioned how I expected a bounce, a dip and then another bounce, which all pretty much played out based on my technical analysis, with one exception. The last move up was shorter than initially expected, however even based on my tools I was probably 'too optimistic'. Starting with the S&P 500, we can see how the bullish channel was broken and significant downside followed. Then the market had a strong bounce off the 300 DMA + horizontal support. After the bounce it got rejected on the 100 DMA + diagonal resistance + horizontal resistance, and fell down to the 200 DMA where it bounced. What is odd to me is that the bounce ended with a double top, rather than getting up to the 50 DMA and test the diagonal, while forming an SFP. A double top there is somewhat bullish in the short term, as it is an area that the market will probably break before making new lows. At the moment the market is sitting right at the Yearly Pivot but has broken below the 200 DMA, a situation that is neither very bullish or bearish. As a whole the momentum is indeed pointing lower and this isn't a great picture. In turn the Nasdaq 100 is actually looking much worse than the S&P 500, as a lot of the big tech behemoths have been taking several big hits recently. Slow growth, higher inflation and higher interest rates, are definitely not beneficial for these companies. For example, we saw a massive gap down for Facebook after a disappointing earnings report, a gap similar to what happened in June 2018, with the NDX going down 19% from that point in the next 6 months. Tech stocks have massively outperformed everything else since 2009, and pretty much everything compared to where they were in Feb 2020, so it is normal to get some extra weakness in this index. At the same time several parts of the stock market started peaking throughout 2021, with mid Feb 2021 being a major inflection point. At that time many unprofitable tech related companies had reached bubble territory and started reversing, but the effects of their valuation getting crushed started having an impact on NDX three months ago. The third index and final index is the Russell 2000, which looks like it was in distribution for about 10 months, while a few days ago it had a throw back into resistance. The RUT had a really strong breakout in Nov 2020 and by March 2021 it was up 35%. Then in September it formed a clear bull trap that led to the major leg down. Once the 2100 support that was tested multiple times for about a year was broken, it became clear that more downside would soon follow. At the time of my previous analysis, I mentioned that we'd probably see the Russell retest that support and flip it into resistance, which happened as expected. Now the index is below all major moving averages and Pivots, and is still looking bearish, even though in the short term it has shown a decent amount of strength. Until it reclaims 2250, it remains in bearish territory and it is probably best to avoid going long, Based on all the above, things overall aren't looking great. At least not in the short to medium term, for the economy and the stock market. Central banks are trapped and most investors are aware of that, and now there is an extra variable, that of the conflict. So the question then becomes, if everyone is aware of all of this, couldn't the market simply go up from here? Aren't lots of these things priced in? Aren't wars said to be good for the stock market? Well, like I mentioned above all of these are correct. It is true that due to the conflict we might see bond yields roll over and we get more stimulus from central banks and governments, both of which could push stocks higher. However, in the short term there is a lot of uncertainty due to the way many things will get disrupted in the world. Because of that gold and oil could go ballistic, hence they are the best bets at the moment. It is probably best to stay away from stocks for now, as their potential downside is substantial, while their potential upside is limited as they need some time to recover. Nothing in the charts really suggest that they are ready to go up hard any time soon. Let's also not forget that stocks would have eventually deflated to an extend, regardless of what the Fed or what happens in the world, as the 2020-2021 frenzy couldn't last forever. Of course this doesn't mean that I believe a major bear market is in play right now, just that the SPX could eventually get to 3900-4000 in the next year, that the NDX will test its major log diagonal and that the RUT will its 2018 highs. Although I don't know how or when we get there, to me the most likely scenario is that within the next 2 years bond yields will collapse and the government will be forced to spend a lot, while the Fed is forced to cut rates and do QE. Even if the yields don't collapse and inflation goes rampant, the US government will still be forced to print and spend a lot, something that would make the problems worse. In conclusion, despite the fact that I was mostly bullish on stocks and oil through 2020-2021 and neutral-bearish on gold, my stance now remains bullish on oil (buying dips anywhere from 55-75$), neutral-bullish on gold and neutral-bearish on stocks. For me to turn bullish on stocks again, I'd either need to see certain levels get to the downside or reclaim certain levels to the upside, or some extreme action by central banks or governments. In terms of US bonds and the US Dollar, the picture is not as clear. In early 2021 I was bearish on bonds, but after that I was bullish as I didn't really expect the Fed to raise rates and thought bonds were significantly oversold. Even if I wasn't expecting the Fed to raise rates, the USD was also extremely oversold and none of the issues of the financial system had been solved. The world was still short on dollars, what the Fed and the government did was too little and at the same time everyone printed. In the current environment, on the one hand bonds are in major downtrend and the USD is in a major uptrend, and on the other hand both might have reversed after hitting major inflection points. Hence it is probably better to either go with the trend or simply wait a bit until the market gives us a clearer picture as to where it wants to go next. Thanks a lot for reading and good luck with your trading! :)
FX:NAS100Education
by BitcoinMacro
Using different deflactors on IndexesHere I put up a series of deflactors on the Nasdaq 100 Total Return... I like to use Total Return Indexes becuase they acurately reflect the actual growth of the invested money, rather than simple price indexes... I picked the Nasdaq because as you may have noticed from previous posts the Nasdaq is the absolute winner in terms of performance in the last 15 years... also (unfortunately) I did not find a Total Return option for the S&P500 on Tradingview... actually it's quite bad out there, even spglobal.com doesn't seem to publish those anymore, much less deflated with CPI... Anyway, moving to the chart here we present a series of deflactors applied to the $NDX Total Return since INCEPTION: 1. Gold 2. CPI 3. CPI+DXY 4. M2 (Fred money stock) 5. REAL M2 (Fred money stock with CPI) I found the Real M2 the most interesting idea, for in a high monetary inflation environment, Real M2, purges the nominal M2 (total monetary inflation) of its price inflation "component", and comes to a somehwat more balanced deflaction than the original metric (435% performance using M2 Real, vs 275% using the Pure M2 deflactor)
NASDAQ:NTTREducation
by LotusTrading20
3
Indexes - What are they and how do they work?Index tracks performance of multiple assets that are grouped together. One of the first people to introduce the concept of indexing were Charles Dow and Edward Jones when they created the Dow Jones index in 1896. This concept allows for an easy tracking of performance of any particular sector within the economy. For example, the Nasdaq 100 index tracks performance of hundred biggest tech companies in the U.S.; similarly, the Russell 3000 index tracks three thousand largest companies in the United States. These indexes contain U.S. securities which account for over 90% of U.S. corporate equity; therefore, analyzing an index provides an investor with information about the overall health of the economy or particular sector. Diversification Generally, investing in indexes is associated with lower risk than investing in stocks. This is because indexes are structured in such a way that they diversify risk by tracking performance of multiple assets rather than by tracking performance of one single asset. For example, if an investor's portfolio consists of shares of a single stock company and the value of those shares drops, then it directly affects the portfolio in a negative way. However, if an investor owns an index tracking performance of 10 companies instead of a one stock title, then the investor's risk is diversified among ten companies instead of one single company. Therefore, an index tends to perform well as long as the majority of its components perform well. Similarly, when the majority of companies incorporated within an index perform poorly then the index tends to reflect it. Illustration 1.01 Illustration above depicts the monthly chart of Hang Seng Index (Ticker: HSI). It is observable that the index performed well in the long-term. Though, massive drops in the index are observable too in 1997, 2000, 2007, 2015 and 2018. Source: www.tradingview.com Value of the index and weight distribution The value of an index is dependent on its underlying holdings; further, it can be based on the price, market-cap or any other metric related to these assets. There are various methods on how to weight an index which plays an important role in how it performs. For example, in an unweighted index all its components have equal significance, regardless of their size. However, in a market-cap weighted index these components hold significance that is proportional to the size of their market-cap. Therefore, a volatile move in a big company would have a bigger impact on the overall performance of an index as opposed to the volatile move in a small company. Most indexes are price-weighted and market-cap weighted. Indexes as financial assets Generally, indexes tend to move in trends and produce good results over a long-term period. Index investing is preferable for inexperienced and passive investors because it tends to outperform active management in the long run. Additionally, it takes off psychological pressure that is associated with an actively managed portfolio while providing more free time to an investor. Exposure to an index can be gained by investing in index futures, options, CFDs, ETFs and other derivatives. Major indexes include: Dow Jones Industrial Average - thirty large U.S. companies that trade on the NYSE and NASDAQ. Nasdaq 100 - hundred biggest tech U.S. companies that are publicly traded. Standard & Poor 500 - five hundred biggest companies in the U.S. that are publicly traded. Russell 2000 - two thousand smaller companies that comprise the Russel 3000 index. Russell 3000 - three thousand biggest companies in the U.S. that are publicly traded. DAX 40 - forty biggest German companies that trade on the Frankfurt Exchange. Hang Seng Index - sixty biggest companies that trade on the Hong Kong Exchange. Seasonality and trends Indexes tend to move in cyclical trends and less often in trading ranges. They are less prone to the effects of calendar and industrial seasonality when compared to stocks and commodities. Change in components Since their inception many indexes have changed the composition of their underlying assets. For example, the Dow Jones Industrial Index started as Dow Jones Transportation Average in 1896 and consisted of only twelve companies. These companies operated mainly in railroads, cotton, tobacco, gas and oil sectors. However, eventually new companies were added to the index until it reached the total number of thirty companies in 1928. Since then the composition of the index changed several times; although, the number of companies stayed the same. This concept of rebalancing indexes is common to many other indexes; and it usually occurs on a quarterly basis. Illustration 1.02 Picture above shows the monthly chart of the Nasdaq 100 Index (Ticker: NDX) between 1995 and 2006. Companies included in this index changed over time. Nowadays, the Nasdaq 100 index includes such companies as Alphabet, Apple, Microsoft, Intel, Tesla, etc. Source: www.tradingview.com If you have not read our previous articles on stocks and commodities, please feel welcome to do so. They are attached to this idea. Additionally, feel free to express your own thoughts and ideas in the comment section below. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.
Editors' picks
SP:SPXEducation
by Tradersweekly
43
What is going on in the market..?All major indexes have reached new lows today and bounced back a little, Which shows sellers are strong..! on the other hand they bounce back a little and none of them even touched the middle of yesterday's candle, which shows buyers are not strong enough! I think any trader in order to be successful should have a predefined plan for trading! That plan must look like an algorithm code: a combination of 0,1, and, if, or..! It means: IF A, B, C... happened I will open the position! But he should not forget to monitor his position! So, IF X, Y, Z, ... happened, I will close my position! But, What if A, B, C, .. do not happen for a while? The answer is I will sit calmly and wait for the next opportunity..! In other words, A, B, C to happen! One of the biggest trading mistakes is not defining a "No-Trade Zone"! I think we are at the highest level of uncertainty in the market, in other words, "No Trade Zone". One question: Did you define your A, B, C,...X, Y, Z??? Best, Moshkelgosha DISCLAIMER I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
TVC:RUTEducation
by Moshkelgosha
11
Some important questions & answers (for beginner investors)Today we prepared for you several questions and answers that might be helpful to new investors. Please feel free to post your own questions and answers in the comment section. What is technical analysis and why does it work? Technical analysis is a scientific discipline that analyzes investments by evaluating statistical data (usually price and volume). This method works because of fractal nature which represents the ability of same price patterns to appear across multiple different time frames independently. This applies also to patterns observable in oscillators, indexes and other technical tools. What trading systems are the best performing ones? Best performing trading systems are trend based. Purpose of such trading systems is to identify the trend and then „ride it“ – which means investing in its early stage and taking profits in its latter stage. Which time frame is the most reliable? Generally, bigger time frames are more reliable as opposed to smaller time frames. Though, patterns and trading signals usually take longer to develop when using a bigger time frame. Most common time frames are: 1-hour, 4-hours, daily and weekly. What is leverage? Is it a really fast way to make money? Leverage simply represents borrowing money in order to fund an investment. For example, when a trader uses leverage with ratio 1:10 and underlying asset moves by 1% then leveraged asset moves by 10% in the same direction. Leverage is definitely one of the possible ways to generate money fast. However, it is also a quick way to lose money. Should I use a leverage when I am new (unexperienced) investor? Use of leverage by new investors is pretty common as it represents an enticing opportunity to make money fast. However, in our opinion, an unexperienced investor should not use leverage at all. That is because leverage is very difficult to manage and its use by an unexperienced trader usually results in loss of capital. Is it possible to time exact market tops and bottoms? Timing exact market tops and bottoms is incredibly difficult even for an experienced trader. There are several technical tools at disposal of a technical analyst which he or she can use to indicate market reversal points. However, picking these exact spots is not necessary in order to turn profitable in trading. As mentioned previously, best performing trading systems are trend based. Such trading systems work by identifying trends and by exploiting them (without requirement to identify exact market top or bottom). What is diversification? Why should I implement it? Diversification is one of the possible ways to manage risk in the portfolio. It simply stands for diversifying capital into multiple different investments rather than focusing capital in a single investment. Proper diversification protects investor's capital from price fluctuations within particular market sectors. Additionally, it is crucial in order to build a long-term lasting portfolio. Should I invest in the stock market when it just reached all time high? Probably not. Usually, the market tends to pull back when it reaches a new all time high. Therefore, in our opinion it is not best to add to the long position just when a new all time high was reached by an asset. One of the best strategies in a strong bull market is to add to the long position when price drops and then sell the position once an asset reaches new all time high. Should I invest in an asset just because it fell 90% in value recently? Not necessarily. Fall of such high magnitude does not necessarily mean that the price trend will reverse. There may be various reasons why an asset fell by so much; and therefore, doing your own due diligence is highly advised before entering any trade. Is past performance of an asset indicative of its future performance? No. Past performance of an asset should not serve as a basis for predicting future performance of that same asset. Should I use options/other derivatives as a new trader? There is no restriction to use options as a new trader but derivatives in general are more complex instruments than stocks or bonds; additionally, their price is determined by numerous factors that an investor should be aware of. If a trader does not fully understand how some asset class behaves, then he or she should avoid such a particular asset class. Should I keep holding a losing position? It depends on the investor's own assumption but in general it is better to close positions that keep losing to prevent further losses and to be able to use capital somewhere else. I feel I haven’t made many trades in the recent past. What should I do? Trading is not about making enough trades but about generating profit. Sometimes there are not enough opportunities in the market; making too many trades could lead to entering positions that a trader is not fully comfortable with. Also too many trades reduce profit due to trading fees being stacked up. So if a trader can not find another opportunity to make a trade, the best solution is to take a “break” and to keep looking for the next opportunity rather than force himself or herself into trading. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as basis for taking any trade action by individual investor. Your own due dilligence is highly advised before entering trade. This content serves solely educational purposes.
Editors' picks
SP:SPXEducation
by Tradersweekly
116
SPX'S Elliot. What's ABC- WXY- WXYXXZ = Coffee Espresso shots !THE ONLY NOTICABLE DIFFERECNE IS THE CONNECTION WAVE "X" & "XX" IN WHICH THEY CAN BE ANYTHIGN BUT AN EXPANDING TRIANGLE !!! Double and Triple ZigZag Rules: Double (DZ) and Triple (TZ) Zigzags are similar to Zigzags, and are typically two or three Zigzag patterns strung together with a joining Wave called an x Wave, and are corrective in nature. Doubles are not common, and Triples are rare. Zigzags, Double Zigzags and Triple Zigzags are also known as Zigzag family patterns, or 'Sharp' patterns. Double Zigzags are labeled w-x-y, while Triple Zigzags are labeled w-x-y-xx-z. Both these patterns are included in the list of rules and guidelines below. Only a Double Zigzag is illustrated below. Wave W must be a Zigzag. Wave C of W cannot be a failure. Wave X can be any corrective pattern except an ET. Wave X must be smaller than Wave W by price. Wave X must retrace at least 20% of W by price. The gross price movement of Wave X must be less then 3 times the price movement of Wave W. Wave X must be no more than 5 times Wave W by time. Wave Y must be a Zigzag Wave Y must be greater than or equal to Wave X by price. Back to back and double failures are not allowed. Wave Y must be greater than 90% of Wave W by price, and Wave Y must be less than 5 times Wave W by price. Wave Y must be no more than a factor of 5 times either Wave X or W in price or time. Wave C of Y cannot be a failure. Wave XX can be any corrective pattern except an ET. Wave XX must be smaller than Wave Y by price. Wave XX must retrace at least 20% of Y. The gross price movement of Wave XX must be less than 3 times the gross movement of Wave W. Wave Z must be a Zigzag Wave Z must be greater than or equal to Wave XX by price. Wave Z must be less than 5 times Wave Y by price, and must also be less than 5 times Wave W by price. Wave Z must be no more than a 5 times either Waves XX, Y, X or W in both price and time. Double and Triple ZigZag Guidelines: The largest Wave in Wave W is usually less than Wave W by price. Wave X is usually a Zigzag family pattern. Wave X is usually less than 70% of Wave W by price. Wave X will usually retrace at least 30% of Wave W. Wave X is most likely to be a 38.2% retracement of Wave W. Wave X is next most likely to be a 50% retracement of Wave W. Wave X is next most likely to be a 61.8% retracement of Wave W. The largest Wave in Wave X is usually less than 140% of Wave W by price. The time taken by Wave X is usually between 61.8% and 161.8% of Wave 1. Wave Y is next most likely to be equal to 61.8% or 161.8% of W by price. Expect the time taken by Wave Y to be between 61.8% of Wave W and 161.8% of shortest of Wave W and X. Wave XX is usually a Zigzag family pattern. Wave XX is usually less than 70% of Wave Y by price. Wave XX will usually retrace at least 30% of Wave Y. Wave XX is most likely to be a 38.2% retracement of Wave Y. Wave XX is next most likely to be a 50% retracement of Wave Y. Wave XX is next most likely to be a 61.8% retracement of Wave Y. The largest Wave within Wave XX is usually less than 140% of Wave Y by price. Wave Z is most likely to be about equal to Wave Y by price. Wave Z is next most likely to be about equal to 61.8% or 161.8% of Wave Y. The largest Wave in Wave Z is usually less than Wave Y by price.
SP:SPXEducation
by samitrading
10 steps to a VERY PROMISING NASDAQ 100 auto trading strategy Steps: 1) Fit a SuperTrend indicator (By KivancOzbilgic) on a daily chart 2) Fit another SuperTrend on a smaller timeframe ( when 1 and 2 are green then Bullish, 1 & 2 are red then bearish) 3) Use the TTM Squeeze indicator (By Greeny) to determine entry and exit points 4) Adjust the level of fluctuation you are willing to live with by setting a cap on the ATR level . Your strategy can be 10x more lucrative if you are willing to stomach a 56% drawdown on your account. Reducing the ATR threshold reduces that Max Drawdown but also the profit. It is all about balancing risk with profits. 5) Size the trade positions based on the remaining equity (if your strategy is successful, you'll benefit from compounding, when it is loosing money, you reduce your exposure so you don't go bust) 6) Trade with futures to benefit from leverage 7) Adjust your positions between day and night (the margin requirements are lower during RTH so you can increase your position) 8) Script the whole thing 9) Tweak the parameters of all the above until you get the desired outcome (or until you are sick and tired of it :) ) 10) Finally automate the trades by sending the alerts to a webhook URL and send them to your brokerage account using your Optional: Add safety gates such as Max Drawdown, Max Intraday Loss or Max number of loosing days.... I built a script to quickly play with all the variables as input and back test different scenarios with different chart timeframes and trading windows for the above strategy. The resulting strategy was back tested as far as I could (15 months with the data I have) and the numbers are, what can I say, IMPRESSIVE! The strategy turned 10K into 3,000K with 62% Profitable Trades and 1.8 Profit Factor while keeping the Max Drawdown below 35% over a 15 months period! Before you ask, no the script does not repaint and yes the result were from a standard candle chart. Finally, commissions are factored in. I started trading this automated strategy live this week on my margin account using MNQ1!. So far so good... I'll keep you posted... Disclaimer: Successful back testing is not a guarantee of future success. Trading involves risk and so does automation. The above is not an investment advice but merely an idea. Do your own due diligence and above all, trade safely and stay safe!
CME_MINI:MNQ1!Education
by adventurous51
8
Trading with Regression Trend, 21 day MA, RSI, and MACDI just wanted to share some tricks I learned using some basic TA tools in trading view. I marked up the NASDAQ with some examples. Please note that hind sight is 20/20 and using these tools in real time is much harder. First, I think the Regression Trend tool is underutilized by traders. It is a very powerful tool for automatically generating trading channels. IMO, I would wager that most automated trading algorithms use some form of this technique under the hood. Linear prediction is the easiest and most common form of regression analysis. What you are trying to do is fit linear a trend to the stocks movement. IT takes a little practice to know when a trend has switch from bull to bear and back again. I find that the 4h is a good time frame to eliminate a lot of the noise in prices. Also, heikin ashi instead of candle sticks can make this easier, but you can't see gap ups/downs, which can be important. One way to ID a trend change is to look for a new high to break out and clearly close above the current channel. Once you find the "pivot", then you start a new regression trend moving it along to keep up with the previous day's price. Some times it can be better to let it lag a day or two to better estimate the price's location in the trend, which may be important when a trend first starts as there is not much data for the prediction. What you are looking for is highs and lows that get close to or have a candle wick out of the trend. This give you a high probability that the price is about to reverse. That is kind of the whole thing. Just keep movin gthe trend along with each day looking for the price to touch the top or bottom of the trend. Obviously, more info is better. This is where the other tools come in. The 21 day SMA is a nice one (you have to configure the MA to days not the default and set it to 21). If the price touches this level, it will most often bounce off (up in a bull market and down in a bear). You should also look at the RSI for obvious overbought and oversold conditions. Again, the 4H seems to work best for swing trading. You need to use the regression trend with the RSI as the RSI reading can give you a "false" trigger in strong markets as it can stay oversold or overbought for several days. Last by not least is the MACD. It is a great momentum indicator that you can use to determine when the market is switching gears from buying to selling and vice versa. There are other more advanced tools like trend lines, fib levels, and Waves that are very helpful, but to be honest I think you can be very successful with just the basic techniques I described. Maybe another day I will go into more detail on those tools. Hope this helps and good luck.
TVC:NDQEducation
by Dr_Roboto
3
Bollinger BandsBollinger Bands Timing for options trades relies on many price signals and confirmation. Even so, knowing when trends are likely to continue or to end is a skill of its own and many traders have timed entry and exit poorly because the trend was misread. One signal helps overcome this problem. Bollinger Bands (BB) track the trend with three bands. The middle band is a simple moving average of 20 sessions, and the upper and lower bands are each two standard deviations of that average. This sets up a great visual, forming a “probability matrix” of both price and trend. Because price is not likely to trade above the upper band or below the lower band for very long, any move outside of this matrix is likely to be followed by a retreat back into range. However, BB is not just a price-specific analytical tool. It also sets up a version of resistance and support as a dynamic factor rather than the traditional straight line. The chart of the Nasdaq 100 Index shows this relationship between the upward-moving trend and resistance. It is possible to draw straight lines to identify resistance or support as well as times of breakout. BB tends to provide a dynamic version, which is more accurate and more predictive. As the price trend is upward-moving, the upper band tends to track resistance with extreme accuracy. And as a trend moves downward, the lower band tends to track support In the NDX chart, three examples of the relationship between the upper band and the dynamic price movement are circled. The most revealing aspect of this is how accurately the band points to both entry and exit. As the price moves close to the upper band, it marks the beginning of a strong bullish move. This is seen in all three of the highlighted examples. These are highly reliable entry points for bullish trades such as long calls or short puts. The bullish trend ends as price moves away from the upper band. This is also seen clearly in all these instances on the chart. Logically, this marks an exit point, but not necessarily the start of a bearish move. Unlike most reversal signals, the move of price away from the upper band signals only the end of the price move. The next phase could be resumption of the trend, retracement, or reversal. To decide, requires a new set of signals. The interaction between the bands and identification of the trend also works when a dynamic trend ends and moves into a period of consolidation. This occurred at the beginning of December. Notice how strongly the band width narrows, going from 600 points in beginning November down to under 250 points. This shrinking band width signals a likely period of consolidation, which serves as a rest between dynamic trends, a plateau before trend resumption or reversal. This also points to the timing for a different type of option trade, which exploits a range-bound tendency in the short term. In fact, consolidation may be the most profitable trend for short-term trading because breakout is easily identified. Look for a widening of the band width to anticipate a new dynamic move. It does not matter whether that will be bullish or bearish; the issue is that a widening band width signals likely end to consolidation. Entering a consolidation-type trade like an Iron Condor (with strikes far outside the band width), a short covered straddle, are well-timed as consolidation begins, but should be closed as consolidation ends. At that point, a new trade can be opened to exploit dynamic price movement, such as synthetic stock (long or short) or simply a long option. The issue to keep in mind in all of these timing decisions is that BB provides more than a reliable tracking device for price. It also marks the nature of short-term trends, whether dynamic or sideways-moving. It is one of the most reliable predictive signals options traders can find.
Editors' picks
TVC:NDQEducation
by NewCycleTrading
18