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NVDA - Short Term Update - $118 Resistance - 08/15/2024NVDA is currently at the $118 resistance we discussed previously. I've moved that position to cash for the time being. Swinging some options in case we do get continuation to the upside, though. I'd like to see NVDA come back to $100 where I'd be buying back my equity but for now, just waiting to see what the price action does. Short term upside targets if we break out of 118 would be 125, 130, 132. To the downside, I'd see 112 as the first support, then 106 before ultimately seeing 100. Taking profit felt good, now I will patiently wait for the market to do something on this historically bearish time period. August on average has a -4.45% return on the S&P since 1950, and Aug/Sep combined is an average return of -5.8%. October tends to be the best month to be a buyer with an average return of 4% after 2 months and 6% after 6 months.
NASDAQ:NVDA
by bitdoctor
12
AST SpaceMobile (ASTS) Analysis: Multi-Timeframe BreakdownYet another great week traders and yet another analysis for us to look at today. I've been closely watching AST SpaceMobile (ASTS) across the weekly, daily, and 15-minute timeframes, and there’s a lot happening here. Let’s break it down: Weekly Chart On the weekly chart, ASTS has absolutely exploded. We're looking at a massive 50%+ gain this week alone. My Deno LinReg Candles are showing a steep upward trajectory, which aligns with this strong bullish move. The price has surged well above the MA21, and the momentum is clearly in favour of the bulls. The RSI is sitting deep in the overbought territory, which is a signal that we might see some cooling off soon. However, in such strong uptrends, overbought conditions can persist longer than expected. Key Support: The closest support on the weekly chart is around $19.36, but the way this stock is moving, we could see new levels of support form higher up if the bullish trend continues. Key Resistance: There’s no immediate resistance in sight since we’re in breakout territory, but psychologically, round numbers like $35.00 or $40.00 could act as resistance. Daily Chart Moving to the daily chart, ASTS has continued its bullish run, with the price extending far beyond the upper band of the CPR. This is indicative of a strong trend, but it also suggests that we might be due for a pullback or at least some consolidation soon. The MA21 is acting as solid support, and as long as we stay above this level, the trend remains bullish. The RSI on the daily chart is also in overbought territory, so we need to keep an eye out for any signs of weakness. Key Support: Immediate support on the daily is around $22.68, with stronger support at $19.88, which is near the MA21. Key Resistance: We’re in uncharted territory, but again, look out for psychological levels as potential resistance. 15-Minute Chart Zooming in on the 15-minute chart, things are cooling down a bit. After that massive run, the price is starting to consolidate, which is healthy after such a big move. My Deno LinReg Candles are starting to show some mixed signals, indicating that we might see a range-bound market in the short term. The price is currently hovering around the MA21 on this timeframe, and if it holds, we could see another leg up. However, if it breaks down, we might revisit the lower band of the CPR. Key Support: Immediate support is at $29.82, with stronger support around $28.00. Key Resistance: The next level to watch is $31.36, which was the recent high. Forecast and What to Expect Looking ahead, ASTS is in a strong uptrend on the higher timeframes, but with the RSI being overbought on both the weekly and daily charts, we could see some profit-taking or a pullback soon. On the daily and 15-minute charts, I’ll be watching to see if the price can hold above the MA21. If it does, the bullish momentum could continue, potentially pushing ASTS to new highs. However, if we start to see signs of weakness, particularly on the 15-minute chart, I wouldn’t be surprised to see a pullback to those key support levels I mentioned. Stay tuned, and let’s see where this rocket ship takes us!
NASDAQ:ASTSLong
by Deno_Trading
5
EURUSD: An In-Depth Analysis and Timeless Trading Strategy👀 👉 The EUR/USD pair is the most traded currency pair in the world, and in this video, I take you through a comprehensive analysis of this highly liquid market. I also present a trade idea that can be considered for today. However, the concepts and strategies discussed are not limited to a single session—they can be applied at any time in the future across various market conditions. In this video, we explore the key features and benefits of TradingView, highlighting some of the essential tools I use in my day-to-day analysis. Whether you're a seasoned trader or just starting out, these tools can enhance your market insights and trading precision. We delve into critical concepts such as trend analysis, market structure, price action, and the methodology for pinpointing precise entry points on any given trading day. This strategy is not just a one-time trade idea; it’s a robust approach that can be utilized across different currency pairs, making it a versatile addition to your trading toolkit. Please note that while this analysis is thorough, it should be used as part of a broader trading strategy that takes into account your personal risk tolerance and financial goals. Trading in the currency markets carries inherent risks, and it's important to approach it with a clear understanding of those risks.
by fxtraderanthony
21
Comparing Different Financial MarketsComparing Different Financial Markets In trading, understanding the types of international financial markets is crucial. This article offers a comprehensive market comparison of the stock, forex, commodity, crypto* and bond arenas. You’ll learn the importance of these financial markets and what it takes to navigate each one effectively. Stock Market The stock market is a financial marketplace where traders and investors can buy and sell shares of publicly traded companies. By purchasing a stock, an investor essentially owns a slice of the company, and their investment's value moves in tandem with the company's performance. - Risk: Stocks can be volatile, subject to market sentiment, economic indicators, and company performance. Risk varies widely among different types of stocks. - Income Potential: Day traders aim for short-term gains, while long-term investors often seek stocks that offer dividends or high growth potential. - Knowledge: A solid understanding of market trends, company fundamentals, and technical indicators is beneficial for effective trading. - Liquidity: Most stocks, especially those listed on major exchanges, have high liquidity, allowing for quick entry and exit. - Costs and Fees: Costs can include brokerage commissions, although many online platforms now offer zero-commission trading. - Trading Hours: Generally restricted to weekdays, opening and closing at set times, with after-hours trading being possible but less liquid. Forex Market The forex market is the global marketplace for buying and selling currencies. Traders pair two currencies, like EUR/USD, and profit from the fluctuations in exchange rates. - Risk: Forex trading can be highly volatile and is considered riskier than stock trading, influenced by geopolitical events, interest rates, and economic data. - Income Potential: High leverage can amplify gains but also increase risk. Many traders seek to profit from short-term fluctuations. - Knowledge: Understanding of macroeconomic indicators, geopolitical events, and technical analysis can be crucial for success. - Liquidity: Extremely high, given the 24/5 operation of the Forex market. - Costs and Fees: Typically lower than other markets, often involving spreads rather than direct commissions. - Trading Hours: Operates 24 hours a day, five days a week, allowing for flexibility in trading times. Commodity Market The commodity market is one of the types of international financial markets where physical or virtual assets like gold, oil, or agricultural products are traded. These markets often act as a gauge for supply and demand conditions globally. - Risk: Commodities can be quite volatile, influenced by global events, natural disasters, and political instability. Traders often hedge against other market risks by investing in commodities. - Income Potential: Gains can be substantial but are also subject to dramatic shifts based on the factors mentioned above. - Knowledge: Understanding of global economic indicators, supply and demand factors, and geopolitical events is critical. - Liquidity: Varies widely depending on the commodity; for example, gold and oil are highly liquid. - Costs and Fees: This can include brokerage commissions, futures contract fees, and costs associated with physical storage for some commodities. - Trading Hours: Vary by commodity and exchange, but many have extended hours due to global demand. Cryptocurrency Market* The cryptocurrency market is a decentralised digital asset market that includes cryptocurrencies like Bitcoin, Ethereum, and various tokens. It's the newest and one of the most rapidly evolving financial markets. - Risk: Extremely volatile, with prices subject to rapid fluctuations, sometimes within minutes. Regulatory concerns add another layer of risk. - Income Potential: High potential for both short-term and long-term gains, but also significant risk of loss. - Knowledge: Understanding of blockchain technology, market sentiment, and technical analysis is often crucial. Familiarity with regulation is also beneficial. - Liquidity: Generally high for well-known cryptocurrencies but can be low for lesser-known tokens and coins. - Costs and Fees: Vary by platform and may include transaction fees, deposit/withdrawal fees, and "gas" fees for certain types of transactions. - Trading Hours: Operates 24/7, allowing for ongoing trading and the chance to react to market news or events. You can head over to FXOpen's free TickTrader platform to explore the above-mentioned markets for CFD trading in real-time. Bond Market The bond market is a segment of the financial market where debt securities are issued and traded. Unlike the stock market, which is a part of the capital market, the bond market focuses on long-term debt instruments. This highlights the difference between capital markets and financial markets. - Risk: Generally considered lower risk compared to stocks and commodities, although risk can vary depending on the issuer's creditworthiness. - Income Potential: Lower yield compared to more volatile markets, but often offers more stable returns through interest payments. - Knowledge: Understanding of interest rates, yield curves, and credit ratings is essential for bond trading. - Liquidity: Varies depending on the type of bond; government bonds are usually highly liquid, while corporate bonds can be less so. - Costs and Fees: Transaction costs are generally built into the bond's price, but some brokers may charge commissions. - Trading Hours: Primarily traded over-the-counter (OTC), with some bonds available on exchanges. Trading hours can vary but are generally regular business hours. The Bottom Line In summary, the diverse features of financial markets offer traders a range of opportunities, from stocks and commodities to cryptocurrencies* and bonds. Armed with this knowledge, you're now equipped to navigate the markets with confidence. Want to put these insights into action? Consider opening an FXOpen account to kickstart your trading adventure. *At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:XAUUSDEducation
by FXOpen
4
9.35 and BeyondFavoring a rapid move higher in wave (iii) of {iii} of 3 through at least the 9.35 wave {b} of 2 high against the {ii} of 3 low of 5.10. Aurora developed a flat in wave 2 and has since began to develop higher in what appears to be a series of first and second waves before the onset of a third wave at multiple degrees. Third waves typically travel the most distance in the shortest amount of time and I expect to see volatile and rapid upside while any downside should remain corrective. A violation of 5.10 would invalidate the pattern and likely signify further downside through 4.41.
NASDAQ:ACBLong
by PhiWaveCapital
3
ATOMUSDATOMUSD Price Action: Trend: The overall trend in the chart is bearish. After a peak in April 2023, the price has been making lower highs and lower lows, indicative of a downtrend. Support and Resistance: ➢Support: There appears to be a support level forming around the $4.50-$4.80 range. The price has tested this level multiple times recently, showing some buying interest. ➢Resistance: Resistance is visible around the $7.00-$8.00 level, where the price previously bounced before continuing downward. Bollinger Bands: The Bollinger Bands are relatively wide, indicating higher volatility. Price Position: The price is currently near the lower band, which could signal that the asset is oversold in the short term. This often suggests a potential bounce or a period of consolidation. Middle Band (20-day SMA): The price is below the middle band, reinforcing the bearish sentiment. Volume: Recent Volume: The volume has seen spikes during the price drops, indicating strong selling pressure. However, the most recent volumes are tapering off slightly, which could imply that selling pressure is weakening or that traders are waiting for a clearer signal. Indicators & Signals: Possible Reversal: If the price holds the support around $4.50 and starts moving upwards, it could signal a short-term reversal or at least a retracement towards the middle Bollinger Band (~$6.00). Continuation of Downtrend: If the support breaks, we could see further declines, potentially testing lower levels not visible on the current chart. Conclusion: The chart shows a bearish trend with a key support level around $4.50-$4.80. The price is currently at the lower Bollinger Band, indicating it might be oversold in the short term. However, the overall sentiment remains bearish unless we see a significant change in price action, such as a break above the middle Bollinger Band or a significant volume spike with upward movement.
COINBASE:ATOMUSDShort
by Sahrin
7
Atlas Copco AB: Potential Entry Points in a Long-term UptrendOMXSTO:ATCO_A has demonstrated a long-term uptrend throughout its history, marked by two strong channels, with higher highs and higher lows. Since the Ukraine-Russian market crash, OMXSTO:ATCO_A has experienced a 100% increase. Currently, the stock is at the resistance channel, which has resulted in a notable downward reaction: During the strong uptrend, previous resistance levels, where the price peaked, turned into support levels when the stock experienced pullbacks. Now, as the stock returns to these crucial levels, they may serve as key support, potentially causing the stock to struggle to break below them or to rebound and rise further. I anticipate that the stock will gradually break through each of these key levels, eventually approaching the lower trendline before launching into a significant bull run. This scenario presents a promising opportunity for a long position, but we need additional bullish confirmation at these levels before making a move. Important levels: 150 SEK, 140 SEk, 120 SEK, 100 SEK
OMXSTO:ATCO_BLong
by Tallblomma
6
A Guide on How to Stay on the Right Side of Market RiskStaying on the right side of the market is the only thing that matters in investing. The goal is simple: be long the things that go up and avoid the things that go down. Although this sounds straightforward, investors often focus too much on the upside potential and forget about the downside. In reality, avoiding the downside is by far the most important factor that will have the biggest impact on your total returns. This is because a -50% loss will always require a +100% gain just to break even. Step 1: Follow the Trend The most effective method to stay on the right side of the market is by following the trend, primarily through moving averages. The two most common types are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA). The EMA assigns more weight to recent price movements, making it more responsive and effective for signalling the start of a downtrend, while the SMA offers a clearer view of the longer-term trend. The simplest way to construct a trend-following indicator is to combine a short-term EMA with a long-term EMA. A buying signal is triggered when the short-term EMA crosses above the long-term EMA, and a selling signal is triggered when it crosses below. This systematic approach ensures clear and actionable signals. Optimizing this strategy involves backtesting various EMA combinations to strike a balance between minimal trading frequency, lowest maximum drawdown, and highest profit factor. It’s also crucial to select assets that have historically adhered to trends, as these are more likely to continue doing so. Assets that typically adhere to trends, such as cryptocurrencies, fiat currencies, commodities, and tech stocks, are often driven by speculative or uncertain future expectations. By incorporating a longer-term SMA and adding a safety margin to the calculation, you can help minimize false signals from the EMAs. It’s advisable to compare asset performance not only against the USD pair but also against the safest investable asset in the selected asset class. This comparison helps determine if the additional risk is worth taking. Step 2: Draw the Lines Trend-following strategies are effective only with a clear market trend. Without it, prices may exhibit range-bound movements and generate false signals. Drawing trend lines and identifying horizontal support and resistance levels are crucial for enhancing the accuracy of these signals. The most reliable entry points typically follow a confirmed breakout from these lines, with older lines often indicating more significant breakouts. When drawing trend lines, it’s crucial to use both normal and logarithmic chart scales. The most reliable trend lines appear consistent across these scales, with a breakout observed on both further confirming the trend. Additionally, identifying reliable patterns like head and shoulders, inverse head and shoulders or double tops and bottoms can further validate trend breakouts. TradingView’s pattern recognition tools can automate this process and provide price targets, which can be helpful but are not always guaranteed. Step 3: Understand the Macro Following current macroeconomic conditions can enhance your understanding of the overall business cycle. The primary macro forces that influence asset markets are growth, inflation, and policy. These factors are subjective and not directly quantifiable, making them unsuitable for direct investment decisions. However, they are useful for assessing the market’s risk appetite, which should influence only your position size and not your systematic approach. The US Composite Leading Indicator (CLI) is one of the most informative macroeconomic indicators, providing insights into potential economic growth trends and helping anticipate inflections in the business cycle. Monitoring the US inflation and unemployment rates is also beneficial, as they significantly influence monetary policy. While minor fluctuations may not provide much insight, sustained trends that align with the Federal Reserve’s targets of 2% inflation and low unemployment are indicative of a healthy economy. Furthermore, tracking global liquidity can reveal the real-time effects of monetary and fiscal policies implemented by major central banks and governments. This serves as a valuable tool to assess the market’s risk appetite. In conclusion, this guide helps investors stay on the right side of the market by adopting a systematic approach that captures bull markets while avoiding major downturns. Recognizing that the future is unpredictable and that markets are driven by momentum, this method can both preserve and grow your wealth in a less stressful way. A disciplined, systematic approach, executed dispassionately, is essential for navigating market uncertainties. All indicators discussed are publicly available or can be accessed on my profile. Disclaimer: This article is for informational and educational purposes only and should not be construed as investment advice.
NASDAQ:NVDAEducation
by ingeforberg
5
Gold could rise to 2460After a significant drop of nearly 1,000 pips last Monday, gold has established strong support at 2,380 and began to recover mid-week, reaching the 2,430 resistance zone. The recent pullback from this resistance found support at 2,415—a level that has served as both support and resistance since the beginning of the month. Once again, support has formed higher, this time at 2,420. At the time of writing, the price is hovering around 2,435, and we could see a clear breakout to the upside in the hours. My strategy is to buy on dips, and I will remain bullish as long as the price stays above 2,415.
OANDA:XAUUSDLong
by Mihai_Iacob
18
Thin Markets Unnerve Traders: What to Know About Summer TradingLow trading volume is the market theme of the summer, which is driving investors to question their knowledge and ability to move in and out of markets. Forex, stocks, commodities and even crypto — they all seem more volatile during the summer quarter and there’s a reason for that. Big-shot traders ditch the trading desks for margaritas, espresso martinis and tan on the Amalfi coast while algo trading gets to slosh around billions of dollars. The result — thin liquidity sinks trades every now and then. August Trading Shakes and Stirs Markets The summer months have rolled in and with them a heightened feeling of unease has swept global markets. From a rally in the Japanese yen , to a big meltdown in stocks and crypto market carnage , asset classes got shook from this one market characteristic — volume . Thinning trading volumes disrupted the usual market rhythm, ushering in an environment dominated by increased volatility and unpredictable swings. Low volumes have the tendency to amplify price declines and increases. Illiquid August conditions may turn a rather normal move into a violent swing. Fewer shares traded means that a trading instrument is more susceptible to sharp price movements as there are fewer participants to absorb the trades. Panic Selling and the Carry Trade A volatility storm swept Japan’s stock market last week, throwing it into its worst single-day performance since 1987. Japan’s broad-based index Nikkei NI225 crumbled 12.4% in a single session while US stocks slumped 3%. Wall Street’s fear gauge, the VIX index of volatility VIX , shot up more than 50% to its highest level in 2020 when the pandemic was wreaking havoc. A day later, Japan bounced up 10% and the S&P 500 jumped 1%. The VIX shot lower by 28%. Japan ended up in the spotlight due to the unwinding of what’s called the “carry trade” — big hedge funds had borrowed trillions of cheap Japanese yen at near-zero interest rates to buy stocks or jam the cash into Treasury bills that pay a 5% interest. Risk-free. What’s not to like? The yen’s rise, for one. The sharp appreciation of the yen sent panicked carry traders scrambling to dump their holdings and repay their yen debt, which was getting more expensive. It’s the Algos’ Market, We All Live In It In August, traders typically exchange about 9.3 billion of US shares a day. Compared to March, where 13.2 billion shares change hands a day, that’s a 30% decrease in trading volume. Apparently, Wall Street does get a break from trading. Or does it? The stock market and the currency market, in particular, are dominated by and large by computer-trading algorithms that execute trades at lightning speed based on pre-programmed criteria. These algorithms, or simply algos, are allowed to process huge amounts of data and react to market conditions in milliseconds. While this can create efficiency and liquidity in normal market conditions, during periods of low volume — such as the summer months — they can contribute to increased volatility, especially if they are levered to the tune of 15, 20, 30 times. A single large order or a sudden piece of news can trigger a cascade of algorithmic responses, leading to rapid and sometimes exaggerated price movements. In other words, when these algos make a decision, that’s when volatility goes through the roof. Pair it with low volumes and you’ve got an explosion (or implosion) of prices. How to Survive Wild Markets? Given the unique challenges of summer trading, traders need to adjust their strategies accordingly. Here are some tips that can help. Lower Position Sizes : In a thin market, large positions can be harder to exit without moving the market (especially if you’ve loaded up on illiquid meme coins). Reducing position sizes can help mitigate this risk. Wider Stops : With increased volatility, it may be necessary to widen stop-loss orders to avoid getting wiped out by intraday market noise. Focus on Liquidity : Stick to trading more liquid instruments where possible, as these will typically be less affected by the summer slowdown. Hint: forex is the most liquid market. Keep an Eye on Economic Data : Summer doesn’t stop economic data releases , which can lead to outsized market reactions in a light market. Stay informed. Patience and Discipline : Summer trading requires patience and discipline. The temptation to overtrade in a quiet market can lead to mistakes. It’s often better to wait for clearer setups rather than forcing trades in a challenging environment. While you're waiting for the right moment to step in, test your strategies and find the best moves for future trades. What Do You Think? Summer trading presents a unique set of challenges that can unnerve even the most experienced traders. Thin markets, increased volatility, and the dominant role of algorithmic trading create an environment where caution is paramount. How do you handle volatile markets in thin trading? Let us know in the comments and let’s spin up a nice discussion!
SP:SPX
by TradingView
4
How to get exposure to crypto without owning crypto! Getting into crypto doesn’t always mean buying tokens like CRYPTOCAP:BTC , CRYPTOCAP:ETH or CRYPTOCAP:SOL directly onchain or even on centralized crypto exchanges. Sometimes, it’s easier, cheaper, and even more strategic to gain exposure through traditional investment vehicles There’s a few reasons why: * Tax efficiency: Many of these investments can be made through tax advantaged accounts, potentially saving you money come tax season and in the long run. * Regulatory safety: Traditional investments often come with better regulatory oversight, reducing the risks associated with direct crypto ownership. * Convenience: No need to set up wallets, remember seed phrases, or stress about hacks and CZ funds are SAFU tweets! So you know the why, now let’s get into the 5 ways to ride the blockchain wave without owning a single coin. 1/ Crypto ETFs If you’re looking to dip your toes into crypto, these funds offer exposure to digital assets without the hassle of managing a wallet. Spot/Leverage CRYPTOCAP:BTC & CRYPTOCAP:ETH ETFs: These funds directly track the price of Bitcoin or Ethereum, and some even offer leverage for those looking to amplify their bets. Think of it as buying Bitcoin or Ethereum, but without needing to worry about wallets or decentralized exchanges. Tech & Crypto ETFs (like LSE:ARK , AMEX:BLOK , NASDAQ:BKCH , AMEX:BITQ ): These funds mix crypto exposure with other cutting-edge tech stocks, offering a broader play on the future of this technology 2/ Coinbase Investing in Coinbase gives you a stake in the broader crypto ecosystem. Coinbase isn’t just a trading platform it’s a gateway to stablecoins, the Base blockchain, and a big chunk of crypto market activity Plus, they’re even an ETF custodian! And Coinbase’s stock has been COOKING: 3/ Fintech giants Companies like Robinhood, PayPal, Block, Mercado Libre, and Nubank are embracing crypto tech in a big way. Investing in these fintech giants means you’re betting on the growth of crypto adoption within our existing financial system The nice thing about investing in the fintech giants is it's a more diversified bet. If something happens to crypto, these fintech companies still have an underlying business with millions of users and real revenues. While they may drive crypto adoption and give you exposure to it, they don’t NEED crypto to still be a good investment. 4/ MicroStrategy and MetaPlanet These two public companies are heading up the “Bitcoin on the balance sheet” charge MicroStrategy is like the ultimate Bitcoin bull and holds billions in CRYPTOCAP:BTC and Metaplanet is a Japanese blockchain consulting firm that has adopted a similar strategy.Buying NASDAQ:MSTR is similar to leveraged $BTC. When CRYPTOCAP:BTC goes up, NASDAQ:MSTR goes up higher, same for the other direction though so be careful 5/ Bitcoin mining companies Want to bet on the infrastructure behind Bitcoin? Bitcoin mining companies (like NASDAQ:RIOT , NASDAQ:MARA , and NASDAQ:HUT ) are the backbone of the CRYPTOCAP:BTC network. By investing in these companies, you’re betting on a combination of the performance of the mining company and the price of Bitcoin. Bitcoin mining companies can also find additional revenue streams, like providing compute for Artificial Intelligence or heating homes. Similar to the Fintech giants, Bitcoin miners provide another diversified way to invest in crypto. As you can see, there are plenty of ways to get your slice of the crypto pie without ever buying a single token Sure, some options come with a bit more spice yet betting on companies means you’re not just riding the CRYPTOCAP:BTC or CRYPTOCAP:ETH wave, you’re also banking on those companies’ success. But depending on your situation, this might be the perfect way to dip your toes in the crypto waters or even beef up your portfolio. which way you chose and why?
NASDAQ:MSTREducation
by moonypto
12
How to Read the RSI Indicator: The Market's Lie DetectorAttention TradingViewers, market gurus, and Instagram influencers, this one indicator goes hard whenever it’s onto something. Let's talk about the RSI — the Relative Strength Index . This bad boy is like the lie detector test of the market, calling out overhyped moves and under-the-radar opportunities. What’s RSI All About? The RSI is a momentum-based oscillator that captures the speed and change of price movements. It operates on a scale of 0 to 100, and if you know how to read it, it’s like having X-ray vision into the market’s moods. The best part? It’s super easy to use — slap it on any chart, any time frame and let it do its thing. The Numbers Above 70 : Overbought alert! If the RSI shows a reading above 70, the trading instrument may have been partying a little too hard. Anywhere above 70 means that it’s flashing “overbought” – like a sugar rush that’s about to crash. Traders who follow the RSI usually interpret this as a signal to sell and move out of the asset before the line reverses course and dives back under the high-water mark. Sometimes, however, the price keeps climbing well above 70. Below 30 : Now we’re in “oversold” territory – it’s like spotting a hidden gem in a bargain bin. When RSI drops below 30, the market’s saying, “This thing’s been beaten down, but maybe – just maybe – it’s time for a comeback.” Keep in mind that sometimes the dip may keep dipping. How It’s Calculated RSI is all about relative strength — it compares the magnitude of recent gains to recent losses. Picture a tug-of-war between bulls and bears. The RSI score tells you who’s winning the battle right now, but also hints at who might be running out of strength. Trading with RSI Overbought? Maybe Sell (obligatory DYOR) . When RSI hits 70 and above, you might be looking at a market running out of fuel. You may start thinking about trimming your position, or at least keep an eye out for a reversal. After all, what goes up must come down (except maybe Bitcoin BTC/USD ?) Oversold? Maybe Buy (obligatory DYOR) . If the RSI drops to 30 and below, it could be a signal to start looking for a buying opportunity. The market is going through a meltdown and sometimes that’s your cue to go bargain hunting and snap up some discounted assets. Just make sure that your stock or crypto of choice isn’t falling for a specific reason — no indicator can save you from an actual rug pull. The Sweet Spot — Divergences: Ever notice when the RSI and price action don’t agree? That’s called a divergence, and it’s like catching the market in a lie. If the price is making new highs but the RSI isn’t, or vice versa, it’s a clue that something fishy’s going on and you may want to be on the lookout for a sur- price reversal. Bonus Tip: RSI in Different Timeframes Wanna get fancy and earn some bragging rights? Use RSI across different timeframes. A stock might be oversold on the daily but overbought on the weekly. By spotting the trend across different time frames, you can pick your desired time frame to trade in and follow closely. The higher the time frame, the longer the time horizon for the move to actually pan out. So, there you have it – the RSI. It’s not a crystal ball, but it’s pretty close. Use it wisely, and you might just outsmart the market — or at least stay ahead of the next big move. Keep those charts hot, continue learning about technical analysis and go smash those trading goals of yours. 🔥
Education
by TradingView
17
Understanding Dark Pools█ Diving Into Dark Pools In recent years, dark pools have become a significant part of the financial markets, offering an alternative trading venue for institutional traders. But what exactly are dark pools, and how do they impact market quality and price efficiency? This article delves into the comprehensive study titled "Diving Into Dark Pools" by Sabrina Buti, Barbara Rindi, and Ingrid Werner, which sheds light on the complexities of dark pool trading in the US stock market. █ What Are Dark Pools? Dark pools are private financial forums or exchanges for trading securities. Unlike public stock exchanges, dark pools do not display the order book to the public until after the trade is executed, providing anonymity to those placing trades. This lack of pre-trade transparency can help prevent large orders from impacting the market price, which is particularly beneficial for institutional investors looking to trade large volumes without revealing their intentions. █ How Do Dark Pools Work? In dark pools, the details of trades are not revealed to other market participants until the trade is completed. This lack of transparency helps prevent significant price movements that could occur if the order were known beforehand. Dark pools typically execute trades at the midpoint of the best bid and ask price in the public markets, ensuring fair pricing for both parties involved. █ Why Are Dark Pools Used? Dark pools are primarily used by institutional investors who need to execute large trades without revealing their trading intentions. Displaying such large orders on public exchanges could lead to unfavorable price movements due to market speculation and front-running by other traders. █ Benefits of Dark Pools Reduced Market Impact: Large orders can be executed without affecting the stock's market price. Anonymity: Traders can buy or sell significant amounts without revealing their identity or strategy. Lower Transaction Costs: By avoiding the public markets, traders can often reduce the costs associated with large trades. Improved Execution: Dark pools can offer better execution prices due to the lack of market impact and reduced volatility. █ Why Do Large Actors Hide Their Orders Using Dark Pools? Large institutional investors use dark pools to hide their orders to: Avoid Market Manipulation: Prevent others from driving the price up or down based on the knowledge of a large pending trade. Maintain Strategic Advantage: Keep trading strategies and intentions confidential to avoid imitation or counter-strategies by competitors. Achieve Better Prices: Execute trades at more favorable prices by not alerting the market to their actions. █ Actionable Insights for Traders Understand Market Dynamics: Knowing how and why dark pools are used can provide insights into market liquidity and price movements. Monitor Market Quality: Be aware that increased dark pool activity can improve overall market quality by reducing volatility and spreads. Assess Price Efficiency: Recognize that while dark pools can enhance market quality, they might also lead to short-term inefficiencies like price overreaction. █ Key Findings from the Study The study analyzed unique data on dark pool activity across a large cross-section of US stocks in 2009. Here are some of the critical insights: Concentration in Liquid Stocks: Dark pool activity is predominantly concentrated in liquid stocks. Specifically, Nasdaq stocks show higher dark pool activity compared to NYSE stocks when controlling for liquidity factors. Market Quality Improvement: Increased dark pool activity correlates with improvements in various market quality measures, including narrower spreads, greater depth, and reduced short-term volatility. This suggests that dark pools can enhance market stability and efficiency for certain stocks. Complex Relationship with Price Efficiency: The relationship between dark pool activity and price efficiency is multifaceted. While increased activity generally leads to lower short-term volatility, it can also be associated with more short-term overreactions in price for specific stock groups, particularly small and medium-cap stocks. Impact on Market Dynamics: On days with high share volume, high depth, low intraday volatility, and low order imbalances, dark pool activity tends to be higher. This indicates that traders are more likely to use dark pools when market conditions are favorable for large trades. █ Conclusion Dark pools play a crucial role in modern financial markets by allowing large trades to be executed without revealing the trader’s intentions, thus minimizing market impact and reducing costs. For retail traders, understanding the mechanics and implications of dark pools can lead to better-informed trading decisions and a deeper comprehension of market behavior. The study concludes that while dark pools generally contribute to improved market quality by reducing volatility and enhancing liquidity, their effect on price efficiency is nuanced. For small and medium stocks, dark pools can lead to short-term price overreactions, while large stocks remain largely unaffected. The findings underscore the importance of understanding the different impacts on various stock categories to make informed trading decisions. For institutional traders and market participants, understanding the role and impact of dark pools is crucial for navigating the modern financial landscape. By offering an alternative venue for executing large trades discreetly, dark pools play a pivotal role in today's trading ecosystem. █ Reference Buti, S., Rindi, B., & Werner, I. (2011). Diving into Dark Pools. Charles A. Dice Center for Research in Financial Economics, Fisher College of Business Working Paper Series, 2010-10. ----------------- Disclaimer This is an educational study for entertainment purposes only. The information in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell securities. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on evaluating their financial circumstances, investment objectives, risk tolerance, and liquidity needs. My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
OANDA:BTCUSDEducation
by Zeiierman
8
$SKEW CBOE SKEW Index and two recent signalsSKEW is a measure of options prices in the S&P500 Index that divides the options volatilities of puts/calls. How to use the CBOE:SKEW Index gets a bit more cloudy since it isn't always clear or perfect in its "signal generation". But I think it is important to know what it is showing so you can at least decide what the general sentiment and positioning is in the options market for the S&P500 or $SPY. So let's talk about a couple of scenarios: 1. Rising CBOE:SKEW and Rising AMEX:SPY prices. The thinking process behind this combination is that people are selling calls and using the proceeds to buy puts to protect against a market drop. This is a market that is "hedging" as the market goes up. So if people are hedging their longs, they are effectively showing that they are worried about falling prices and that implies the market is "climbing a wall of worry." Markets usually continue to climb in that condition. I have labeled this setup in late May which preceded the advance in stock prices in June. 2. Falling CBOE:SKEW and Falling AMEX:SPY prices. The logic behind this setup is that people are buying calls as stock prices fall, getting more emboldened with price declines, which is a very bearish setup implying lower prices ahead. This is the scenario we had going into the end of July which preceded the drop in August. You can see that CBOE:SKEW has returned to the middle of the range here, so there is no new signal to work from here. Stay tuned for one of these scenarios to set up again. The next variable to use is the level of TVC:VIX to alert us to whether there is active buying of options or selling of options to give us deeper insights into what is likely to happen. Cheers, Tim 10:59AM EST 8/8/2024
S
by timwest
2
Microsoft: More Oversold than During Covid?Microsoft has declined along with other AI names in the last month. How big was the pullback? Some traders may be surprised to know its intensity. The first noteworthy signal on today’s chart is Wilder’s Relative Strength Index (RSI). The oscillator hit 24.69 on Monday. That was the lowest reading since August 2015. In other words, MSFT this week was more oversold than March 2020 -- at the depths of the coronavirus selloff. Next, the software giant tested and held its April 25 low around $388. That may suggest support remains in effect. Third, MSFT is trying to hold its 200-day simple moving average for the first time since March 2023. That could indicate the presence of a longer-term uptrend. TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors. Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges. TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
NASDAQ:MSFT
by TradeStation
2
XAUUSD 8 Aug 2024Based on the latest data, the current price of XAU/USD (Gold Spot US Dollar) is around $2,387.40. Support and Resistance Levels: The current support level is around $2,381, while the resistance level is near $2,391. If the price breaks above the resistance level, we could see further upward momentum. Economic Factors: Fed Rate Decisions: Speculations of potential rate cuts by the Federal Reserve could support gold prices as investors seek safe-haven assets. Geopolitical Tensions: Ongoing geopolitical uncertainties can also drive investors towards gold, further pushing the price upwards. Entry Price: Entry Type: Limit Order Entry Level: $2387.00 (This is a point of confluence being near a support level and near the 38.2% Fibonacci retracement level from the recent swing low to swing high.) Stop Loss: Stop Loss Level: $2375.00 (Below the recent low and the support zone to avoid getting stopped out by minor fluctuations. This gives a risk of $12 per trade, which is within the 1% risk tolerance.) Target Price: Target Price Level: $2410.00 (A level of high liquidity and potential retracement. This provides a reward-risk ratio of approximately 1.92 ($23 potential reward/$12 risk).) Adjusting Stop Loss to Trail Profits: First Adjustment: Once the price reaches $2395, move the stop loss to break even at $2387. Second Adjustment: Once the price reaches $2400, move the stop loss to $2392 (locking in $5 profit). Final Adjustment: As the price approaches the target of $2410, adjust the stop loss to $2405 to secure more profits while allowing room for the price to reach the target. Trade Execution: Order Type: Limit Buy Order Entry Price: $2387.00 Stop Loss: $2375.00 Take Profit: $2410.00
OANDA:XAUUSDLong
by therabbittrades
11