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THE PROCESSTHE PROCESS 1. Look at the Market State - The Market State column shows the state for all three broad market indices (Green = Bull Uptrend, Light Green = Bull Pullback, Yellow = Bear Rally, Red = Bear Downtrend) 2. What bucket of Volatility - The Market Vol Levels column tells you what level of volatility we are in currently. (Green under 20 = Trending Market, Yellow between 20-30 = Choppy Market, Red > 30 = Whipsaw Market with large moves usually to the downside. You can look to buy and hold assets for longer during Green Markets. In yellow markets you need to be more active and be willing to accept small gains. Red markets are a time to be very conservative and to consider investing in inverse ETFs and/or selling short if you can. 3. SP500 Volatility Structure - The SP500 VIX Volatility column shows a shorter timeframe. A favorable environment has numbers rising as you go down the column. If the first number in the column is higher than the third number in the column , that is a sign there is stress in the overall market to the downside 4. What to buy - keep and open mind and consider all asset classes (stocks, bonds, real estate, commodities and currencies). Certain asset classes perform better than others in different market environments. If possible diversify between multiple asset classes if the data shows multiple asset classes are performing well. If you are only buying individual stocks, do the same and consider buying stocks in multiple sectors. 5. When to buy - Look to buy strength on pullbacks and sell weakness on rallies. Wait for reversals in price either back to the upside for longs or back to the downside for shorts. This means when price reverses and goes above the previous days high for longs, or reverses and goes below the previous days low for shorts. 6. How much to buy - Position sizing is one of the most critical aspects for long term success. There are multiple ways to position size. We prefer to size based upon risk and volatility. For example, we don't like to risk any more than .5% of our account on any position enter. Our risk per position is determined by the volatility of the asset. The formula looks like this...Account Size * .05 = Total Risk per position. Total Risk / (Entry Price - Stop Price) = Number of Shares we can purchase. Our stop price at entry is always 3 * ATR. The ATR of each asset is in the table in the first column to the right of the 15-period history. This must be kept consistent with all new positions and your feelings about one trade vs another should not factor into your sizing decision. 7. How to buy - This is a little of personal preference. Once you determine the size of the position, some people buy the whole position at once. Others enter in pieces. We prefer to enter in pieces and enter 50% of our position first, a second tranche of 25% quickly once the position moves in our favor, and then the last 25% tranche shortly after again if the position is profitable. If we enter any of the first two tranches and the position goes against us, we will not enter the remaining tranche(s) unless the position once again becomes profitable. 8. Managing the position - Positions should be looked at daily. Alerts can be used to alert you if something dramatic is happening during the day. If price moves in your favor initially you should move your stop up with it keeping it 3*ATRs below the current price if you are long and vice versa if you are short. Never move it lower if the price pulls back for longs or higher for shorts. Once the position moves 3 ATRs above your entry price your stop will be at breakeven. From this point on it is good practice to take some of the position off, taking some profits off the table and lowering your risk of giving all your profit back. Particularly if we are in a Choppy Market. When you are in the position, you should be monitoring the table to see any signs of potential weakness (red colors).
CME_MINI:MNQ1!Education
by mbrannigan
14
Advanced Bull Flag ConceptsHave you ever wondered why price action sometimes forms a bull flag pattern? Have you ever wondered if there is a way to predict whether a bull flag will break out before it actually does so? In this post, I will try to address these questions by presenting a couple of theories about the nature of bull flags. Bull Flag Theories (1) The flag structure of a bull flag tends to form along Fibonacci levels, with the ideal flag proportion being an approximated golden ratio to the flagpole; and (2) Fibonacci and regression analyses can provide useful insight into whether price will successfully break out of its bull flag pattern, sometimes long before price even attempts to do so. I will try my best to clearly explain both theories in detail below. Note: Although this analysis is also generally true for bull pennants, bear flags, and bear pennants, to keep things simple I will focus solely on bull flags. Additionally, this analysis is generally true across timeframes. Part I - The Basics of a Bull Flag First, let's begin with the basics. As shown in the image below, bull flags form when an asset is in a strong uptrend. The uptrend forms the flagpole of the bull flag structure. The flag structure forms when price consolidates, usually in a falling trend. This consolidation phase is often characterized by price oscillators rotating back down while the price retraces only a small part of its prior upward move. From a market psychology perspective, bull flags often form when most market participants who bought the asset continue to hold it expecting the uptrend to resume, while only a minority of market participants sell (or short the asset) as its price corrects downward. The bull flag pattern is a continuation pattern because it reflects the market's general expectation that price will eventually resume its upward move. Once the price definitively breaks above the upper channel of the flag (often with strong momentum and high volume), the bull flag pattern is validated. Upon breakout, the expected move up is equal to the vertical height of the flagpole. Part II - The flag structure of a bull flag tends to form along Fibonacci levels, with the ideal flag proportion being an approximated golden ratio to the flagpole Here's where things begin to get interesting. Below is the golden ratio. Two quantities, a and b (where a > b ), form the golden ratio if their ratio is the same as the ratio of their sum to the larger of the two quantities. (See the equation below) The equation above shows the Greek letter phi which denotes the golden ratio. Phi is equivalent to a/b when such ratio is also equivalent to (a + b)/a. Although bull flags can take various forms, it is my hypothesis, based on chart analysis and research, that the most perfectly structured bull flags (ones that also have the highest probability of successful breakouts) occur when the flag forms a golden ratio to the flagpole. Mathematically, this means that the vertical height of the flagpole is equivalent to (a + b) and the vertical height (i.e. the width) of the flag is equivalent to b. This is also to say that price retraces down to the 0.382 Fibonacci level as measured by applying Fibonacci retracement levels along the flagpole (or to the 0.618 point on the vertical height of the flagpole if one measures from the bottom to top). I realize that this can be quite confusing, so let’s walk through some visualizations. Let's first visualize this hypothesis using the golden rectangle. Below is an image of the golden rectangle. A golden rectangle is composed of a square (with sides equal to a) and a smaller golden rectangle (with width equal to b and length equal to a). Now let's rotate the golden rectangle to better visualize the hypothesized flag pattern. The bull flag is hypothetically an approximation of the golden rectangle, whereby the width of the flag is in a golden ratio approximation to the length of the flagpole. In the illustration below, there are multiple bull flags contained within a Fibonacci spiral. The spiral is made up of golden rectangles, with each larger golden rectangle containing a smaller golden rectangle inside it. The smaller golden rectangle is the flag structure, and the length of the larger golden rectangle is the flagpole. One can think of the Fibonacci spiral and the golden rectangles as a series of bull flags that build on top of each other in a repeating pattern. In this diagram, price is represented by the increasing length of the sides of each golden rectangle. In other words, the price on a chart can be seen as spiraling higher after each bull flag breakout. Of course, not all bull flags form a structure that approximates the golden ratio, but it is my belief that in forming a bull flag, price action is aspiring to achieve as close of a golden ratio approximation as it can. I believe that the bull flags that best approximate the golden ratio structure also present the highest probability for a successful break out. To learn more about Fibonacci spirals, including the golden spiral that Fibonacci spirals approximate, you can check out this Wikipedia article: en.wikipedia.org Part III - Fibonacci and regression analyses can provide useful insight into whether price will successfully break out of its bull flag pattern, sometimes long before price even attempts to do so. To see how Fibonacci levels and regression analysis can give insight into whether a bull flag will break out or break down before it does so, let's consider an example. Let’s consider the massive bull flag that the iShares Russell 2000 ETF (IWM) formed in 2021. In 2021, the monthly chart of IWM formed what appeared to be a bull flag, as shown below. Now let's see why Fibonacci analysis and regression analysis were warning that this bull flag was not likely to break out successfully. First, IWM's price did not retrace to a Fibonacci level before attempting a breakout (when using the pole as the Fibonacci retracement reference point). In the chart below, we see that price tried to break out, without even so much as retracing down to the highest Fibonacci retracement level: $196.71. By not undergoing Fibonacci retracement, price did not give its oscillators the opportunity to rotate back down fully. Instead, price remained overextended at the time it attempted to break out. Now let's look at regression analysis. Below is a log-linear regression channel that contains IWM's entire price history. As noted in my prior posts, a regression channel simply indicates how far above or below the mean (or average) price an asset's current price is trading. In the regression channel above, the red line is the mean price, the upper channel line is 2 standard deviations above the mean, and the lower channel line is 2 standard deviations below the mean. A successful breakout of the bull flag would have taken IWM's price way above its regression channel, to a level that is too many standard deviations above its mean price for us not to question the probability of the breakout’s success. Achieving the full measured move up would have been extremely unlikely, assuming that the regression channel is valid and that price tends to revert back to its mean over time. What was more likely than a breakout was a breakdown, and a reversion back to the mean, which is what ended up happening with IWM. Another interesting note about IWM’s bull flag is that it presented a false breakout in November 2021. This false breakout was presenting multiple warnings signs including being a UTAD test of a Wyckoff Distribution. As shown below, however, another important clue that the November 2021 breakout would likely fail was that the breakout was not confirmed when comparing IWM to the money supply (M2SL). See the chart below. One can interpret this chart to mean that in late 2021, IWM’s price was rising because the central bank was increasing the money supply, but not due to improving strength of the underlying companies that comprise the ETF. Using the money supply as a ratio to an asset elucidates the true inherent strength of the asset's value. To understand more about why the money supply can be used in this manner, you can check out my post below. Part IV - Additional Comments I have a few additional comments. I usually use Fibonacci levels on a log-scale chart to identify Fibonacci spirals because Fibonacci spirals are logarithmic spirals. However, when using Fibonacci levels based on log scale, the ratios, percentages and numbers, can seem quite confusing because they are logarithmically adjusted. If you choose to replicate my process, please be mindful of this. While using log-scale charts is critical for higher timeframes (e.g. the monthly chart or higher), I have not identified much benefit to using it on shorter timeframes. In a prior post, I noted that Plug Power (PLUG) is currently forming one of the best-looking log-scale, golden ratio bull flags I have ever seen. If my above hypotheses are true, I would expect to see PLUG move dramatically higher in the years to come. For more information about PLUG, you can read my post linked below. (This is not a solicitation to buy PLUG. Please do your own research and carefully consider all risks.) At the risk of making this post too long and too dense, I just want to briefly note that it is also my hypothesis, based on observation and research, that the golden ratio is where many S-curve dilemmas are solved. If you don't know what an S-curve dilemma is and you'd like to read about this you can see my post below about Jumping S-Curves . In short, an S-curve dilemma is another way of conceptualizing the question of whether a bull flag will break out or break down. I hope that someone finds value in this post. I spent a lot of time studying, researching, analyzing, and cogitating the mathematical nature of price action to reach many of the conclusions here. Thank you for your valuable time in reading my post.
AMEX:IWMEducation
by SpyMasterTrades
51
A pill for missed opportunitiesPrevious parts of the post: Part 1: My Three Comrades: the Chart, the Screener, and the Watchlist Part 2: Two captains of the same ship The market is an element we take for granted. It can't stop when we're busy doing other things, and it can't work if the stock market is off and you personally have work days. The small investor's impact on the market is close to zero. Some may not like it, but I see it as a big plus. I'm not the only one. Even Peter Lynch wrote about this . It is because of our size that we small investors have the ability to get the best buy and sell prices on stocks. Just imagine an elephant and a mouse trying to drink water from a coffee mug. Who has a better chance? Like the best sales, attractive stock prices don't last long. This also applies to the period of increased stock prices that are interesting to sell. To make sure you don't miss this time, TradingView has an alert service. Why do we need an alert system? For our convenience. Once we have selected fundamentally strong companies, our next step is to keep an eye on their stock price so we can buy them at a price we can benefit from. You remember our strategy, right? Buy rooms in a great hotel, and even during a sale period. How do you monitor these "sales"? You have two options: to monitor the price chart yourself during the trading period, or set up alerts so that if the stock price reaches a certain level, you will receive an SMS message to your phone or email, or a push-notification in the TradingView app (depending on your settings). Agree, this is very convenient. So how do you set up the alerts? 1. First of all, you must open the chart of the stock you are going to configure the alerts for. 2. Then click on the "Alert" button at the top toolbar of the chart. 3. Set the alert parameters in the settings menu. How do I read the settings in this picture? If the Apple stock price is less than $130 per share, I will receive an alert every minute, all the time the stock is trading below $130. The alert I will receive will contain the following message: AAPL Less Than 130.00 If you don't want to get an alert every minute, set the trigger to "Only Once". 4. In the "Notifications" tab, you can configure where the alerts and the sound will go. The system of customized alerts will allow you to use your time effectively. You will not be chained to the monitor and you can calmly wait for the cherished message. In the picture you can see that alerts can come as: - push notification to your phone (if you have the TradingView app installed); - a pop-up window on your monitor; - a letter to your email address; - a message to a web address (advanced feature for developers); - SMS to your phone, but via email (i.e. your email service must have the ability to send copies of emails via SMS). As for my investment strategy, it's quiet enough to work on it even without alerts. Mr. Market doesn't often come with insanely interesting prices , so it takes time to get to the target values. It's like waiting for an astronaut from the Moon: he can't return to Earth in a day, you have to wait patiently, with the occasional peek at the situation. So, I'm concluding my series of posts dedicated to the basic functions of TradingView. I advise you to "play" with the platform for a while to get used to it as quickly as possible. In fact, it has a lot of features that you will discover over time. For now, that's it. In the following posts, we will begin to examine perhaps the most important aspect of an investment strategy, which is fundamental analysis. Get ready, here comes the part that will require the most concentration. But then you will be able to navigate this topic with ease. See you next time!
NASDAQ:AAPLEducation
by Be_Capy
18
5 Tips for Diversifying Your Portfoliohello dear traders, Here are some educational chart patterns that you must know in 2022 and 2025. I hope you find this information educational and informative. We are new here so we ask you to support our views with your likes and comments, Feel free to ask any questions in the comments, and we'll try to answer them all, folks. When the market is booming, it can seem almost impossible to sell a stock for less than the price you bought it for. However, since we can never be sure what the market will do at any given moment, we cannot forget the importance of a well-diversified portfolio in any market condition. What is diversification? Diversification is a battle cry for many financial planners, fund managers, and individual investors alike. It is a management strategy that mixes various investments in a single portfolio. The idea behind diversification is that different types of investments will yield higher returns. This also suggests that investors will be exposed to less risk by investing in different vehicles. 5 ways to help diversify your portfolio 1. Spread the Wealth 2. Consider Index or Bond Funds 3. Keep Building Your Portfolio 4. Know When to Get Out 5. Keep an Eye on Commissions 1. Spread the Wealth:- Equities can be wonderful but don't put all your money into one crypto or one sector. Consider creating your own virtual mutual fund by investing in companies you know, trust and even use in your daily life. But stocks aren't the only thing to consider. You can also invest in commodities, exchange-traded funds (ETFs), and real estate investment trusts (REITs). And don't just stick to your home base. Think beyond and go global. That way, you'll spread your risk around, which can lead to bigger rewards. However, don't fall into the trap of going too far. Make sure you keep yourself in a portfolio that is manageable. There's no point investing in 100 different Crypto when you don't really have the time or resources to maintain them. Try to limit yourself to about 20 to 30 different investments. 2. Consider Index or Bond Funds:- You might consider adding an index fund or fixed-income fund to the mix. Investing in securities that track various indices makes a wonderful long-term diversification investment for your portfolio. By adding some fixed-income solutions, you are hedging your portfolio against market volatility and uncertainty. These funds try to match the performance of a broad index, so instead of investing in a specific sector, they try to reflect the value of the bond market. These funds often come with low fees, which is another bonus. This means more money in your pocket. The management and operating costs are minimal due to the cost involved in running these funds. One potential shortcoming of index funds may be their passively managed nature. While hands-off investing is generally cheaper, it can be sub-optimal in inefficient markets. Active management can be beneficial in fixed-income markets, for example, especially during challenging economic periods. 3. Keep Building Your Portfolio:- Add to your investments regularly. If you have $10,000 to invest, use dollar-cost averaging. This approach is used to help smooth out the peaks and valleys created by market volatility. The idea behind this strategy is to reduce your investment risk by investing the same amount over time. With dollar-cost averaging, you regularly invest dollars in a specified portfolio of securities. Using this strategy, you will buy more shares when prices are low and less when prices are high. 4. Know When to Get Out:- Buy and hold and dollar-cost averaging are good strategies. But just because you have your investments on autopilot doesn't mean you should ignore the forces at work. Stay up to date with your investments and stay alert to any changes in overall market conditions. You would like to know what is happening with the crypto you have invested in. By doing this, you will also be able to tell when it is time to cut your losses, sell, and move on to your next investment. 5. Keep an Eye on Commissions:- If you are not the trading type, understand what you are getting for the fees you are paying. Some companies charge a monthly fee, while others charge a transaction fee. These can definitely add up and chip away at your bottom line. Be aware of what you are paying for and what you are getting. Remember, the cheapest option is not always the best. Keep yourself updated if there is any change in your fees. Bottom line:- Investing can and should be fun. It can be educational, informative, and rewarding. By taking a disciplined approach and using diversification, buy-and-hold, and dollar-cost-averaging strategies, you can find profitable investments even in the worst of times. Trade with care. If you like our content, please feel free to support our page with a like, comment Hit the like button if you like it and share your charts in the comments section. Thank you
Education
by CryptoSanders9563
32
Relative Strength IndexThe Relative Strength Index is one of the most widely used tools in traders handset. The RSI is an oscillating indicator which shows when an asset might be overbought or oversold by comparing the magnitude of the assets recent gains to its recent losses. A common misconception is that the RSI draws a comparison between one security and another, but what it actually does is to measure the assets strength relative to its own price history, not that of the market. The Relative Strength Index is useful for generating signals to time entry and exit points by determining when a trend might be coming to an end or a new trend may be forming. It weighs the prices upward versus downward momentum over a certain period of time, most often 14 periods, thus showing if the asset has moved unsustainably high or low. The RSI is visualized with a single line and is bound in a range between 1 and 100, with the level of 50 being considered as a key point distinguishing an uptrend from a downtrend. You can see how the RSI is plotted on a chart on the following screenshot. J. Welles Wilder, the inventor of the Relative Strength Index, has determined also two other fundamental points of interest. He considered that an RSI above 70 indicates that the asset is overbought, while an RSI below 30 suggests an oversold situation. These levels however are not strictly set and can be manually switched, according to each traders unique trading system. Trading platforms allow you to choose any other value as overbought/oversold boundary apart from the conventional levels. How is RSI calculated? The formula is as follows: RSI = 100 – Where the RS (Relative Strength) is the division between the upward movement and the downward movement, which means that: RS = UPS / DOWNS UPS = (Sum of gains over N periods) / N DOWNS = (Sum of losses over N periods) / N As for the period used for tracking back data, Wilders original calculations included a 14-day period, which continues to be used most often even today. It however can also be a subject to change, according to each traders unique preferences. After the estimation of the first period (in our case the default 14 days), further calculations must be made in order to determine the RSI after a new closing price has occurred. This includes one of two possible averaging methods – Wilders initial and still most commonly used exponential averaging method, or a simple averaging method. We will stick to the most popular approach and use exponential smoothing. The UPS and DOWNS for a 14-day period will then look like this: UPSday n = / 14 DOWNSday n = / 14 What does the RSI tell us? here are several signals that the Relative Strength Indexs movement generates. As we said earlier, this indicator is used to determine what kind of trend we have and when it might come to an end. If the RSI moves above 50, it indicates that more market players are buying the asset than selling, thus pushing the price up. When movement crosses below 50, it suggests the opposite – more traders are selling rather than buying and the price decreases. You can see an example of an uptrend below where the RSI remains above 50 for almost the duration of the move. However, do keep in mind to use the RSI as a trend-confirmation tool, rather than just determining the trend direction all by itself. If your analysis is showing that a new trend is forming, you should check the RSI to receive additional confidence in the current market movement – if RSI is rising above 50, then you have a confirmation at hand. Logically, a downtrend has the opposite properties. Overbought and oversold levels Although trend confirmation is an important feature, the most closely watched moment is when the RSI reaches the overbought and oversold levels. They show whether a price movement has been overdone or it is sustainable, thus, indicating if a price reversal is likely or if the market should at least turn sideways and see some correction. The overbought condition suggests a high probability that there are insufficient buyers on the market to push the asset further up, thus leading to a stall in price movement. The reverse, oversold, level indicates that there are not enough sellers left on the market to further push prices lower. This means that when the RSI hits the overbought area (in our case 70 and above), it is very likely that price movement will decelerate and, maybe, reverse downward. Such a situation is pictured on the screenshot below. You can see two rebounds from the overbought level with the first move being extraordinary strong and bound to end with a price reversal, or a correction at least. . Having noted that prices tend to rebound from overbought/oversold levels, we can therefore reach the conclusion that they tend to act as support/resistance zones. This means that we can use those levels to generate entry and exit points for our trading session. As soon as the price hits one of the two extremes, we can use the Relative Strength Index to confirm a probable price reversal and enter an opposite position, hoping that prices will reverse in our favor. We can then set the opposite extreme level as a profit target.
Education
by FOREXN1
27
The unknown obvious: there's only one strategyThere's only one trading strategy, one way to trade and +inf number of ways (most of them are senseless) to model it & play around it. How & why prices move is not a mathematical principle that can be explained with a set of logic. It's the set of logical principles that can be modeled with mathematics. These mathematical aka quantitative ways are numerous and generally offer a tradeoff between the computational needs and the resulting quality. Take a look at my chart, you's see the weighted box plot that includes 80% of the data and weighted mean & standard deviations that also include 80% of the data. They're almost the same! As they should be, since the're modelling the same stuff. Box plot is a lil better since it's non-parametric (works well for all the distributions). WMA & WSTDEV are less on point, but cmon, easier to compute. And then you have the 1st degree model - weighted regression (WLSMA), that for some "unknown" reason sometimes matches the deviations that include 80% of the data?! Hard to compute tho, matrixes, vectorized ops.. Different ways, different tradeoffs, the same end, pick your poison & go. Thing is it's all modelling, but the real underlying principles are much easier, and strangely, hard to automate 4 real, at least business wise. These things are very hard to algorithmize, and probably impossible to just calculate at all. The principles themselves are easy tho and are the same on any resolution: 1) levels are the places where it was/it is/it will be potentially or proved with evidence as cheap/expensive; 2) everything else in between these levels are buying/selling waves aka directional order flows; Minding all that, there's only one "strategy" that will let you make the market better & earn money by doing so: buy @ potentially cheap & proved cheap, sell @ potentially expensive & proved expensive. All your momentums & mean reversions etc are ideologically the same things that allow you to do it. Everything else is a question of position sizing and gradual risk loading/offloading. Now coming back to quantification of all this stuff & automation. In terms of algorithmization, levels are the nightmare. their origins, positioning, clearing. You'll need to run numerous nested cycles on wide data and query databases nonstop in order to process it all, and you'll need to do it on all the resolutions you use. Waves are even more complicated, they start & end in particular places and levels affect it, they get exhausted & overridden. Wave starts/wave ends are based on levels, sometimes on higher resolutions, recursions are involved. Now imagine you're doing it on multiple assets in business environment. I don't even mentioned many absolutely deterministic & well defined judgmental calls that are made during borderline cases. You can instead try to approximate it all using mathematics. Since the real original principles will not be reached anyways, the best we can do is to include all the information in our models and pick the formulas & methods that are as much coherent with the source as possible. Formulas & methods are secondary. Regardless the methods, fancy formulas, what you call ML & AI these days, omg DSP adepts, bloody wavelets and ftts, etc etc etc, you can gain as much information from the data it as it is there. Information is the main thing. The whole game if about information. Features are inherited from the fundamental particle of the market: a tick. Tho, we more interested in the 'tuple' of the 2 last ticks: current tick and the previous tick (wassup Markov). 1) Price. The actual sampled prices, calculated volume modes of every bar, HLC3, HL2, but never a Close lol; 2) Time. Can estimate the most prominent cycle and divide it by 2 / leave it alone; 3) Sequence matters. May be achieved via linear weighting of the data points; 4) Volume. Weighting by volume/ inferred volume; 5) Direction. Plus or minus? Then multiplied by volume? We might have overshoots due to negative weights tho. Another way? You'll surely end up with something working. ^^ Funny thing tho, it's all extremely easy to do as an organic life form, you just scroll through different resolutions and see it all on the charts in a matter of seconds w/o any brain damage, without any approximations, without any data loss. I think at this point you understand that there's absolute zero sense in using any chart studies if you trade 100% manually. If you don't I'm spamming the F button
CME_MINI:ES1!Education
by gorx1
7
END Procrastination Today with 7 TipsOne of the biggest issue a trader has is none other than procrastination. • They doubt their trades – so they don’t take them. • They skip a trading day – so they miss opportunities. • They don’t monitor their results on a weekly or bi-monthly basis- so they can’ track their performance. Initially, I thought it was because of a lack of confidence. But to be honest, I think it’s something a lot more transparent. LIFE! You have a life to live, income to earn, food to put on the table, things to do with your family and loved ones and the general duties of life. So it’s all down to priorities at the end of the day. Because my life has been dedicated to trading since 2003, it’s why I don’t procrastinate – take a day off or anything of the sorts. So I’m going to give you some pointers on how to stop procrastination or at least reduce it… TIP #1: CHOOSE YOUR TRADING DAYS If you really don’t have the energy (not the time, everyone has time), then just choose two or three days to trade. And find the best time to locate to your trading. Maybe it’s first thing in the morning when you’re having coffee or breakfast. Maybe it’s when you come home after work and before you get onto the social media world. Maybe it’s an hour before bed or Netflix. Adopt it into your life in a way that it is comfortable and manageable for the future. TIP #2: SET SMALLER TASKS Break larger tasks into smaller, more manageable chunks. This will make it easier to start working on a task and to make progress. Instead of looking at EVERY market in one day, to drive you crazy. Choose a sector market and only focus on that watchlist… E.g. Local stocks one day, Forex another day and international markets another day. TIP #3: TRACK RESULTS ON A SPECIFIC DAY Choose a day in the week, where you’ll jot in your trades that you added, adjusted or closed. Create a schedule and stick to it. Having a structured plan can help you stay on track and avoid getting side-tracked by less important tasks. TIP #4: SET A TIMER If you have only 1 hour to trade, set the timer. You’ll find with a timer, you’ll be more focused determined and less distracted with anything else. TIP #5: REMOVE DISTRACTIONS Stop the distractions from your workspace. This may include turning off notifications on your phone or computer, finding a quiet place to work, or using noise-cancelling headphones. TIP #6: SELF-TALK YOURSELF Use positive self-talk to motivate yourself to do it. Psychology is an important element to your trading. Instead of telling yourself that you can't do something or that it will be too hard, try telling yourself that you are capable and that you can do it. TIP #7: REWARD YOURSELF Reward yourself for making progress of following with your trading actions. This could be as simple as taking a short break or treat yourself to something you enjoy. These are just a few ideas on how you can end your procrastination from your trading endeavours… There will be no change in your life without action, so always keep the prize in mind and you should have all the determination in the world to GO FOR IT. If you enjoyed this feel free to LIKE and follow for more daily tips. Trade well, live free. Timon MATI Trader
JSE:J200Education
by Timonrosso
17
Breaking News and Breaking IndicatorsIntroduction News and economic events can have a significant impact on the performance of trading indicators. While indicators are based on past price action and are designed to help traders make informed decisions about when to buy or sell a security, they do not always accurately reflect the impact of current events on the market. It's important for traders to consider the impact of news and economic events on indicators in order to make more informed trading decisions. How news can affect trading indicators News events, such as earnings reports, political developments, and natural disasters, can all impact the performance of trading indicators. For example, a positive earnings report may lead to an increase in a company's stock price, but this may not be reflected in the indicators until after the news has been released. This lag time between when news is released and when it is reflected in indicators can create opportunities for traders who are able to react quickly to news events. Using technical and fundamental analysis together To get a more complete picture of the market and make more informed trading decisions, it's important for traders to use a combination of technical and fundamental analysis. Technical analysis involves using tools such as trading indicators to analyze past price action and identify trends, while fundamental analysis involves analyzing a company's financial statements and other factors that may affect its stock price, such as management, market trends, and economic conditions. By using both approaches together, traders can get a more well-rounded view of the market and make better informed trading decisions. The role of economic indicators Economic indicators, such as gross domestic product (GDP) and employment data, can give insight into the overall health of the economy. These fundamental indicators can impact the performance of stocks and other securities and should be considered when using technical trading indicators on higher time frames. For example, strong GDP growth may indicate a healthy economy and potentially positive performance for stocks, while weak employment data may indicate a weaker economy and potentially negative performance for stocks. Tips for incorporating news and economic events into your trading strategy To stay up-to-date on current events and economic indicators, traders can use a combination of news sources and economic calendars. It's also important to have a plan in place for how to react to news and economic events, as they can have a significant impact on the market. Some traders may choose to use stop-loss orders or other risk management techniques to protect their positions in the event of significant market movements. Conclusion Incorporating the impact of news and economic events into your trading strategy is important for making informed and successful trades. By using a combination of technical and fundamental analysis and staying up-to-date on economic indicators, traders can get a more complete picture of the market and make better informed trading decisions.
Education
by TrendFlowIndicator
28
Introducing Minds! 5 Things you need to know.Social media has evolved to become an essential tool for traders and investors. Staying up to date with market narratives, sharing and reading top ideas, and directly collaborating with others all serve to make the medium an extremely important part of the research process. That’s why today we’re thrilled to announce the next step in that evolution - Minds! In today’s post, we’re going to highlight a few ways to use Minds to improve the way you follow, share, and chat about your favorite symbols. After all, in markets, information is everything and this is another tool to build into your workflow: 1.) Think of Minds as a feed created by your peers – full of their opinions, notes, and shared news topics, all relevant to whatever ticker you’re currently looking at. 2.) Minds can be used to quickly measure the general sentiment for any symbol. Ask yourself what people are talking about and if it’s bullish or bearish. 3.) Accessible from any symbol page, or from the right rail (with the thought bubble icon), this unique format allows you to chat with other members of the community alongside your chart. Watch the chart and social conversation at the same time. 4.) Want feedback about a specific symbol? Head to the Minds feed for that symbol and share your questions or comments . Other traders will eventually see your posts on the Minds feed. They can then comment, upvote and downvote to let you know what their initial reaction is. This feedback can be used to improve your understanding of a symbol. 5.) Minds can be used to quickly catch up on all the news about your favorite symbols. Head to a Minds feed and examine what people are saying. Is there breaking news? Links? Charts? Something else? Over time these feeds will become essential newsfeeds for you. Minds is currently in beta, so please send us any feedback you have! Know that we are working diligently to improve it. Finally - while Minds is open to all users to read, follow, and vote, only paying members (Pro, Pro+, and Premium) can currently post to the Minds feed and leave comments, similar to the other social tools on our site. Let us know how you like it, and get out there and post your first Mind today! Happy Holidays! 😎🌲 -Team TradingView ❤️❤️
NASDAQ:AAPLEducation
by TradingView
17
Our take on AI-generated Pine Script™The fact that GPT can generate Pine Script™ code has garnered much attention lately. While the perspective of making natural language requests to an AI to generate code is understandably attractive, it is unfortunately not something traders should use as a substitute to learning to program, or to finding a freelancer who will program for them if they are not interested in learning to code. Simply put, the core of the problem lies in the fact that code generated by software like ​GPT is unreliable, and that only someone who already knows Pine can analyze it and make the inevitable changes required for it to work as intended. Would you rely on code you cannot trust to trade your money? Those who can answer "yes" to that question are gamblers — not traders — and they most probably won't be reading this publication anyway. Because you are reading this, we assume that you are, or hope to become a trader, in which case elementary risk management would dictate that you consider GPT-generated Pine code with suspicion and not use it to make your trading decisions. Some of the typical problems you can expect of GPT-generated Pine Script™ code is that its logic will not do what you asked it to do, and that it will frequently fail to compile because its syntax is malformed, among other reasons because it mixes up different versions of Pine. Consequently, we have decided not to allow requests to fix GPT-related code in the Q&A forums where PineCoders answer programming questions. We believe this is the best way to support our community's all-important volunteers who contribute their valuable time and knowledge to help Pine programmers facing programming challenges. Our Q&A forums are not indicator-writing services for traders who do not code in Pine. For that, traders can use our list of Trusted Pine Script™ Programmers for Hire to find a reliable freelancer they will pay to do the work for them. Our Q&A forums for Pine Script™ programmers are:  • Stack Overflow  • "PineCoders Pine Script™ Q&A" room on Telegram  • "Pine Script™ Q&A" chat on TradingView If you are interested in learning Pine Script™, start here . Whether you program or not, do not miss the opportunity to explore our 100,000-strong Community Scripts published by TradingViewers who so graciously share their work with our community. Disclaimer This publication is not intended as a dismissal of GPT-3. Originally designed to process requests to generate text, the successive versions of ​GPT have turned out to be increasingly adept at producing relatively good quality text, so much so that it is often difficult for humans to detect that a program wrote it. See on the chart above, for example, its own text on the subject we explore in this publication, or this paper it wrote about itself . We can certainly foresee many uses for GPT-generated text, although it does bring to light challenging ethical questions. Look first. Then leap.
TEducation
by TradingView
22
Trading BTC : Dunning Kruger Effect 🐸Hi Traders, Investors and Speculators 📈📉 Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year. Daytime job - Math Teacher. 👩🏫 Have you ever wondered what it takes to be a good and profitable trader? Have you wondered how long it will take before you would have mastered the art f trading? Myself and Dunning Kruger will let you in on a little secret - the journey of pretty much every person that has ever started trading is explained in the chart above. The Dunning-Kruger effect, in psychology, is a cognitive bias whereby people with limited knowledge (in a given intellectual or social domain) greatly overestimate their own knowledge or competence in that domain relative to objective criteria or to the performance of their peers or of people in general. This happens in trading all the time. In fact, we probably all started there if we're being honest . So - What causes the Dunning-Kruger effect? Confidence is so highly prized that many people would rather pretend to be smart or skilled than risk looking inadequate and losing face. Even smart people can be affected by the Dunning-Kruger effect because having intelligence isn’t the same thing as learning and developing a specific skill. Many individuals mistakenly believe that their experience and skills in one particular area are transferable to another. Many people would describe themselves as above average in intelligence, humor, and a variety of skills. They can’t accurately judge their own competence, because they lack metacognition, or the ability to step back and examine oneself objectively. In fact, those who are the least skilled are also the most likely to overestimate their abilities. This also relates to their ability to judge how well they are doing their work, hobbies, etc. The Dunning-Kruger effect results in what’s known as a double curse : Not only do people perform poorly, but they are not self-aware enough to judge themselves accurately—and are thus unlikely to learn and grow. So how can we prevent ourselves from falling into this trap? Here's a few things to keep in mind: To avoid falling prey to the Dunning-Kruger effect, you should honestly and routinely question your knowledge base and the conclusions you draw, rather than blindly accepting them. As David Dunning proposes, people can be their own devil’s advocates, by challenging themselves to probe how they might possibly be wrong. Individuals could also escape the trap by seeking others whose expertise can help cover their own blind spots, such as turning to a colleague or friend for advice or constructive criticism. Continuing to study a specific subject will also bring one’s capacity into a clearer focus. 💭Practice these habits to ultimately escape the double curse: - Continuous learning. This will keep your mindset open to new possibilities, whilst increasing your knowledge over time. - Pay attention to who's talking about what. Is the accountant talking about bodybuilding? - Don't be overconfident. This is self explanatory. I hope you enjoyed this post today! Please give us a thumbs up 👌 _______________________ 📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍 We thank you for your support ! CryptoCheck
Education
by CryptoCheck-
58
ADX: How to use this under-the-radar tool.Hey everyone! 👋👋 In this video, we're taking a look at the ADX Indicator. We break down how it works, how to interpret its output, common uses for it, and ways that it can help you find and screen for opportunities you like. Feel free to drop some questions below in the comments! Remember - nothing in this video constitutes advice, our only goal is to educate you about the markets and how to use our platform more broadly. Cheers! -Team TradingView ❤️❤️ Check out more information about the ADX in our help center here .
NASDAQ:AAPLEducation
by TradingView
24
HOW TO DETERMINE THE TRENDHello everyone! Today I want to discuss with you the methods of trend identification. Finding a trend is an important task, because it is by trading according to the trend that you can earn a lot of money. PATTERNS Thanks to the patterns, you can understand where the price will go. There are many patterns confirming the trend: flag, pennant, wedge, and so on. The exit from these patterns is the confirmation of the strength of the main trend. Follow the patterns, they will help you find the trend. MA Moving Average is an important trend indicator and is quite clear and simple. The moving average is used by analysts in large banks and funds for a reason. The main trend indicator is the price rebound from the moving average. If the price bounces from the moving average towards the trend, then the trend is strong. CHANNELS The trend pushes the price in one direction and even the corrections become shorter. Under such conditions, the channel boundaries are directed towards the trend. Channel breakouts also occur in the direction of the trend, which is a confirmation of the trend. FIBONACCI Thanks to the Fibonacci levels, you can identify good entry points. It is enough to stretch the grid to the price impulse. This trend helps to open a position with a good entry point. And what methods do you use to identify the trend? Traders, if you liked this idea or if you have an opinion about it, write in the comments. I will be glad 👩💻
Education
by Lingrid
47
The birth of the chart. The evolution of the tapeLast time we studied how the exchange price is formed, and we found out that it is important to learn how to read charts correctly in order to analyze price changes correctly. Let's see how a chart is made and what it can tell us. Everyone who went to school probably remembers: to draw a function, we need the X and Y axes. In stock charts, the X-axis is responsible for the time scale, and the Y-axis is responsible for the price scale. As we already know, a chart is built on the basis of data from a tape. At the previous post , we have produced the following tape: FB $110 20 lots FB $115 5 lots FB $100 10 lots Actually, in addition to ticker, price and volume the tape also fixes time of trade. Let's add this parameter to our tape: FB $110 20 lots 12/08/22 12-34-59 FB $115 5 lots 12/08/22 12-56-01 FB $100 10 lots 12/08/22 12-59-02 That's it. Now this data is enough to put points on the chart. We draw three points, connect them with straight lines and get a chart. At one time, this was enough, because trades on the exchange were not frequent. But now some popular stocks, such as Apple or Google, have hundreds of trades per second with different prices. If the minimum division on the X scale is one second, what price point should we put if there were many trades at different prices in one second? Or let's place all the points at once? We will discuss that in the next post. And now, as a postscript, I want to show you some pictures describing how the tape was born and evolved. Here is a picture of a stock player, looking through a tape with quotations, which is given by a special telegraph machine. Each telegraph machine is connected by wires which, like a spider's web, entangle New York City. 1930's broker's office with several telegraph machines and a quotation board. An employee of the exchange looking through a tape of quotes. It won't be long before all this is replaced by the first computers. We'll continue today's theme soon.
AMEX:SPYEducation
by Be_Capy
8
VIX IndexThe Volatility Index VIX is one of the most popular methods for determining stock market emotions. In full, it stands for CBOE Volatility Index, the volatility index of the Chicago Board Options Exchange. The market is an emotion, always has been, always will be. Robots? Great, but they are created by people with emotions. And a trader needs a method that allows him to identify these emotions. That's where the VIX index comes in. It is based on the volatility of options on the S&P 500 Index. Yes, yes, it's actually an index for an index, this happens in the markets. The VIX index is also known as the Fear and Greed Index. The index is expressed as a percentage and indicates the probability of the S&P 500 index moving over a period of 30 days, where the probability level is 68% (one standard deviation from the normal distribution curve, aka the Gaussian curve). Let's say that if the VIX is 15, therefore the expected change in the S&P 500 index over the course of a year, with a 68% probability, is less than 15% up or down. What does that have to do with emotion? For that, we need to understand the forces that underlie any strong market movement. Greed is the desire to possess more and more than is really needed. Whether it be money, goods, services, or any material values. According to a number of scientific studies, greed is the product of a chemical reaction in our brains that causes common sense to be discarded and sometimes causes irreversible changes in both the brain structure and the body. Perhaps someday a pill for greed will be invented, but for now, everyone is greedy without restraint. Greed is as addictive as smoking or drinking alcohol. "He has pathological greed," "he's the greediest guy the world has ever seen," are all victims of a very common mania. The average trader comes to the market and he is subjected to the strongest emotional influence, caused by the very brain "chemistry". He wants more and more and more, all the time. He wants more numbers on the account. He can't stop, he can't control himself. As the result, brokers and different near-market agents use this obsession with pleasure, exploiting his mental disease. Similar effects are associated with the emotions of "happiness" and euphoria. As a result, such traders' brains are constantly bombarded with emotional temptations and endless financial carrots, just as narcotic substances give the effect of not getting high at all but of temporary relief. The dot-com bubble This is a classic example of market greed. The Internet bubble led to millions of investors continuously pouring money into Internet companies between 1995 and 2000, despite the fact that most of them had no future. It got to the point of absurdity. Some companies were getting hundreds of millions of dollars just for creating the website "XYZ dot com". Greed bred greed, led to a colossal overestimation of assets and their real value. Investors, obsessed with making easy money, invested insane amounts of money in nothing. The inflated bubble naturally burst and took all the money of the greedy people with it. The Financial Crisis of 2008 The book "The Big Short: Inside the Doomsday Machine" by Michael Lewis (and the movie "The Big Short ") tells the story of how a few people profited from the massive greed of others. An instrument like CDS (Credit Default Swap) turned into a crazy financial pyramid scheme with a turnover of over $62 trillion. In the financial crisis of 2007-2010, the volume of this market shrank threefold another bubble driven by greed and obsession burst at the seams, and the financial world shuddered and shrank dramatically. Only a few people made a fortune as they worked against the greed of the crowd. Fear An uncomfortable state of constant stress, waiting for the worst fate and constant threat. The dot-com bubble also demonstrated this emotion well. To cope with the horrific results of the dot-com bubble, out of fear, investors took money out of the stock market and put it into the safest possible instruments, like stable investment funds or government-backed funds. These funds were not very profitable, but their main advantage in the eyes of investors was minimal risk. This is an example of how investors ruined all of their long-term investment plans because fear forced them to hide their money literally under their pillow. These assets did not generate income, but remained conditionally safe. How to read VIX The correlation between the VIX and the S&P 500 is quite clear. Let's compare the values, where the blue line is the VIX and the orange line is the S&P 500. As we can see, a decrease in the VIX corresponds to an increase in the S&P 500, while an increase in the VIX (fear) in contrast is a signal of a collapse of the S&P 500. Statistics show that there is an inverse correlation between the VIX and the S&P 500, as the VIX moved in the opposite direction from the S&P 500 more than 80% of the time between 2000 and 2012. Where the VIX peaks, there is a decline in the S&P 500 and all the associated effects that affect both the dollar and other currencies. So, if the VIX is less than 20, investors are less worried, the volatility of the S&P 500 is expected to be low. If the VIX is greater than 30, investor fear increases as option prices on the S&P 500 rise; hence, investors pay more to hedge their assets. A typical picture is, for example, the VIX is at an ultra-low 10 and the S&P 500 is breaking new growth records. This is all an indication of an impending collapse of the S&P 500. However, if the Central Banks change monetary policy accordingly, this VIX level could very well become the new "normal" value. One scenario to use is to wait for the VIX to consolidate above 30 and enter the SPX on its decline. When investors have a scare, it's an indication of a panic sell-off. Let's look at some real examples. Since the beginning of this year, the VIX Index has been hitting fear records, reaching a high of 30. In theory, this means a drop in the SPX index. Well, why in theory? In practice it worked out 100%, the SPX index really collapsed spectacularly. Conclusion As we know, the S&P 500 index, which we have already studied, is the "king" index. It not only shows the state of the U.S. economy and stock market, but also indirectly shows the state of a mass of other assets, from interrelated indices to the value of the dollar. Because of correlation, Fear and Greed indices can be adapted to everything, both indices and currency pairs. It is one of the most popular stock indicators, unique in its kind and actively used for long-term market forecasts.
CBOE:VIXEducation
by DeGRAM
24
History of the American Dollar. Ups and Downs 1825-1906: US begins market operations to maintain the gold standard. 1924-1931: US engages in number of market operations, including buying foreign currencies, to maintain the gold standard. 1934-1961: US Treasury creates the Exchange Stabilization Fund (ESF), conducts frequent operations directly in foreign exchange markets. 1971: Nixon Administration ends USD convertibility to gold, which had become unsustainable due to the large supply of dollars outstanding relative to gold reserves. 1973: US conducts intervention against German mark. 1974: US conducts intervention against Japanese yen. 1976: The USD officially becomes: fiat currency. 1977-1979: Very easy monetary policy weakens the USD. US intervenes often to support USD. 1979: Fed announces change in its open market procedures to combat inflation and, partly, to support a weakening USD. 1980-1981: US intervenes to tame strengthened dollar. 1985: Major economies agree in the Plaza Accord to devalue the USD relative to the JPY and DEM. In the following weeks, US intervenes often, selling dollars for other G5 currencies. 1987: Major economies sign Louvre Accord to halt USD depreciation. In coordinated interventions, US intervenes often to buy USD. 1988 - 1990: US intervenes repeatedly after G7 statement on importance of maintaing exchange rate stability. 1990: USD appreciates on a backdrop of solid economic growth and dormant inflation. 1991-1992: US and European central banks intervene often against the backdrop of a US recession and weakening USD. 1993: US intervenes to buy dollars and sell yen. 1994: Fed unexpectedly starts rate hiking cycle on an improving economy following the recession. US intervenes repeatedly to support the USD. 1998: US intervenes to purchase yen in a coordinated intervention to support Japan's economy following the Asian financial crisis. 2000: Dot-com bubble bursts. leading to recession. 2000: Coordinated G7 FX intervention to support the Euro, initiated by the ECB. 2001: 9/11 attacks increase overall uncertainty. Fed lowers rates to prop up the economy. 2002: Japan intervenes, selling yen for dollars, often supported by the Fed and ECB. 2004-2006: Fed tightens policy to curb inflation. 2008: Global Financial Crisis ushers in an era of exceptionally easy monetary policy in the US, much of the developed world, and some EMs. Flight to safety strengthens the USD. 2010: Euro sovereign debt crisis unfolds. 2011: US. UK and European central banks sell yen in a coordinated intervention following a sharp rise In FX volatility as a result of an earthquake in Japan. 2011: Standard & Poor's downgrades US sovereign debt; flight to safety nevertheless boosts USD in the months that follow. 2014: USD begins to rally on the back of stronger growth relative to other major economies and divergence in DM monetary policy. 2015: Fed begins raising rates. 2015: China surprises global financial markets by devaluing the renminbi for three consecutive days. 2017-2018: USD depreciates on the back of convergence in global growth, President Trump's sentiments for a weaker Dollar, and strength in other major currencies, particularly the euro. 2018-2019: USD rallies on tax reform and Fed's continuing tightening cycle. 2020: COVID-19 spreads globally; recession begins. March 2022: Fed begins raising rates again. July 2022: Dollar reaches parity with the euro for the first time since 2002. Source: Federal Reserve Board, Congressional Research Service, Haver Analytics, various news sources, Goldman Sachs GIR. Regards, R.Linda!
TVC:DXYEducation
by RLinda
43
10 reasons most traders lose moneyHey everyone!👋 Trading & investing is not easy. If it were, everyone would be rich. Here’s a couple time-honored reasons that traders lose money, and some tips to help you get back to basics. Lack of knowledge 📘 Many traders jump into the market without a thorough understanding of how it works and what it takes to be successful. As a result, they make costly mistakes and quickly lose money. Poor risk management 🚨 Risk is an inherent part of trading, and it's important to manage it effectively in order to protect your capital and maximize your chances of success. However, many traders don't have a clear risk management strategy in place, and as a result, they are more vulnerable to outsized losses. Emotional decision-making 😞 It's easy to feel strong emotions while trading. However, making decisions based on emotions rather than rational analysis can be a recipe for disaster. Many traders make poor decisions when they are feeling overwhelmed, greedy, or fearful and this can lead to significant losses. Lack of discipline 🧘‍♂️ Successful trading requires discipline, but many traders struggle to stick to their plan. This can be especially challenging when the market is volatile or when a trader is going through a drawdown. Create a system for yourself that's easy to stay compliant with! Over-trading 📊 Many traders make the mistake of over-trading, which means they take on too many trades and don't allow their trades to play out properly. This leads to increased risk, higher brokerage costs, and a greater likelihood of making losses. Clearly articulating setups you like can help separate good opportunities from the chaff. Lack of a trading plan 📝 A trading plan provides a clear set of rules and guidelines to follow when taking trades. Without a plan, traders may make impulsive decisions, which can be dangerous and often lead to losses. Not keeping up with important data and information ⏰ The market and its common narratives are constantly evolving, and it's important for traders to stay up-to-date with the latest developments in order to make informed decisions. Not cutting losses quickly ✂️ No trader can avoid making losses completely, but the key is to minimize their impact on your account. One of the best ways to do this is to cut your losses quickly when a trade goes against you. However, many traders hold onto losing trades for too long, hoping that they will recover, and this can lead to larger than expected losses. Not maximizing winners 💸 Just as it's important to cut your losses quickly, it's also important to maximize your winners. Many traders fail to do this, either because they don’t have a plan in place, telling them when and how to exit a trade. As a result, they may leave money on the table and miss out on potential profits. Not Adapting 📚 Adapting to changing market conditions is paramount to success in the financial markets. Regimes change, trading edge disappears and reappears, and the systems underpinning everything are constantly in flux. One day a trading strategy is producing consistent profits, the next, it isn't. Traders need to adapt in order to make money over the long term, or they risk getting phased out of the market. Overall, the majority of traders make losses because they fail to prepare for the challenges of the market. By educating themselves, developing a solid trading plan, and planning out decisions beforehand, traders can improve their chances of success and avoid common pitfalls. We hope you enjoyed! Please feel free to write any additional tips or pieces of advice in the comments section below! See you all next week. 🙂 – Team TradingView
NYSE:CVNAEducation
by TradingView
197
Interest Rate Futures and the First Cash Settled ContractCME: Eurodollar Futures ( CME:GE1! ), CBOT: Treasury Bond Futures ( CBOT:ZB1! ) This is the second installment of the Holidays series “Celebrating 50 Years of Financial Futures.” Before 1970, commercial banks did business by accepting short-term deposits at low regulated rates and offering longer-term business and personal loans at higher rates. Double-digit inflation changed all that. Federal Reserve eliminated interest rate ceilings on time deposits under 3 months in 1970, and on those over 3 months in 1973. Banks incurred huge loss from a negative spread with deposit rate higher than loan rate. Fast forward to 2022, we find ourselves in a high inflation and an inverted yield-curve environment again. The overnight Fed Funds rate (4.00%) is nearly 500 basis points higher than the 10-Year Treasury Note (T-Note) yield (3.51%) as of December 4th. Rising interest rates increase the financing cost from businesses to households alike. The Fed’s six consecutive rate hikes from March to November 2022 contributed to significant drawdown in the value of stocks, bonds, and commodities. If you bought $100,000 of Treasury bonds (T-bonds) in January, its market value could drop as much as 30% with bond yield jumping to 3.5% from 1.5%. If you owe $10,000 in credit card debt, monthly interest rate charge could run up to 25% a year from 15%. Like foreign exchange, interest rate is not a physical commodity. It is a right to holders of an interest-bearing product, and a liability to its issuer. The above examples show that both buyer and seller could have large financial exposure to changes in interest rates. To hedge interest rate risks, futures contracts were invented in Chicago futures markets, namely, Chicago Board of Trade (CBOT) and Chicago Mercantile Exchange (CME). CBOT Ginnie Mae Futures Government National Mortgage Association is a US government supported entity within the Department of Housing and Urban Development (HUD). The nickname “Ginnie Mae” come from its acronym GNMA. GNMA issues Ginnie Mae certificates, a type of mortgage-backed passthrough securities. Investors receive interest and principal payments from a large pool of mortgage loans. Since timely payments are backed by the full faith and credit of the US government, Ginnie Mae bonds are considered default risk free and have an AAA credit rating. Although they are free from default risk, holders of Ginnie Mae bonds are exposed to interest rate risk, as bond price moves inversely with bond yield. Sensing the need from savings and loans, mortgage bankers, and dealers of mortgage-backed securities, CBOT launched Ginnie Mae Bond Futures in October 1975. This was the first time a futures contract was based on an interest-bearing instrument. At contract expiration, futures buyers would receive actual Ginnie Mae bonds from futures sellers. While the Ginnie Mae contract has since delisted, it paved the way for the successful launches of other interest rate futures contracts in the 1970s and 1980s. CME Treasury Bill Futures Treasury bills (T-bills) are short-term securities issued by the US Treasury to help finance the spending of the federal government. New T-bills with maturities of thirteen, twenty-six, and fifty-two weeks are issued on a regular basis. The secondary market for T-bills is active, making them among the most liquid of money market instruments. In May 1972, the International Monetary Market (IMM) division of the CME launched foreign exchange futures, the first financial futures contract. In January 1976, the IMM listed futures contract on 90-day (13-week) T-bills. It was the first futures contract for a money market instrument. Nobel laureate Milton Friedman rang the opening bell on T-Bill Futures launch day. Upon maturity, seller is required to deliver T-bills with a $1 million face value and thirteen weeks left to maturity. Contracts for delivery in March, June, September, and December are listed. At any one time, contracts for eight different delivery dates are traded. T-bills do not pay explicit interest. Instead, they are sold at a discount to redemption value. The difference between the two prices determines the interest earned by a buyer. T-bill yields are quoted on a discount basis. Futures contracts are quoted on an index devised by the IMM, by subtracting the discount yield from 100. Index values move in the same direction as T-bill price. A rise in the index means that the price of a future delivered T-bill has risen. The formula for calculating the discount yield is: Discount Yield = ((Face Value - Purchase Price) / Face Value) X (360 / Days to Maturity) CBOT Treasury Bond Futures In August 1977, CBOT launched futures contracts on the T-Bonds. At the time, the birth of T-bond futures hardly seemed like a breakthrough. Financial futures were still in their infancy. Soybeans and corn were king in the CBOT trading pit. But all that changed in October 1979 when the Fed moved to strangle runaway inflation with a revised credit policy. The Saturday night massacre, as it was dubbed, ended decades of interest-rate stability. Interest rates bounced like a Ping Pong, affected by money supply, world events and inflation. Trading of T-Bond futures took off like a rocket. In addition to the traditional T-Bond futures (ZB) with 15-year maturity, CBOT also lists a 20-Yr T-Bond futures (TWE) and an Ultra T-Bond (UB) with 30-year maturity. In the Mid-curve, the T-Note suite includes 2-Yr Note (ZT), 3-Yr Note (Z3), 5-Yr Note (ZF), 10-Yr Note (ZN), and Ultra 10-Yr T-Note (TN). On December 2, 2022, daily volume of the first T-Bond futures was 388,370 contracts, while open interest reached 1,170,800 contracts. Daily volume of all CME Group interest rates futures and options contracts (IR) reached 13,786,454 lots, contributing to 54.1% of Exchange total. IR open interest was 78,244,297 lots, representing 70.4% of Exchange total. Cash Settlement Comes to Futures Market Up until now, futures contracts were settled by physical delivery of the underlying commodities. • Buyer of 1 CME Live Cattle may pick up 35 cows (40,000 pounds) from Union Stockyard in Chicago southside or take delivery at a cattle auction in Wyoming. • Seller of 1 CBOT Soybean contract would ship 5,000 bushels of the grain to a licensed grain elevator in Illinois, Iowa, or Kansas. • For CME Pork Bellies, settlement may involve title changes of warehouse receipt from seller to buyer for 40,000 pounds of the frozen meat in a cold storage. Even financial futures required physical delivery at that time. • For British Pound/USD contract, it is £62,500 in pound sterling. • For Ginnie Mae contract, it is $10 million worth of Ginnie Mae certificate. • T-Bond futures calls for delivery of treasury bonds with face value of $100,000 and maturity of no less than 15 years. As we discussed in “The Bogeyman in Financial Contracts”, there is inherent risk in the physical delivery mechanism. No matter how robust its original design is, industry evolution could outgrow capacity, rendering delivery failure under extreme market conditions. In December 1981, CME launched Eurodollar futures, the first contract with cash settlement feature. Cash settlement alone can be viewed as a financial revolution. Why? • It significantly reduces transaction cost, which in turn enhances the risk transfer or hedging function in futures. • It allows non-commercial users to participate in futures. Broader participation improves liquidity, and the price discovery as well as risk management functions. CME Eurodollar Futures Eurodollars are dollar-deposits held with banks outside of the US. There are two types of Eurodollar deposits: nontransferable time deposits and certificates of deposit (CDs). Time deposits have maturities ranging from 1 day to 5 years, with 3 months being the most common. Eurodollar CDs are also commonly issued with maturities under a year. Technically, buyer of Eurodollar future contract is required to place $1,000,000 in a 3-month Eurodollar time deposit paying the contracted interest rate on maturity date. However, this exists only in principle and is called a “Notional Value”. Cash settlement means that actual physical delivery never takes place; instead, any net changes in the value of the contract at maturity are settled in cash on the basis of spot market Eurodollar rates. Unlike T-bills, Eurodollar deposits, the underlying of Eurodollar futures, pay explicit interest. The interest paid on such deposit is termed an add-on yield because the depositor receives the face amount plus an explicit interest payment when the deposit matures. In the case of Eurodollar, the add-on yield is the London Interbank Offered Rate (LIBOR), which is the interest rate at which major international banks offer to place Eurodollar deposits with one another. Like other money market rates, LIBOR is an annualized rate based on a 360-day year. Price quotations for Eurodollar futures are based on the IMM Eurodollar futures price index, which is is 100 minus the LIBOR. In the following four decades, all financial futures are designed with cash settlement. Eurodollar futures paves the way for equity index futures, which were launched in February 1982 at Kansas City Board of Trade (KCBT) and April 1982 at CME. Without cash settlement, can you imagine how to deliver 500 different stocks on a market-weighted basis for the S&P 500 futures? Or 2,000 stocks for the Russell 2000? Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trade set-ups and express my market views. If you have futures in your trading portfolio, check out on CME Group data plans in TradingView that suit your trading needs www.tradingview.com
CBOT:ZB1!Education
by JimHuangChicago
9
👻5 INDICATORS FOR BEGINNERS👻 🍉Moving Average A moving average helps cut down the amount of noise on a price chart. Look at the direction of the moving average to get a basic idea of which way the price is moving. If it is angled up, the price is moving up (or was recently) overall; angled down, and the price is moving down overall; moving sideways, and the price is likely in a range. A moving average can also act as support or resistance 🍉Bollinger Bands Bollinger Bands are a form of technical analysis that traders use to plot trend lines that are two standard deviations away from the simple moving average price of a security. The goal is to help a trader know when to enter or exit a position by identifying when an asset has been overbought or oversold. Bollinger Bands were designed by John Bollinger. Bollinger Bands help by signaling changes in volatility. For generally steady ranges of a security, such as many currency pairs, Bollinger Bands act as relatively clear signals for buying and selling 🍉Relative Strength Index (RSI) The relative strength index (RSI) is a momentum indicator used in technical analysis. RSI measures the speed and magnitude of the pair’s recent price changes to evaluate overvalued or undervalued conditions in the price of that pair. It can also indicate pairs that may be primed for a trend reversal or corrective pullback in price. It can signal when to buy and sell. The RSI is displayed as an oscillator (a line graph) on a scale of zero to 100Traditionally, an RSI reading of 70 or above indicates an overbought situation. A reading of 30 or below indicates an oversold condition. 🍉MACD(Moving Average Convergence Divergence) The concept behind the MACD is fairly straightforward. Essentially, it calculates the difference between an instrument's 26-day and 12-day exponential moving averages (EMA). In calculating their values, both moving averages use the closing prices of whatever period is measured. On the MACD chart, a nine-period EMA of the MACD itself is also plotted. This line is called the signal line, which acts as a trigger for buy and sell decisions. The MACD is considered the "faster" line because the points plotted move more than the signal line, which is regarded as the "slower" line. 🍉On-Balance Volume (OBV) On-balance volume (OBV) is a technical trading momentum indicator that uses volume flow to predict changes in the price. The theory behind OBV is based on the distinction between smart money – namely, institutional investors – and less sophisticated retail investors. As mutual funds and pension funds begin to buy into an issue that retail investors are selling, volume may increase even as the price remains relatively level. Eventually, volume drives the price upward. At that point, larger investors begin to sell, and smaller investors begin buying. 🌺Hope u like my article. Please tell me what is YOUR favortie indicator? Love, Anabel❤️ Please, support my work with like and comment! Love you, my dear followers!👩‍💻🌸
Education
by AnabelSignals
80
Investors' Holy Grail - The Business/Economic CycleThe business cycle describes how the economy expands and contracts over time. It is an upward and downward movement of the gross domestic product along with its long-term growth rate. The business cycle consists o f 6 phases/stages : 1. Expansion 2. Peak 3. Recession 4. Depression 5. Trough 6. Recovery 1) Expansion : Sectors Affected: Technology, Consumer discretion Expansion is the first stage of the business cycle. The economy moves slowly upward, and the cycle begins. The government strengthens the economy: Lowering taxes Boost in spending. - When the growth slows, the central bank reduces rates to encourage businesses to borrow. - As the economy expands, economic indicators are likely to show positive signals, such as employment, income, wages, profits, demand, and supply. - A rise in employment increases consumer confidence increasing activity in the housing markets, and growth turns positive. A high level of demand and insufficient supply lead to an increase in the price of production. Investors take a loan with high rates to fill the demand pressure. This process continues until the economy becomes favorable for expansion. 2) Peak : Sector Affected : Financial, energy, materials - The second stage of the business cycle is the peak which shows the maximum growth of the economy. Identifying the end point of an expansion is the most complex task because it can last for serval years. - This phase shows a reduction in unemployment rates. The market continues its positive outlook. During expansion, the central bank looks for signs of building price pressures, and increased rates can contribute to this peak. The central bank also tries to protect the economy against inflation in this stage. - Since employment rates, income, wages, profits, demand & supply are already high, there is no further increase. - The investor will produce more and more to fill the demand pressure. Thus, the investment and product will become expensive. At this time point, the investor will not get a return due to inflation. Prices are way higher for buyers to buy. From this situation, a recession takes place. The economy reverses from this stage. 3) Recession : Sector Affected : Utilities, healthcare, consumer staples - Two consecutive quarters of back-to-back declines in gross domestic product constitute a recession. - The recession is followed by a peak phase. In this phase economic indicators start melting down. The demand for the goods decreased due to expensive prices. Supply will keep increasing, and on the other hand, demand will begin to decline. That causes an "excess of supply" and will lead to falling in prices. 4) Depression : - In more prolonged downturns, the economy enters into a depression phase. The period of malaise is called depression. Depression doesn't happen often, but when they do, there seems to be no amount of policy stimulus that can lift consumers and businesses out of their slumps. When The economy is declining and falling below steady growth, this stage is called depression. - Consumers don't borrow or spend because they are pessimistic about the economic outlook. As the central bank cuts interest rates, loans become cheap, but businesses fail to take advantage of loans because they can't see a clear picture of when demand will start picking up. There will be less demand for loans. The business ends up sitting on inventories & pare back production, which they already produced. - Companies lay off more and more employees, and the unemployment rate soars and confidence flatters. 5) Trough : - When economic growth becomes negative, the outlook looks hopeless. Further decline in demand and supply of goods and services will lead to more fall in prices. - It shows the maximum negative situation as the economy reached its lowest point. All economic indicators will be worse. Ex. The highest rate of unemployment, and No demand for goods and services(lowest), etc. After the completion, good time starts with the recovery phase. 6) Recovery : Affected sectors: Industrials, materials, real estate - As a result of low prices, the economy begins to rebound from a negative growth rate, and demand and production are both starting to increase. - Companies stop shedding employees and start finding to meet the current level of demand. As a result, they are compelled to hire. As the months pass, the economy is once in expansion. - The business cycle is important because investors attempt to concentrate their investments on those that are expected to do well at a certain time of the cycle. - Government and the central bank also take action to establish a healthy economy. The government will increase expenditure and also take steps to increase production. After the recovery phases, the economy again enters the expansion phase. Safe heaven/Defensive Stocks - It maintains or anticipates its values over the crisis, then does well. We can even expect good returns in these asset classes. Ex. utilities, health care, consumer staples, etc. ("WE WILL DISCUSS MORE IN OUR UPCOMING ARTICLE DUE TO ARTICLE LENGTH.") It's a depression condition for me that I couldn't complete my discussion after spending many days in writing this article. However, I will upload the second part of this article that will help investors and traders in real life. This article took me a long time to write. I'm not expecting likes or followers, but I hope you will read it. @Money_Dictators
NASDAQ:AAPLEducation
by Money_Dictators
64
🟢STOP AND LIMIT ORDERS EXPLAINED🟢 ✴️Types of orders in trading There are two main types of order: entry orders and closing orders. An entry order is an instruction to open a trade when the underlying market hits a specific level, while a closing order is an instruction to close a trade when the market hits a specific level. ✴️Stops vs limits A stop order is an instruction to trade when the price of a market hits a specific level that is less favourable than the current price. On the other hand, a limit order is an instruction to trade if the market price reaches a specified level more favourable than the current price. ✴️Stop orders explained You can use stop orders to close positions and to open them, by using either a stop-loss order or a stop-entry order. ✴️Stop-loss orders A stop-loss order is the common term for a stop closing order – an instruction to close your position when the market value becomes less favourable than the current price. ✴️Stop-entry orders A stop-entry order enables you to open a position when the market reaches a value that is less favourable than the current price. If you were opening a long position, you’d place your stop-entry order above the current market price. And if you were opening a short position, you’d place your stop-entry order below the current price. Although it may seem strange to open a trade at a worse price, stop-entry orders can enable you to enter a trade once a trend has been confirmed. This helps you take advantage of market momentum. ✴️Limit orders explained Like stop orders, limit orders can be used to open and close trades. ✴️Limit-entry orders A limit-entry order enables you to enter a trade when the market hits a more favourable price than the current price. For long positions, this would be below the current price level and for short positions this would be above. ✴️Limit-close orders A limit-close order enables you to close a trade at a more favourable price – which would be at a higher level for a long position and a lower level for a short position. The major drawback of a limit order is that there is the possibility it will not be filled if the market never reaches your order level – in this case the order would expire. If you had placed a limit-entry order, it is possible that your trade would never be executed. And if you had placed a limit-close order, your trade would not be closed automatically. 😊Thank you for reading, guys😊 ✅Like and Subscribe for more education✅ Do you like this post? Do you want more articles like that?
Education
by ProSignalsFx
36