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Fibonacci: The FundamentalsApplying Nature's Harmony to Financial Markets From flower petals to far away galaxies, the Fibonacci pattern is found across the natural world. Fibonacci patterns are derived from the Fibonacci number sequence where each number is the sum of the two preceding ones: 0, 1, 1, 2, 3, 5, 8, 13, and so forth. Some traders believe the Fibonacci sequence and its derived ratios, like 38.2%, 50% and 61.8% occur in the price movements of financial markets. These ratios are used to predict levels at which assets might retrace or extend their trends. I. Fibonacci Retracements: Add Precision When Timing Pullbacks Fibonacci retracements are based on the idea that after a significant price movement, an asset often retraces a portion of that move before continuing its original trend. The retracement is simply a pullback against the impulsive trending move. Identifying the impulsive trending move is pivotal to drawing Fibonacci retracements. This trending move is known as the ‘impulse leg’ and is labelled X-A on our charts (below). The Fibonacci retracement tool can be overlayed on top of any impulse leg to provide a series of retracement levels generated from the Fibonacci number sequence. Fibonacci Retracement Levels: Past performance is not a reliable indicator of future results 38.2%: This level indicates a moderate retracement. It's often seen as an area where traders might anticipate a reversal or a continuation of the trend. 50%: A key level, suggesting a potential halfway point for the retracement. Traders closely watch this level for potential shifts in market sentiment. 61.8%: Known as the "golden ratio," this level holds perhaps the most significance in the world of Fibonacci – it is the ratio described by Leonardo da Vinci as representing divinely inspired simplicity and orderliness. 78.6%: While not as commonly used as the others, some traders like the 78.6% retracement as it is perceived to offer the greatest potential reward relative to X (the inception of the trending move). However, the deeper the retracement the weaker the trend. Fibonacci Retracements in Uptrends: Past performance is not a reliable indicator of future results Fibonacci Retracements in Downtrends: Past performance is not a reliable indicator of future results Uses of Fibonacci Retracements: Identifying Support and Resistance: These retracement levels often act as potential areas where price movements may pause or reverse. Planning Entry and Exit Points: You can use Fibonacci retracements to plan entry points for trades during a trend and set exit points to take profits or minimise losses. Confirmation Tool: When Fibonacci levels align with other technical indicators or chart patterns, they can provide confirmation for trade setups, adding confidence to trading decisions. II. Fibonacci Extensions: Projecting Price Targets and Beyond Fibonacci extensions are used to project potential future levels beyond the initial trend. They help traders anticipate where price movements might extend. Like Fibonacci retracements, the impulse leg (labelled X-A) is key. The Fibonacci trend extension tool can be overlayed onto your impulse leg to generate Fibonacci-based levels to which the impulse leg may extend. Common Extension Levels: Some commonly used levels are 138.2%, 161.8%, and 261.8%. Fibonacci Extension Levels Past performance is not a reliable indicator of future results Fibonacci Extensions in Uptrends Past performance is not a reliable indicator of future results Fibonacci Extensions in Downtrends Past performance is not a reliable indicator of future results Uses of Fibonacci Extensions: Setting Profit Targets: You can use extensions to establish potential price targets, aiding in setting profit-taking levels for their trades. Predicting Price Reversals or Extensions: These extension levels can signal where a trend might exhaust or where it could extend further, assisting traders in adjusting their strategies accordingly. Conclusion: While debates surround the impact of Fibonacci in markets, the core principles—identifying strong impulse legs, timing pullbacks precisely, and projecting targets—form the cornerstone of price action trading. Next week, we'll explore the synergy of retracements and extensions, delving deeper into the captivating realm of advanced Fibonacci patterns. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. Social media channels are not relevant for UK residents
CAPITALCOM:GOLDEducation
by Capitalcom
27
The 2023 Broker Awards: Vote Now! It's our duty as a trading community to support each other, no matter our backgrounds or experience levels. Our annual Broker Awards help traders find the perfect broker for their trading needs. The awards are entirely based on verified reviews from real traders, like you. The best part? Your votes decide the winning brokers. That's right, real reviews and real connections, all from real traders. Be sure to connect to your favorite broker and write your first verified review, if you haven't already. That single vote could push your broker to the top of the list. No vote is too small. Get involved, traders! To learn more about our 2023 Broker Awards check out the the links below. We've got explainers, details, and more for everyone: 1. Our 2023 Broker Awards season is officially open: tradingview.com 2. Visit the 2023 Broker Awards page here: tradingview.com 3. Connect, review and read about all the brokers on our platform: tradingview.com The TradingView Broker Awards are where the world's best compete to show off their brokering capabilities on an international stage. May the best brokers win.
B
by TradingView
16
Flight Boarding - Grand Theft Auto 6Hey fellow gamers and number-crunchers, gather 'round! 🎮 Big news alert: Rockstar Games is dropping the first trailer for Grand Theft Auto 6 on December 5, 2023! twitter.com Now, for those who live and breathe gaming, no further explanation needed. But hey, to the data lovers and boomers in the house, let me break it down for you. Rockstar is the genius behind hits like Grand Theft Auto, Red Dead Redemption, Bully, and La Noire. Flashback to 2013 when they unleashed Grand Theft Auto 5, which turned out to be the best-selling console/PC-only game EVER. Talk about a gaming legend! Fast forward to now, and GTA 5 has racked up a mind-blowing 185 million units in sales by August 2023. That's across three console generations and PC, making it the cash cow of the entertainment world. Hold on to your controllers because Grand Theft Auto 6 is gearing up for launch, and the prediction is a whopping $1 billion in sales from the get-go! 🤑 Experts are betting on at least 25 million copies flying off the shelves on release day. For the financial gurus out there, I've got the deets on TTWO Rockstar Games history prices in my previous analysis. And if you're eyeing the market, the sweet spot for entering the trade seems to be at that red horizontal line at 146 - 150. But here's the cherry on top: I believe we're aiming for a new all-time high beyond 210! 🚀 So, who's ready for the next gaming revolution? 🌟 Share your thoughts below and let the positive vibes flow! 🚀🎉
NASDAQ:TTWOLong
by GoldCartel
35
ADX Trend-Based StrategiesThe Average Directional Index is a highly-respected tool in many traders’ arsenals, capable of measuring the strength of market trends. This article delves into two ADX-based strategies, exploring how to combine this tool with other popular indicators like RSI and EMA for a well-rounded trading system. Understanding the ADX Trend Indicator The Average Directional Index (ADX) is a trend strength indicator commonly used in technical analysis. It helps traders identify the strength of market trends, thereby serving as a key component in crafting an effective trend trading strategy. Originally developed by Welles Wilder, the ADX oscillates between 0 and 100, providing a quantitative measure of trend strength. When its value is below 25, the trend is typically weak or non-existent. Conversely, readings above 25 signify a stronger trend, with values over 50 suggesting a very strong trend. Traders often use these numerical benchmarks to assess whether to enter or exit a trade based on the prevailing trend conditions. Importantly, this tool does not indicate the direction of the trend; rather, it measures the trend's intensity. Therefore, it is often used in conjunction with other indicators to provide a complete picture of market conditions. This makes the ADX a versatile and valuable indicator for any trader aiming to build a robust trend trading strategy. Basic Parameters for ADX The ADX usually comes with a default setting of a 14-period lookback. This means the indicator evaluates the trend strength based on the last 14 bars, whether you're using a daily, hourly, or any other time frame. In most trading platforms, including FXOpen’s own TickTrader platform, setting up the ADX involves selecting it from the platform's list and then choosing the period parameter. Some traders tweak the period to fit their trading style, although caution is advised when straying from the standard settings. Interpreting ADX signals is straightforward: a rising value suggests an intensifying trend, while a falling value indicates a weakening trend. This makes it easier for traders to gauge market conditions and determine their trend-following strategy. ADX and RSI Strategy The Relative Strength Index (RSI) is often dubbed one of the best trend indicators when used in combination with ADX. When employed together, they form a powerful duo to identify trend strength and market momentum. For this strategy, both indicators are used at their default settings: a 14-period lookback for both ADX and RSI. Horizontal lines are drawn at 45 and 55 on the RSI window and at 25 on the ADX window to serve as reference points. Entry When the RSI rises above 55 or falls below 45, traders wait for the ADX to cross above the 25 level to enter. It's discretionary for traders to decide whether to enter when the RSI is in overbought (above 70) or oversold (below 30) territories. While these conditions may offer trading opportunities, they can also be riskier as the trend could easily continue. Stop Loss Traders often position a stop loss above or below a nearby swing point to protect their trades. Take Profit Profits may be taken when the ADX falls below 25, signalling a weakening trend. Alternatively, traders can opt to exit the trade at a predetermined support or resistance level. ADX and EMA Strategy The Exponential Moving Average (EMA) is a type of moving average that responds quickly to price changes and new trends. For this setup, the EMA is configured to a 28-period lookback, while the ADX retains its default 14-period setting. The EMA is essentially another trend filter, acting as a useful baseline for trend direction. Entry Traders look for entry opportunities when the price is either above or below the 28-period EMA, indicating the direction of the trend. Once the ADX crosses above 25, confirming trend strength, traders wait for the price to retrace back to the EMA line to enter the trade. Stop Loss A stop loss may be positioned just beyond the EMA. Alternatively, placing the stop loss at a nearby swing point offers another way to mitigate risk. Take Profit Profits might be taken when the ADX falls below the 25 level, suggesting that the trend may be losing momentum. As another option, traders may choose to exit at a predetermined support or resistance level. Benefits and Risks of ADX Trend Trading Strategies Understanding the benefits and risks associated with ADX-based strategies is crucial for traders aiming for consistent returns. Here's a breakdown: Benefits Objective Trend Strength: ADX quantifies trend strength, removing subjective guesswork. Versatility: ADX can be combined with various other indicators like RSI and EMA to create multi-dimensional strategies. Clear Signals: Thresholds like ADX 25 provide clear, easy-to-understand entry and exit signals. Risks Lagging Indicator: Being a trend-following tool, ADX can lag, potentially causing late entries or exits. False Signals: Market volatility can lead to false ADX signals, especially in lower time frames. The Bottom Line In essence, mastering the ADX indicator can equip traders with the ability to discern even stock trend patterns effectively. Its versatility and simplicity mean it’s a great inclusion for trend-following strategies. The strategies given here offer a foundation to work with, but it’s well worth experimenting for yourself and seeing how the ADX works in practice. If you’re looking to put these trading techniques into practice, you can consider opening an FXOpen account. You’ll gain access to the advanced TickTrader platform, hundreds of markets to choose from, and competitive trading fees. Good luck! 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.
Education
by FXOpen
11
A Traders’ Weekly Playbook – timing the turn We roll into December and many hoping to take a couple of weeks off over the festive season may be reconsidering that call – such is the opportunity cost. Whether one is looking at equities, the USD, gold, or bonds/rates it's all a big momentum play. In equity land, the US30 is where the big moves are playing out, with the index in beast mode and a mere 1.9% away from its all-time highs. The S&P500 also closed higher for a fifth consecutive week and our US500 index now eyes a test of the 27 July high of 4611, where price action throughout last week suggests further juice in the rally is still possible. What concerns me is that these markets are rich in positioning, valuation and technically overbought. Market internals are very frothy, with 57% of stocks closing at a 4-week high, 85% of stocks above the 50-day MA, and 32% of stocks with an RSI above 70 – levels that typically signal an overloved market and a potential reversal. Valuations are also lofty, with the S&P500 trading on 21.4x forward earnings, although that is more of a 2024 story. Positioning is becoming extreme, with CTAs now max long and shorts having covered hard. Downside protection/hedges have been rolled right off, where the volatility markets have pulled back to the point where many are feeling its cheap and prudent to buy short-dated puts or put spreads. US rates and swaps are rich (see above), notably on the starting point for Fed easing, with the March FOMC meeting now priced at a 70% chance of a cut. We can also look further out and see over five 25bp cuts priced by the end of 2024. The move in short-end rates has been swift, and the USD has followed in earnest. It suggests that the skew in the risk and the potential direction of travel is shifting, and if any of the US data points this week – notably US payrolls - come in above consensus then USD shorts will part cover and those positioned long of Treasuries may too – equity will be sensitive to any move higher in yields. So the chase in risk into year-end heats up but what is extreme can become more so, with the market's elastic band getting pulled back to greater and greater levels. On balance, it feels like long risk is still tactically the right position, but the higher it goes the more the ‘January effect’ will kick in and the more pronounced the position squaring and risk drawdown could play out – as liquidity thins out it could be a very lively period ahead. A turn is coming, but timing it is where the money will be made. Good luck to all…. The marquee event risks for the week ahead: ECB President Lagarde speaks (01:00 AEDT) – the EU swaps market prices 20bp of cuts as soon as the March ECB meeting and 114bp (nearly 5) cuts 12 months out – will Lagarde push back on this dovish pricing, and will the market believe her? Tokyo CPI (Tuesday 10:30 AEDT) – the median estimate is we see headline inflation at 3% (from 3.3%) and core 3.7% (3.8%). This shouldn’t move the JPY unless it’s a speculator beat/miss, but the BoJ will be watching this closely. RBA meeting (Tuesday 14:30 AEST) – the market prices no hikes at all for this meeting, so it will be down to the tone of the statement and whether the 8bp of hikes priced for the February RBA meeting are correctly priced. It’s hard to see any major deviation from RBA Gov Bullock's recent communication, so the meeting should be a low-volatility event for the AUD or AUS200. US JOLTS job openings (Wednesday 02:00 AEDT) – the market looks for a slight cooling in job openings, with 9.3 million job openings eyed (9.55m). The USD could be sensitive to this print and prone to short covering if we see above 10m job openings. US ISM services (Wednesday 02:00 AEDT) – the consensus is that we see expansion in the US service sector, with consensus at 52.3 (51.8). A downside read towards 50 (the growth/contraction divide) could see further buyers in US Treasuries and keep the pressure on the USD. If the data comes out inline or above consensus then USD shorts could cover. The sub-components of the report matter, notably in new orders and employment. If the employment sub-component comes in under 50, then it could impact expectations and positioning ahead of nonfarm payrolls (NFP). Australia Q3 GDP (Wednesday 11:30 AEDT) – It’s hard to see this influencing the AUD too intently, but it is a small risk for those running AUD exposures over the event. The market eyes GDP at 0.4% qoq / 1.8% yoy. US ADP employment change (Thursday 00:15 AEDT) – with NFPs on Friday the market should be less sensitive to the outcome of the ADP report. With the consensus at 120K jobs, a big beat/miss could impact the USD, as expectations for the NFP change. Bank of Canada meeting (Thursday 02:00 AEDT) – the market prices no change in policy at this meeting, so it’s the guidance and tone of the statement that matters more. CAD swaps price an 80% chance of a 25bp cut by the March meeting and nearly 5 cuts priced by end-2024 China trade data (Thursday – no set time) – the market looks for import growth of 4%, and exports to fall 1.5%. The market will look for signs of internal demand, so could be sensitive to any beat/miss in the import print. US nonfarm payrolls (S at 00:30 AEDT) – the marquee event risk for the markets this week. The median estimate is for around 180k jobs, with the economist's estimates ranging from 240k to 100k. We will also look at trends in revisions to the prior reads, as this will also affect the 3-month average. The market could be sensitive to the U/E rate which is expected to remain unchanged at 3.9% - a 4-handle on the E/U rate would get the market talking and likely hit the USD. Also, consider average hourly earnings are expected at 0.3% mom/4% yoy. I would argue the USD would rally harder on a big NFP print, than selloff on a weaker print. China CPI/PPI (Sat 09:30 AEDT) – The data falls when markets are closed, so there is some gapping risk in Chinese assets and their proxies. Here the market looks for CPI at -0.2% and PPI inflation at -3%. Amid the disinflationary/deflationary backdrop, there are increasing calls for further monetary policy easing.
PEPPERSTONE:US30Long
by Pepperstone
14
GC: Gold Reaches Record High on Hope of Fed Rate CutsCOMEX: Gold Options ( COMEX:GC1! ) Gold prices rallied to an all-time high on Friday. Spot gold climbed 1.6% to $2,069 per ounce, up 3.4% for the week. Gold price rose to $2,075 mid-session to beat the previous record of $2,072 reached in 2020. U.S. gold futures also broke new ground. The February 2024 contract of COMEX gold futures settled at a record high of $2,089.7, up 1.6% for the week. On Friday, gold futures trade volume was 259,889 lots, with open interest standing at 498,685 contracts. Options on the COMEX gold futures also attracted investor attention. On Friday, total options volume was 92,906, up 112% from the prior day. Open interest was 806,297 lots. For the lead February 2024 contracts, investors bought 19,565 call options and 6,894 put options. A call-to-put ratio of 2.83:1 indicates that investors are very bullish on gold. Gold prices have been pumped up on investor hype that the Federal Reserve may have completed its monetary tightening policy and could start cutting rates as early as March. How high could gold price go? Since last year, I have written extensively about gold on TradingView. Let’s revisit the fundamental drivers of the global gold market. Gold as an Inflation Hedge Gold has historically been an excellent hedge against inflation because its price tends to rise when the cost-of-living increases. The US CPI Index has a base value of 100 set at 1982-1984. Its latest reading in October is 307.7. Over the last 40 years, the cost of US goods and services has tripled on average. The year-end gold price between 1982 and 1984 averaged $378. As of Friday, the bullion gained 447% for the same period. Over the long run, investing in gold does beat inflation. Gold as a Precious Metal As a commodity, gold is negatively correlated to the US dollar. Since gold is priced in dollar, a strong dollar raises the cost for foreign investors who must pay more with weakened foreign currency. This reduces the demand for gold. “Strong Dollar, Weak Commodities” is the general theme in global commodities market, gold included. A closely related theme is “Higher Rates, Lower Prices”. Higher interest rates and Treasury bond yields raise the opportunity cost of holding non-yielding gold. Unlike other commodities, gold is not consumed or used up every year. Therefore, gold mining output is not a major factor in the pricing of gold. Gold as a Safe Haven Investment Gold retains its value in times of both financial chaos and geopolitical crises. People flee to its relative safety when world tensions rise. During such times, gold often outperforms other investments. In the past two decades, gold price peaked during the 2008 financial crisis, the 2010 European debt crisis, the 2018-19 US-China trade conflict, the outbreak of COVID pandemic, the Russia-Ukraine conflict, and the March 2023 U.S. bank run. Gold as an Investment Class As an investment class, gold competes for investor money along with stocks, bonds, cryptos and money-market funds. Even at record high, gold gained only 13.2% year-to-date, underperforming S&P 500 (+19.6%), Nasdaq 100 (+46.4%) and Bitcoin (+136.0%). A False Narrative on Monetary Easing The recent rise in the stocks and gold is largely shaped by the changes in market sentiment. Investors believe that the Fed is shifting gears from restricted to easing policy. Looking back in the past two years, market sentiment might not be the most reliable gauge of the Fed’s next step of action. The market has called for the Fed Pivot prematurely and incorrectly multiple times. We will need to wait and see what’s happening next. In his speech at Spelman College in Atlanta on Friday, the Fed Chair said that “the risks of under- and over-tightening are becoming more balanced,” but the Fed is not thinking about lowering rates right now. Investors focus on the current rate well into restrictive territory, but pointedly ignore the warning that it was premature to speculate on easing rates. The confirmation bias is at work here. They hear what they want to hear and create a new narrative that rate cuts will come sooner. Pricing in 5-6 rate cuts in a year is very aggressive. The Fed Chair has been accused of being too late to act, seeing inflation transitory earlier on. When it comes to cutting rates, the Fed would be very cautious, and at a very slow and measured pace. Trading Opportunities with Gold Options Market fundamentals haven’t changed. Market sentiment, however, has shifted. The aggressive rate-cut assumption has the effect of lowering the expected interest rates. This helps raise the present value of future cash flows. Hence, stock value goes up. Lower bond yield reduces the disadvantage of holding the non-yielding gold, and the US dollar weakening makes gold more attractive to foreign buyers. This bull market is vulnerable. If investors adjust their rate-cut assumptions from 5-6 to 2-3 times, the market could turn nosediving. However, investors set their sight on rate cuts and will not abandon it until the fact rejects the false narrative. Gold has a so-called “Santa Claus rally” and could continue for a while. The Fed Chair’s statement could become more convincing if: • Nonfarm payroll stays strong (December 8th) • CPI stops falling (December 12th) • The Fed keeps rate unchanged and emphasizes on fighting inflation (December 13th) Options on COMEX Gold Futures (GC) could be a cost-efficient and risk-mitigated way to express one’s opinion on how quickly the Fed would cut rates. Each options contract is based on 1 futures contract and has a notional value of 100 troy ounces of gold. At $2,089.7, each contract is worth $208,970. For illustration purpose: For the February 2024 contract, an out-of-the-money (OTM) call at 2190 ($100 above futures price) is quoted at 18.80. To acquire 1 call options requires an upfront premium of $1,880 (= 18.80 x 100 ounces). An OTM put at 1990 ($100 below futures price) is quoted at 9.00. To acquire 1 put requires an upfront premium of $900 (= 9.00 x 100 ounces). Options premium is significantly lower than futures margin, which stands at $7,800 per contract. It’s a fraction of the cost if you were to buy 100 ounces of gold in the spot market. If the trader buys a call and gold futures goes up, his account will increase in value. Unlike investing in spot gold or gold futures, the payoff in options is nonlinear, determining by the Black-Scholes option model. Similarly, when the trader buys a put and gold futures declines, he would also make a profit. On the flip side, the trader could lose money if the market moves against him. But the maximum loss is capped at the upfront premium. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
COMEX:GC1!
by JimHuangChicago
7
Explosion In Gold. Where To Next?It has been quite a volatile year for EASYMARKETS:XAUUSD and, judging by end of November and beginning of December activity, it continuous to be a volatile one, as we get closer to the new year. On the 4th of December we saw EASYMARKETS:XAUUSD hitting a new historic high, reaching the area near the 2144-dollar mark. This way the precious metal surpassed its previous all-time high, near the 2082-dollar mark, reached in April of this year. That said, before the EU market open on the 4th of December, the yellow metal fell back below that previous high and at the time of writing it is struggling to get back above that barrier. If EASYMARKETS:XAUUSD continues to trade below that 2082 zone, we may see a slight correction back down. That said, we may class that correction as a temporary one, before another leg of buying, as long as the price stays somewhere above a long-term tentative upside support line drawn from the lowest point of November 2022. As mentioned above, if the price is able to stay somewhere above the 2082 hurdle, this may attract more buying interest, possibly dragging EASYMARKETS:XAUUSD towards the newly-established all-time high, at 2144. If that hurdle gets broken, this will confirm a forthcoming higher high, placing the commodity into an uncharted territory. That’s when we will use the help of our Fibonacci extension tool, in order to try and find our next possible resistance target. As we can see from our chart, the next potential target is at 61.8% extension, which is around the 2180 level. Alternatively, a drop back below the 2048 zone could signal a possible larger correction lower. In that scenario we will start aiming for the 2009 hurdle, marked by the highest point of October. If that hurdle is not able to halt the slide, we may see EASYMARKETS:XAUUSD drifting below the psychological 2000 area, towards the 1933 level. That level marks the lowest point of November. Disclaimer: easyMarkets Account on TradingView allows you to combine easyMarkets industry leading conditions, regulated trading and tight fixed spreads with TradingView's powerful social network for traders, advanced charting and analytics. Access no slippage on limit orders, tight fixed spreads, negative balance protection, no hidden fees or commission, and seamless integration. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, are intended only to be informative, is not an advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Please be aware, that past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios based upon the reasonable beliefs of the third-party provider are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statements. easyMarkets makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or any information supplied by any third-party.
EASYMARKETS:XAUUSD
by easyMarkets
16
Have you had your coffee yet?We already know that coffee beans have always been one of the most traded commodities in the world, specifically second, so why the sudden interest again? Figure 1: Summary of World Coffee In recent years, global consumption has increased at a higher rate than production due to pent-up demand. This rather large deficit in balance in the past two years puts the coffee market in an interesting spotlight. Nonetheless, arabica beans continue to be the more favored selection, with South America as the central production region, driven mainly by Brazil. Gaining Access to This Market Amongst various coffee derivatives, a coffee futures contract is the most common way to trade coffee. The 4/5 Arabica Coffee Futures (ICF) listed by Brasil, Bolsa, Balcão (B3) Exchange is an example of such contracts. For those unfamiliar with futures contracts, it is a legal agreement to buy or sell a specified asset at a predetermined price for delivery at a specified time in the future. For the ICF contract, the asset is 100 bags of 60 kilograms filled with grade 4-25 or better Arabica coffee bean produced in Brazil that is meant to be delivered in the city of São Paulo, Brazil, or a B3 accredited warehouse. The ICO’s Grading and Classification of Green Coffee states that “coffees of the highest altitudes are denser and larger in size than those produced at lower altitudes.” Loosely speaking, larger beans with higher density are better. The grade indicators refer to the number of defects found in a 300g sample. To achieve a 4-25 grade, the coffee must be classified by B3 in accordance with its rules and regulations. This grading system is more specific to Brazil-produced beans. Other coffee-producing countries have other specifications and classifications. The Trampoline Effect Figure 2: Supply & Demand Factors Historically, the ICF future prices resemble that of a trampoline, with major support lines at the 124.55 and 103.60 levels. Let us explore some of the factors that caused these jumps previously; bear in mind that consumption of Arabica beans has been steadily increasing since the 1990s. S1: Poor weather conditions in South America in 2010 Brazil suffered from poor weather conditions and faced significant problems in meeting the expected crop yield. Large producers were also considering hoarding their stocks. The problem was further exacerbated by the backdrop of record low arabica stock levels since the 1960s. S2: Drought in Brazil in 2014 Similarly, poor weather conditions caused uncertainty in crop production for the harvest year and pushed prices up. S3: Drought and frost in Brazil 2021 The effects of drought followed by a severe wave of frost in Brazil wiped out its coffee production. This was accompanied by increased freight costs and shipment issues caused by Covid-19. S4: Harvest Conditions Evidently, weather conditions pose significant downside risks to the coffee supply. Moreover, occasional coffee leaf rust coupled with increasing demand has caused spikes in coffee prices. USD and Coffee Figure 3: ICF and DXY (Inverted) As with many commodities, coffee tends to move inversely with USD. This is especially so since most coffee contracts, like the ICF, are priced in USD. When the dollar rises, coffee becomes more expensive in non-USD terms and can cause international demand to fall, and vice versa. Figure 4: ICF and BRLUSD This relationship becomes more apparent when compared to BRLUSD. Our thought process: Local Brazilian producers and manufacturers traded these ICF contracts as a hedging tool. During the physical delivery of the beans, these market participants would then have to do a currency exchange. Consequently, the impact of BRLUSD rates would have a larger impact on them. Similar Coffee Futures Contract Figure 5: ICF and KC The two contacts’ underlying assets - arabica beans - have similar grading standards. Consequently, macroeconomic factors are likely to have similar impacts on the two contract prices. The prices between the two contracts exhibit a very strong positive correlation. We can then create a spread with ICF – Coffee C (KC) Futures Contract. Figure 6: ICF - KC ICF is quoted USD per bag for a contract size of 100 60kg bags, while KC is quoted USD cents per pound for a contract size of 37,500 lbs. We can then create a spread with ICF1!/60-KC1!/0.4536/100, by converting both contracts to the same base units. The spread setup indicates that KC generally trades at a premium compared to ICF. This could be attributed to several factors, a notable one being the higher liquidity preference investors tend to have for the KC contract, which might reflect a broader international preference. It is also worth noting that ICF requires Brazil-produced arabica beans, while KC comprises beans from other countries. This could explain the uncanny coincidence between the upside bias in spread movements (Figure 6) occurring in periods identified in Figure 2 – supply-side factors driven mainly from the Brazil side. Putting into Practice Enough has been said about coffee; you must be wondering how we then use this information to set up trades. Here are some ways for consideration. Case Study 1: Directional Driven By considering current macroeconomic factors on coffee, to express a “quieter” outlook on coffee, an investor could sell the ICF future contract (ICFH4). At the present level of 206.00, with a stop-loss above 219.00 – a conservative resistant line – it brings us a hypothetical maximum loss of 219.00-206.00 = 13.00 points. As shown in Figure 2, if ICF1! Reverts to major support line 124.55, a hypothetical gain of 206.00-124.55=81.45 points. Each ICF futures contract represents 100 bags; the value of each point move is USD100. However, as we approach the main harvest period for Brazil, May to Sep, it is of paramount importance for the investor to keep a watch for any potential hiccups that could negatively affect the harvest yield. Furthermore, this is likely to be a medium-term macro-driven strategy. Case Study 2: Spread Driven Regarding the ICF-KC spread currently trading at the upper bound, an investor with a bearish short-term view that the spread will trend downwards could sell ICF futures contract (ICFH4) and buy KC futures contracts (KCH4). At the present level of 206.00 and 169.95 for ICFH4 and KCH4, respectively. Following the formula above, the spread will be at –0.31336 points. Setting the resistance at the Fibonacci 50% ratio, we have a stop loss at -0.25, which brings us a hypothetical maximum loss of -0.25-(-0.31336) = 0.06336 points. Setting the support at the Fibonacci 38.2% ratio, we set our take profit at -0.40, which brings us a hypothetical gain of -0.31336-(-0.40) = 0.08664 points. The value of each point move in ICFH4 is USD100, while KCH4 is USD375. Conclusion There are various methods to create opportunities for investors, depending on how the investor would like to view the market or what other financial assets to pair up with coffee futures contracts. What we have covered in this article merely scrapes the tip of the iceberg, and we hope investors keep a creative mindset and explore other potential options. Disclaimer: The contents of this article are intended for information purposes only and do not constitute investment recommendations or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description.
BMFBOVESPA:ICF1!Short
by inspirante
10
PLTR Has Reached Key Upside Levels: Tighten StopsPrimary Chart : Palantir Technologies Inc. NYSE:PLTR on a daily time frame with key Fibonacci Levels drawn as well as support, resistance, the 21-day EMA, and a critical VWAP from the bear-market lows of December 2022 Palantir Technologies Inc. NYSE:PLTR , once a tech darling of the 2020-2021 bull market in equities, has achieved a substantial retracement now of its vicious 2021-2022 bear-market decline. PLTR has been a popular stock ever since going public via a direct public offering, the same type of registered share offering used by NYSE:SPOT and Slack Technologies, LLC, which is now owned by Salesforce. PLTR provides data-analysis and AI technologies to large government agencies, including defense agencies and branches of the military, as well as large corporations. Despite periods of consolidation—especially from August 1, 2023, to November 1, 2023, PLTR has been in a primary-degree uptrend since its bear market low on December 27, 2022. The uptrend has been mostly strong and supported by the volume-weighted average price anchored to the bear-market low (green), which is shown on the Primary Chart above. Price has also run into a major long-term Fibonacci level at $20.74. This level is also shown on the Primary Chart in gold. Using a logarithmic scale, this Fibonacci level at $20.74 is a 61.8% retracement of the all-time high to the December 2022 low. Above this level suggests more upside. Below this level suggests either (i) consolidation, or (ii) resumption of the downtrend (if key long-term support levels break decisively). When plotted on a linear chart, PLTR has also reached (and stalled at) a critical Fibonacci retracement of its entire bear-market decline. This .382 Fibonacci retracement at $20.85 is often where bull flags or bear flags consolidate within a given trend. Some might view this level as a decisive level for the bbear case given that 38.2% of the bear-market decline has been retraced, and therefore, rising above this level would suggest the uptrend has further to climb (e.g., $25.46 at the 50% retracement shown in green below). So this level at $20.74 / $20.85 (whether viewed as a .618 Fibonacci retracement or a .382 Fibonacci retracement) is crucial to monitor. Supplementary Chart A This post argues that the primary uptrend looks as though it has become extended. Does this mean the high has been reached for the this particular uptrend? It's not wise to call the end of a primary trend until technical confirmation has occurred. Picking a long-term high is nearly impossible. The negative divergences on weekly and daily time frames are shown in the following charts: Supplementary Chart B Supplementary Chart C Supplementary Chart D Supplementary Chart E Supplementary Chart F So momentum has definitely slowed in this AI / tech / data-analysis name, and negative (bearish) divergences have arisen. At a minimum, this could signal a period of consolidation lies ahead in the first half (1H) of 2024. The supplementary charts show the divergences one should watch carefully. This may provide a reason for bullish position traders and investors to tighten stops. And if key levels snap decisively, such as the $16.36 level or the August 2023 supports at $13.68 or the VWAP (green) from December 2022, then watch for a retest or break of lows.
P
by SquishTrade
24
Bitcoin ETFs coming soon: what could happen?Hello, folks! If this is your first time reading one of my ideas, welcome, hope you enjoy it. If you are a regular visitor of my ideas, thank you! Let's discuss the fuss around Bitcoin Exchange-Traded Funds (ETFs). With 8 Bitcoin ETFs awaiting regulatory approval, decisions are anticipated between January and March 2024, let's consider how this could shake up Bitcoin's price, the wider crypto market, investor confidence, and the overall financial scene. 🧙🏽‍♂️ Spot ETFs: A Direct Link to Bitcoin's Supply SPOT ETFs are unique because they require the actual holding of Bitcoin by the fund. In an environment where Bitcoin's availability on exchanges is at an all-time low, these ETFs could significantly influence the market's supply-demand dynamics. The approval of SPOT ETFs is likely to ramp up demand significantly. Given Bitcoin's capped supply, this increased demand could lead to substantial price surges, potentially setting new all-time highs. 🧙🏽‍♂️ Investor Sentiment: A Confidence Boost For investors, SPOT ETFs represent a more secure, regulated path to Bitcoin investment. This could draw in a fresh wave of investment, both from retail and (more importantly) institutional sectors, think pension funds for example. This could potentially result in elevating Bitcoin's price and market stability in a way never seen before. 🧙🏽‍♂️ The Financial Landscape: Embracing Digital Currencies On a larger scale, SPOT ETFs indicate a significant stride in incorporating cryptocurrencies into mainstream finance. This move could spark further innovation and adoption of digital currencies in diverse financial services. While some banks are now known to block transactions related to crypto, or even entire accounts, it's not unimaginable that they will start offering crypto services themselves. An approval of several ETFs would incorporate crypto into Wall Street. 🧙🏽‍♂️ The First-Mover Scenario: A Case for Simultaneous Approval In the realm of these ETF applications, the potential for a first-mover advantage looms large. Here's a breakdown of the key players and their decision dates: Ark/21 Shares Bitcoin Trust: 1/10/24 Bitwise Bitcoin ETF Trust: 3/15/24 BlackRock Bitcoin ETF Trust: 3/16/24 VanEck Bitcoin Trust: 3/16/24 WisdomTree Bitcoin Trust: 3/16/24 Valkyrie Bitcoin Fund: 3/16/24 Invesco Galaxy Bitcoin ETF: 3/16/24 Fidelity Wise Origin Bitcoin Trust: 3/16/24 If one of these ETFs gets approval ahead of the others, it could dominate investor interest. To avoid this and foster a healthier, more competitive market, regulators might consider approving multiple ETFs simultaneously, ensuring no single fund unfairly corners the market. This means that we might see approval of several ETFs in January 2024, less than 2 months from now! 🧙🏽‍♂️ Conclusion: A Turning Point for Crypto? The potential approval of Bitcoin SPOT ETFs marks a pivotal moment in the crypto narrative. It's a validation of Bitcoin's growing influence and a beacon for a more inclusive crypto market. For the crypto community, it's a period of pride and anticipation; for cautious investors, a new pathway into the crypto realm; and for the financial world, a step toward embracing the digital currency era. Let's eagerly watch together how this story unfolds. Here's to the dynamic and ever-evolving world of cryptocurrencies! 🥂🚀🌕 ❓ Questions for you: What do you think will happen? Do you expect one or more ETFs to be approved in January? What do you think will be the effect on price of that happening? How will you trade/invest based on your expectations? Leave your answers to these questions in the comments below. Oh, and if you enjoyed reading this, like/boost, follow and shares are highly appreciated!
COINBASE:BTCUSD
by Nico.Muselle
147
Financial Crisis Impact on Different Asset ClassesA financial crisis is a severe disruption in the financial markets and banking system of a country or even the entire world. It typically involves a sudden and widespread loss of confidence in the financial system, leading to a range of negative economic consequences. In this article, we provide a comprehensive overview of how different asset classes tend to behave during turbulent times of financial and economic crises. Some prominent historical examples uncover the dynamic interplay within these markets. Impact of Financial Crisis on Equities Shareholder investments depend heavily on company-specific factors; however, general economic conditions and market sentiment play a decisive role as well. Equity markets typically plummet during financial crises. During a financial crisis, investor sentiment turns bearish as confidence in the stability of the financial system wanes, causing a domino effect through massive sell-offs on equity markets. Increased risk aversion imposes a higher risk premium to borrowing costs, and businesses may encounter significant challenges in securing loans for expansion or even daily operations. This difficulty in accessing capital negatively impacts corporate earnings, further eroding investor confidence in equities. Higher volatility is common in such conditions as well, and traders could turn the situation into an opportunity for short-term shorting profits. Economic Crisis Examples Causing Stock Market Crashes The Dot-Com Crash unfolded in the early 2000s, following a period of excessive overvaluation of internet-related and technology stocks. Having no earnings or clear path to profitability but going public on overhyped expectations, these companies enjoyed skyrocketing stock prices. The bubble burst when major technology companies initiated large sell orders for their own shares, confirming the extreme overvaluation and triggering a wave of panic selling. The Nasdaq Composite Index lost over 76% of its value, while the shock wave reached retirement accounts, investment portfolios, and mutual funds. The housing market collapse in 2008 and the subsequent banking crisis also resulted in a severe stock market downturn. Major stock indices, such as the S&P 500, plummeted in early 2009, causing substantial losses for investors. Financial Crisis Affects Fixed-Income Asset Classes by Risk At times of financial crises, investors often seek safety in government bonds from stable countries, leading to increased demand and higher prices. Therefore, government bonds are widely used as safe-haven asset classes for investments. On the flip side, concerns about creditworthiness during financial turmoil can cause bond prices from corporate issuers to decline. The scenario is different for corporate bonds. Negative sentiment causes panic selling and declining corporate bond prices, while positive sentiment, often due to government interventions or stimulus measures, can boost corporate bond prices. Central banks also respond to crises by adjusting interest rates, affecting bond prices: lower rates can make existing bonds with higher coupon rates more attractive, driving up their prices, while raising rates can lead to falling bond prices. Global Financial Crisis: The 2008 Mortgage Collapse The global financial crisis of 2008 triggered diverse reactions in the bond market. As the crisis unfolded, the huge demand for government bonds caused yields to drop to historically low levels, driving prices up in early 2009. In contrast, bonds tied to the housing and mortgage markets, such as mortgage-backed securities and collateralised debt obligations, experienced significant declines in prices due to heightened credit risk and concerns about mortgage defaults. A liquidity squeeze in the market exacerbated the pricing volatility, making it more challenging for investors to buy or sell bonds at desired prices. Central banks responded with measures like interest rate cuts and bond purchases to stabilise financial markets, influencing bond prices further. Financial Crisis Impact on Asset Classes Like Commodities The effects of financial crises on commodities are complex, with both safe-haven and risk-off assets experiencing fluctuations as investors seek to adapt to evolving market conditions. Financial crises impact supply and demand dynamics in commodity markets. Traders can profit from significant fluctuations, taking long or short positions in different commodity types. Precious metals like gold and silver are considered safe-haven assets by investors seeking refuge from volatile equities and currencies, which can drive their prices up. Conversely, industrial commodities, such as oil and base metals, may face declining prices due to reduced demand resulting from economic slowdowns and decreased industrial activity. Additionally, fluctuations in exchange rates due to monetary policies in response to the crisis can influence commodity prices. Impact of the Global Financial Crisis: Examples The 1997 Asian financial crisis caused severe economic contractions and currency devaluations. Key players like South Korea and Indonesia faced significant downturns in manufacturing and construction activity, leading to diminished consumption of copper and aluminium and a sharp decline in their prices. In Russia, the devaluation of the ruble in 1998 made it more profitable for Russian oil companies to export their crude, leading to an increase in oil production. Thus, a surge in supply combined with the reduced demand in Asia the year before resulted in a global oversupply of oil. Consequently, oil prices experienced a sharp decline. A more recent oil price decline in 2018 and 2019 was also triggered by oversupply concerns, primarily due to the rapid growth in oil production. Trade tensions, the global economic slowdown, and uncertainty in the face of slowing economies were also contributing factors. A Financial Crisis Is a Pivotal Moment for Currency Markets A complex interplay of forces can create substantial volatility in the forex market during a financial crisis, reshaping exchange rates. Heightened uncertainty and risk aversion among investors drive a flight to safety found in stable currencies, causing their values to appreciate. On the other hand, currencies of countries affected by the crisis, like emerging markets, often face depreciation due to economic uncertainty. Monetary policy adjustments by central banks, like interest rate cuts or quantitative easing, influence currency values further. The European Debt Crisis In 2010-2012, the depreciation of the euro significantly impacted currency markets. Concerns about the fiscal stability of several Eurozone countries led to investors seeking refuge in other major currencies like the US dollar and the Swiss franc. The European Central Bank's policy interventions played a critical role in managing the crisis's effects, highlighting the intricate relationship between regional economic and political developments and their impact on the global currency market. Alternative Asset Classes: Cryptocurrencies* Major cryptocurrencies* like Bitcoin and Ethereum can be seen as a hedge against crises in the traditional markets. Despite their different characteristics, purposes, and risk profiles, many major players see them as alternative investments because of an observed negative correlation at times. In the early stages of a financial crisis, cryptocurrencies* have sometimes been seen as "digital gold" or a safe-haven asset by some investors. This perception can lead to an initial increase in demand and higher prices for them. However, while some investors see cryptocurrencies* as a hedge against traditional financial system risks, others view them as speculative assets. This duality can result in varying responses during crises, with some investors flocking to cryptocurrencies* and others selling off to raise cash or reduce risk exposure. Bitcoin: The “Digital Gold” At the end of 2020, the COVID-19 pandemic accelerated the narrative of Bitcoin being a digital safe-haven asset. Extensive monetary stimulus during the pandemic raised extreme inflation concerns, while fear of worldwide economic recession kept stocks from rising, making many investors see Bitcoin as a superior store of value. Additionally, the pandemic fueled the rise of decentralised finance (DeFi) and digital payment solutions, boosting cryptocurrency* adoption. If you are willing to explore how various assets react to changing market conditions and hedge risks by diversifying your portfolio, you can visit FXOpen’s free trading TickTrader platform. Conclusion Financial crises bring to light the diverse behaviour of various asset classes. Stocks tend to collapse, bonds respond to interest rates and credit concerns, and commodities and currencies get volatile to reflect global dynamics. Amidst these, cryptocurrencies* emerge as an alternative store of value. Ready to extend your trading experience? You can open an FXOpen account and explore the opportunities. *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:SPXMEducation
by FXOpen
8
Why All Traders Should Master Alerts: Cyber Monday SpecialWe've got great news... We've extended our epic Black Friday sale into Cyber Monday. That's right - one more chance to get a plan at up to 70% off. Act now, or you'll miss our deal. Seriously, this is it. With one of our Premium plans, you'll get up to 800 combined alerts and all our other features (Volume Profiles, more bars, indicators on indicators, and endless other tools) for less than $17 per month. Many of the best traders out there covet our alerts. Why do alerts matter? How can you use them? Let us explain and be sure to utilize these tips with your new plan: 1. Plan ahead with alerts and be prepared 🎯📈 The act of creating alerts requires research, planning, and thoughtful analysis. In order to find the exact level you want to place an alert at, you first must research the chart in great detail. Then, once you've found your level, you'll want to create an alert at that level and wait for it to trigger. This entire process is the cornerstone of creating a plan and becoming more prepared for all the things markets may throw at you. Alerts allow well-prepared traders with some edge to step back from the markets and allow the trades to come to them. Ready to make your first alert? Here's how: Right-click on the exact price level and then select "Create Alert" from the menu. You can also use the keyboard shortcut Alt + A or on a Mac option + A. Lastly, at the top of every chart is a clock icon. Click that to open your alert menu and get started. The very act of creating alerts encourages planning, research, and preparation for the future possibilities. 2. Alerts create good trading habits 😎💪 Alerts take out the guesswork of entering and exiting a position. Set alerts for the prices you would like, then place a trade if, and only if, the conditions are met and that alerts triggers. Set the alert and wait patiently. Let the market do its thing and let the probabilities work in your favor. Do your research. Find a price level that looks important and wait. You have the tools available to you to research and follow markets, now add an alert at a level that's important to you and let our platform do the heavy lifting - we'll notify you when it triggers. 3. Our alerts don’t miss ✅⏰ Our alerts notify you anywhere and everywhere whether it's on our desktop app, mobile phone, email or a custom webhook to a chat room, website or something entirely unique to you. Our customizable alerts allow well-organized traders to capture every opportunity as they see it. Our alerts also work on trend lines, technical indicators, customizable scripts, and much more, so you can ensure that your favorite setups aren’t being missed. We offer both technical alerts and price alerts, which means you have double the number of alerts at your disposal. We hope you learned something new from this post and utilize all the helpful tips in your new TradingView plan. Happy Cyber Monday! - TradingView
by TradingView
22
TRADING BASICS: TRENDLINESTrend lines are the simplest and most basic concept of technical analysis. It is also, paradoxically, one of the most effective tools. Since almost all price patterns require the use of trend lines, the latter are the basic element of both pattern definition and its use. Now we will discuss what trend lines are, how to work with them and how to determine whether they are working. A trendline is a straight line that connects descending lows in a rising market or highs in a falling market. Lines that connect lows are called rising trend lines, and those that connect highs are called falling trend lines. To make a falling trend line, we connect the first high to the subsequent highs. When the price breaks the trend line, it is a hint that the trend may change. Similarly, for a rising line. How to draw a trend line? ✔️ For a trend line to be real, it must connect the previous highs or lows. Otherwise, there is no sense in such a line at all. This is called the major trend line. It is where the first low of a bearish trend connects to the first intermediate low. In the example below, the trend line is not particularly steep (it is at a low angle, and angles are important in a trend). Unfortunately, price then accelerates sharply after the next low. In a situation like this, it's best to simply redraw the trendline as price moves further away. This is called a new line in the picture and it reflects the changed trend much better. This line will be a secondary trend line. Well, the downtrend lines are drawn in the same way, but in reverse. Since the trend can go sideways, it is quite possible to guess that trend lines can be drawn horizontally. This is often the case when we find price patterns like the "neck" in the Head and Shoulders pattern, or the upper and lower borders of triangles. In such patterns, if the trend line is crossed, it is an indication that the trend is changing. The same is true for rising and falling trends. It is also important to realize that drawing a trend line is a matter of using common sense, not a set of very strict rules. A trendline breakout could indicate a reversal or consolidation The completion of a price pattern can indicate: 1. reversal of the previous trend, aka reversal pattern; 2. continuation of the previous trend, aka consolidation or continuation pattern. Similarly, a trend line breakout indicates either a reversal of the trend or a continuation of the trend. An example demonstrates this concept for a downtrend. In this case, the trend line connecting one high after another is broken in a downtrend. The fourth high will be the highest point of the bearish trend, so an upward breakout of the trend line in this case indicates the beginning of a bullish trend. In the picture above we see again a rising trend and a trend line breakout, but this signal has a completely different outcome. The reason is that the break of the trend line caused the trend to continue, but at a much slower pace. The third scenario is when the price goes into consolidation (aka sideways) instead of reversing, which is shown in picture. Accordingly, when a trendline is broken, it is a strong indication of a trend reversal. A changed trend can eventually reverse or go sideways after rising or falling. Unfortunately, in most cases we can't tell accurately what will follow a trendline breakdown. However, there can be some pretty good clues, such as the angle of the trendline. Since trends that run at an acute angle are less stable, their breakout more often leads to sideways rather than reversals. Useful hints can be hidden in the general state of the technical structure of the market. In addition, a trend line breakout often occurs at the successful completion of a reversal price pattern or shortly before. Extended trend lines ✔️ Many beginners, when they see that a trend line is broken, automatically conclude that the trend is about to change and immediately forget about the line. After all, an extended trend line can be as important as the fact of its breakdown. For example, if a rising trend line is broken, the price very often returns to the same line, but later. This is called a throwback. Significance of trend lines ✔️ So, we have it all figured out - a trend line breakout leads to either a trend reversal or a trend slowdown. Of course, it is not always possible to say what exactly happens there, but we need to understand how effective a trend line breakout is in general, which we are going to do now. In general, the significance of this event depends on three factors: The length of the line; The number of touches; The angle of inclination or rise. 1. Trend line length ✔️ A trend line is used to measure a trend. The longer the line, the longer the trend and the more such a line will become important to us. If descending lows come one after another for 3-4 weeks, such a trendline is less relevant. If the trend line lasts 1-3 years, its breakout is extremely important to us. The breakout of an old trend line is very important, it is a powerful signal. The breakout of a fresh (relatively) trend line is a less important signal. 2. Number of touches or approaches to the trend line ✔️ The more touches or interactions with the trend line, the more important it is, there is a direct correlation. Why is this so? Because the trend line represents a dynamic zone of support or resistance. Each successful touch of the line strengthens it, reinforces its importance as a support or resistance zone. Thus, the trend line's role as a guide for the trend as such is also strengthened. Approaching the trend line is no less important than touching it, because this is how the zone is actualized. If the trend line has become strong due to the touches, its continuation will be no less strong, but from the other side. After all, in an extended trend line, support often becomes resistance and vice versa. 3. Angle of slope ✔️ A very steep trend is usually unstable and easily broken, even by a short sideways movement. All trends break sooner or later, this is a fact. However, steep trends break much faster. The breakout of a steep trend is less significant than the breakout of a smooth and gradual trend. It sounds paradoxical, but the point is this - the break of a steep trend usually causes a short correction, sideways price movement, after which the trend resumes, but much less strong and smoother. Accordingly, the breakout of a steep trend line is a confirming pattern, not a reversal pattern at all. To summarize Trend lines are an easy tool to understand, but they must be used correctly and thoughtfully. A trend line breakout indicates a temporary interruption of the trend or a reversal of the main trend. The significance of a trend line consists of its length, the number of touches/approaches to it and the slope angle. A good trend line always reflects the underlying trend and forms significant support and resistance areas. Extended trend lines change former support/resistance in places, which should be paid special attention to. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Education
by Lingrid
36
Sofi - A possible repeating patternA repeating pattern and potential opportunity All three companies have some form of crypto offering. NUbank, Coinbase and Sofi appear to have similar bottoming patterns with double bottoms and a head and shoulders style reversal. The charts are not identical but you can clearly see a repeating testing of levels and a price cluster (red shaded area) which appears to be the new base forming offering good enough support for a trade set up. Under the price cluster red shaded area there are double bottoms. I have been in the NUBank trade since Jan 2023 at $3.51 and I noticed COIN had a similar bottoming pattern in June 2023 but it had not broken out yet, so I shared a comparative chart at the time and took a position in COIN, noting the stop as the bottom of the red box. I have shared individual charts on COIN and NU to this effect also. Since June COINBASE has had 120% increase and I believe this will continue. Whilst its price movement since the sharing in June is not identical to NUbank, you can clearly see a parallel channel bottoming, head and shoulders reversal and similar price clusters which i marked up. I was most confident on the COIN trade when it had its strong pull back from Jul - Oct, here I double the position when it came back and bounced off the the 200 day moving average perfectly. Two of the great trades of this year from me which I am still currently holding NYSE:NU and $Coin. I believe there maybe an opportunity for this much smaller company $SOFI. A trade set up is there with a defined stop and good risk to reward (outlined on chart). I have not entered this trade yet, but i may in coming weeks. I will keep you posted. PUKA
NASDAQ:COIN
by PukaCharts
14
A Traders’ Weekly Playbook: The heat is onVolume and liquidity kick back into markets after the US Thanksgiving celebrations and we consider if the trend of a weaker USD, low cross-asset volatility, rising gold and Bitcoin can continue. Direction for this scenario will focus on the direction of travel in equity markets, and notably, whether the NAS100, US500 and even the JPN225 can kick higher. The economic data and broad event risk offer no major landmines for traders to get overly concerned by, and I think we need to look further ahead at the US nonfarm payrolls (9 Dec) and US CPI (13 Dec) reports for the big part of the macro jigsaw. At this juncture, for traders who cut their craft on higher timeframes (4hr, daily, weekly) there doesn’t seem to be many reasons to be aggressively short risk, and while price action will be dictated to by passive and portfolio flows, the news, and levels of implied volatility suggests if risky assets do kick then it could pay to chase. The USD is central to broad market sentiment, and Friday’s close in the DXY below the 200-day MA may well be telling. With an eye on EU CPI, we focus on whether EURUSD can push through 1.0950/60, and USDJPY into 148, a factor which could see new cycle highs in gold with industrial metals also supported, although Chinese data could play a part in driving that trade. I like USDCHF downside, with a stop above 0.8760. GBPUSD and AUDUSD also look like they could kick, although the latter needs to push through the 200-day MA and then the 0.66 level. Bitcoin is making another run at 38k, and after consolidation, we’ll see if price can continue its ascent since mid-October. Clients believe this to be true and are positioned accordingly and many will be thinking Bitcoin can start 2024 with 40 as the big number. Good luck to all. The marquee event risks for the week ahead: China Industrial Profits (27 Nov 12:30 AEDT) – coming off a low base, we saw profits gain 11.9% yoy seen in September. There is no consensus to work off, so pricing risk on the data is a challenge, so the data is unlikely to see too great an initial reaction in markets. US consumer confidence (29 Nov 02:00 AEDT) – the consensus is that we see the index come in at 101.0 (from 102.6). A print below 100 could further weigh on the USD. Australia monthly CPI (29 Nov 11:30 AEDT) – the market looks for the monthly CPI read to come in at 5.2% (5.6%), with the range of estimates set from 5.5% to 4.9%. Few expect a hike from the RBA on 5 December, but expectations of a hike in the February RBA meeting are delicately poised at 50%, so the monthly CPI print could influence that call and impact the AUD vs the crosses. RBNZ meeting (29 Nov 12:00 AEDT) – the RBNZ will leave interest rates unchanged at 5.5%, with the markets ascribing no probability of a hike here. In fact, the argument is more on the timing of the first cut, with a 33% chance of a 25bp cut priced by the May RBNZ meeting, and 55bp of cuts priced by end-2024. Sweden Q3 GDP (29 Nov 18:00 AEDT) – the market looks for Q3 GDP to come in at -0.2% QoQ / -1.4% yoy. After recording -0.8% in Q2, another negative quarter puts Sweden in a technical recession and accelerates the need to cut rates, where we see the door open for easing from June 2024. This GDP print should also mark the low point, where GDP should be less bad going forward, which is part of the reason why the market has been better buyers of the SEK of late. China manufacturing and services PMI (30 Nov 12:30 AEDT) – the market looks for the manufacturing index at 49.6 (from 49.5) & 51.1 (50.6). Keep an eye on copper over the data, and for a possible upside break of $3.80 and the 200-day MA – a scenario which would likely put upside risks in the AUD. EU CPI (30 Nov 21:00 AEDT) – the market looks for headline CPI inflation to come in at -0.2% MoM / 2.7% (from 2.9%), with core CPI at 3.9%. The swaps market sees the ECB hiking cycle as firmly over and looks for the first cut in April, which may be a touch optimistic. We also see the hedge fund community heavily short of EURs, so if equities can squeeze higher then EURUSD should follow suit with moves accelerated on short covering. OPEC meeting (delayed - 30 Nov) – Expectations of deeper output cuts are low, with most commodity strategists seeing a higher risk that the current output cuts are extended into 2024. OPEC+ could shock the market of course, but looking at the price action in crude it seems the market is positioned short of Brent Crude into the meeting and betting OPEC+ don’t step up its attempts to reverse the recent bear trend. A close above $83 could see shorts square and even reverse. US core PCE inflation (1 Dec 00:30 AEDT) – the market looks for 3.1% on headline PCE inflation (down from 3.4%) and core PCE at 0.2% mom / 3.5% yoy (from 3.7%). We look at trends in service prices and services ex-shelter, where slower prices rises should cement the view of adjustment rate cuts from the Fed in 2024. Canada employment report (2 Dec 00:030 AEDT) – the consensus is that we see 15k jobs created and the U/E rate at 5.8% (from 5.7%) – There’s not a lot to like about the CAD at present, although the market is seeing even less interest in the USD at present. A break of 1.3692 would be welcomed by USDCAD shorts, and the jobs print may influence that flow. In rates, we see the first cut from the BoC priced for April and some 74bp cuts priced by end-2024. US ISM manufacturing (2 Dec 02:00 AEDT) – the market looks for modest improvement with the diffusion index eyed at 47.7 (46.7). I’m not expecting a huge reaction to this data point as we know manufacturing is weak and we won't learn too much here. Central bank speakers RBA – Gov Bullock speaks from Hong Kong (12:18 AEDT) BoE – Ramsden, Haskel, Bailey (30 Nov 02:05 AEDT), Hauser, Greene ECB – Lagarde, Deo Cos, Panetta Fed – Goolsbee, Waller, Mester, Powell (2 Dec 03:00 AEDT) BoJ – Adachi, Nakamura
PEPPERSTONE:NAS100Long
by Pepperstone
2
4 Types of Gap You MUST Know in Trading Hey traders, In this article, we will discuss a very common pattern that is called gap. In technical analysis, the gap is the difference between the closing price of the previous candlestick and the opening price of the next candlestick. 📈Gap up represents a situation when the price bounces up sharply at the moment of a transition from one candlestick to another. The price gap that appears between them is called gap up. 📉Gap down represents a situation when the price drops sharply at the moment of a transition from one candlestick to another, the price gap between the closing price of the previous candle and the opening price of the next candle is called a gap down. From my experience, I realized that with a high probability the gap tends to be filled. For that reason, once you see a gap, consider trading opportunities around that. Depending on the market conditions where the gap appears, there are several types of a gap to know: 1️⃣Common gap appears in a weak, calm market. When the trading volumes are low and the market participants are waiting for some trigger, or the asset reached a fair value price. Above, there is a perfect example of a common gap that was formed on Dollar Index on an hourly time frame. 2️⃣Breakaway gap appears in a situation when the price suddenly breaks a structure (support or resistance) in a form of a gap. Such a gap usually confirms a structure breakout. I spotted a perfect breakaway gap on Dollar Index. The market violated a solid horizontal support with that. 3️⃣Runaway gap usually appears when the market is growing or falling sharply. It signifies the dominance of buyers/sellers and highly probable continuation. Usually such gaps are not filled. Runaway was a perfect indicator of a strength of buyers on US30 Index. 4️⃣Exhaustion gap is, in contrast, appears around major key levels and signifies a highly probable reversal. The exhaustion gap is usually confirmed by a consequent strong opposite movement that fills the gap. US100 formed an exhaustion gap, trading in a strong bullish wave. After that the gap was filled and the market started to fall rapidly, forming a breakaway gap. Learn to recognize gaps on a chart and learn to interpret them. It will increase the accuracy of your technical analysis. Hey traders, let me know what subject do you want to dive in in the next post?
Education
by VasilyTrader
10
Ichimoku Cloud: How To GuideHave you ever considered using the Ichimoku Cloud, a powerful and versatile technical analysis tool that goes beyond traditional chart analysis? 💜 If you appreciate our guides, support us with boost button 💜 Discover the Ichimoku Cloud, technical analysis tool developed by Japanese journalist Goichi Hosoda in the late 1960s. This method visually represents support and resistance levels, providing crucial insights into trend direction and momentum. Let's delve into the key aspects of the Ichimoku Cloud, providing you with insights and skills to take another step up in your trading game. 1. Understanding Ichimoku Cloud Components of the Cloud: The Ichimoku Cloud comprises five key elements — Tenkan-sen, Kijun-sen, Senkou Span A, Senkou Span B, and the Kumo (cloud). Grasping the role of each component is fundamental to interpreting the cloud's signals. - Kijun Sen (red line): The standard line or base line, calculated by averaging the highest high and the lowest low for the past 26 periods. - Tenkan Sen (blue line): The turning line, derived by averaging the highest high and the lowest low for the past nine periods. - Chikou Span (green line): The lagging line, representing today’s closing price plotted 26 periods behind. - Senkou Span (red/green line): The first Senkou line is calculated by averaging the Tenkan Sen and the Kijun Sen and plotted 26 periods ahead. The second Senkou line is determined by averaging the highest high and the lowest low for the past 52 periods and plotted 26 periods ahead. It’s not necessary to memorize the computations; understanding their interpretation is key. 2. Trading Strategies with Ichimoku Kumo Twists and Turns: The twists and turns of the Kumo offer valuable signals. A bullish twist occurs when Senkou Span A crosses above Span B, while a bearish twist is signaled by the reverse. These crossovers present entry and exit points. The Power of Kijun-sen and Tenkan-sen: The relationship between the faster Tenkan-sen and the slower Kijun-sen offers additional insights. A bullish crossover suggests a potential uptrend, while a bearish crossover may indicate a trend reversal. Utilizing the Lagging Span: The Lagging Span (Chikou) acts as a momentum indicator. Confirming its position relative to the price and cloud provides a powerful confirmation tool for trend strength. 3. Practical Tips for Ichimoku Trading Timeframe Considerations: Adapt your approach based on the timeframe. Longer timeframes offer a broader market perspective, while shorter timeframes can reveal short-term trends. Risk Management: Like any trading strategy, risk management is paramount. Set stop-loss orders, and ensure risk-reward ratios are carefully considered before executing a trade. Backtesting and Practice: Before going live, engage in extensive backtesting and paper trading. This will hone your understanding of Ichimoku signals and enhance your ability to interpret them in real-time. 4. How to Interpret Ichimoku Lines Senkou Span: - If the price is above the Senkou span, the top line serves as the first support level while the bottom line serves as the second support level. - If the price is below the Senkou span, the bottom line forms the first resistance level while the top line is the second resistance level. Kijun Sen: - Acts as an indicator of future price movement. - If the price is higher than the blue line, it could continue to climb higher. If below, it could keep dropping. Tenkan Sen: - An indicator of the market trend. - If the red line is moving up or down, it indicates a trending market. If it moves horizontally, it signals a ranging market. Chikou Span: - A buy signal if the green line crosses the price from bottom-up. - A sell signal if the green line crosses the price from top-down. As a trend-following indicator, Ichimoku can be applied across various markets and timeframes. Emphasizing trading in the direction of the trend, it helps avoid entering the wrong side of the market. With its combination of support and resistance levels, crossovers, oscillators, and trend indicators, Ichimoku simplifies complex analysis, making it an invaluable tool for traders seeking a comprehensive approach to technical analysis. Dive into the charts, explore the strategies, happy trading!
Education
by Vestinda
5
Why Invest in Tradingview?As we approach the final stretch of Tradingview's Black Friday sales, I thought I would outline some reasons why you should invest in Tradingview, or more specifically, a paid membership. Its the time of year where expenses start piling up. Christmas on the horizon. If you are a licensed professional, then you have to start renewing your license and insurance (I have two licenses to maintain sadly, which are extremely expensive). And if you live in the North Eastern United States or Canada (with the exception of you East Coasters out there), you're also looking at the heating costs and the dreaded winter tire expenses. So I get why having another expense added can be all so dreadful, especially if you are starting out as a trader and not quite profitable yet. But here are some reasons why I think it makes sense and why I think you should support Tradingview (and yourself) through a paid membership: 1. Its tax deductible. Yup. It is. If you are a trader and relying on Tradingview in the conducting of your business, it is indeed tax deductible. Your laws and regulations may vary slightly depending on state and country, but in Canada, if you are a day trader and unincorporated, you are considered a Sole Proprietor and can write off the expense as a "business expense". 2. It provides more enhanced access to data . Not only can you use more indicators and all that fun stuff, but you can actually get more data, further back in history. As a premium member, I can pull data on the SPX from the 1800s, when people were trotting down to their local broker's office (maybe? Not sure if that was a thing but probably) in horse and carriage to sign for and purchase their very own shares in such things as the Mackintosh company.... No, not the computer company, but the very stylish raincoat manufacturer of the 1800s. Look it up. 3. Integration of brokerages: Tradingview allows you to integrate your brokerage into a more chic and functional chart platform. As I am Canadian, the brokers we have available here are pretty god awful in the functionality they permit you to do. Tradingview allows you to do far more tailored things to your charts and also provides you the ability to trade directly from your Tradingview chart! (If you are Canadian, currently only IB is the big one supported here). 4. Pinescript. I know I shill Pinescript a lot, but if you are a quantitative trader, or a trader who likes to use code and scripts in a meaningful way to help you trade, for the most part Pinescript and Tradingview are hands down the best and happy medium. While Pinescript cannot execute trades for you at this time, Pinescript, by default, has real time and direct access to exchange data, all compressed on a relatively easy to learn platform that will have you writing useful code that can really help you with a little bit of effort. I rely on Pinescript every day (see my post on Why you Should Learn Pinescript if you are interested in how it changed my trading for the better). If you want to use another platform, such as Python, your only alternative is yFinance, which has delayed data. For real time data, you would have to go to a provider such as Polygon who charges you, on average, 80$ per month to get the live data that Pinescript already has access to and is built into its native platform. And while you don't need a paid membership to use Pinescript, you need a paid membership to optimize pinescript to use more advanced or bigger codes that may take a bit longer to execute. As well, having a paid memebership grants Pinescript more access to more data (point 2 of this post). 5. Its a supportive community. Everyone on here all is doing the same thing and all has, generally, the same sense of how trading goes. We know that you win some, you lose some, you have hard days, you have bad days and your mood fluctuates with the market. No other community is as in-tuned with these nuances of the market as the Tradingview community. Trolling can and does happen sometimes on here, but not to the same extent as I have observed on other platforms, which can pretty hostile and.. let's say, unsupportive. 6. Tradingview supports all equally. Unlike Youtube or Insta or TikTok (I think? I'm Millennial so, boomer by TikTok standards) who reward you for your following, Tradingview doesn't. Having recently started their Editors Pick monetary rewards, they pick all types of people, with all types of ideas, who trade all types of instruments, regardless of their following numbers or preferred instruments. They support you and sharing your ideas, so it may be nice to return the favour to them. The same goes for Pinecoders. There have been editor's pick codes who were first time coders who just posted their first indicator. Its not the person themselves that matters to Tradingview, its the person's idea and passion and I think that's important in this type of community. 7. The vast access to tickers and exchanges! Tradingview offers you access to multiple tickers and indices and exchanges in multiple different countries. More access than any single broker does (at least, again, for us Canadians haha). In a matter of seconds, you can be checking out China's stock exchange, Germany's, Frances, London's, Canada's, Russia's, the list goes on! 8. And I forgot to add, they are constantly making improvements to their platform ! Introducing new things, like interviewing traders in livestreams, providing more functionality to Pinescript, providing more functionality for chartists, the list goes on! As we all try to improve as traders, Tradingview continually improves as a helpful platform! Anyway, those are my thoughts. On that note, you have approximately 1 day left to get the awesome discounts, so chop to it if you want! And if you are interested, I am not sure if it counts if you already have a Tradingview account, but you can use the referral code here, I want to say, to get 15$ if you are switching to a paid from unpaid or new account creator (hopefully I understood correctly): www.tradingview.com Use it, don't use it, doesn't really matter. The point I want to make is, its worth it if you are really passionate and interested and serious about trading! That's it! Safe trades everyone and take care!
SP:SPXEducation
by Steversteves
19
HAPPY THANKSGIVING! Let's see Bitcoin's price on this date!Let me begin by wishing everyone in the TradingView community a Happy Thanksgiving! A day of joy, gathering and happy family moments! Aren't you curious to see where the price of Bitcoin (BTCUSD) was trading on this day in the previous years? If so, have a look: 2010: $0.28 2011: $2.49 2012: $12.51 2013: $813 2014: $376 2015: $328 2016: $739 2017: $8,771 2018: $4,015 2019: $7,150 2020: $18,764 2021: $58,927 2022: $16,353 2023: $37,000 So the obvious question is this. Do you see the pattern?? Since 2009 there have been 10 Thanksgiving dates where the price of BTC was higher than the previous year and only 4 where it was lower. Only once we've seen two straight red Thanksgivings and at least two green Thanksgiving dates follow. This year we have a green one, more than double the price of 2022 and in fact this is the first time BTC doubled coming from a red Thanksgiving since 2016. An interesting pattern that arises on this chart is that when measuring the line that connects the Thanksgiving closer to the Cycle Top back to years, we can see that its angle is lower (naturally) by a certain rate. From 2015 to 2017 it measured the previous angle x 0.64. From 2019 to 2021 it was the previous angle x 0.68. From 2022 to 2024 based on this progressive pattern, is should be the previous angle x 0.72 (0.68 + 0.04). That gives us a rough value just under $80000 for the next Thanksgiving (November 28 2024). It is very possible that the Cycle top will be priced higher a few weeks after on an aggressive spike above $100k, as BTC often does (only the June 2011 Cycle Top was way off, being in the middle of two Thanksgivings). But what do you think about this model and its projection? Are you expecting a BTC price around 80k on the next Thanksgiving and if not, what is your estimate? Feel free to let us know in the comments section below! ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
CRYPTO:BTCUSD
by TradingShot
32
BITCOIN UPDATE (SCROLL DOWN)We are in an ascending channel pattern for 466 days now, which is a bearish pattern, we are hovering around $36566 price, we lots of volatility yesterday because the CEO of Binance stepped down. For the price to still be where it is now is actually a good reaction from the market! This does not mean bearish and bullish patterns always play out, what we can do is set alerts on the resistance and support levels and trendlines and identify the patterns so we can trade it accordingly.
by UnknownUnicorn22804749
32