The Evolution Of Streaming Platforms For Movies And SeriesIn this work, we will analyze the evolution of streaming platforms for movies and series, from the emergence of the first video rental stores to the present day. We will compare the main companies in the sector, such as Amazon, Netflix, Warner Bros. and Disney, and evaluate their technical and fundamental performance in the stock market. Our thesis is that streaming platforms are a phenomenon that revolutionized the entertainment industry, but that also face challenges and controversies in a turbulent economic and social scenario.
1. The origin of streaming platforms
Hollywood, located in Los Angeles, in the state of California, became very famous for producing movies and series that are consumed worldwide. This made Los Angeles one of the 5 most profitable cities in the world. In the 80s, there was a popularization of VHS tapes and, because they had a slightly higher cost, several video rental stores appeared, where they lent these tapes in exchange for a monthly fee or separate rentals. And so, with technology maturing, they started to integrate these movies into DVDs, where access became much easier than VHS tapes, but also brought the entry of piracy, which became very popular in countries with underdeveloped governments, such as Brazil, Mexico, Colombia, Turkey and among others.
Even with the advancement of technology, the film industry did not stop, which brought a lot of profitability to the state of California and to the city of Los Angeles, which was the main film hub in the world. And while this was happening, the internet evolved. What was already something interesting with telephone stairs lines or radio signals gradually became what would replace video rental stores, giving rise to the first streaming platforms. Netflix, which originally was a physical video rental store, started to integrate a very well-designed library of movies and series for a low subscription cost.
2. The popularization of the internet and online content
Over the years, it seemed that this internet thing would work out very well. The Justin.tv platform allowed people to broadcast everyday and normal events. This site saw a significant increase in internet users, which led to the creation of Twitch, focused on games and interaction with viewers. Note that at this point there was still no transmission of movies, as it was not something that happened much at the time. Also with the popularization of YouTube, from Google, which belongs to Alphabet Inc., people started to consume videos made by ordinary people about some content made by these same internet users. And there was a maturation on the part of people, who hired platforms like Netflix to watch movies and YouTube to watch other types of content that did not air on television. Since this type of content was for cable TV, where there was a variety of exclusivities.
With abusive prices for cable TV and several repetitions by broadcasters, since the content of closed channels always repeated programming, where it became a snowball of reruns and that gradually stressed the consumer, who gradually abandoned the idea of using cable TV and switched to the internet.
There were several clandestine sites, where people started watching movies and series online, without having to resort to cable TV. However, with many annoyances of ads and pop-ups with an unpleasant courtesy to those who watched. With that, with the popularization of these clandestine sites, Netflix also became popular, which offered its services without having any type of annoying ads. So, people started to pay for it so they don’t have to resort to clandestine sites. And those who didn’t pay watched within these sites anyway. What happened was that since DVD, where piracy was born, the internet also managed to mature it a lot with these clandestine sites that pirated content.
3. The competition and diversification of streaming platforms
Obviously, the strike will hinder some plans for major streaming platforms.
Well, this shows that with all the evolution we described here, the fight for exclusivity and copyrights has become increasingly fierce and competitive. And of course competition also generates performance and what also attracts investors. Bringing now 5 actions from these respective companies.
Starting to do a study, where we will analyze first the paper from Amazon. Because it acquired Justin.tv, launched in 2007, and Twitch, being a branch, being launched in 2011. And so in 2014, Justin.tv being discontinued. Also in the same year, it was acquired by Amazon. It also has a streaming platform that has rivaled Netflix quite a bit, which is Amazon Prime Video. In addition to having another streaming system aimed at music, which has also rivaled Spotify quite a bit, which is Amazon Music Unlimited and Amazon Prime Music.
Speaking now about Netflix, which is a company that has a great history and that has been around for a long time. In addition to a streaming service, it also now started to develop movies and series to fill the catalog that were removed due to copyrights. Of course Netflix is a controversial company, loved by many and hated by others, for addressing issues that are not very receptive by a large part of the public, such as gender ideology or something related to the queer public. And even with all the controversies and controversies about Netflix, it is a great company with good numbers.
Speaking now about Warner Bros., which is another company that is in the streaming business, betting heavily on HBO Max. What worked out very well in 2021, where the paper rose a lot. Warner is a very reputable company, which has been around for a long time, owning several successful movies and brands. In addition, they are also in the music business, calling themselves Warner Bros. Music Inc. But we can’t say that just like Amazon and Netflix, Warner suffered a lot from the American macroeconomy, with high inflation acceleration. Also dropping the paper, going from 74 to below 9 USD. Having a devaluation of 81.9%, which is a very high value for the investor who had a lot of losses by holding this paper. Despite all this, Warner is trying to reinvent itself, as it has made productions that have not pleased the large community. So they have bet on a reboot in the cinematic universes of their respective scripts.
And lastly, now we will talk about Disney. It is a mega-company, not only acting in movies, but also it has several amusement parks. Being the most famous Walt Disney World, located in Orlando, Florida. Just like the other companies mentioned here, Disney was also badly hurt in 2022 with some economic problems in the United States. But with the high of 2021, which was a placebo effect of pandemic recovery. And also with the success of the Disney+ platform, which made the company rise to the level of 200 USD. Just like Netflix, Disney has been heavily criticized for tirelessly addressing gender ideology issues, changes in ethnicity of consolidated characters, in addition to several controversial accusations about reproducing
content to sexualize children. The path of diversity and liberalism has bothered a large part of investors, who are not pleased with the company’s policies. In addition, it also felt the effects of high American inflations, causing the paper to plummet a lot. All this together with the effect of fundamental analysis.
4. The technical and fundamental analysis of the main companies in the sector
Let’s look at the technical and fundamental analysis of each of the companies we mentioned, and see how they have behaved in the stock market.
4.1 Amazon
Let’s look at the technical analysis of this asset:
Notice that in 2022 there was a drop in Amazon. This was normal, since the S&P itself felt this drop. So all companies in the index were affected, including the Nasdaq Composite asset. Within this downtrend channel, in November 2022 they started to form a range, where the first test is done without enough supply for the price to drop further. And again in March we have another test with lower sales than the last purchases. With that, an uptrend channel started, where it returned to the top of September 2022 and to the region of the VWAP of 750 periods. It seems that we can see Amazon’s paper plummet a little. Maybe there in the range of 120 to 125. And if there is no buyer interest in this price range, we can see the market fall further. But reaching this price range and happening to enter buyer flow, they can hold the price at 125 and make it return to the same top of the region of 135.
Now we will be analyzing the fundamental data.
Source Yahoo Finance
The company has a strong market, good cash generation and high growth, but it also has an uncertain valuation, high costs, high risks and high debt. This means that it can be an investment opportunity for those seeking high long-term returns, but it can also be a pitfall for those unwilling to take the risks involved. The company does not pay dividends, which can be a negative point for those looking for passive income
Well, this is not a good foundation, but it is open to interpretation. Seeing this and the technical scenario, things may not be so good for Amazon. In addition to a very stretched price at a top of the VWAP of 750 periods, it is also not very convincing in fundamentals. But that doesn’t take away from the fact that the Amazon empire is a wonderful and successful company.
4.2 Netflix
Let’s look at the technical analysis of this company and see what the chart along with the fundamentals want to say?
Source: Yahoo Finance
The company has good growth, good profitability and good cash generation, but a poor market value and does not pay dividends. Your margin, ROE, and ROIC metrics are good, but your asset turnover is bad. Its current liquidity is good, but its total debt to equity is high. Therefore, the company may be a good fit for investors looking for growth, but not for those looking for passive income or low risk.
It is a company that, doing a technical study on it, has not corresponded so much. If we look closely, the part where Netflix had more appreciation was after the pandemic, where there is a spike in price and forming a very common pattern in technical analysis called zig zag pattern.
Which is very common during reversal movements. From 2022 it was very bad for Netflix, which suffered a very abrupt drop, leaving 696 and coming to fetch 171. Which was indeed very worrying. She even managed to return to 416. However, this top, as we saw in the first chart, Netflix may be heading for another reversal. That is, being this high just a corrective movement. Because if we notice well, buyer interest has been falling more and more. And besides, she lost the region of the VWAP of 50 periods, showing that there is an acceleration in price. So in the most optimistic hypothesis, she could look for 360 USD.
Source Yahoo Finance
The company has good growth, good profitability and good cash generation, but a poor market value and does not pay dividends. Your margin, ROE, and ROIC metrics are good, but your asset turnover is bad. Its current liquidity is good, but its total debt to equity is high. Therefore, the company may be a good fit for investors looking for growth, but not for those looking for passive income or low risk.
Observing that Netflix’s fundamental data have been good, despite some bad indicators. Even with good fundamentals, it has conflicted a bit with the technical part. However, as I said, being very optimistic, she may look for 366. And of course, if buyer interest appears there, they can accumulate. Even looking at the good fundamentals that the company has. This is because investors make decisions not only because of the good fundamentals of the company. They also take macroeconomics into account.
4.3 Warner Bros.
Let’s look at the technical analysis of this asset:
It seems that things are not very good.
We will now do a fundamental analysis.
Source Yahoo Finance
The company has a bad market value, negative profitability and does not pay dividends. Your margin, ROE and ROIC metrics are bad, as is your EV/EBITDA. Its cash generation is good, but its current liquidity is poor and its total debt to equity is very high. Therefore, the company can be a bad option for investors, as it presents high risk and low return.
With regular to regular fundamental data, fundamental analysis confirms the downward bias along with technical analysis.
We know that Warner has a lot of growth potential and that despite all the problems she went through, she can turn things around. If you do good management of the company.
4.4 Disney
We will be doing a technical analysis study on the asset.
Here we have the presence of 3 charts, where we can clearly see that Disney has been going through a very worrying moment. At least on the technical analysis part, it has shown decline. You can’t tell how far it really goes, due to some proportions. For example, we know that Covid Bottom’s barrier is a psychological support, where participants took advantage of a panic moment there in 2020 to be able to spin the market. However, it seems that it is becoming unsustainable and we can see Disney fall a lot if it happens. It can also happen not to fall and there is buyer interest. But we have no technical evidence to show us buying at the moment.
Now we will be observing the fundamentals:
Source: Yahoo Finance
The company has good market value, good cash generation and good EBITDA, but low P/E and low ROE. Its operating margin and current ratios are fair, but its net profit and total debt-to-equity ratios are weak. Some indicators are not available like DY, DP, ROIC, gross margin and asset turnover. Therefore, the company may be a moderate option for investors but the technical analysis leaves a lot to be desired, which can be worse.
We can see that Disney’s fundamental data are regular, but not exactly the worst on the list. But it also does not present security to investors in a turbulent economic moment.
5. The conclusion and future prospects
In conclusion, we can affirm that streaming platforms are a phenomenon that revolutionized the entertainment industry, but that also face challenges and controversies in a turbulent economic and social scenario. Through the technical and fundamental analysis of the main companies in the sector, we saw that they have presented varied performances in the stock market, depending on factors such as the quality of service, the diversity of catalog, customer loyalty, competition, innovation, reputation and macroeconomics. For the future, we hope that streaming platforms continue to grow and adapt to the demands and preferences of consumers, but also that they are responsible and ethical in relation to the content they produce and distribute.
Community ideas
NVDA has topped. Sell it now.2023 has been an incredibly strong year for stocks. The Nasdaq rallied 38% in the first six months for one of the best starts to a year in history.
This rally has been primarily led by an AI/tech theme that has been responsible for the bulk of these gains. That part of the rally is likely over, however… at least for now.
Every bull market has a “theme” with leading stocks that set the pace. In the late 90s that was the dot-com bubble. In the 2009-2020 bull market that was big tech like Facebook, Amazon, Netflix, Apple and Google (hence the FAANG stocks moniker). The 2020-2021 bull market was led by “work-from-home” stocks like Zoom, Teladoc and Peloton.
The 2023 bull market has been led by artificial intelligece. The leading stocks have been Meta, Microsoft, Dynatrace, MongoDB, Palantir, AMD, and the biggest leader of them all, Nvidia.
Over the last 4-6 weeks we have witnessed many of these leading names roll over and retrace beneath their 50-day moving average – a key level that generally supports top stocks through the move higher.
Despite the recent pullback in the market, Nvidia has held at its highs.
Wednesday after the close, Nvidia reported earnings. And the results were better than anyone could have expected.
Earnings $2.70 per share versus estimates of $2.08. Sales were $13.5 billion – 20% above expectations. And the company raised forward guidance (how much they expect to bring in next quarter) from $12 billion to $16 billion.
They also announced a $25 billion share buyback which should act to propel the stock price even further. Investors got everything they wanted and then some. NVDA stock shot up 10% after hours. The news was so good, the entire Nasdaq index shot up 1% on the news.
But Thursday, in the first few hours of trading, all of those gains were gone. The Nasdaq opened higher, and immediately began selling off. It fell 3% during the session. And NVDA was back where it closed the day before.
This, to me, is a clear signal that the 2023 rally in tech stocks is over. The high was likely made on July 19th, and I doubt we see that level again this year.
In a bear market, like we had in 2022, what you want to see is the market going UP on BAD news. This is the sign that the low is in, and buyers are coming back in.
We saw this on October 13, 2022. After a government inflation report revealed the worst numbers yet – far worse than expectations – the market gapped down and opened a full 3% lower than it was the day before. However, stocks immediately began to rally, and the index surged 5% that day. This was the signal that the low was in.
On the other hand, in a bull market, we want to watch for times when the market goes DOWN on GOOD news. This often signals a top. And I believe we saw that on Thursday.
Nvidia was the only stock that could have reversed this pullback. The earnings report was better than even the most optimistic investor had hoped. This should have absolutely put an end to the pullback and caused the market to rally higher. Instead, we saw the opposite.
So, what does this mean?
First of all, and let me be clear on this, I am NOT saying the market is about to crash. I simply believe the “easy money” stage is over.
I expect to see fairly choppy conditions for the next few weeks or months, and investors can no longer rely on the bull market to push everything higher.
I believe tech stocks have seen their highs for 2023. Those with large open gains in stocks like Meta, Amazon, Apple, Google, Nvidia and the like may consider selling to lock in those gains here.
There will still be stocks that go up, some of them by substantial amounts. But I believe this is now a more selective stock picker’s market.
Personally, I sold the index funds in my long-term account and moved to cash ( I also went short the Nasdaq via QID). As of yesterday, those index funds funds were up 37% year-to-date. That is a phenomenal year, and I do not want to risk giving those gains back.
To me, this is a low-risk decision. The worst-case scenario is that I am wrong or something material changes that propels stocks higher.
If this happens, and the Nasdaq makes new highs this year, I will simply buy those funds back. All I will have missed is a 6% move.
BTC: Distribution and Re Distribution Part TwoHi Everyone! The 20-minutes allowed for video publications ran out during the creation of this video. Which means I will pick up where I left off with a "Part Three" video.
I will follow up with screenshots shortly to allow you to see charts covered in this video. Then, I'll work on Part Three video and pick up where I was "cut off" in this video.
SPX vs. Money Supply A fellow trader on Tradingview turned me on to the idea of tracking the US money supply and its effect on the S&P 500 and let me tell you, was this an all consuming rabbit hole or what!
In this post, I will look at the relationship between the US money supply and the S&P. Well, that was what it was supposed to be. It then turned into a look at how global money supplies affect indices in general because it is a really interesting rabbit hole indeed. So let’s get into it.
Does Money Supply Affect the Stock Market?
The general consensus that I could find in economic research and reports is that, in general, the US money supply and, more generally, global money supplies influence stock markets indirectly. The most obvious way is, money supply is needed to fund global investments in markets. Without money, there would be no way to invest. But there are also some indirect ways that money supply (MS) can influence the stock market. The most notable way is by creating liquidity and influencing behaviour. This is probably the most fresh example as it was arguably one of the biggest fuels on the post-COVID recovery bull run we had. The Federal reserve enacted monetary policy that made borrowing attractive and promoted investment, borrowing and leveraging (which took advantage of very low interest rates).
If we take a look at the chart above, this chart depicts the US money supply against $SPX. The data is standardized in Z-Score format to be able to do side by side, direct comparisons. We can see that immediately following the COVID crash, the US money supply began rapidly increasing. This was the result of federal reserve policy aimed at quantitative easing. This was arguably one of the leading causes to the unprecedented growth of the S&P in such a short timeframe.
How has the US Money Supply Affected the S&P 500?
If we zoom out on the above chart and look at the US money Supply since 1959 overlayed against the S&P, we can see, visually, how the US money supply has impacted the S&P 500:
The first thing of note is there is a high degree of correlation between SPX and the US Money Supply, which has a Pearson correlation of 0.98. This is a strong, positive correlation . This means that as the US Money Supply increases, so too should the S&P and vice versa.
We can also see that, for the most part, the S&P’s growth is comparable to the US money supply. As the Money Supply increases, the S&P grows to match this supply. The exception to this was a stint of time between 19843 and 2002 where the S&P outpaced the US Money Supply:
The dotcom crash ultimately led to the S&P correcting back below the US Money supply, where it then recovered to catch back up to the US money supply, and the money supply actually became resistance in 2007.
We then again outpaced the money supply in 2018. This likely could have been a cause to the 2018 correction, which actually brought the S&P back down in line with the current supply at that time:
We then outpaced the money supply again in 2021, which was corrected during the 2022 bear market. However, we have ,yet again, in 2023, surpassed the current monetary supply:
Calculating Money Supply & SPX Price
The relationship between the monetary supply and the S&P is so strong, we can actually calculate the expected range of the SPX based on the current monetary supply. We can also reverse this and calculate what the monetary supply should be to support the current price of $SPX.
To calculate the expected range of SPX based on the money supply, we would use this formula:
SPX price = US Money Supply x 1.918^-10 – 114.426
This would calculate what the price of SPX should be within +/- 228 points.
To calculate the needed money supply to support the price of SPX we would use this formula:
Money supply needed = SPX price x 4970424901 + 8.204^11
This would calculate the money supply needed to match the SPX.
So let’s do these calculations.
As of August, the current US Money Supply is 20.903 Trillion. So we substitute:
SPX Price = 20.903 Trillion * 1.918^-10 – 114.426
SPX Price = 3895.01 +/- 228
So the range that SPX should be in based on the money supply is between 4,123 and 3,667.
What about our monetary supply? What should that be to support the current price of SPX?
Well, let’s do the calculations. As of Friday August 25th, SPX closed at 4,405.
Monetary supply needed = 4,405 x 4970424901 + 8.204^11
Monetary supply needed = 23.63 Trillion
So the SPX should be at ~23.63 Trillion in order to support the current price of SPX. That is roughly a 13% increase from where we currently are.
How does an Index surpass Monetary Supply?
This is a great a question and one that I am not qualified or knowledgeable to answer very in-depth. But one way in which the SPX can sustain itself at levels above the current domestic monetary supply is through foreign investment. Indices and stocks are traded internationally and are not dependent on their own domestic currency alone.
Where this gets interesting is if we start looking at global monetary supply. Now, there are no tickers or indices that look specifically at global monetary supply, but what we can do is take the monetary supply of a few nations that have a high degree of international trade and compare the monetary supply among those countries.
You will notice the strong degree of correlation between all the nations in this table. (Keep in mind, these nations were randomly picked based on extent of their involvement with international and U.S. based trade.) If we were to standardize the data into Z-Score format (where we are just looking at the standard deviation) and put it into a line graph, this is the result:
When we standardize data, the difference is very indiscernible. This is because, monetary supply naturally increases at a steady and controlled rate, as to keep inflation under control and create supply and demand.
How does the SPX’s Growth Compare to Global Monetary Supply?
In researching for this post, I was curious how SPX’s growth looked in relation to the global monetary supply. The reason being, the thesis is that SPX’s growth above monetary supply can only be supported by the global interconnectedness of nations and the ability of foreign investment to supplement domestic investment. To do this, I standardized SPX in the same way and overlayed it with the random sample of countries monetary supply. The results are displayed in Chart 1 below.
I found this particularly interesting. I wondered if perhaps this was an American thing where everyone is just simply flocking to US investments. So then I thought to plot out some other indices, namely the TSX (Canada), NIFTY (India), DAX (Germany), and FTSE (U.K.). The results are listed in Chart 2 below.
Well, colour me shook. For the longest time it was actually the DAX and TSX that were just growing beyond the average monetary supply. Who would’ve thought? However, in 2019, SPX began exponentially growing, where it currently sits at approximately 0.7 standard deviations above the average monetary supply.
So what does it all mean?
So the logical question is what does it all mean and how does it help me? And unfortunately, this is a question more for an economist than for me. But I and you yourself can speculate by looking at all the data.
If we turn back to our SPX chart overlayed with the US monetary supply and apply Tradingview’s Cycle lines, we can see that the SPX operates in cycles in relation to the monetary supply:
And using the Sine function:
Essentially, these things are cyclical. We can see the same type of cyclical behaviour when we compare the individual indices to the SPX directly:
All this means is that we should eventually correct back down to the monetary supply, during which time another index will outperform the SPX and take the lead. Then rinse and repeat.
My personal take away from this little research project is twofold.
First, diversification in foreign markets is a smart idea and provides somewhat of a hedge against putting all your eggs in one market and one economy.
Second, you should pay attention to where and when you are investing in relation to the current monetary supply.
If we look at the chart above, the most stable and healthy gains were achieved when SPX was below the monetary supply. Whenever it was trading above, it would frequently experience drops of, on average, 2 standard deviations back down to the monetary supply in a matter of months until eventually correcting with a bear run and then resuming a healthy bull run.
That doesn’t mean you need to wait for a crash or calamity before investing, but its good to pay attention to the extent that a stock may exceed the current money supply. If we look for example at NVDA:
This is not a place I would buy NVDA because this move is likely not sustainable. But if we look, for example, at a stock like Ford ( NYSE:F ):
You will see that it is in a much more enticing area for a potential long entry.
Final Thoughts:
Hopefully you found this interesting, I sure did! I want to just say, that I am not saying SPX is going to crash or that we will experience another bear market any time soon. The reality of the situation is SPX has a track record of spending years trading above current monetary supply before correcting. Therefore, its not really realistic to expect SPX to suddenly come crashing down in a matter of weeks and correct back to the levels that the current MS supports. During the 1980s and 90s, it took over 15 years to correct!
As well, only looking at the MS is probably going to be insufficient if its all you are looking at in planning your trades. Its just one of many things to consider when you are researching your investments for your portfolio with the ultimate decision coming from weighing out all factors holistically. But it is definitely something to be mindful of!
And that concludes the lengthy post. Thank you for reading! Leave your comments and questions below!
Improve Your Research With MindsOur new social feature, Minds, is now available on our free mobile app for iOS and Android.
Minds is an exclusive chat for your favorite symbols. Want to read what other investors are saying about AAPL? Head to the AAPL Mind. Curious to discuss Bitcoin’s price action? Check out the BTCUSD Mind. There’s now a place to chat about every symbol no matter how obscure or popular. Gather around a specific symbol with other traders and start sharing your mind.
To celebrate the launch of Minds on mobile, we’d like to show you how it works and specifically showcase how it can improve your research. If you don’t have our mobile app, get it now .
How to use Minds from your mobile phone:
Open the TradingView app and select a symbol from your watchlist.
Then, find and select the tab that says “Minds” - depending on your screen size, you may have to scroll down.
Now you can read what everyone is saying about that specific symbol!
To post your own ideas, thoughts and analysis, click the cloud with a plus at the bottom right-hand corner of the screen.
Type your message and then press the button that says “post” to share your message with everyone.
This new social feature will make it incredibly easy to meet, chat, and discuss your favorite symbols with others. You now have access to a highly specific chat only for those who care the most about specific symbols. Remember: this is a community feature, so the more active you are, the better it’ll be for you and everyone else involved.
Note: If you’re having trouble accessing Minds, double check that the Show symbol screen feature is on, which can be activated from the settings menu.
Wait… don’t go anywhere yet! We have some tips to share because Minds creates a whole new way to research your favorite symbols. Keep reading…
How can you improve your research with Minds?
1. Real-time sentiment analysis
With Minds, you will be able to read what other people think about your favorite symbols. It is very common to see new perspectives with this approach and avoid one of the biggest mistakes in trading, which is believing you’re always right. You know what they say… one big mistake is enough to blow your account, so reading what other people are saying can open your mind in that sense.
2. Concise Insights
Condensing intricate concepts or analysis into easily digestible bite-sized updates makes information accessible to a wider audience. Even those without a deep understanding of the charts can gain insights and stay informed, thereby fostering a more inclusive and informed community.
In today's world, there's a lot of information everywhere, and it can be overwhelming. The Minds’ updates make things clear and simple. They show you just what you need to know, making it easier to stay in the loop without getting lost in the noise.
3. See how other traders use technical and fundamental analysis
One of the most interesting features on Minds is the ability to share charts. This is useful as you can see Support or Resistance Levels, Triangles, Head and Shoulders and all sorts of chart patterns from different time intervals by traders all around the world. Every trader sees things differently so it is a great way to see how others analyze charts.
4. Timeliness and breaking news
In the financial world, where split-second decisions can translate into significant gains or losses, timing stands as an important cornerstone. The Minds feature helps in facilitating the instantaneous dissemination of news, charts and analysis since you don’t have to write lengthy descriptions. Minds enables real-time sharing of analysis, ensuring that traders and investors are aware of developments that could impact their decisions almost as soon as they happen.
5. Personalization
Imagine scrolling through a news feed – these updates are like short and interesting news pieces. You can easily look through them to find the ones that match what you're interested in or what you need to know. So, it's like getting the information you want without having to search too hard. This keeps you connected and up-to-date with what matters to you.
Meet others, share, and interact to get started. Think about it as a way to get the most important updates about symbols on your watchlist without all the extra stuff that might confuse you.
We look forward to seeing how you interact with Minds! Please write us in the comments below with any feedback, comments or suggestions.
Team TradingView
A comparison between AI and EV Bubble!In this article, you will see the comparison between the different stages of EV and AI bubbles!
Post-Pandemic Bubble:
TSLA, NIO, WKHS:
Bubble Burst:
TSLA experienced +50, while NIO went Down -30% and WKHS went down -80%:
TSLA bubble burst:
February 18, 2021:
I published this article
The market front-runner industry (EV makers)seems exhausted ..!
and I received comments like this:
Compare this with The comments I received these days:
TSLA:
While revenue increased 82%, the price is now 43% below All-Time High
Conclusion:
We are going to experience an accelerated drop soon!
Top is in for NVIDIARegardless of earnings tomorrow, stock goes down.
I would imagine the earnings will be great, which will provide a ton of exit liquidity to the makers of this market.
Anyway, this candlestick pattern is called DARK CLOUD COVER.
the context here is fantastic, I feel very confident in this outcome.
How low does she go? lets figure that out later.
This reminds me of apple earnings, regardless of outcome, it was going down down down.
How To Go Full Time As A TraderHey guys!
In this video, we discuss some of the most important things to take into consideration before making the jump to becoming a full-time trader.
Topics discussed:
- Cash in, cash out and burn rate
- The importance of a solid, time-tested strategy
- Psychological pitfalls and how to avoid them
- Long term wealth impacts
Have questions? Let us know in the comments!
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Unveiling Crypto Market Insights: Bitcoin CyclesGreetings, fellow crypto enthusiasts!
We are thrilled to initiate a series of posts dedicated to educational market content, with a central focus on crypto markets.
To kickstart this series, we will delve into the cyclical nature of Bitcoin and introduce the key terms pivotal to our upcoming detailed reports.
In this analysis of Bitcoin cycles, the cycle's start is identified as the lowest point following the peak of the preceding cycle within a multi-year timeframe. Historically, the duration between low points in Bitcoin cycles has been around 4 years. This encompasses a 3-year bullish phase (approximately 150 weeks) represented by the green chart area, followed by a 1-year bearish phase (about 50 weeks) depicted in red. The cyclical nature of Bitcoin is influenced by various factors, including the Bitcoin halving. This event reduces the block reward, thereby diminishing new supply, by 50% approximately every 4 years. The upcoming Bitcoin halving is anticipated in April/May 2024.
We are currently trading in week 40 of the current bull phase of the cycle, which lasted ca. 150 weeks in previous two cycles we presented on the charts.
Bitcoin is approximately 35 weeks away from the halving. What are your price expectations as we approach this event?
In which week of the cycle do you expect current cycle top to occur?
Let us know in the comments.
Tesla $TSLA vs Lithium PricesTesla NASDAQ:TSLA vs Lithium Prices
Tesla was faced with crushing increases in the price of lithium which created a feedback-loop spiral to the downside for investor and speculator expectations.
There were many other factors going on at the same time for Tesla's big slide from $400+ down to $100+ per share, but this picture paints a picture and story which is easy to remember.
One of the biggest costs of producing battery-electric-vehicles (BEV's) is the cost of lithium. This massive run-up in the price of lithium may have exposed Tesla to the uncertain pricing of lithium supplies and may also have encouraged Tesla to begin their own lithium extracting and processing operations. Clearly, this was a problem and it fed into investor expectations and drove the stock lower and lower until finally the fever broke and lithium prices have crashed.
Keep an eye on Lithium prices here at TradingView and set alerts for a heads-up on sharp increases or decreases in the price to have a heads-up on what is happening under the surface.
Tim
10:02AM 8/22/2023 EDT
A Traders’ Week Ahead Playbook; destination Jackson Hole The big market themes last week were trading increased China risk and a resilient US economy with higher US ‘real’ yields (TradingView - TVC:US10Y-FRED:T10YIE ) – the result was broad USD strength and global equity weakness. GBP longs also saw tailwinds from the UK data flow, with GBPNOK the best performing major currency pair on the week – Services PMI could test GBP longs this week, although pullbacks should be shallow.
US equity and index options expiry may have played a part in the equity drawdown, with dealer’s net short gamma and delta hedging through shorting S&P500 futures and single stock names. Let’s see how options dealers/market makers deal with this inventory of short positioning/hedges this week, as it may be unwanted - suggesting risk that they buy-back short S&P500 futures hedges (to close), which could cause an early relief rally in equity.
Positioning will play a huge part this week and it wouldn’t take much to see US real rates a touch lower, with the USD following in its wake.
As the new trading week cranks up, news flow on China will drive and should the HK50 and CNH find further selling interest, then I’d be aligned, with a bias to look at short GER40 trades. The China property sector remains the elephant in the room, with the market finding little tangible fiscal support to reprice risk higher – the price action in the HK50 reflects that, with rallies quickly sold into. It’s time for Chinese authorities to step it up.
We get PMI data out throughout the week, but as the week rolls on the attention should turn to Jackson Hole, where Jay Powell takes centre stage. While this forum has been the setting for some bold changes to monetary policy in years gone by, it doesn’t feel like this time around we’ll be treated to such action. The USD remains front and centre this week – biased long, I acknowledge positioning is rich and could easily be vulnerable to profit taking into Powell’s speech.
The marquee data to navigate:
• China loan prime rate decision (21 Aug 11:15 AEST) – after the PBoC surprised the market and eased the Medium-Lending Facility last week, we should see the PBoC ease the 1- and 5-year Prime lending rate by 15bp respectively. Unless we see the Prime Rate left unchanged, Chinese equity markets will likely overlook any policy easing here and funds should continue to shy away from HK50, CHINAH, and CN50 longs. USDCNH finds support below 7.3000, but few are buying yuan with conviction other than to cover yuan shorts.
• Eurozone manufacturing and services PMI (23 Aug 1800 AEST) – the market eyes the manufacturing index at 42.6 (from 42.7) and services at 50.5 (50.9). A weaker services PMI, especially if the data prints below 50 (the expansion/contraction line) and we could see better EUR sellers, with the GER40 eyeing a break of the July lows of 15,500. Tactically warming to EURCAD shorts.
• UK manufacturing and services PMI (23 Aug 18:30 AEST) – the market looks for manufacturing to come in at 45 (45.3) and services at 50.8 (51.5). GBP – the best performing major currency last week - could be sensitive to the services print.
• US S&P Global manufacturing and services PMI (23 Aug 2345 AEST) – with much focus on China’s markets, US real rates and Jackson Hole, there is less concern about US growth metrics. As a result, the outcome of this may have a limited impact on the USD – it is still a risk to have on the radar.
Jackson Hole Symposium – Fed chair Jay Powell will be the highlight of the conference (speaks Sat 00:05 AEST) – again, it’s still premature for Powell to declare victory in the Fed’s inflation fight and will likely emphasise there is still more work to be done. He may also spend time exploring a higher for longer mantra (for interest rates), with a focus on where they are modelling the neutral fed funds rate; possibly one for the PhDs and academics. Powell should re-affirm his view that rate cuts are not in their immediate thinking.
From a risk management perspective, I am sensing Jackson Hole/Powell’s speech to be tilted on the hawkish side, and therefore modestly USD positive. Although given the bull run in the USD one could argue a hawkish Powell is largely priced.
Other Jackson Hole speakers:
• Fed members Goolsbee and Bowman (23 Aug 05:30 AEST)
• Fed member Harker (25 Aug 23:00 AEST)
• ECB president Lagarde (26 Aug 05:00 AEST)
BRICS Summit in South Africa (Tuesday and Wednesday) – It’s hard to see this as market moving and a risk event for broad markets. However, with BRICS countries (Brazil, Russia, India, China, and South Africa) accounting for 32% of global GDP and some 23 countries wanting to join the union, there will be increased focus on their expansion plans. Some have linked the BRICS to an acceleration of global de-dollarization, and while a global reliance on the USD will likely fall over time, the movement is glacial. A common currency for this union – while possibly getting headlines at this summit - is not something that seems viable anytime soon.
Key corporate earnings:
US - Nvidia report earnings (aftermarket) – many will recall the 24% rally in the share price in Q1 earnings (in May) and hope for something similar. Given the incredible run and heavy positioning, it may need something truly inspiring to blow the lights out. The market prices an implied move on earnings is 10.2%, so one for those who like a bit of movement in their trading.
Australia – 68 ASX200 co’s report, including – BHP, Woodside Petroleum, Qantas, Northern Star and Wesfarmers
Live stream - Weekly Close Livestream 8-14-2023Did Elon (SpaceX) really crash the price of Bitcoin... or was the Bitcoin short clear based on technical analysis for the last few weeks? "Yes" to the latter and I'll detail why this week with a tutorial on how price respects levels and what this means.
BTC Bitcoin Technical Analysis and Trade IdeaBitcoin has reached a crucial support level after a decline in bullish momentum. The price has become significantly overextended, leading to the question of whether we can expect more downward movement or a substantial retracement. In the video, we delve into the trend, price action, market structure, imbalances, and other essential aspects of technical analysis. As always, the video provides a detailed explanation of everything discussed, and it's important to note that this content should not be interpreted as financial advice.
HFT: Benefits, Controversies, and Technological AdvancementsIntroduction
High-Frequency Trading (HFT) is a sophisticated trading strategy that utilizes powerful technology and algorithms to execute a substantial number of trades within fractions of seconds. While HFT has revolutionized the financial markets and brought numerous benefits, it has also stirred controversies due to its potential impact on market stability and fairness. In this article, we will explore the benefits of HFT, delve into the controversies it has sparked, and examine how advanced technology enables this lightning-fast trading approach.
The Benefits of High-Frequency Trading
a. Enhanced Liquidity: One of the primary advantages of HFT is its contribution to market liquidity. HFT firms frequently provide liquidity by being both buyers and sellers in the market, narrowing bid-ask spreads and ensuring smoother price discovery.
b. Reduced Transaction Costs: The competitive nature of HFT leads to lower transaction costs for all market participants. This translates to cost savings for retail investors, institutional traders, and other market participants.
c. Efficient Price Discovery: HFT's rapid trading enables the market to react quickly to new information, leading to more efficient price discovery and reducing information asymmetry among market participants.
d. Market Efficiency: High-frequency traders help bridge the gap between different trading venues and ensure prices remain aligned, promoting overall market efficiency.
Controversies Surrounding High-Frequency Trading
a. Market Instability: Critics argue that HFT's ultra-fast trading can exacerbate market volatility, leading to abrupt price swings and destabilizing market conditions.
b. Unfair Advantage: HFT firms, with their advanced technology and proximity to trading servers, gain an unfair advantage over traditional investors and retail traders, leading to an uneven playing field.
c. Flash Crashes: HFT has been implicated in certain flash crash events where a sudden and severe market downturn occurs in a matter of minutes. Critics claim that HFT's aggressive strategies may contribute to these incidents.
d. Regulatory Challenges: Regulators struggle to keep pace with the rapidly evolving HFT landscape, leading to concerns about potential market manipulation and inadequate oversight.
Leveraging Technology for High-Frequency Trading
a. Low-Latency Trading Infrastructure: HFT firms invest heavily in low-latency trading infrastructure, such as proximity hosting and direct market access, to minimize communication delays and execute trades swiftly.
b. Advanced Algorithms: Complex algorithms form the backbone of HFT strategies. These algorithms analyze market data, identify patterns, and make split-second decisions on trade execution.
c. Co-location Services: HFT firms often lease space near exchange servers to reduce network latency further. Co-location allows them to place their trading servers in close proximity to the exchange, gaining a speed advantage.
d. Colossal Data Processing: High-frequency traders process enormous amounts of market data in real time to execute trades with precise timing and efficiency.
Regulatory Efforts and Future Outlook
In response to concerns surrounding HFT, regulators worldwide have been working to implement rules and controls aimed at maintaining market integrity and reducing the risk of disruptive events. Measures such as circuit breakers, minimum resting periods, and market-making obligations have been introduced to mitigate potential negative impacts.
The future of HFT remains promising, with ongoing technological advancements driving the industry forward. Machine learning, artificial intelligence, and big data analytics are revolutionizing trading strategies and contributing to even faster decision-making.
Conclusion
High-Frequency Trading has undoubtedly transformed the financial landscape, introducing benefits like enhanced liquidity, efficient price discovery, and reduced transaction costs. However, its lightning-fast pace and perceived unfair advantages have sparked controversies and regulatory challenges. As technology continues to evolve, the future of HFT will likely see further innovations and improvements, but it will also require careful monitoring and oversight to ensure fair and stable markets for all participants.
Is Ethereum about to correct to 700 dollars?There is growing evidence for it. On the above 10-day log growth chart price action has been riding the ‘mean’ log growth line for a little over 1 year now. Throughout this whole time price action trades within an ascending channel, a bear flag. Within this bearish channel a smaller bear flag is printing.
A measured move on the smaller bear-flag confirmation would see a 40% correction in price action.
A measured move on the larger bear-flag confirmation would see a 60% correction in price action, <700 dollars. This is a fascinating level for two reasons:
1) It would be a correction to the golden ratio as was with the 2019 correction.
2) It would be a correction to the lower log growth curve, which is expected before the next bull run FOR Ethereum.
Lastly there is the Ethereum/Bitcoin chart. Two significant events:
1) The GRM (Golden Ratio Multiplier) has now failed as support (green line), a bull market requires support.
2) Price action has exited a large bear-flag.
Is it possible price action keeps rising? Sure. A convincing break of 2300-2400 would void this outlook.
Is it probable price action keeps rising? No.
For the bulls, price action must break above 2300-2400 and hold it for a 2-3 weeks.
For the bears, a correction to 1750 and under is a green light.
It is not all bad news. Would you like to Time-warp back to January 2016 and buy Ethereum for $2? It is possible and no one is talking about it. Will say elsewhere.
Ww
Weekly ETH/BTC pair.
2-week ETH/BTC large bear flag confirmation
How to Use the Chaikin Oscillator in TradingThe Chaikin Oscillator is a powerful momentum indicator that can help traders uncover hidden trading opportunities and spot emerging trends. In this article, we’ll delve into its inner workings, explore how to interpret its signals and show you how it can be applied.
What Is the Chaikin Oscillator?
The Chaikin Oscillator, developed by Marc Chaikin, is a momentum indicator designed to assist traders in identifying trends and predicting potential price movements. It combines the accumulation/distribution (A/D) indicator – a well-known Chaikin volume indicator – with the moving average convergence divergence (MACD) formula to demonstrate money flow in or out of an asset.
Definition and Characteristics
At the heart of the Chaikin Oscillator is the A/D line, which uses an asset’s closing price relative to its high-low range, weighted by its volume, to determine whether an asset is being accumulated (bullish) or distributed (bearish). Like MACD, the Chaikin Oscillator measures the distance between two moving averages. However, instead of closing prices, the Chaikin Oscillator is calculated using two exponential moving averages (EMAs) of the A/D line, typically 3 and 10.
The resulting indicator oscillates above and below a zero line. Positive values indicate buying pressure or accumulation, while negative values suggest selling pressure or distribution. In other words, when the faster EMA moves above the slower EMA, the oscillator will turn positive. When the faster EMA crosses below the slower EMA, it’ll read negative.
How the Chaikin Oscillator Is Calculated
The calculation of the Chaikin Oscillator is a multi-step process that begins with determining the accumulation/distribution line. To calculate A/D, we first need to find the money flow multiplier (MFM), which is found using the following formula:
MFM = ((Close - Low) - (High - Close)) / (High - Low)
Next, we multiply the MFM by the volume for the period to obtain the money flow volume (MFV):
MFV = MFM x Volume
The ADL is then calculated cumulatively by cumulatively the MFV values over a given period:
ADL = Previous ADL + Current MFV
Finally, the Chaikin Oscillator is derived by subtracting a longer-term EMA of the ADL from a shorter-term EMA of the ADL. Using the default Chaikin Oscillator settings of a fast 3-period EMA and slow 10-period EMA would mean:
Chaikin Oscillator = (3-day EMA of ADL) - (10-day EMA of ADL)
Interpreting the Chaikin Oscillator Indicator
There are three primary ways to interpret the Chaikin Oscillator: centre crossovers, divergences, and trend confirmation. Let’s take a look at each.
Centreline Crossovers
As discussed, a move above the zero line indicates that buying pressure is taking over and usually precedes further bullishness. Conversely, a bearish signal occurs when the oscillator crosses below the zero line, suggesting selling pressure.
Divergences
Divergences occur when the price of an asset moves in the opposite direction of the Chaikin Oscillator. A bullish divergence is seen when price hits a new low, but the oscillator forms a higher low. Likewise, a bearish divergence is where price makes a higher high, but the oscillator shows a lower high. In both scenarios, traders can anticipate a potential trend reversal.
Trend Confirmation
Lastly, the Chaikin Oscillator can be used to confirm the direction of the prevailing trend identified with other technical analysis tools. If the oscillator is consistently above the zero line during an uptrend, it signals buying pressure and vice versa.
Want to try your hand at interpreting the indicator for yourself? Try our free TickTrader platform at FXOpen, where you’ll find the Chaikin Oscillator alongside dozens of other indicators and tools.
How to Use the Chaikin Oscillator: an Example
The nature of the Chaikin Oscillator means that it frequently fluctuates above and below the zero line, which can generate plenty of false signals. However, many traders get around this by using the centreline crossover as an entry signal following a divergence. As an additional filter, we can look to enter when a divergence occurs at an area of support/resistance.
In the chart shown, we’ve identified three potential support and resistance areas. When price enters these areas, we can begin to look for divergences. Then, when the oscillator moves above or below 0 and confirms the divergence, we can make an entry. The theory says stops can be placed above or below the relevant support/resistance level, while profits can be taken at an opposing support/resistance.
For best results, you can look for obvious divergences that stand out. While smaller divergences can work, they’re often less reliable.
Limitations of the Chaikin Oscillator
While the Chaikin Oscillator is a valuable tool, it has limitations. The first is that its interpretation can be confusing without strict entry criteria in place. As in the chart above, there are many times when the oscillator fluctuates above and below 0, despite the broader trend being bearish. While this can be mitigated by using higher periods, like 10 and 50, it can still easily throw up false signals when used in isolation.
The second is a broader limitation of the A/D indicator. Since A/D relies on volume and price movements, assets with low liquidity or erratic price action can make interpreting the oscillator tricky. The simple answer here is to trade liquid, stable markets. However, in scenarios where you are trading these less liquid and volatile markets, you may need to employ other technical analysis tools.
Your Next Steps
Ready to create your own Chaikin Oscillator trading strategy? You can apply the example above in TickTrader and see how it works for yourself. Once you’ve backtested a few setups and got to grips with the strategy, you may want to open an FXOpen account. With low trading costs, ultra-fast execution speeds, and over 600 markets to choose from, you can rest assured you’re partnering with a trusted broker. 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.
The Carry Trade
With the current aggressive interest rate hikes happening with some of the world's leading central banks due to inflation problems, we figured it would be an ideal time to discuss the carry trade.
This post will go into further detail about the carry trade and how it works in the forex market. We will also discuss one of the most popular carry trades to take place in forex history and the risks traders should be wary of when trying to implement this strategy.
What is the carry trade?
The simple explanation of the carry trade is that a speculator borrows one financial instrument to buy another financial instrument. For example, let's assume that you go into a bank and borrow $10,000, which then charges you a 1% lending fee ($100). You then take that $10,000 and purchase a Treasury bond that pays you 5% a year. Your profit is 4% (minus commissions and other costs). Basically, you have profited from the difference in the interest rate. This is the carry trade in its simplest form.
The carry trade in the Forex market
The carry trade in the forex market is one of the oldest and simplest forms of forex trading strategies. It was first developed by fund managers to take advantage of the interest rate differentials between currency pairs. A carry trade occurs when you buy a high-interest currency against a low-interest currency. For each day that you hold that trade, the broker will credit you the interest difference between the two currencies (this difference is called the 'interest rate differential'), as long as you are trading in the interest-positive direction. To understand this further, let's give an example:
In the forex market, currencies are traded in pairs (so if you buy USD/JPY, you are actually buying the US dollar and selling the Japanese Yen at the same time).
You receive interest on the currency position you BUY and pay interest on the currency position you SELL.
What makes the carry trade unique in the forex market is that interest payments take place every trading day based on your position. This is because technically, all positions are closed at the end of the trading day in the forex market. You just don’t see it happen if you carry your position overnight due to the fact that brokers close and reopen your position, and then they credit or debit you the overnight interest rate differential between the two currencies (this is also called a rollover or swap).
The amount of leverage available from forex brokers has made carry trades very attractive in the forex market. Most, if not all, forex trading is margin-based, meaning you only have to put up a small amount of the position and your broker will put up the rest. Many brokers ask traders for as little as 1% or even less as margin to trade a position.
Continuing from our above USDJPY example, let's assume that interest rates are 6% for the US dollar and 1% for the Japanese Yen (so the interest rate differential is 5%). Let us assume that you deposit $10,000 with a broker and decide to buy USDJPY with the intention to carry trade and earn +5% interest a year. Let's say the broker offers you 100:1 leverage and you want to purchase $10,000 worth of that currency. Since the broker is offering you 100:1 leverage, you would only require a 1% deposit for the position; therefore, you hold $100 in margin. Now you have an open USDJPY trade that is worth $10,000 and is receiving 5% a year in interest. To get a clearer picture of this, let's see the image below:
What will happen to your account if you do nothing for a year? There are three possibilities. Let’s take a look at each one in the image below:
Due to the 100:1 leverage being offered to you, in this scenario you have the potential to earn at least 5% a year from your initial $10,000, but there are huge risks to this (we will get to that later).
The infamous AUDJPY carry trade
During the early to mid-2000s, traders experienced near-perfect combinations of these conditions across numerous forex pairs, most popularly the AUDJPY. This particular FX carry trade involved going long on the AUDJPY.
The Australian dollar has historically yielded higher interest rates than other global currencies. The Bank of Japan has been keeping interest rates low since the mid-1990s in an effort to revive the economy after a stock market crash caused a recession. The Bank of Japan has persisted with its approach to low interest rates, and in 2016, it announced negative interest rates. This means Japanese banks now pay interest on the cash they deposit with the Bank of Japan instead of earning interest on it.
AUDJPY Exchange Rate and Interest Rate Differential 2001–2014
As you can see in the image above, the interest rate differential between Australia and Japan was consistently high. Due to the Australian dollar yielding a much higher return on investment compared to the Japanese yen, the situation provided retail traders and big institutions great opportunities for carry trading to occur with this currency pair and reaped huge profits from it. These conditions boomed, especially throughout the early to mid-2000s; however, this seemed to change just before the end of the 2000s. In 2008, with the global recession, the economic conditions surrounding Australian and Japanese investments changed as interest rates in Japan drifted slightly upward from near zero to just above zero, while interest rates in Australia fell considerably. As a result of both countries having their interest rates close to each other, the Japanese yen drastically appreciated against the Australian dollar, which would have caused traders huge losses when implementing the carry trade method during this period. You can see this in the chart below:
AUDUSD 3-Month Chart
Interest rates have changed since then: as of August 2023, Australia's interest rates are now back up to 4.10%, while Japan's interest rate remains at -0.1%.
Risks of the carry trade
The biggest risk in a carry trade strategy is the absolute uncertainty of exchange rates. For example, if a trader is buying a currency to profit from that currency pair's interest rate differential and the country of the currency cuts its interest rate unexpectedly, the exchange rate of that currency will most likely drastically fall, which can potentially cause the trader to suffer sudden and big financial losses. Due to this, it is important to look at more than just the interest rates on the currencies before you trade on the forex market. Additionally, if a country’s economic outlook does not look positive, the demand for that country's currency will decrease, especially if the market thinks that their central bank will have to lower interest rates to help their economy.
Another important risk factor for traders to consider with the carry trade is that if substantial leverage is used to implement it, then big market moves against the trader's favour could result in losses that may cause margin calls, the position being automatically stopped out, or worse, losing more than your initial deposit and the trader's account ending up in a negative balance.
Lastly, global markets and economies have still not fully recovered from the global crash of 2008. Carry trades are very difficult to do now with major forex pairs due to the majority of brokers no longer offering positive swaps on major pairs. Traders have been looking at some exotic currency pairs as viable options because some of their countries' interest rates are still high. Exotics such as the Mexican peso, the South African rand, and the Nigerian naira are all options that many forex brokers offer, with currency pairs featuring USD, GBP, EUR, and even JPY variations. However, exotic currency pairs can be extremely volatile and dangerous as traders are susceptible to experiencing big market moves constantly in both directions, which makes these currencies very unpredictable and can cause traders big losses. These currency pairs can also be very expensive to trade due to the high spreads and possible additional commission costs.
1 Month MXNJPY chart example:
The above chart shows that traders have been looking at exotic currencies as alternative options to continue carry trades, though they pose very high risks and can be very expensive to trade.
The carry trade, while potentially lucrative and rewarding, can be very dangerous, and you must consider all risk factors if you are looking to implement this trading method. Trading this way with major and cross-currency pairs is very difficult to do now, and we cannot stress enough that you must trade with absolute caution if you’re implementing the exotic currencies into your own carry trading strategy. That being said, we may get to a time again where carry trades are possible with major currency pairs as interest rates are going back up globally in an attempt to recover from the global inflation crisis. Forex brokers may be open again to offer traders positive swaps on majors and crosses.
BluetonaFX
Paypal could flash a 10% earnings yield this yearPaypal is expected to earn 4.95 eps this year 2023 and yet the stock is lagging the sp500. If risk avoidance returns in the sp500, it is possible that paypal underperforms further if the paypal downtrend continues.
However, wouldnt that be a value buying opportunity? if paypal reaches the 50 level and paypal continues to grow its earnings power (as analysts expect), the earnings yield on paypal would be around 10% earnings yield.
Value investors would be happy to consider a stock earnings 10% which at the moment is almost twice the treasury rates and twice the AAA corporate bond yields.
Growth investors might also find paypal meeting PEG ratio buy parameters, since analysts expect 15-18% growth annually.
If paypal weakens further, a 50 handle would be tempting. Analysts still show a 21 $ eps for for 2032 which could warrant a valuation for future 2032 between 400-600 per share in good times, 9-10 years from now.
XAUUSD TA: Full Naked Chart Trading At New Long Entry ZonesHey Traders,
I've covered gold a lot of times previously as we let it crumble further.
This is due to weak price action zones and further negative MKT sentiment.
To get better entries you need strong rejection in the market (causing a reversal).
Here is where we are looking to get to.
Trade small always.
Create & Organize Your 1st WatchlistA tutorial video walking you through how to create & organize a watchlist. In my experience I've found that organization is the key to consistency & that consistency is the key to success so having an organized watchlist is something that has been very helpful in both my trading and investing.
Hope you enjoyed the video & if you have any questions, comments or request for future videos please leave them in the comment section below.
Also if you have a second please hit that BOOST button to show me some love on your way you!
Plan Your Trade, Trade Your Plan!
Akil
