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GBP/JPY Analysis: Strong Reversal and Bearish Setup OpportunityThe GBP/JPY continues its strong reversal from yesterday after reaching the 208.000 area, where a strong weekly supply zone has been present since July 2008. This significant resistance level has prompted the price to retrace. According to the latest Commitment of Traders (COT) report, retail traders and non-commercial participants are still holding long positions, while commercial traders have shifted their positions to bearish over a month ago. This divergence between retail and commercial traders suggests a potential shift in market sentiment. We are looking to capitalize on this reversal by setting up a bearish trade. Monitoring key levels and market conditions closely will be essential in executing this strategy effectively. As the price begins to retrace, identifying optimal entry points for a short position will be crucial in taking advantage of this bearish setup. ✅ Please share your thoughts about GBP/JPY in the comments section below and HIT LIKE if you appreciate my analysis. Don't forget to FOLLOW ME; you will help us a lot with this small contribution.
Short
by FOREXN1
1
Mind Over Market: The Burden Of Continuous Chart WatchingNovice traders are often swayed by their emotions. Even when equipped with knowledge of technical and fundamental analysis, as well as risk management, individuals are invariably guided by psychological factors. This influence isn't limited to emotional extremes such as greed, excitement, or despair. It also encompasses feelings like curiosity, self-assertion, and the quest for validation of one’s decisions. While these feelings aren't inherently wrong, they do come with certain nuances. One research agency conducted an analysis of a broker's database, choosing to keep the names confidential to avoid advertising. The agency itself noted that the research was intended for private insights rather than a comprehensive analysis. The primary objective was to identify the actions traders tend to take most frequently. The findings revealed that the most predictable action among traders is closing a position. Interestingly, market orders are closed twice as often as limit orders. This suggests that most traders tend to follow market trends and manually close their trades, which may conflict with established risk management principles. This fact has been termed the “Monitoring Effect”. 📍 WHAT IS THE MONITORING EFFECT? The monitoring effect in trading describes a psychological phenomenon where excessive scrutiny of short-term market fluctuations leads to impulsive and often detrimental trading decisions. When a trader spends too much time staring at the chart, this constant observation distorts their perception of market movements. In essence, a trader who continuously monitors the chart may interpret the data differently than someone who examines it after a few hours of absence. This prolonged focus can create a skewed view of the market, resulting in rash choices that might not align with their overall trading strategy. 📍 NEGATIVE IMPACTS OF MONITORING EFFECTS ON TRADERS • Overemphasizing Short-Term Information. Traders may place excessive importance on recent price movements or news events, leading them to make reactionary decisions. For instance, an impulsive urge to close a trade can arise from a fleeting negative signal, such as a false pattern or a false breakout, even if the overall trading strategy remains sound. • False Perception of News. By constantly tracking news and events, traders can overestimate their significance, prompting rash decisions based on short-term fluctuations. This can lead to trades that are not aligned with long-term strategy or analysis. • Frequent Position Changes. The urge to change positions often is exacerbated by constant monitoring. Traders may respond to momentary shifts in market direction, resulting in frequent reversals of positions. This behavior not only increases trading costs due to commissions and spreads but can also lead to overall reduced profitability. A trader may incur losses as they jump in and out of trades based on short-lived movements. • Emotional Stress. Ongoing market observation can heighten emotional stress and lead to fatigue. As traders become more engrossed in monitoring, their ability to think clearly and make rational decisions diminishes. This emotional toll can distort judgment, further complicating the trading process. • Increased Risk Appetite. Prolonged engagement with the market can result in an increased appetite for risk. As traders become accustomed to fluctuations, they may become more willing to take on higher-risk trades, often without a solid foundation in their analysis. This increased risk tolerance can lead to larger potential losses, especially if the market moves against them. To watch the chart or not to watch the chart? The monitoring effect has some positive aspects. Firstly, you train your skills of instant reaction to an event. Secondly, you learn to quickly recognize patterns and find levels. 📍 TIPS TO MANAGE CHART MONITORING 1. Wait After News Releases Avoid Immediate Reaction. It’s crucial to refrain from making quick trades immediately after major news releases due to potential volatility and false spikes. Prices may not reflect fair value during that time, leading to uncertain outcomes. Trade After the Dust Settles. Waiting for 30-60 minutes allows the initial market reaction to stabilize, providing a clearer market direction and reducing the likelihood of entering a trade based on erratic price movements. 2. Develop Psychological Stability Practice Mindfulness. Engage in mindfulness techniques such as meditation or deep breathing exercises to enhance emotional regulation. Set Realistic Expectations. Understand that losses are a part of trading and work on accepting them without letting them influence your emotional state. Simulate Trading. Use demo accounts to practice trading strategies without real financial pressure, keeping emotions in check. 3. Focus on the Trading Process Emphasize Strategy Over Outcomes. Concentrate on executing your trading plan and strategies instead of being fixated on profit and loss. This shift in mindset can reduce stress and enhance performance. Track Your Progress. Regularly review your trades to identify patterns in behavior and decision-making, making adjustments as necessary without getting bogged down by the results of individual trades. 4. Avoid Unrealistic Goals Set Achievable Milestones. Goals should be specific, measurable, and realistic based on your skill level and market conditions. Aim for gradual improvement rather than sudden leaps in performance. Focus on Personal Growth. Compare your progress against your own benchmarks rather than against other traders, which can help foster a healthy mindset. 5. Use and Stick to a Trading Plan Define Your Strategy. Clearly outline entry and exit strategies, risk management rules, and market conditions for trading. A well-structured plan reduces impulsive decisions. Review and Adapt. Regularly review your trading plan to ensure it aligns with market conditions and your evolving trading style. Adjust it as needed, but avoid impulsive changes based on short-term outcomes. To mitigate the effects of constant monitoring, traders are encouraged to develop a clear trading plan that includes well-defined rules for entering and exiting trades. Utilizing automatic stop losses and take-profit orders is essential for effective risk management. Additionally, setting specific time frames for checking trading positions can help avoid the pitfalls of incessantly watching the market. For instance, you might establish a schedule to check in on your trades five minutes after the start of each new hourly candle. The key is to cultivate the discipline to adhere to this schedule and resist the temptation to deviate from it. 📍 CONCLUSION Everything is good in moderation. Long-term trading strategies do not require constant monitoring; instead, a quick five-minute check of the chart every few hours are often sufficient. Utilizing pending orders that align with your risk management guidelines can also enhance your trading approach. Taking breaks after each 1H candle can be beneficial. If there are no clear trading signals, allow yourself to step away from the chart for the duration of one hour. During this time, it's not necessary to search for signals on lower timeframes. Embracing this disciplined approach can help you maintain focus and improve your overall trading performance. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment 📣
Education
by Lingrid
1
AUDUSD: Bearish Outlook For Next Week 🇦🇺🇺🇸 AUDUSD broke and closed below a key daily structure support. After its violation, the pair started to recover steadily within a rising wedge pattern. Retesting the broken structure, the price formed a double top pattern. After that, the market violated both the neckline of a double top and a trend line of a rising wedge, giving us a strong bearish confirmation. We can expect a bearish movement on Monday. Goals: 0.6537 / 0.652 ❤️Please, support my work with like, thank you!❤️
Short
by VasilyTrader
2
USD/JPY: JPY Maintains Upward MomentumThe Japanese Yen (JPY) continues its upward momentum against the US Dollar (USD) for the fourth consecutive session, reaching the 152.000 mark yesterday. This strength in the Yen is attributed to traders unwinding carry trades in anticipation of the Bank of Japan’s (BoJ) policy meeting next week. The upcoming BoJ meeting is highly anticipated, with expectations of an interest rate hike. This speculation has led short-sellers to close their positions, bolstering the JPY. Additionally, the BoJ is expected to announce plans to taper its bond purchases, aiming to scale back its extensive monetary stimulus program. Meanwhile, the US Dollar could find support as recent US PMI data showed a faster expansion in private-sector activity for July. This data highlights the robustness of US economic growth despite high interest rates, giving the Federal Reserve (Fed) more flexibility to maintain its restrictive policy stance if inflation does not ease. Technical analysis suggests that the JPY/USD pair may continue its bearish trend, with potential support levels around 148.160 and further down at the demand zone of 142.210. These areas could provide solid entry points for traders anticipating a USD rebound. Currently, we are not planning any trades but are monitoring the price movements towards these key levels for potential buying opportunities. ✅ Please share your thoughts about USD/JPY in the comments section below and HIT LIKE if you appreciate my analysis. Don't forget to FOLLOW ME; you will help us a lot with this small contribution.
by FOREXN1
1
Yen Alert: Unprecedented Option Trade on CMEThere's a pretty big reason to talk about the forecast for the yen's exchange rate. It's because of that big option trade that happened yesterday on the CME (Chicago Mercantile Exchange). These kind of transactions don't happen often with the yen, and this was the biggest one of the year so far. Here's a chart of the nearest yen futures. It shows where the quotes are likely to move based on the type of options portfolio we talked about in this post. In other words, the guy who owns this option portfolio is betting on the yen going up, or, if you look at the forex rates for USDJPY, he's betting on it going down. We'll be watching both the rates and his portfolio closely. It looks like he knows what he's doing.
Short
by ClashChartsTeam
Potential Bearish Trend for NZD/USDThe NZD/USD currency pair may be entering a new bearish trend. After retesting the 0.6220 area, the price experienced a technical rebound at the resistance level, subsequently revisiting the previous supply area. This sequence of movements indicates a potential downward trajectory. In our analysis, we have observed that the market dynamics are aligning with a bearish outlook. The resistance at 0.6220 has proven to be a significant hurdle for the bulls, and the price action suggests that the bears are gaining control. We are now closely monitoring this pair for a bearish setup. Our objective is to anticipate and capitalize on the next downward movement. Key indicators and market sentiment support this bearish outlook, suggesting that the NZD/USD may continue to decline as it tests lower levels of support. Investors and traders should consider the broader market conditions and sentiment around the NZD/USD pair. Economic indicators, global market trends, and geopolitical developments will also play crucial roles in shaping the future direction of this pair. ✅ Please share your thoughts about NZDUSD in the comments section below and HIT LIKE if you appreciate my analysis. Don't forget to FOLLOW ME; you will help us a lot with this small contribution.
Short
by FOREXN1
1
What Is Yield Farming In Crypto? Yield farming can be likened to traditional bank deposits, where an investor puts in money and earns returns over time. However, in the world of cryptocurrencies, the concept takes on a more complex form. Yield farming is a broad term that encompasses various activities, including liquidity mining and staking. While these methods share similarities, they differ in their objectives, such as whether they involve issuing new tokens or not. 📍 HOW YIELD FARMING WORKS Yield farming is a way for cryptocurrency holders to generate income by lending or providing liquidity to decentralized financial (DeFi) protocols. By contributing their assets, users can earn rewards in the form of additional tokens or interest income. This opportunity allows individuals to participate in the DeFi ecosystem and benefit from the growing demand for decentralized financial services. 📍 THE PROCESS: 1. Providing liquidity: Users deposit their cryptocurrency assets into liquidity pools on the DeFi platform, which facilitates various financial transactions such as token exchanges, lending, and borrowing. 2. Earning rewards: In return for providing liquidity, users receive rewards, including: Commissions from transactions passing through the liquidity pool Native tokens of the platform (e.g. management tokens) Additional tokens through various incentive programs 📍 EXAMPLES OF DEFI PLATFORMS: Uniswap: A decentralized exchange (DEX) where users deposit tokens into liquidity pools, earning commissions on each transaction made through these pools. Compound: A lending platform where users can lend their cryptocurrencies and earn interest on their deposits. Borrowers pay interest on the use of these assets, providing a revenue stream for lenders. Aave: A platform that allows users to earn interest on deposited assets and use them as collateral for loans, providing a dual income stream. SushiSwap: A DEX similar to Uniswap, but with an additional twist - liquidity providers are rewarded with SUSHI tokens, providing an additional incentive to participate in the platform. 📍 MAKING PROFIT IN DEFI: 1. Analyze and Choose a Platform: Select a reputable platform with a stable income stream. Carefully review the terms and conditions of liquidity provision to ensure you understand the risks involved. 2. Diversify Your Assets: Spread your investments across multiple platforms and pools to minimize risks. This will help you ride out market fluctuations and potential platform-specific issues. 3. Optimize Your Strategy: Continuously compare different pools and platforms to find the best terms for your investments. Some platforms offer combination strategies that can help maximize returns. 4. Monitor and Adapt : Regularly review your investments and adjust your strategy as market conditions change. This will help you stay ahead of the game and mitigate potential losses. 📍 RISKS OF YIELD FARMING: • Technical Risks: Smart contract vulnerabilities can lead to irreversible losses, compromising the security of your funds. • Market Risks: Cryptocurrency price fluctuations can impact your income. In many cases, you're unable to withdraw your funds immediately, leaving you vulnerable to potential losses if token values decline. • Liquidity Risks: Low liquidity in pools can result in significant spreads and reduced returns, limiting your earning potential. • Platform Risks: The risk of platform hacking or closure can result in the loss of your invested funds, leaving you without access to your assets. 📍 CONCLUSION While yield farming can be an attractive option for earning additional income, one of the most significant risks is the potential for a price drop and the inability to quickly withdraw your locked coins. However, for those who have a long-term perspective and plan to hold their cryptocurrency for at least a year or more, temporary drawdowns are unlikely to significantly impact their overall returns. On the other hand, yield farming offers the possibility of generating significant additional income, potentially exceeding 10-15% per year. By carefully weighing the risks and rewards, investors can make informed decisions about whether yield farming is a suitable strategy for their investment goals.
Education
by Lingrid
1
NZDUSD - Selloff Acceleration on Neckline BreakThis week's open will be interesting. It'll largely be dependent on the resumption of strength of the US dollar. The anticipated strengthening of the US dollar is supported over on this NZDUSD pair. Looking at the daily timeframe, the New Zealand dollar has shown a weakening in strength throughout the months of June and early July. My proposed trade entry and exit targets are based on the 5-period daily ATR of 42. Take profit: 100 pips (2x~) Stop loss: 40 pips (1x~)
Short
by FinancialGamblR
Euraud needs clearing to go up Hello fellow traders , my regular and new friends! Welcome and thanks for dropping by my post. Needs this current area to clear on daily timeframe before it can head higher,more bias on it to go up though. Do check out my recorded video (in trading ideas) for the week to have more explanation in place. Do Like and Boost if you have learnt something and enjoyed the content, thank you! -- Get the right tools and an experienced Guide, you WILL navigate your way out of this "Dangerous Jungle"! -- ********************************************************************* Disclaimers: The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes. *********************************************************************
Long
by Shadowing_The_Big_Boys
USD/CHF Analysis: Bearish Trend and Potential Reversal ZonesThe USD/CHF continues to decline and may encounter its first support in the demand area around the 0.8800 level. This ongoing downward movement has prompted us to close a previous short position on this pair, which you can find linked below. Recently, the Swiss National Bank (SNB) reduced its key interest rate by 25 basis points for the second consecutive meeting in June. This decision was influenced by subdued inflationary pressures and the resilience of the Swiss Franc, contributing to the current bearish trend in USD/CHF. The rate cut underscores the SNB’s efforts to stimulate the economy amidst low inflation, which in turn has strengthened the Franc. Looking ahead, the bearish pattern in USD/CHF may persist until the first week of August. However, we are closely monitoring potential reversal zones. The next key demand areas, as indicated in the chart, could provide opportunities for a reversal if the bearish trend loses momentum. Traders should remain vigilant and watch for any signs of a trend change, particularly around these demand areas. Identifying these zones is crucial for planning potential entry and exit points in anticipation of a market reversal. For further details and to review our previous short position, please refer to the link below. ✅ Please share your thoughts about USD/CHF in the comments section below and HIT LIKE if you appreciate my analysis. Don't forget to FOLLOW ME; you will help us a lot with this small contribution.
Short
by FOREXN1
1
USD/CHF Dips as Strong Swiss GDP Data Boosts FrancThe USD/CHF pair experienced notable selling pressure around the 0.9100 mark on Thursday during early European trading hours. This downward movement was primarily driven by the Swiss Franc (CHF) gaining traction following the release of a stronger-than-expected Gross Domestic Product (GDP) report for Switzerland in the first quarter (Q1) of 2024. As a result, the USD/CHF pair is currently trading 0.35% lower for the day. Switzerland's economy continued to show resilience and growth in Q1, as reported by the State Secretariat for Economic Affairs (SECO) on Thursday. The country's GDP increased by 0.5% quarter-over-quarter (QoQ), which exceeded both the previous quarter's growth of 0.3% and market expectations. On a year-over-year (YoY) basis, the GDP figure rose to 0.6%, outperforming the market consensus of 0.5%. This strong economic performance provided substantial support to the Swiss Franc, consequently driving the USD/CHF pair down to its weekly lows. The positive GDP data highlights the underlying strength of the Swiss economy, suggesting robust economic activity despite global uncertainties. The stronger economic performance is likely to influence the Swiss National Bank's (SNB) monetary policy stance, potentially leading to a more hawkish outlook, which further supports the CHF. From a technical perspective, the USD/CHF pair shows signs of a potential bearish reversal. On higher timeframes, a divergence has been observed, indicating that the recent price action might not be sustainable. The pair has also reached a significant demand area, as identified in the red rectangle, which has historically acted as a support zone. This confluence of technical factors suggests that the USD/CHF pair may be poised for further downside movement. Additionally, the broader market sentiment and the performance of the US Dollar (USD) also play a crucial role. The USD has faced pressure from mixed economic data and shifting expectations regarding the Federal Reserve's monetary policy. If the US economic indicators continue to show signs of slowing growth or if the Federal Reserve adopts a more dovish stance, the USD could weaken further, adding to the bearish outlook for the USD/CHF pair. Given these fundamental and technical factors, we are looking for a bearish setup on the USD/CHF pair. Investors and traders should closely monitor upcoming economic data releases, particularly from Switzerland and the United States, as well as any statements from central bank officials, which could provide further insights into the potential direction of the pair. In summary, the combination of strong Swiss economic performance, technical indicators pointing to a potential reversal, and the broader market dynamics suggests that the USD/CHF pair may continue to face downward pressure. This creates an opportunity for traders to consider bearish strategies, taking advantage of the current market conditions.
Short
by FOREXN1
3
High-Impact News Trading StrategiesHigh-Impact News Trading Strategies Trading in the dynamic world of foreign exchange demands a constant adaptation to the ever-evolving factors influencing currency markets. Among these factors, high-impact forex news stands out as a catalyst capable of reshaping market action. In this article, we explore some of the nuances of high-impact news trading, aiming to offer insights that may help manage high volatility and harness its power. Trading High-Impact News Understanding which news releases wield significant influence over the forex market and what market reaction can be expected is paramount for any trader. Forex News with High Impact High-impact news includes events like interest rate decisions, inflation rates, retail sales, consumer spending, labour market data, and nonfarm payroll reports. The impact of these events can be profound, affecting market sentiment and, thus, currency values. Traders keen on mastering this domain must comprehend the dynamics that drive market reactions to such news and position themselves accordingly. It's important to note that these news events can cause extreme volatility in either direction, creating both challenges and opportunities. Forex News Impact Analysis Traders analyse the potential impact of events on currency pairs, employing a combination of technical and fundamental analysis. Fundamental Impact of Economic Data Fundamental analysis involves evaluating the economic factors that underpin a currency's value based on the country's economic health. Traders delve into the consensus forecast, scrutinise historical data, and gauge the prevailing economic climate to gain insights into how these fundamental elements might shape market reactions. Technical Analysis Simultaneously, technical analysis plays a vital role in deciphering the market sentiment and potential price movements. Utilising technical analysis tools such as indicators, support and resistance levels, and trendlines, traders can identify key entry and exit points. By integrating technical analysis, traders gain a more comprehensive view of the market, potentially enhancing their ability to make informed decisions. Forex News Trading Strategies Considering the expected impact of economic data and utilising advanced technical analysis tools based on past forex rates performance, traders can design viable trading strategies at times of major news releases. Retracement Trading: Unveiling Potential Reversals Retracement trading is a strategic approach that capitalises on market pullbacks following significant movements triggered by high-impact news. Look at the example of trading on the US CPI announcement in November 2023: - Fibonacci Retracement: Helps identify key support and resistance areas where price corrections may occur. - Moving Averages: The 9- and 20-period MAs can be applied as a trend confirmation. Entry Traders identify significant Fibonacci retracement levels, typically 38.2%, 50%, 61.8%, or 78.6%, and look for alignment with a bullish/bearish MA crossover to confirm entry points for a long/short position. Stop Loss Stop loss may be placed just below (for long positions) or above (for short positions) the identified Fibonacci retracement level to safeguard against unexpected market reversals. Take Profit A potential signal for a take-profit point could be an MA crossover in the opposite direction of a trade following a failed attempt of the price to break a resistance/support level that coincides with a Fibonacci extension level. Do you already have a strategy for the upcoming high-impact forex news today? Visit FXOpen and trade on the free TickTrader forex trading platform. Trend-Change Trading Strategy Trading during major news releases demands a nimble and precise approach to capitalise on medium-term price fluctuations. This strategy incorporates three technical indicators simultaneously to evaluate the strength of the price movement and determine potential entry and exit points. In this approach, we utilise: - Relative Strength Index (RSI): Identifying overbought or oversold conditions. - Stochastic Oscillator: Gauging the strength of a price trend. - Average True Range (ATR): Measuring market volatility, helping to settle appropriate stop-loss levels. Entry Following a major price move on the news event, traders could identify weakness in an uptrend/downtrend by observing the divergence of both RSI and Stochastic indicators with the price movement. A potential entry for a long/short position involves aligning bullish/bearish signals from RSI and Stochastic, such as crossing above/below oversold/overbought areas. Stop Loss Stop loss could be placed just below recent lows or above recent highs for long and short trades, respectively, factoring in the ATR to account for potential market volatility. Take Profit Traders may determine possible take-profit points by considering bearish/bullish signals from RSI and Stochastics. Exploiting Increased Volatility Trading during high-impact news events requires a specialised strategy that accounts for increased market volatility. A sound volatility-based approach implements specific indicators so traders may be able to capitalise on rapid forex rate deviations. The chart shows trading on Japan’s industrial production data release at the end of October 2023, and we use: - Bollinger Bands: These help identify potential surges in volatility through band expansion. - ATR (Average True Range): This can be used for trailing stop-loss levels - MACD (Moving Average Convergence Divergence): A surge in buying or selling pressure can be reflected in MACD crossovers. Entry Traders would monitor Bollinger Bands for an expansion preceding news events. Price cross above/below the middle Bollinger Band after the release may signal an entry point for long/short positions. This should align with a bullish/bearish MACD crossover. Stop Loss Traders may place stop-loss orders just beyond recent price extremes to account for potential market reversals and limit possible losses and use the ATR indicator to calculate trailing stop-loss levels. Take Profit A possible take-profit level for long/short trades can be derived from a bearish/bullish reversal of the MACD indicator, or it can be set based on the expected price range derived from the ATR. Concluding Thoughts Trading high-impact forex news requires a mix of market analysis, risk management, and strategic execution. By understanding the dynamics of high-impact events and implementing robust trading strategies, traders may navigate the volatility inherent in these situations. Ready to trade on major economic news? You can open an FXOpen account and try out your strategies. 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
5