The US Treasury cash rebuild; volmageddon or a nothing burger
While Congress still needs to pass the debt limit agreement, the debate in the market has shifted to the need for the US Treasury Department (UST) to rapidly rebuild its depleted cash levels.
We have no understanding of the timetable, but already the debate is whether the significant level of Treasury bill issuance will result in a major headwind for global financial markets, while others believe this is pure hype.
Some are contrasting what lies ahead as a massive liquidity withdrawal from financial markets – Quantitative Tightening (QT) on steroids – where we will essentially see USD liquidity sucked out of the system.
The process of raising cash levels
To raise and rebuild its now low cash balances, the US Treasury Department (UST) will look to issue around $1.3t of US T-bills over the following 12 months. Around $700b of this T-bill issuance will be fast-tracked, tapping up the market within a matter of months, with the private sector expected to buy what the Treasury is selling.
US Treasury bills (‘T-bills’) are high-quality debt instruments which have a maturity of less than 12 months.
With the US Treasury replenishing its cash balances it would be able to make ongoing payments and meet its obligations. Plus they will keep its additional capital on the Fed’s balance sheet (under the Treasury General Account or ‘TGA’) for future payments.
The effect on markets
The concern in the market is around the notion of a “liquidity drain” – whereby the UST remove such staggering levels of liquidity out of the system, in a short period, that we see bank funding costs heading markedly higher and USD rates rising to highly concerning levels. Could this dynamic cause renewed concerns in the US regional banks?
Drilling into the theme - the potential stress in markets really comes down to who exactly absorbs the issuance, as this is key in determining the potential impact on system liquidity.
A drawdown in RRP balances
US money market funds (MMF) have historically been the big buyers of T-bill issuance and could again play a key role in supporting the USTs quest to recapitalize. Money funds currently have near-exclusive access to the Fed’s Reverse Repo facility or ‘RRP’ (TradingView code – RRPONTSYD), and have around $2.2t parked there, where they get 5.05% (annualized) risk-free.
If US T-bills are issued to the public at a yield close to the RRP rate (of 5.05%), then there’s a case that we see money funds withdrawing a sizeable level of holdings from the RRP facility and supporting the US T-bill issuance.
It is widely considered that risk assets (e.g. equities) would not be impacted when a large percentage of the USTs issuance is funded by RRP balances. In fact, some are saying this could be a net positive given there has been a scarcity of high-quality T-bills in the system of late.
A drain in bank reserves would be more problematic for markets
Banks are required to hold a level of reserves as a percentage of their deposit base. However, banks/depository institutions often hold reserves in excess of their regulatory requirements - this can be highly advantageous should they have to meet increasing deposit withdrawals.
Instead of keeping these excess reserves (cash equivalent) on their balance sheet, they can be offered to the Fed, where since 2008 they will receive interest paid at 5.15% (annualized) through the Fed’s IORB facility (Interest on Reserve Balances - TV code: WRBWFRBL).
The RRP and IORB spread guides overnight lending rates
With the RRP rate currently at 5.05% and IORB paid at 5.15% this spread represents the corridor by which the fed funds effective rate (EFFR) – the rate at which banks will borrow/lend cash overnight – trades. This is the fundamentals of how the Fed sets monetary policy and to date, it has been very effective.
The concern from some is where money funds have less involvement in supporting UST T-bill issuance - resulting in a comparatively low RRP drawdown – with a large percentage of the issuance supported by a drain of bank reserves.
Some strategists estimate that of this potential $700b in near-term T-bill issuance around $400b to $500b of this will be funded by the liquidation of bank reserves balances. That could the scenario where we could – in theory - see higher market volatility.
It’s really about a scarcity of reserves
There are currently $3.28t of excess bank reserves parked on the Fed’s balance sheet - so if we were to see a $500b drawdown in reserves then this balance would fall quite rapidly to around $2.8t. This is important because many feel the Lowest Comfortable Level of Reserve (LCLoR) that must be in the financial system is between $2.5t and $2.2t.
Interestingly, some feel an aggressive decline in reserves would be a headwind for risk assets – if we look at the regression between reserves and S&P500 futures, we can see an R^2 of 0.79. In effect, 79% of the variance in US equity futures can be explained by reserves – statistically, it’s very meaningful.
So this injects some credence to the idea that reserve drawdown could be a short-term headwind for risk. However, where this becomes interesting, and where we would see true stress in the system is through monitoring the spread between the Fed’s effective rate (TradingView Code: EFFR) and upper bound of the rates channel and Interest paid on Reserve Balances (on TradingView code: IORB).
Currently, this spread sits at -7bp, but if we were to see the fed funds effective rate (EFFR) moving to the top of this corridor and even trading at a premium to IORB, it’s at this point where the market is telling us that we’re moving closer to a scarcity of reserves in the system.
This is where things would be far more prone to breaking, and the Fed will need to act swiftly.
When EFFR trades at a premium to IORB it essentially portrays that the money market channels are breaking and demand for short-term loans is becoming increasingly inelastic – subsequently, those in need of short-term loans will continue to pay ever higher prices.
Of course, this may not play out. We may see reserves falling precipitously and risk assets and the USD show no relationship at all to this dynamic. However, it is a risk, and we need to recognise the triggers and be open to the possibility it does cause a higher volatility regime, especially given it comes at a time when EU banks are having to pay back E500b of TLRO loans to the ECB.
Price is true, but I will be the moves in the KRE ETF (US regional bank ETF), as well as watching the EFFR- IORB spread as this could be far more important for the USD and signs of increased risks in the financial system.
Fundamental Analysis
Daily Time Frame is The MAIN Time Frame to Trade! Learn WHY:
Hey traders,
You frequently ask me what is the most important time frame to analyze and follow.
And even though I must admit that multiple time frames must be taken into consideration for successful trading like weekly/daily/4h/1h. Among them, there is the one that is universally considered to be principal. That is a daily time frame.
There are a lot of reasons why so many traders rely on a daily time frame:
1️⃣ - Daily time frame shows a global market trend at the same time reflecting a mid-term and short-term perspective letting the trader catch trend following moves and spot early reversal signs.
2️⃣ - Covering multiple perspectives, daily time frame is the foundation of the majority of the trading strategies being the main source of key levels & pattern analysis.
3️⃣ - Daily time filters out news events that happened during the trading day. It shows the composite reaction of the market participants to all the data posted in the economic calendar.
4️⃣ - Daily time frame reflects all trading sessions. Within one single candle, we see the outcome of the Asian, London, and New York Sessions.
5️⃣ - Daily candle filters out all the noise from lower time frames & intraday price fluctuations and sudden spikes & rejections.
6️⃣ - Covering all the trading sessions, daily time frame mirrors the activities of big players like hedge funds and banks. Showing us the flow & direction of big money.
⚠️Being so important for analysis, do not neglect other time frames.
The most accurate trading decision can be made only relying on a combination of intraday and daily time frames.
What is your favorite time frame to trade?
❤️Please, support my work with like, thank you!❤️
📊 6 Ratios Investors MUST Know📍The current ratio is a financial metric used to assess a company's short-term liquidity and ability to cover its immediate obligations. It is calculated by dividing a company's current assets by its current liabilities. A higher current ratio indicates a better ability to meet short-term financial obligations.
📍The price-to-earnings ratio is a valuation metric used to evaluate the relative value of a company's stock. It is calculated by dividing the market price per share by the earnings per share. The P/E ratio provides insights into investor sentiment and expectations regarding a company's future earnings growth. A higher P/E ratio often suggests that investors anticipate higher future earnings.
📍Return on equity is a profitability ratio that measures how effectively a company generates profits from shareholders' equity. It is calculated by dividing net income by shareholders' equity. ROE provides insights into a company's efficiency in utilizing shareholder investments to generate profits. A higher ROE indicates better profitability and efficient use of equity.
📍The debt-to-equity ratio is a financial leverage ratio that indicates the proportion of a company's financing that comes from debt compared to equity. It is calculated by dividing total debt by shareholders' equity. The D/E ratio helps assess a company's financial risk and its reliance on debt for operations and growth. A higher D/E ratio implies higher financial leverage and increased risk.
📍The price-to-book value ratio is a valuation metric that compares a company's market price per share to its book value per share. Book value represents the net asset value of a company, calculated by subtracting liabilities from assets. The P/B ratio is used to assess whether a stock is undervalued or overvalued. A lower P/B ratio may indicate an undervalued stock.
📍The price/earnings to growth ratio is a valuation metric that combines the P/E ratio with a company's projected earnings growth rate. It is calculated by dividing the P/E ratio by the earnings growth rate. The PEG ratio helps investors evaluate a company's stock in relation to its growth prospects. A lower PEG ratio may suggest that the stock is relatively undervalued compared to its expected earnings growth
👤 @AlgoBuddy
📅 Daily Ideas about market update, psychology & indicators
❤️ If you appreciate our work, please like, comment and follow ❤️
The Debt Ceiling AgreementThe debt ceiling is a limit set by the U.S. Congress on the amount of debt that the federal government can have outstanding. This debt is primarily made up of two components: debt held by the public (like U.S. Treasury bonds held by investors) and intragovernmental holdings (like those in the Social Security Trust Fund).
From a financial perspective, the debt ceiling is significant for several reasons:
1. Creditworthiness of the United States: The U.S. government is seen worldwide as an issuer of risk-free assets, primarily because it has never defaulted on its debt. If the debt ceiling is not raised in time, it could potentially lead to a default, shaking the world's confidence in U.S. government securities. This could increase the interest rates that the U.S. has to pay to borrow money in the future.
2. Global Financial Markets Stability: U.S. Treasury securities are used as a benchmark for many other types of credit and are widely held by financial institutions around the world. A default could cause significant upheaval in these markets and potentially lead to a financial crisis.
3. Economic Recession : A default could lead to severe economic consequences. It could cause a sharp decrease in government spending (since the government couldn't borrow to finance its operations), which could in turn lead to job losses and potentially a recession. Treasury Secretary Janet Yellen warned of this risk in the case of the 2023 debt ceiling negotiations.
4. Budgeting and Planning: The debt ceiling also has implications for how the government budgets and plans its finances. When the debt ceiling is reached, the Treasury Department has to use "extraordinary measures" to keep the government funded, which can create uncertainty and inefficiency.
5. Political Tool: While not strictly a financial point, it's worth noting that the debt ceiling has often been used as a political tool. Lawmakers may refuse to increase the debt ceiling without certain concessions, such as spending cuts or policy changes. This can lead to financial uncertainty, as was the case during the 2023 debt ceiling negotiations.
The negotiations that led to the agreement were marked by considerable compromise. President Biden, for instance, noted that the agreement represented a compromise where not everyone got what they wanted but was nonetheless an important step forward1. House Speaker Kevin McCarthy, despite opposition within his own party, committed to passing the bill within 72 hours of its introduction on the House floor. This commitment was a testament to the urgency felt by lawmakers due to the looming threat of a potential default on the U.S. debt obligations.
The agreement was a product of compromise and necessity, driven by the urgent need to avoid a default on U.S. debt obligations. It included a two-year budget deal holding spending flat for 2024 and imposing limits for 2025, effectively reducing spending as Republicans had insisted. This was in exchange for raising the debt limit for two years, until after the next election. The deal would boost spending on the military and veterans' care and cap spending for many discretionary domestic programs. However, the specifics of these spending caps remained subject to further debate between Republicans and Democrats.
Conclusion
The 2023 U.S. debt ceiling negotiations showcase the intricate dynamics of American politics and its intersection with economic policy. They underscore the importance of compromise in a divided government and the challenges that ideological divergences within parties can pose to such compromise. These negotiations and their outcome also highlight the potential economic implications, such as the risk of default, that can arise when political disagreements hinder prompt fiscal decisions.
SIX LESSONS FROM THE "TRADING IN THE ZONE"The book Trading in the Zone, written by Mark Douglas, is a financial trading classic. It explores the psychological aspects of trading and how they can be used to improve your trading performance. Douglas emphasizes the importance of having a clear understanding of the psychology of trading and how it affects your trading decisions. He also stresses the importance of having an edge in the markets and understanding the risks associated with trading.
Douglas argues that traders must also be prepared for the emotional roller coaster associated with trading. He encourages traders to remain calm and focused on the task at hand and not to give into emotional responses. Douglas also stresses the importance of having a plan and sticking to it, no matter what the markets are doing. He believes that having a plan allows traders to focus on the task at hand and reduce the risk of emotional trading.
Here 6 lessons from the book “Trading in the Zone”:
1. A trader's edge is the set of core beliefs and methods that he relies on to make decisions about when to enter and exit trades. Understanding your edge and following it with discipline is essential to successful trading. A trader's edge is the set of core beliefs and methods that he relies on to make decisions about when to enter and exit trades. Understanding your edge and following it with discipline is essential to successful trading.
2. Risk management is the key to success in trading. It involves understanding the risks associated with each trade, setting stops and limits accordingly to protect your capital, and limiting your trading exposure to the most optimal level. There are a number of different risk management strategies you can use when trading, including stop-loss orders, stop-limit orders, and position limits. You can also use risk management tools, such as risk gauge monitors and stop-loss calculators, to help you understand your trading risks and measure your success.
3. Managing your emotions is crucial to being a successful trader. Emotions can lead to poor decisions and increased risk-taking, and if you're not aware of this, you could end up losing trades and money. To be a successful trader, you must be able to control your emotions and make rational, objective decisions.
4. Focus on Process, Not Outcome: To be successful in trading, you must focus on the process of making good trading decisions, not on the outcome of the trade. This will help you remain consistent and disciplined, and it will also help you to optimize your chances of success.
5. It's crucial to accept responsibility for your own actions as a trader. You must be willing to take full responsibility for your decisions, no matter how good or how bad they may be. You need to constantly be learning and improving your trading skills in order to succeed as a trader.
6. Have a Plan and Stick to It: Developing a trading plan and following it with discipline is essential for success. A good trading plan should include your entry and exit points, money management rules, and risk management strategies. A trading plan is a roadmap that helps you stay on track by detailing your desired outcome and the steps you will take to get there.
In the end, Douglas' main message is that trading is a game of probabilities and that traders must learn to understand and manage the risks associated with trading. He encourages traders to remain disciplined, have a plan, and focus on the long-term. He also emphasizes the importance of controlling emotions and having an edge in the markets.
GLOSSARY Smart Money Concepts - Complete Terms!It's taking the world by a storm.
Smart Money Concepts is what has become famous lately. Now I've been trading for 20 years and even I have learnt to adapt and adjust SMC to my trading strategy.
I guess we have to evolve and adapt with what there is. Anyways,
Today, I've written a complete Glossary on Smart Money Concepts terms for you.
Enjoy!
SMART MONEY CONCEPTS GLOSSARY
Break Of Structure (BOS) (CONTINUATION)
A BOS is when the price breaks above or below, and continues in the direction of the trend. (CONTINUATION).
Break Of Structure Down
When the price breaks and closes BELOW the wick of the previous LOW in a DOWNTREND.
Break Of Structure Up
When the price breaks and closes ABOVE the wick of the previous HIGH in an UPTREND.
Buy Side Liquidity (Smart Money SELLS)
Where an Order Block forms where Smart Money SELLS into retailers (dumb money) BUYING orders - Pushing the price DOWN.
Change of Character (CHoCH) (REVERSAL)
Refers to a much larger shift in the underlying market trend, dynamic or sentiment.
This is where the price moves to the point where there is a change in the overall trend. (REVERSAL)
Change of Character Down
When the price breaks and closes below the previous uptrend.
Change of Character Up
When the price breaks and closes above the previous downtrend.
Daily bias
Tells us which direction, trend and environment the market is in and what we are looking to trade.
Daily bias Bearish
When the market environment is DOWN and the trend is DOWN - we look for shorts (sells) in the market.
Daily bias Bullish
When the market environment is UP and the trend is UP - we look for long positions (buys) in the market.
Discount market <50%
The market is at a discount when the price trades BELOW the equilibrium level. We say the price is at a discount (low price).
Equilibrium
Equilibrium is a state of the market where the demand and supply are in balance with the price. We say the price of the market is at fair value.
Fair Value Gap (FVG)
A 3 candle structure with an up or down impulse candle that indicates and creates an imbalance or an inefficiency in the market.
Fair Value Gap Bearish
A 3 candle structure with a DOWN impulse candle that indicates and creates an imbalance or an inefficiency in the market.
Between candle 1 and 3, do NOT show common prices. The price needs to move back up to rebalance and fill the gap.
Fair Value Gap Bullish
A 3 candle structure with an UP impulse candle that indicates and creates an imbalance or an inefficiency in the market.
Between candle 1 and 3, do NOT show common prices. The price needs to come back down to rebalance and fill the gap.
Levels of liquidity
The area of prices where smart money players, identify and choose to BUY or SELL large quantities.
E.g. Supports, resistances, highs, lows, key levels, trend lines, volume, indicators, psychological levels.
Liquidity
The degree, rate and ability for an asset or security to be easily bought (flow in) or sold (flow out) in the market at a specific price.
Liquidity sweep (Liquidity grab)
Smart money buys or sells (and sweeps or grabs liquidity) from traders who enter, exit or get stopped.
Market down structure
When the price makes lower lows and lower highs.
Market structure
Indicates what a market is doing, which direction it’s in and where it is more likely to go.
Market Structure Shift (MSS)
MSS shows you when the price is breaking a structure or changing the direction in the market.
Market up structure
When the price makes higher lows and higher highs.
Order block
Large market orders (big block of orders) where smart money buys or sells from different levels of liquidity.
Order Block Bearish
A strong selling or a supply zone for smart money.
Order Block Bullish
A strong buying or a demand zone for smart money.
Order block events
Large market orders where smart money buys or sells from certain events i.e. High volume, supports, resistances, highs, lows, key levels, Break Of Structure, Change of Character, News or economic event.
Point Of Interest (POI)
POI is an area or level in the market where there is expected to be a large amount of buying or selling activity i.e. Order blocks.
Premium market >50%
The market is at a premium when the price trades ABOVE the equilibrium level.
We say the price is at a premium (high price).
Sell Side Liquidity (Smart Money BUYS)
Where an Order Block forms where the Smart Money BUYS into the retail (dumb money traders orders - Pushing the price UP.
Smart Money
These are the smart, informed, and savvy financial institutions that invest (buy and sell) their large capital into different financial markets.
Smart Money Concepts
SMC is a more sophisticated method of price action to spot, identify and locate where smart money is buying and selling their positions
Sweep Buy Side Liquidity (Smart Money SELLS)
Smart Money SELLS into positions (and sweeps liquidity) from retail traders who are short (get stopped) and for long traders who buy and enter their trades.
Sweep Sell Side Liquidity (Smart Money BUYS)
Smart Money BUYS into positions (and sweeps liquidity) from traders who are long (get stopped) and for short traders who enter their trades.
Feel free to print this out and have it as a guide to your Smart Money Concepts trading journey.
All the best!
Trading Success Stoppers Part 2 Trading can be an excellent way to grow your wealth.
But as you may know by now, it’s not a straightforward path without obstacles.
In fact, several challenges can hinder traders from achieving success in the field.
Here are four more significant success stoppers that traders face in their trading efforts.
No Support from Anyone
Trading can be a lonely and isolating field.
Once you have the strategy, rules and mindset in place – it’s all on you.
Initially you may want strong support from a community of traders or confirmation ideas that you’re on the right path.
My situation is different. Because I have traded for the last 20 years, it did become very lonely and it felt like I had more to offer. With TradingView at least I have a community to talk to and help out where I can.
So you see, having a support system can make all the difference.
Without support, it can be challenging to stay motivated and focused on your goals. And in the end you’ll realise there is more to trading than just making money.
Solution: The key is to find a mentor or a community of traders who can support and guide you.
Join online trading forums or attending trading events can be an excellent way to connect with other traders and build a support system.
You can also consider hiring a coach or mentor to guide you and provide feedback on your trading strategies.
Success stopper #2: Laziness
Look! Trading requires discipline, focus, and hard work, and without these qualities, it can be difficult to achieve your goals.
Lazy traders are the worst.
They lack the motivation, drive, and discipline that’s necessary to research, analyse, journal and trade in order make informed decisions.
You also need to be able to get up off your ass and trade each week. Sure, you can take off a few days a week – that’s the beauty. But don’t let laziness stop you for more than a few days!
Solution: The key to overcoming laziness is to set clear goals and create a routine that supports your trading activities.
Set aside specific times each day or week to research the markets, analyze charts, and execute trades.
It can also be helpful to create a trading plan that outlines your goals and strategies, which can help keep you focused and motivated.
Success stopper #3: No Money to Trade
This is more of an excuse than a success stopper.
You know you can paper trade until you nail the trading game, until you can start putting in capital.
And when you do save money, you’ll be able to learn the real world of trading and understand the slippage, costs, liquidity, margin trading etc…
Solution: The key to overcoming this challenge is to start small and build your way up.
Consider opening a demo account to practice trading without risking real money.
You can also start by trading with a small amount of capital and gradually increase your investment as you become more comfortable and confident in your abilities.
Success stopper #4: No Skills and Talents
That’s what you think.
But I honestly believe I can take just about anyone with a bit of computer experience and show them how to make a consistent income trading the markets.
Trading requires a specific set of skills, such as market analysis, risk management, and technical analysis. And these skills CAN be taught.
Whether you’re a slow learner or a fast learner, you can learn the ways.
Solution: The key to overcoming this challenge is to invest in your education and development.
Take courses or attend seminars to learn the necessary skills and techniques for successful trading.
You can also consider working with a mentor or coach to help you improve your trading skills and develop your talents.
So what is stopping you from your trading success?
I can only think of 1 thing.
Go look at the mirror.
USDebtCeilingCrisis.ComLet’s make some noise for the 11th hour party people. Bipartisan talks between US President Biden and House Republicans over the debt ceiling crisis have finally come to a resolution. Well, in theory at least since there is the small matter of Congress having to vote on it later this week. US lawmakers might balk at the idea that this is an 11th hour deal since the much touted ‘hard deadline’ of the 1st of June has now moved to the 5th of June. Any chances we could see that pushed forward by a few more days in the event of further brinkmanship during the Congressional vote on the deal?
Make no mistake. Regardless of the real hard deadline before the US technically defaults on its public debt, this will have been an 11th hour deal. The thing with 11th hour deals whether they’re related to business, divorce settlements, ransom/hostage negotiations or drug deals is that they tend to be equally bad for both parties but at least everyone walks away equally disappointed. A deal as critical as the one needed to tackle the debt ceiling crisis should have been done and dusted well before this game of chicken ended in both parties swerving just before the head on collision.
The US debt ceiling issue is a bubble. The limit has been lifted 78 times since 1960 and is quite the magician’s trick. Raising the limit each time a ceiling is reached and then kicking the issue into the long grass until the next time negotiations need to take place is dangerous enough but the way in which this current deal has been tentatively reached has created micro tears in this bubble and only time will tell if the bubble bursts at some point in the not- too-distant future. Even a smooth run through Congress later this week will be short-term relief for markets as the possibility of a crash depends on the extent of any liquidity leaving the system and where exactly that liquidity drain comes from as soon as the US Treasury turns on the T-bill tap to full blast after a confirmed deal.
These are exciting times for FX traders as we trade the bull runs, the bear runs and the crashes. Keep yourself educated and informed at all times. And remember that whenever you go to the market, be careful out there.
BluetonaFX
DOW JONESDow Jones Industrial Average is the oldest index in the world.
The index always shows what is happening with the US economy - the largest economy in the world.
Let's look at the chronology of important economic events since 1916:
1916 Lusitania - Sunk by German Submarine / Emergency Revenue Act - Includes Estate Tax
1917 US Formally Declares War on Germany
1918 World War I - End / Daylight Savines Tima / Amendment, Prohibition - Ratified
1919 Amendment, Women's Suffrage - Ratified
1921 The First Restrictive Immigration Act
1922 Federal Narcotics Control Board - War on Drugs
1923 First Transcontinental Fight Japan Earthquake
1924 Ford Manufactures 10 Milfionth Automobile - Scopes Monkey Trial
1926 Revenue Act - Reduces Income & Estate Taxes
1927 Lindbergh - First Nonstop Flight - New York to Pacis
1928 Amelia Earhart - First Woman to Fly Atlantic
1929 Financial Panic - Stock Market Crash - Depression
1930 Smoot Hawley Tariff Act
1931 Bank Panic - Countrywide Banks Closings
1932 Lindbergh Kidnapping / Reconstruction Finance Corp
1933 The New Deal - FDIC Established
1934 Securities & Exchange Commission - Established
1935 Social Security Act - Passed
1936 Drought in the Western States - Dust Bowl
1937 Hindenburg - Destroyed
1938 The New Deal - End / Fair Labor Standards Act
1939 World War Il - Begins in Europe / Great Depression
1940 France Falls - German Occupation
1941 Peart Harbor - Attacked by Japanese
1942 Price Controls - Begin / Battle of Midway / Guadalcanal
1943 Current Tax Payment Act, Withholding Taxes
1944 Normandy Invasion
1945 World War II - End / Cold War - Begins
1946 Stock Market Crash / Price Controls - End
1947 Taft-Hartley Act / Marshall Plan
1948 Truman Upsets Dewey - For Presidency
1949 Foreign Currencies Devalued
1950 The Korean War - Begin
1951 First Commercial Color TV Broadcast
1952 Steel Workers Strike - Despite Government intervention
1953 The Korean War - the End of Wage Stabilization Board
1954 St. Lawrence Seaway Bill - Passed
1955 President Eisenhower - Suffers a Heart Attack
1956 Suez Canal - Crisis
1957 Sputnik |
1958 USA - First Satellite Launched
1959 St Lawrence Seaway - Opened
1960 First Japanese Cars, Exported to US / U2 Spy Plane Shot Down
1961 The Berlin Wall - Built / Bay of Pigs - Debacle
1962 The Cuban Missile Crisis / Sled Price Rollback
1963 John F. Kennedy Assassinated
1964 Vietnam War Begins - Gulf of Tonkin Resolution
1965 The Great Inflation - Begin
1966 Medicare - Begin / the First Time USA Bombs North Vietnam
1967 The Six-Day War
1968 The Offensive / R.F. Kennedy & M.L King - Assassinated
1969 Apollo 11 - the USA on the Moon
1970 USA & South Vietnamese Invade Cambodia | Kent State
1971 Wage & Price Controls
1972 Watergate - Break-in / Munich Olympics Massacre
1973 US Involvement in Vietnam - End / Arab Oil Embargo
1974 President Nixon Resigns / ERISA Act - Signed
1975 Saigon - Fall / May Day - the End of Fixed Commissions
1976 US Bicentennial / Lockheed Aircraft - Bribery Scandal
1977 Panama Canal Treaty - Control of Panama in 2000
1978 Humphrey-Hawkins Full Employment Act
1979 Three Mile Island - Accident / Iran Hostage Crisis
1980 Iraq Invades Iran - War / Hunt Brothers Siver Crisis
1981 Tax Cut - Passed / Space Shuttle / President Reagan - Shot
1982 Penn Square Bank - Closed by Regulators / Falkland Islands War
1983 Terrorist Bombing of US Barracks - Beirut / Grenada Invasion
1984 Run on Continental Bank
1985 Gramm-Rudman Act / US Becomes a Debtor Nation
1986 Iran-Contra Affair / US Attacks Libya / Chernobyl Accident
1987 Financial Panic / Stock market Crash of Iraq Attacks on USS STARK
1988 Terrorists Bomb N.Y. Bound Airliner - Lockerbie, Scotland
1989 The Berlin Wall - Opens / US Invades Panama
1990 Iraq invades Kuwait / Gorman Unification
1991 The Gulf War / Soviet Union Collapse
1992 The Cold War - Ended / Civil War in Bosnia
1993 Russian Revok / World Trade Center - Bombed
1994 Orange County Bankruptcy of NAFTA instituted
1995 Oklahoma City - Murrah Federal Building - Bombed
1996 Alan Greenspan's “Irrational Exuberance” Speech
1997 Asian Currency Crisis - Hong Kong & Global Stock Market Rout
1998 US embassies in East Africa bombed
1999 NATO Bombs Serbia, Yugoslavia / Y2K - Millennium Scare / Columbine massacre
2000 Bush v. Gore Election Crisis / Terrorist Attack on USS COLE
2001 Terrorist Attack on the World Trade Center & Pentagon / Enron
2002 War on Terror of Turmoil in the Middle East / Corporate Misconduct
2003 Iraq - Weapons Inspections / War in Iraq
2004 Global War on Terror
2005 Record High Oil Prices / Hurricane Katrina
2006 Housing Decline / Nuclear Weapons - North Kores & Iran
2007 Subprime Mortgage / Credit Debacle
2008 Credit Crisis / Financial Institution Failures / Bitcoin - Created
2009 War on Terror / Climate Debate / Healthcare
2010 Gulf Oli Spit / European Union Cassis / Massive Debt
2011 Debt Ceiling Crisis / US Credit Downgrade
2012 European Debt / US Fiscal Cliff
2013 Boston Bombing / Government Shutdown / NSA Leaks
2014 Rise of ISIS / Police Protests / Oil Price Decline
2015 Terror Attacks / Refuges Crisis / China Slowdown / Fed Rate Hike
2016 Brexit - Start / Cuban Embassy Opened / Elections
2017 Trumponomics, Cryptocurrency Fever
2018 United States trade war with China
2019 Chang'e-4 on the far side of the moon / Fire of Notre Dame Cathedral / The first case of 2019-nCoV coronavirus infection in China
2020 US-Iran Tension / The COVID-19 Pandemic / Joe Biden Wins the Presidency / "Black Monday" for oil / Brexit - End / SpaceX space launch
2021 The GameStop short squeeze / Ever Given halts global supply chain / COVID-19 vaccines / America withdraws from Afghanistan
2022 Ukraine Russia War in the Center of Europe - Sanctions for Russia
What awaits us next...
Potential events that may overtake us in the near future:
- The use of tactical nuclear weapons.
- Cyber Warfare.
- Hunger.
- The largest economic crisis (food crisis, trade supply crisis, energy crisis).
- New viruses, pandemics.
- Potential formation and formation of Kurdistan and conflicts around it.
- Massive Blackout.
- Conflicts of countries in Oceania.
Write in the comment section what you would add to the list above.
Best Regards,
EXCAVO
Trading Success Stoppers Part 1Trading as you know is a fantastic alternative to grow your wealth.
However, it is not without its challenges.
In fact, there are several success stoppers that traders face that can derail their trading efforts.
Let’s look at four of them.
STOPPER #1: Same Old Routine
One of the biggest success stoppers for a trader is falling into the same old routine.
It is easy to get into a rut and continue doing the same things day in and day out.
However, this can lead to a lack of progress and stagnant trading results.
Yes you need the same ‘ol strategy, risk management rules and criteria for a consistent track record.
But you also need to be open to try new things and adapting to changing market conditions.
You can do this by:
~ Backtesting and forward testing other strategies.
~ Adapting new markets into your trading
~ Identifying new market environments
~ Even improving your current indicators and chart layouts
Always looking out for better brokers, chart platforms and sources to help your trading
Improving your calculators and trading tools.
STOPPER #2: Self-Doubt
This can cripple a trader’s confidence and ability to make sound trading decisions.
It is natural to experience doubts and fears when trading.
But make sure you don’t let it take over and lead you to emotional decisions, doubting during drawdowns and missed trading opportunities because of how you feel rather than what the charts say.
To overcome this success stopper, you should focus on building your confidence and self-belief through trusting your proven track record.
You can do this by keeping a trading journal to track your successes and failure.
Also seek out the advice of a mentor or coach, and regularly review their trading plan to ensure they are on the right track – to help with your own confidence.
STOPPER #3: Procrastination
Procrastination is a common success stopper for traders.
It is easy to put off making trading decisions or taking action on a new trading strategy.
However, procrastination can lead to you never taking action which means:
No trades
No consistency
No growth
No results
To overcome this success stopper, traders should develop a sense of urgency and take action quickly.
Adapt the 1,2,3 JUST DO IT mentality as I mentioned in the previous video.
Break down larger tasks into bite sized and more manageable ones and set deadlines to complete on time.
STOPPER #4: No Big Idea
Finally, having no big idea or vision for their trading can be a major success stopper for traders.
You need to know your goals, strategy, risk profile and trading personality.
When you do this you will have the BIG idea on what you need to progress and thrive.
Stop these stoppers before they stop you from achieving trading greatness.
Tune in tomorrow for Part 2!
HEAD and SHOULDERS PATTERN Hello my friends!
The most famous figure of technical analysis in the world. It consists of three tops, where the middle one is the highest. Accordingly, two shoulders and one head. The neckline in this case connects the two minimum values of the extreme top.
✳️ Pattern Breakdown
The Head & Shoulders pattern is a common psychological pattern of market players that hasn't changed for decades. Each new price is the result of bulls and bears struggle, but on the relatively long-time interval this struggle gets the more correct recognizable form. Since all traders see the same chart, their behavior is synchronized when a familiar pattern is identified the emotion factor kicks in.
The pattern itself consists of three parts a high peak in the middle and two smaller peaks on the sides. Thus, the first and the second tops form shoulders of the pattern, while the peak in the middle is the head. Support line drawn on the pattern minimum is also a signal line. is also a signal line - its breakdown defines the change of the trend? The first small peak and the subsequent fall mean the weakening of the upward impulse the loss of the bulls' enthusiasm.
However, maintaining the momentum, the price continues to move upwards, forming a higher maximum. At this stage there is still the possibility of a continuation of the bullish movement. But as soon as the price goes down to the previous low, the future development is already predetermined. The bulls make one last attempt to go up, but the price usually only reaches the nearest resistance level, the level of the first peak, and then it has to wait for the support level to be broken down to enter the downside.
There is also an inverted Head & Shoulders pattern that creates a buy signal. In this case instead of three peaks we have three lows, with the lowest one in the middle. The pattern signals completion of the downtrend and formation of a new movement direction.
✳️ Application in practice
Having received a signal about the formation of a new pattern, the first thing we need to determine is the presence of a continuous unidirectional movement. Further, having determined that the trend is bullish, we wait for the formation of a pattern. At the beginning of formation of the second arm we draw a support line by the swing minimums. This will be a signal line, breakthrough of which will indicate a price reversal.
It is necessary to enter the market after breaking through the support level. Confirmation is the closing of the candle behind the level at the opening of the next one, we open a market order to sell. Stop loss is placed just above the peak of the second shoulder. In some cases, the price may try to test the nearest resistance level again, and this moment should be taken into account when setting a stop.
✳️ Conclusion
Head and Shoulders is a time-tested figure, which, if identified correctly, allows you to enter the market at the beginning of a long-term trend. All you have to do is analyze the set-up and make a final decision about entering the trade.
Using On-Chain Metrics for Ethereum AnalysisThe world of cryptocurrency is highly dynamic and ever-evolving, and Ethereum, with its smart contract capabilities and expansive ecosystem, has emerged as one of the leading platforms in the blockchain space. As traders and investors seek to navigate the volatile markets of cryptocurrencies, they rely on various tools and techniques for technical analysis to make informed decisions.
One such powerful tool gaining prominence is the use of on-chain metrics, which provide valuable insights into the underlying fundamentals and behavior of a blockchain network. In the case of Ethereum, on-chain metrics offer a unique perspective on the network's activities and can be instrumental in understanding market dynamics.
By harnessing the power of on-chain data, traders can access a wealth of information about Ethereum's network activity, user behavior, token dynamics, and decentralized finance (DeFi) ecosystem. This data can provide critical insights that supplement traditional price analysis, offering a more comprehensive view of the market and potentially uncovering new opportunities.
For the purposes of this article, I will be using the “J1 Glassnode Metrics Toolkit” designed by Tradingview user Jmorgado89 ().
It is important to note that on-chain metrics serve as a complement to other technical analysis techniques and should not be used in isolation. By combining on-chain insights with traditional indicators and market trends, traders can enhance their understanding of Ethereum's price movements and make more informed trading decisions.
On-chain metrics refer to the data and statistics derived from the activity happening directly on a blockchain network. These metrics provide valuable insights into various aspects of the network, including transaction volume, address activity, token circulation, smart contract interactions, and more. In the context of Ethereum, on-chain metrics offer a comprehensive view of the network's dynamics and can help traders gain a deeper understanding of market trends and sentiment.
-- Transaction Volume : Transaction volume is one of the fundamental on-chain metrics that measures the total number of transactions occurring on the Ethereum network over a specific period. High transaction volume indicates increased network activity, which can be an indicator of market interest and demand for Ethereum and its associated tokens. Traders often monitor transaction volume to gauge the overall health and popularity of the network.
-- Active Addresses : Active addresses refer to the number of unique addresses that interact with the Ethereum network within a given timeframe, typically measured daily or monthly. Tracking active addresses can provide insights into the level of user participation and adoption of Ethereum. Higher numbers of active addresses suggest a vibrant ecosystem with increased user engagement, while a decline in active addresses may indicate a potential shift in market sentiment.
-- New Addresses : Monitoring the growth of new addresses can offer insights into the adoption and expansion of the Ethereum ecosystem. Increasing numbers of new addresses suggest growing interest and participation, indicating a healthy network. On the other hand, a decline in the creation of new addresses may indicate reduced interest or potential challenges within the Ethereum community. By tracking and analyzing the trend of new addresses over time, traders can gain a better understanding of Ethereum's user base and make more informed decisions regarding market trends and potential investment opportunities.
-- Token Circulation : Token circulation refers to the movement of tokens within the Ethereum network. By analyzing the flow of tokens across different addresses, traders can gain insights into the buying and selling activity of specific tokens. Token circulation data can help identify trends, such as accumulation or distribution patterns, and provide indications of market sentiment and investor behavior.
-- Spent Output Profit Ratio (SOPR) : Another important on-chain metric used in Ethereum analysis is the Spent Output Profit Ratio (SOPR). SOPR is a metric that measures the profitability of coins being moved on the Ethereum blockchain. It is calculated by dividing the realized value of the coins being spent by the value at which they were last moved. SOPR is a valuable tool for understanding market sentiment and identifying potential trend reversals. When the SOPR is above 1, it indicates that coins are being sold at a profit, suggesting a higher probability of market participants taking profits and potentially leading to a market correction. Conversely, when the SOPR is below 1, it suggests that coins are being sold at a loss, which may indicate increased selling pressure and a potential market bottom.
-- Decentralized Finance (DeFi) Metrics : Ethereum is home to a thriving DeFi ecosystem, comprising various protocols and platforms that enable decentralized financial activities such as lending, borrowing, and yield farming. On-chain metrics specific to DeFi, such as total value locked (TVL) and protocol-specific metrics like borrowing and lending rates, can help traders assess the growth and activity within the DeFi space. Monitoring these metrics can provide insights into emerging trends and opportunities within the DeFi landscape.
Understanding these on-chain metrics allows traders to go beyond traditional price analysis and gain a deeper understanding of Ethereum's underlying network dynamics. By monitoring these metrics, traders can identify trends, assess market sentiment, and potentially anticipate market movements before they are reflected in price data.
Next, we will explore some of the popular tools and platforms that traders can utilize to access on-chain metrics and enhance their Ethereum analysis.
-- Etherscan : Etherscan is one of the most widely used block explorers for Ethereum. It provides a user-friendly interface for exploring the Ethereum blockchain and accessing a wealth of on-chain data. Traders can use Etherscan to track transaction details, monitor smart contract interactions, view token transfers, and analyze other critical on-chain metrics. This can be accessed at (etherscan.io).
-- Dune Analytics : Dune Analytics is a powerful data analytics platform specifically designed for Ethereum. It allows users to create custom queries and visualize on-chain data in the form of interactive dashboards. Traders can leverage Dune Analytics to explore on-chain metrics, build custom metrics, and gain deeper insights into Ethereum's ecosystem. This can be accessed at (dune.com).
-- Glassnode : Glassnode is a comprehensive on-chain data analytics platform that provides insights into various blockchain networks, including Ethereum. It offers a wide range of on-chain metrics, including transaction volume, network activity, token flows, and more. Glassnode's advanced analytics and customizable charts enable traders to identify trends, track investor behavior, and make data-driven trading decisions. This can be accessed through a few scripts on Tradingview, including the one I have used for this article; otherwise, go to (glassnode.com).
-- CoinGecko : CoinGecko is a popular cryptocurrency data platform that provides on-chain metrics and market information for multiple cryptocurrencies, including Ethereum. Traders can access a wide range of on-chain data, including transaction volume, active addresses, token circulation, and DeFi metrics. CoinGecko's user-friendly interface and comprehensive data make it a valuable resource for analyzing Ethereum's on-chain activity. This can be accessed at (www.coingecko.com).
-- Trading Platforms : Many trading platforms, such as Binance, Coinbase Pro, and Kraken, offer on-chain data and metrics alongside their trading services. These platforms provide access to real-time market data, including on-chain transaction information, network statistics, and token data. Traders can leverage these platforms to access on-chain metrics while executing their trades, allowing for a seamless integration of on-chain analysis with their trading activities.
Now, let's discuss how to integrate these metrics into a comprehensive trading strategy to enhance decision-making and maximize trading effectiveness.
-- Combine On-Chain Metrics with Technical Analysis : On-chain metrics can provide valuable insights into the fundamental health and activity of the Ethereum network. By combining these metrics with traditional technical analysis tools such as chart patterns, trend lines, and indicators, traders can gain a holistic view of market dynamics. For example, by analyzing on-chain transaction volume alongside price trends, traders can identify potential price reversals or confirm the strength of a prevailing trend.
-- Consider Network Activity Metrics : On-chain metrics related to network activity, such as the number of active addresses, daily transaction volume, and gas usage, can provide insights into the overall demand and usage of the Ethereum network. Monitoring these metrics can help traders identify periods of increased network congestion or heightened user engagement, which may impact price movements and trading opportunities.
-- Track Token Movements and Flows: On-chain metrics related to token movements and flows can offer valuable information about investor behavior and market sentiment. Traders can monitor metrics such as token circulation, large transactions, and token velocity to gauge the buying or selling pressure on specific tokens. Unusual token movements or significant changes in token velocity can signal potential market shifts and present trading opportunities.
-- Monitor Decentralized Finance (DeFi) Metrics : Ethereum has become a hub for decentralized finance applications, and on-chain metrics specific to DeFi can provide insights into the health and activity of this ecosystem. Traders can monitor metrics such as total value locked (TVL), lending and borrowing volumes, and liquidity pool sizes to identify trends and potential trading opportunities within the DeFi space.
-- Combine On-Chain Metrics with Risk Management : Incorporating on-chain metrics into risk management strategies is essential for prudent trading. Traders can use metrics such as gas prices and transaction confirmation times to optimize fee management and execution timing. By considering on-chain metrics alongside risk management principles, traders can better manage their exposure to market risks and protect their capital.
-- Stay Updated and Continuously Learn : The field of on-chain metrics is continually evolving, with new metrics and analysis techniques emerging over time. Traders should stay informed about the latest developments and research in this area to enhance their understanding and refine their trading strategies. Following reputable sources, participating in online communities, and engaging with other traders can provide valuable insights and foster continuous learning.
In conclusion, incorporating on-chain metrics into a comprehensive trading strategy can provide traders with a deeper understanding of Ethereum's market dynamics and enhance decision-making. By combining on-chain metrics with technical analysis, monitoring network activity, tracking token movements, and considering DeFi metrics, traders can gain valuable insights and identify potential trading opportunities. Integrating on-chain metrics into risk management strategies further enhances trading effectiveness and helps protect capital.
As with any trading strategy, it is important to practice proper risk management, thoroughly test strategies, and adapt to changing market conditions. By leveraging the power of on-chain metrics alongside other market indicators, traders can strive for more informed and profitable trading in the dynamic world of Ethereum.
💲Learn DXY - US. Dollar Index
✅Why Be Interested?
The strong dollar has been getting a lot of attention lately. Some U.S. companies are blaming the strong U.S. dollar for lackluster earnings, while economists say it's helping the Federal Reserve’s ongoing fight against high inflation.
But how do you know when the dollar is strong or weak? That’s the job of the U.S. Dollar Index (DXY)
☑️What Is the U.S. Dollar Index?
The U.S. Dollar Index is a market index benchmark used to measure the value of the U.S. dollar relative to other widely-traded international currencies.
The Federal Reserve established the dollar index in 1973 to track the value of the U.S. dollar. Two years earlier, President Richard Nixon had abandoned the gold standard, which allowed the value of the dollar to float freely in foreign exchange (forex) markets.
Since 1985, the dollar index has been calculated and maintained by Intercontinental Exchange (ICE).
☑️The Dollar Index History and Makeup
The formula for calculating the value of the U.S. Dollar Index includes the dollar’s relative value compared to a basket of foreign currencies. Initially, it included the Japanese yen, British pound, Canadian dollar, Swedish krona, Swiss franc, West German mark, French franc, Italian lira, Dutch guilder, and Belgian franc.
Following the creation of the euro in 1999, the number of currencies was reduced and the formula for the dollar index was adjusted. Today, the basket includes just six currencies: the euro (EUR), Japanese yen (JPY), British pound (GBP), Canadian dollar (CAD), Swedish krona (SEK) and Swiss franc (CHF).
✅How Is the U.S. Dollar Index Used?
The USDX allows traders and investors to monitor the purchasing power of the U.S. dollar relative to the six currencies included into the index's basket.
Investors also use the dollar index as a litmus test for U.S. economic performance, particularly when it comes to imports and exports. The more goods the U.S. exports, the more international demand there is for U.S. dollars to purchase those goods. When demand for the dollar is high, USDX rises.
☑️Dollar Index Shortcomings:
The weightings of the currencies used to calculate the index were based on the United States’ biggest trading partners in the 1970s.
As a result, its calculation doesn't include emerging market currencies, like the Mexican Peso (MXN) or commodity currencies. It also doesn't include China’s renminbi (CNY), even though China is now the largest U.S. trading partner by a wide margin.
Therefore, the index may be less useful as an economic measure than in previous decades.
✅What Makes the U.S. Dollar Strong?
A combination of higher inflation, the Fed's aggressive tightening campaign and a global search for yield have all contributed to the strong dollar.
A strong dollar means other global currencies have been relatively weak, which exacerbates inflationary pressures and financial market volatility.
📍In Conclusion:
The Dollar Index can be used as a gauge of the Dollar strength or weakness, and it’s futures can be used to profit form Dollar moves without betting on any individual Dollar currency pair which provides diversification. However, the Index is somewhat outdated which needs to be accounted for when using it.
❤️Please, support our work with like & comment!❤️
Please, support my work with like and comment!
Love you, my dear followers!👩💻🌸
HOW TO TRADE 1-2-3 PATTERNHello everybody! 👋 🤗. Today we are going to learn about the 123 chart pattern. The 123 pattern is a typical reversal pattern that traders use to identify if an existing trend might change. These patterns can be a signal to enter the market. At the peaks or bottoms of the market trend, you can see 123-patterns, which signal a change in the trend. Sometimes they form after the completion of corrections in the current trend and may also occur in sideways markets.
The Pattern Formation 📈
1. The price makes a pullback following the rally
2. The price hardly shows a new maximum/minimum. No sign trend continuation
3. A breakout the previous high/low, shows a change in market trend
This happens as a result of traders opening positions when they anticipate the rally is going to continue. Furthermore, these traders will immediately close their trades and enter in the opposite direction if their stops are taken out.
How to Identify a Solid Pattern ✔️
1. The first step in trading the 123 pattern is to determine the existing trend by analyzing and identifying the highs and lows of the price action. The chart below shows one of the setups; it is labeled 1, 2 and 3. The trend was bullish. The market reached a peak. Then a pullback occurred. The result was point 2. Price then attempted to retest the high which was not successful. The price started a bearish movement and then reversed. We should not open the sell trade until we get confirmation of the breakout of line 2.
2. Look for a potential reversal. After identifying the existing trend, the next step is to look for a potential reversal point. This is done by looking for high or low points on the chart. Once a potential reversal point is identified, we can then look for signs that the reversal is actually happening. These signs can include things like a change in price momentum or candlestick patterns. The candlestick that represents the first point should have a wick, and the longer it is and if the wick is directed against the main price movement.
3. Once a potential reversal point has been identified, the we should wait for confirmation that the reversal is happening before taking any action. This confirmation can be provided by a subsequent candlestick close above or below the reversal point 2.
4. Finally, we should place stop-loss and take-profit orders to manage out risk and lock in profits. A breakout of the previous high (or low, depending on the context) is the area to place the orders. Depending on whether the pattern is bullish or bearish, the stop loss should be placed at level 1 below or above. Price should be given breathing room to avoid hitting the stop loss. Determine the distance between the low at point 3 and points 1 and 2 in this formation.
As you can see from the previous example, the price initially was in the bullish trend. After the pullback, the price breaks the support line of the trend, signaling a trend shift which indicates that price doesn’t have enough momentum to move above the previous high. Stops should be placed above point 1 of this formation. This illustration shows how easily the price exceeds price target, providing an opportunity to successfully open a sell trade with R:R ratio 1 to 1.
The 123 pattern can be a great tool for traders looking for a simple yet effective way to open trades in the markets. It is important to remember that no trading strategy is perfect, and traders should always use risk management to protect their capital. With practice and experience, traders can learn to identify the 123 pattern and use it to trade successfully in the forex market.
How to get your Trading DoneTrading is the easiest hardest way to become financially free.
You need to follow a simple approach and then have the discipline to do it again and again for the rest of your life.
It can at first be a daunting task because you have to implement an element of risk.
But before you know it, you’ll be free from your financial shackles and struggle.
Here are five tips to help you get your financial trading done efficiently and effectively.
Step #1: Always have your cheat sheet with you.
A cheat sheet is a list of rules that you have set for yourself when trading.
These rules are from how to spot trading signals, getting your trading setup ready, to implementing the maximum amount of money you’re willing to risk on a trade to the indicators you look for when deciding on a trade.
Always make sure you have your cheat sheet with you to have a clear set of rules to follow. This way you’ll avoid making impulsive decisions.
Step #2: Look for the right trading setups with high probability trades.
Before you enter a trade, it’s essential to look for the right trading setup.
A trading setup is a specific combination of conditions that must be met before you enter a trade.
For example, you may look for a bullish continuation or reversal price breakout strategy, combined with a moving average crossover and RSI divergence indicator.
Once you have identified the right trading setup, you can then look for high probability trades within that setup.
Step #3: Execute your trades or just take the trade.
Once you have identified a high probability trade, it’s time to execute the trade.
When executing a trade, it’s important to remember that the market can be unpredictable.
You may have done everything right and still end up losing money on a trade.
Therefore, it’s essential to take the trade, execute your plan, and move on to the next opportunity.
Step #4: Journal your trades
It’s essential to keep a record of all your trades, including the reasons why you entered and exited the trade.
This can help you identify patterns in your trading and make adjustments to your strategy as needed.
This way you can record, monitor and also identify areas where you can improve and re-evaluate your trading plan accordingly.
Step #5: Rinse and repeat the process.
Finally, once you have executed a trade, recorded it in your journal, and made any necessary adjustments to your trading plan, it’s time to rinse and repeat the process.
Trading is a continuous process.
There will always be new opportunities to explore and it’s ALWAYS the right time to start or continue.
If you follow the above steps, you’ll increase your chances of success and make the most of your trading endeavours.
5 TIF Trading Orders You need to KnowQ. What are the 5 common TIF (Time In Force) Trading Orders to know?
GTC: “Good Till Cancelled”
Where the order remains active until you manually cancel it.
FOK: “Fill or Kill”
This type of order requires immediate execution of the entire order quantity.
If the full amount is not executed, it is then cancelled.
GTD: “Good Till Date”
Where you can specify a specific date until which the order is valid.
MIT: “Market if Touched”
This order is triggered when the market price reaches a specified level (trigger price).
It then becomes a market order and is executed at the best available price.
LIT: “Limit if Touched”
If a Limit if Touched order is triggered when the market price reaches a chosen or trigger price.
GTC (Good Till Cancelled).
This way you’ll know that your position (order) will stay in the market until you cancel it manually.
What trading question do you have? Let me know in the comments.
Can you think of anymore?
Decoding the Structure of the Federal Reserve System 🏦
If you've ever wondered how the U.S. monetary system functions and who runs the show, keep reading. In this article, we will break down the structure of the Federal Reserve System and help you understand how it operates.
🏦 The Federal Reserve System, often referred to as the Fed, is the central banking system of the United States. It was created in 1913 by the Federal Reserve Act and is an independent entity within the government. The Fed has a three-part structure, including the Board of Governors, the Federal Reserve Banks, and the Federal Open Market Committee (FOMC).
1️⃣ Board of Governors:
The Board of Governors is the governing body of the Federal Reserve System. It consists of seven members appointed by the President and confirmed by the Senate for 14-year non-renewable terms. One person is designated by the President as Chair and another as Vice-Chair. The Board's main function is to set monetary policy, supervise and regulate banking institutions, and maintain the stability of the financial system.
2️⃣Federal Reserve Banks:
There are 12 Federal Reserve Banks located throughout the United States. Each Federal Reserve Bank serves a specific geographic district and is responsible for carrying out the policies set forth by the Board of Governors. The Federal Reserve Banks are overseen by a board of nine directors, six of whom are appointed by banks in the district, and three by the Board of Governors.
In addition to overseeing the banking system, the Federal Reserve Banks also provide services to financial institutions and the U.S. Treasury. These services include processing and clearing checks, storing currency, and distributing new currency.
3️⃣Federal Open Market Committee:
The FOMC is the most powerful body within the Federal Reserve System. It is responsible for setting monetary policy, specifically the target for the federal funds rate, which is the interest rate that banks charge each other for overnight loans. The FOMC is made up of the seven members of the Board of Governors and five of the 12 Federal Reserve Bank presidents.
The FOMC meets eight times a year to analyze economic data and determine appropriate policy decisions. Their decisions impact not only the banking system but also the overall economy. For example, if the FOMC decides to raise interest rates, it will become more expensive to borrow money, affecting everything from mortgages to credit card payments.
Conclusion:
The Federal Reserve System is a complex organization that plays a critical role in the U.S. economy. Its structure is designed to ensure checks and balances across its three branches so that no one entity has too much power. While the Board of Governors sets policy and oversees the entire system, the Federal Reserve Banks carry out those policies and provide essential services to the financial system. The FOMC, on the other hand, is responsible for setting monetary policy, affecting the interest rates that impact our daily lives.
Understanding the Federal Reserve System is essential for anyone wanting to understand the U.S. economy. Knowing how the Fed operates can help individuals and businesses make informed decisions about their finances. With this knowledge, you can better navigate the ups and downs of the economy and protect your hard-earned money.
❤️Please, support my work with like, thank you!❤️
Inside Futures Trading: Key Lessons from My Years of ExperienceIn my years as a futures trader, I've learned valuable lessons. I'd like to share these insights with you, hoping to help you navigate the complex world of futures trading.
The Importance of a Plan
A well-structured trading plan stands as the cornerstone of successful futures trading. Like a roadmap, it navigates your journey through the often turbulent market conditions, providing clear guidance on your trading activities. It helps outline your specific trading goals and defines the strategy to achieve them. Whether you aim for short-term profits or long-term investments, a trading plan ensures your objectives align with your financial situation and risk tolerance, thereby averting overambitious goals that could lead to increased risk.
Furthermore, a solid trading plan encompasses your risk management strategy. This safety net is crucial in protecting your capital from significant downturns. Determining the level of risk you're comfortable with, often based on your financial situation and risk appetite, forms a key aspect of this strategy. Besides, your plan should provide explicit criteria for entering and exiting trades, eliminating impulsive, emotion-driven decisions. Such a plan, therefore, operates as a comprehensive framework that synchronizes your trading activities with your financial goals, risk profile, and market understanding.
Over-Expectation and High-Risk Bets
A common pitfall I've witnessed in many traders, especially those just starting out, is the temptation to make substantial profits with a single trade. This approach often involves placing a small amount, say $100, with low leverage, and expecting it to yield significantly high returns, even double the initial investment, in one trade.
This aspiration, while alluring, is fraught with high risks and often overlooks the fundamental principle of market volatility. The likelihood of an asset's value doubling in a short timeframe is generally low unless the market conditions are extraordinarily favorable. Furthermore, while leverage can amplify profits, it can also magnify losses, increasing the risk of liquidation.
It's important to note that futures trading is not a scheme to get rich quickly but a strategic financial activity that requires prudent planning, risk management, and realistic expectations. Patience and consistent smaller wins can often lead to more reliable, long-term profitability. Over-expectation can lead to an increased risk appetite, causing one to disregard safety measures like stop-loss orders and prudent leverage, making their position highly vulnerable to market volatility.
Remember, in futures trading, managing risks and preserving your capital is as crucial as making profits. The goal should be long-term sustainability in the market rather than short-lived, high-risk gains.
The Dangers of Overtrading
In my initial trading years, I subscribed to the notion that more trades equated to more profits. However, I soon discovered that this belief led to overtrading, which increased my costs and risk exposure.
Overtrading occurs when one trades excessively, often reacting to minor market fluctuations. This approach not only amplifies trading costs but also elevates the risk of encountering losing trades. A better strategy I've found is to focus on the quality of trades rather than the quantity, ensuring each trade is well-reasoned and supported by robust market analysis.
Risk Management is Key
The significance of risk management in successful futures trading cannot be overstated. It is the safety net that can cushion you from inevitable market downturns and unexpected volatility. Without proper risk management strategies, a single unfavorable trade could potentially inflict considerable damage to your trading capital.
In practical terms, effective risk management involves setting stop-loss orders to limit potential losses on each trade. It also means not risking too much capital on any single trade, regardless of how promising it might seem. Keeping risks within manageable limits preserves your trading capital and ensures your survival in the trading arena, despite the inevitable setbacks.
Be Careful with Leverage
In futures trading, leverage is a powerful tool that can enhance potential profits but also amplify losses. It provides the ability to control substantial positions with only a fraction of the investment typically required. However, it's crucial to remember that leverage is a double-edged sword.
Leverage can magnify gains when the market moves in your favor, turning a small investment into a substantial return. However, the market can also move against your position. In such cases, the same leverage that amplifies your gains can intensify your losses. Losses can even exceed the initial investment, leading to margin calls and possibly the liquidation of your position. Consequently, I've found it prudent to use leverage judiciously and to never risk more than I can afford to lose.
Understand the Underlying Asset
One of the key components in futures trading is the underlying asset of the contract. The value of a futures contract is inherently derived from this asset, which can range from commodities like gold or oil to cryptocurrencies like Bitcoin.
Understanding the intricacies of the underlying asset is pivotal for making informed trading decisions. It involves scrutinizing its historical performance, the factors influencing its price movements, and its potential future trends. This knowledge can provide crucial insights into the asset's volatility, helping traders formulate effective strategies and manage potential risks.
Researching and continually staying updated about the asset you're trading is not just a recommended practice; it's a necessity. It equips you with the essential information required to navigate the ebbs and flows of the market, potentially turning uncertainties into profitable opportunities.
The Value of Stop-Loss Orders
Stop-loss orders play an instrumental role in prudent risk management within futures trading. They function as automated safeguards designed to close out a trade when the price moves against your position to a pre-defined extent.
Utilizing stop-loss orders allows you to establish the maximum amount you are willing to lose on a particular trade, providing a degree of certainty in an inherently uncertain market. It effectively mitigates the potential impact of adverse market movements, protecting your trading capital from substantial losses. From my experience, using stop-loss orders is not just a recommendation—it's an essential trading practice.
Avoiding the Pitfall of Chasing the Market
Another invaluable lesson I've learned over the years pertains to the timing of market entry. Many traders fall into the trap of entering a trade after a trend has already been well established—a practice known as 'chasing the market.'
Chasing the market can often lead to buying high and selling low, which is the antithesis of profitable trading. This happens because once a trend is firmly established, it's likely closer to its end than its beginning. Jumping onto a fast-moving trend in the hope of riding it further can result in entering the market at an unfavorable price point.
Instead, it's more effective to develop a strategy that allows you to identify potential trends early and enter the market at a more advantageous time. The key here is patience and discipline, waiting for the right market conditions before committing your capital. By not chasing the market, you can avoid costly mistakes and enhance your trading performance.
Cut Losses Short
One of the toughest yet most valuable lessons I've learned is the necessity to cut losses short. It's a human tendency to hold onto losing positions in the hope that they'll rebound. However, in futures trading, this approach can lead to substantial losses.
A losing trade is not just a financial setback—it can also impose a psychological burden. Hoping for a market reversal when stuck in a losing position can cloud your judgment, causing you to overlook other potentially profitable trades. It's crucial to accept that not all trades will be winners, and knowing when to exit is as important as knowing when to enter.
Trade with the Trend
Predicting the market can be alluring, but it often results in entering trades against the trend. Over time, I've realized that it's usually more beneficial to trade with the trend. After all, 'the trend is your friend' is a well-known adage in trading for a reason.
Trends have a propensity to continue for longer than expected, and trading against them can be perilous. Recognizing and trading in the direction of the prevailing trend can increase the likelihood of successful trades. It reduces the chances of being caught on the wrong side of the market and enhances the potential for consistent profits.
Keep Records
Maintaining records of your trades is an essential practice for ongoing learning and improvement. A detailed trading journal allows you to review your past trades, identify recurring mistakes, and refine your strategy accordingly.
Keeping track of each trade, including the reasons for entering and exiting, the profit or loss, and any relevant market conditions, can provide valuable insights. It creates a feedback loop for self-improvement, promoting conscious trading decisions and encouraging disciplined trading.
In conclusion, futures trading is a challenging yet rewarding endeavor that demands careful planning, disciplined risk management, and relentless learning. The lessons I've shared from my years of trading are by no means exhaustive, but they provide a solid foundation for anyone embarking on their futures trading journey. That being said, learning never stops in the world of trading.
If you've come across any valuable lessons or insights that I've not covered in this discussion, please feel free to share them in the comments. It's through our collective experiences that we all become better traders.
DOW THEORY OR HOW TECHNICAL ANALYSIS EVOLVEDSometimes it's useful to go back to the basics in order to fully comprehend the progress achieved. Today technical analysis is taken for granted, and very few people think about what is really behind the well-known market terms. The Dow Theory, and Charles Dow himself in particular, we can say, were at those very basics. In this case, at the present moment the postulates of the theory have not lost their relevance. How they can be applied in practical work on the market, particularly in Forex, is presented in today's post.
Dow Theory and Technical Analysis
At the beginning of the formation of financial markets there were no suitable automatic tools, and most of the work on the analysis was done manually for a long time. That's why you can notice a great attention to detail in the description of the theory, when nowadays many details are usually omitted.
A brief biography of Charles Dow
Dow's first job in the financial environment was as a reporter for the Wall Street news bureau. It was there that he met his partner, Edward Jones. Unlike most other journalists, their work was characterized by straightforwardness - Doe and his partner did not take bribes as a matter of principle. In 1882 Doe and Jones felt the need for a separate publication. So, they founded their own company, Dow Jones & Company, which at first issued daily financial reports.
Later the two-page booklet grew into a full-fledged newspaper, The Wall Street Journal, which is now one of the most authoritative publications in the financial environment. The publication's slogan stated that its main purpose was to tell the news, but not opinions. By 1893, there were many mergers taking place, which increased the proportion of speculation in the markets. At this time Dow saw the need for some indicator of market activity. Thus, he created the Dow Jones Industrial Average, which at that time was a simple arithmetic average of the prices of 12 companies (it now included the 30 largest U.S. companies). Dow drew attention to the fact that prices capture much more information than many people assume. That is, by analyzing prices alone, we can predict their future behavior with great probability, which eventually became the basis of his theory.
Principles of the Dow Theory
The Market Discounts Everything
Of course, the market cannot take into account events which, by definition, cannot be predicted. However, the price takes into account the emotions of participants, economic data of some companies and states, including inflation and interest rates, and even possible risks in case of unforeseen developments. This does not mean that the market or its participants know everything, even future events. This only means that all what has happened has already been recorded in the price, and any new information will also be taken into account.
On this basis, a huge number of technical indicators have been created, and today you can find an indicator for the analysis of literally anything. But while indicators are often used thoughtlessly, Dow analyzed the entire market, relying on the natural segmentation of market players.
An extreme reflection of his work is the industry and transportation indices. The very composition of the index plays an important role. It is not fixed and is periodically reconsidered taking into account changes of the situation on the markets. The essence is that shares of enterprises working in one field are analyzed. As a result, the index is in some way a closed system, where the major part of funds is distributed between the participants and does not go beyond the portfolio.
Three Market Trends
A straight-line market movement is a science fiction. In fact, price almost always moves in a zigzag pattern, forming characteristic ascending/descending highs/minimums. In other words, forming an uptrend or a downtrend. There is a major initial trend in the market. It is the most important to find out, because the basic trend reflects the real price movement direction, when all the lower trend levels depend on the basic one. The duration of the initial trend is from 1 to 3 years.
The most important thing is to determine the direction of the initial trend and trade in accordance with it. The trend remains in force, as long as there was no confirmation of its reversal. The price closing below the previous extremum, for example, can be a prerequisite for trend reversal.
So, the initial trend determines the main market direction. In turn, the secondary trend moves in the direction opposite to the main trend. In fact, it is a correction to the main trend. The secondary trend has one interesting characteristic - its volatility is usually higher than the initial movement.
The last, the smallest trend is nothing more than a secondary trend pullback. Such movement lasts no longer than one week. The classical representation pays the least attention to it. It is considered that there is too much price noise on this time period, and fixation on the smallest movements can lead to irrational trade decisions.
Trend phases
The next principle of the theory of Dow the phases of the trend formation:
The first phase is usually characterized by price consolidation. This is a period of market indecision, when the previous trend is at exhaustion. In other words, this period is marked by the accumulation of forces before the spurt and is also the most attractive entry point (although risky). As soon as the new direction is confirmed, the participation phase begins. This is the main trend phase, the longest of the three, which is also marked by a large price movement.
When the motivating conditions have been exhausted, the saturation phase begins. During this period, savvy players begin to exit positions as soon as there are signs of instability, such as increased corrections. This phase can be described as "irrational optimism", when the price may continue to rise by inertia, despite the lack of clear prerequisites.
Identification of trend movements
In order to identify both trends and reversals on a chart, it is necessary to understand the techniques used by Dow. The main technique in identifying reversals a sequential analysis of extremes. For example, in the picture, points 2, 4, and 6 mark the maximum of the upward movement, while points 1, 3, and 5 mark the minimum. An uptrend is formed when each successive top and trough is higher than the previous one.
A downtrend, on the contrary, is characterized by descending highs/minimums.
The Dow Theory states that until we get a clear signal for a reversal, the trend remains in force. Here we can draw a parallel with Newton's law of inertia, where a moving object tends to move in the intended direction until another force interrupts its movement. The formation of a lower minimum (5) within the upward movement is an obvious signal of the coming reversal.
In the case when the trend is directed downward, the situation is the opposite. If the price failed to form a lower low and still closed above the current high, it means that the market is influenced by a force opposite to the original movement.
Conclusion
The Dow Theory, as many hope, does not answer the question "how to enter the market at the stage of trend formation?" It is a long-term reversal strategy aimed at minimal risk. Nevertheless, the theory helps us better understand technical analysis in general, and why it works at all because price and is a derivative of all the factors affecting it.
USDT vs USDC Reserve BreakdownUSDT (Tether) vs USDC (Circle) reserves☝️
USDT seems to be more diversified then USDC, as they’ve split their reserves into 7 different asset classes. Compared to USDC who are only diversified into 3.
USDT has a healthy 4% of their reserves in Gold, which is up 8% year to date SO FAR. They’re more likely to survive a liquidation process, compared to USDT when the next Crypto crash happens💥
Revenge Trading is Catastrophic - Here's why!Do you feel it in your bones.
Where do you want to:
Take trades to make up for losses?
Take trades for the sake of trading?
Take trades out of emotions and gut (gat feel)?
Take trades to make a quick buck?
If so, you have felt the power and dangers of Revenge Trading.
TO put it blunt.
Revenge trading is detrimental, dangerous and just plain stupid for any traders to succumb to.
I feel like I can finish the article already as I have said what I needed to.
Not just yet! You need to understand why Revenge Trading is to your downfall.
Let’s start with these:
#1: Impulsive decisions are dangerous
In the heat of the moment, you just want to take an impulsive trade.
This can lead to disastrous outcomes.
Revenge trading happens when you want to try recoup losses quickly.
And so traders abandon their strategies, systems and rules.
And they take on unwarranted risks.
This will stop you from making good, calculated, logical and well-informed decisions based on sound reasoning and market research.
Don’t do it!
#2: Trading on emotions is deadly
Emotions such as fear, greed, and frustration have no place in trading.
Revenge trading is fueled by these emotions.
And this causes traders to deviate and steer way from their plans by instead acting irrationally.
What then? Bigger losses, unnecessary risks to the portfolio and skewed results on your trackrecord.
Your hard earned and timely worked on journal!
Is it worth it?
I think not.
Cut out your emotions and work at being calm and take on the more logical approach, devoid of emotional interference.
#3: Violating trading rules is damaging
Every trader should have a set of well-defined trading rules in place.
Not just rules but also a list of criteria.
Revenge trading typically involves disregarding these rules and just going against everything you should do.
Basically, what the average dumb retail trader does which results in 98% of traders losing in this financial endeavour.
Violate your rules and there will be severe consequences.
Loss of confidence.
Bigger losses
More losses
Erratic wins (which make you want to do it again and again and again)
Not worth it.
Don’t do it.
#4: Too much unnecessary risk
You know you’re using your hard earned cash to trade and build a portfolio right?
So why are you burning it and cutting it up like it’s nothing?
This reckless behavior can lead to bigger drawdowns and can even wipe out trading accounts entirely.
Don’t do it!
#5: Creates an ongoing cycle of doing it again
Great! Once you have violated your rules, gone against your strategy and pretty much gone ape or rogue on trading – it takes a lot to gain ones integrity and discipline back.
One of the most dangerous aspects of revenge trading is its cyclical nature.
Break the rule, you’ll break it again.
Cheat, you’ll cheat again.
Enter a gambling mentality and you’re beeped.
Bank a winning rogue trade and you’ll succumb to the trading world of discretionary action.
However, if these subsequent trades result in further losses, the cycle repeats, trapping traders in a never-ending loop of revenge trading.
Breaking free from this destructive pattern will then need a ton of discipline, self-awareness, and a commitment to sticking to one’s trading plan.
So please be careful.
Embracing Risk ManagementEmbracing Risk Management in Forex Trading:
In the world of forex trading, embracing risk management is an integral aspect of achieving long-term success and preserving your capital. Implementing effective risk management strategies is essential to navigate the inherent uncertainties of the forex market. Let's explore some key principles of risk management in forex trading.
• Define Your Risk Tolerance:
Before entering the forex market, it is crucial to determine your risk tolerance. Assess your financial situation, investment goals, and personal comfort level with risk. This will help you establish appropriate risk parameters and guide your decision-making process.
• Proper Position Sizing:
Determining the right position size is a critical element of risk management. Avoid overexposing your trading account by allocating a reasonable portion of your capital to each trade. A general rule of thumb is to risk only a small percentage of your account balance (e.g., 1-20%) per trade. This ensures that a string of losing trades does not significantly impact your overall account balance.
• Utilize Stop-Loss Orders:
Implementing stop-loss orders is vital to protect yourself from excessive losses. A stop-loss order sets a predetermined price level at which your trade will automatically be closed if the market moves against you. Place your stop-loss orders based on technical analysis, support and resistance levels, and market volatility. This tool helps limit potential losses and protects your trading capital.
• Take-Profit Targets:
Setting take-profit targets is equally important in managing risk. A take-profit order enables you to exit a trade when the market reaches your desired profit level. Determine your take-profit targets based on technical analysis, market trends, and reward potential. Regularly reassess your take-profit levels as the market evolves to secure profits and prevent sudden reversals.
• Risk-Reward Ratio:
Maintaining a favorable risk-reward ratio is crucial for long-term profitability. Aim for trades that offer a potential reward that outweighs the potential risk. A positive risk-reward ratio means that your potential profit is greater than your potential loss. This allows you to achieve profitability even with a lower win rate, as long as your winning trades outweigh your losing trades.
• Regular Evaluation and Adjustment:
Consistently evaluate and analyze your trading performance to identify strengths and weaknesses. Keep a trading journal to review your trades, assess your decision-making process, and identify areas for improvement. Adapt your risk management strategies based on market conditions, and avoid chasing losses or taking excessive risks due to emotional impulses.
[ i]Remember,
risk management is an ongoing process that requires discipline and continuous monitoring. Stay informed about economic news releases, market events, and volatility to adjust your risk parameters accordingly. Embrace risk management as a fundamental part of your forex trading journey, and let it guide you towards consistent profitability and capital preservation.
In forex trading, success is not solely determined by profitable trades but by effectively managing risks and protecting your trading capital. By embracing your risk management principles such as defining your risk tolerance, proper position sizing, utilizing stop-loss and take-profit orders, maintaining a favorable risk-reward ratio, and regularly evaluating and adjusting your strategies, you can navigate the forex market with confidence and achieve sustainable results.
Embracing Risk Management trading GOLD:
In the golden path of trading gold, risk management takes center stage as a paramount factor for success. It is crucial to implement effective risk management strategies to protect your capital and navigate the inherent uncertainties of the forex market. Let's delve deeper into the key aspects of risk management in trading gold.
• Proper Position Sizing:
Determining the appropriate position size is the foundation of risk management. Carefully consider your account size, risk tolerance, and market conditions when deciding how much of your capital to allocate to each gold trade. Avoid overexposure by keeping your position sizes in line with your risk tolerance, allowing for potential market fluctuations.
• Stop-Loss Orders:
Implementing stop-loss orders is an essential risk management tool. Set a predetermined level at which you will exit a trade if the market moves against you. This ensures that your losses are limited and prevents them from spiraling out of control. Always place stop-loss orders based on sound analysis and risk-reward ratios to protect your capital.
• Take-Profit Levels:
In addition to stop-loss orders, establish take-profit levels to secure your profits. These levels are predetermined price points at which you will exit a trade when the market reaches your desired profit target. Take-profit orders help you lock in gains and avoid potential reversals that can erode your profits. Regularly reassess your take-profit levels based on market conditions and adjust them accordingly.
• Risk-Reward Ratio:
Maintaining a favorable risk-reward ratio is essential in risk management. This ratio represents the potential profit you can make relative to the amount you are willing to risk. Aim for trades that offer a higher potential reward compared to the potential loss. By consistently seeking trades with a positive risk-reward ratio, you increase your chances of profitability over the long term.
• Regular Assessment and Adjustment:
Risk management is an ongoing process that requires continuous assessment and adjustment. Regularly review your trading performance, analyze your trades, and identify areas for improvement. Adapt your risk management strategies as market conditions change and stay vigilant in monitoring your trades to ensure they align with your risk parameters.
Do remember again,
risk management is not about avoiding risks altogether but rather about managing them intelligently. By implementing proper position sizing, setting stop-loss and take-profit levels, and maintaining a favorable risk-reward ratio, you can protect your capital and create a solid foundation for long-term success in trading gold.
In the golden path of trading, risk management is not a choice but a necessity. Develop a disciplined approach to managing risk, and let it guide you towards a prosperous journey where the allure of gold meets the prudence of risk
☆ Good Foreign Exchange Trading Daysz ☆ J
Understanding Economics: Exploring Micro and Macro ConceptsWelcome to my first ever post! Starting today, I will be embarking on a journey to try and spread the knowledge about the world of economics. As a 16-year-old student who is undertaking their A-Levels, I want to share some of the knowledge I am getting and I am excited to share my knowledge and insights on micro and macro economics over the next year and a half.
Through this journey, we will delve into essential topics such as Individuals, Firms, Markets, and Market Failure. We will explore the fundamental concepts of supply and demand, market structures, and the consequences of government interventions. Together, we will develop a solid foundation in microeconomic principles.
In the second phase of our exploration, we will turn our attention to the macroeconomy. I will guide you through the intricacies of the circular flow of income, aggregate demand, and aggregate supply analysis. We will unravel the complexities of fiscal policy, monetary policy, inflation, unemployment, and their impact on the macroeconomic landscape.
Whether you are a student, a professional, or someone simply seeking to enhance your understanding of economics, this blog aims to provide valuable insights and practical knowledge. I encourage you to actively participate by sharing your suggestions and questions as we embark on this educational endeavor together.
Join me as we dive into the world of economics and unravel its mysteries. Stay tuned for regular updates on my blog, where we will explore various economic concepts and their real-world applications.
If you wish the take a look at what I will be going through, I will list them down below, but apart from that
Good luck!
MICRO
4.1 Individuals, frms, markets and market failure
4.1.2 Individual economic decision making
4.1.3 Price determination in a competitive market
4.1.4 Production, costs and revenue
4.1.5 Perfect competition, imperfectly competitive markets and
monopoly
4.1.6 The labour market
4.1.7 The distribution of income and wealth: poverty and inequality
4.1.8 The market mechanism, market failure and government
intervention
4.2.1 The measurement of macroeconomic performance
Macro
4.2.2 How the macroeconomy works: the circular flow of income,
aggregate demand/aggregate supply analysis and related concepts
4.2.3 Economic performance
4.2.5 Fiscal policy and supply-side policies
4.2.6 The international economy
