NEO FOR FUNDING TRADERS For all funding traders who deal with this business, mostly the broker gives you some of the cryptocurrencies to trade. Neo is one of them.
I see some liquidity between 14-15 and at the same time a vector candlestick that appears and it fills up until 12.18. Wait for the market makers to do what they have to do and come back at low prices, maybe a little higher, maybe a little lower. Another scenario that can happen is a breakthrough from a double bottom that has been in place for more than a year. Targets can be POC range 08 December 2021 - 01 May 2022, VAH and at the same time the maximum target of pattern 29.37.
Fundingfortraders
How to use futures funding in a trading strategy?Funding , also known as the funding rate, plays a crucial role in the dynamics of perpetual futures contracts. Its primary purpose is to maintain price parity between perpetual contracts and the underlying assets in the spot market. For instance, it ensures that the price of a BTCUSDT futures contract closely tracks the BTC spot price.
Traders participate in funding by either paying or receiving the funding rate, which depends on the overall market conditions. In simpler terms, a trader can either incur the funding cost or earn from it. Some traders strategically use the funding mechanism to generate profits, not just from trading contracts but also from the funding rate itself.
The necessity for funding arises to prevent significant disparities between perpetual futures contract prices and the actual assets. This mechanism helps smoothen price fluctuations in perpetual contracts, keeping them as close as possible to spot prices. It's important to note that funding is distinct from trading commissions, as funding rates are payments made by traders to other traders. On certain exchanges, funding comprises two components: a fixed percentage and a "premium" that adjusts based on the deviation between futures and spot prices.
Typically, funding rates are calculated as a fraction of a percentage of the position size and depend on the magnitude of the deviations. Most exchanges settle funding payments every hour, four hours, or eight hours. Unlike trading commissions, which are charged for specific actions like opening or closing a position, funding rates accumulate continuously as long as the position remains open.
Example
When the funding rate is positive, it implies that long position holders pay short position holders. Conversely, when it's negative, short position holders pay long position holders. For example, if you hold a long perpetual contract at $5,000 and the funding rate is positive, you will pay a percentage of $5,000 (e.g., $0.76) to the trader holding a short position over a set period (e.g., 8 hours).
Conversely, a negative funding rate suggests that the contract price has fallen below the spot price. To balance this, the exchange collects funding from short sellers and distributes it to long sellers. This encourages participants to avoid shorting and favor long positions, as the rate increases if the price continues to drop. In such situations, shorting becomes less profitable, prompting participants to close short positions, which, in turn, exerts upward pressure on the futures price to align with the spot price.
The closer the futures price stays to the spot price, the lower the funding rates are. Thus, it's in the interest of traders to prevent deviations between contract and spot prices. The exchange continuously incentivizes traders to maintain this balance.
In summary:
Positive funding rate: Contract price > Spot price; long positions pay short positions.
Negative funding rate: Contract price < Spot price; short positions pay long positions.
The funding percentage accumulates as long as the position is open, and it can fluctuate between positive and negative based on market conditions. Each exchange may have its unique formula for calculating funding rates.
For trading strategies, traders often compare funding rates with the prevailing market trend. The logic is simple:
- Positive rate suggests the contract price is above the spot price, making short positions favorable.
- Negative rate implies the contract price is below the spot price, making long positions attractive.
If funding rates and the trend align, it can provide traders with an additional advantage. However, it's essential to regularly monitor funding rates to avoid unexpected losses when employing funding-based trading strategies.
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GOLD WEEKLY - 17 JULGold spot seems to be taking a break from its astonishing ride in the last couple of months.
SHORT SCENARIO
Despite still quoting above the previous all time high of 2011 highlighted with the blue area, at the moment the priority is downwards. Indeed, the price of XAU is currently below the 8daily moving average (which was strongly broken downwards ) and inside the Fibonacci retracement area of the last leg down (the small green rectangle), meaning that if not broken to the upside, the next movement will be a continuation of the short term downtrend with another leg down. Any level within those could be good for opening a short position, even if a retest of the moving average would be the perfect signal, with targets indicated by the arrows in the chart
LONG SCENARIO
Instead, should the price broke both the 8 moving average and the Fibonacci retracement area to the upside with a daily close, the two targets would be the previous high and the green rectangle (Fibonacci extension of the last leg up), respectively.
Dax daily: 22 Jul 2020The positive continued yesterday as we expected. The price reached above 13 235 resistance and we've noticed the biggest volume of orders for the entire day session. Unfortunately, Dax hasn't stayed long in those levels and the afternoon session wiped out all gains, dropping down to a support level of 13 093.
Important zones
Resistance: 13 235, 13 519
Support: 12 882
Statistics for today
Detailed statistics in the Statistical Application
Macroeconomic releases
NIL
Today's session hypothesis
Today's session opened near Friday's close and Dax is now retesting yesterday's close. This is good news for sellers as the initial signal implies that buyers are not fully convinced of their strengths. Needless to say that Dax is still in the uptrend which is uninterrupted. We anticipate the repetitive test of 13 125 which could be a good level for bearish traders.