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PSYCHOLOGY OF A TRADER | MASTER EMOTIONS & MASTER THE MARKET The market is driven by people. The crowds are always behind strong market rallies. What the majority fails to recognize is the fact, that being chaotics in its nature, the markets are always trading in predictable patterns . Believe it or now, but the market participants are driven by the same emotional impulses . It does not really depend on how wealthy is the person. With the core motive being to make a ton of money with a little risk possible, we can derive a universal archetype . Every asset, every financial instrument has an element of a "potential value" . Being 100% subjective, an attempt to calculate the future value drives the market. Depending on the current expectation of the crowd and its emotions it is necessary for a professional trader to learn to play with its behavior. With many years of constant observations, the cyclic psychological curve was derived to explain the relationships between our emotions and market cycles. On the chart, I have drawn 9 main stages of trader's psychology: 😶 INDIFFERENCE - No opportunities are spotted, searching for the right pick. 🙂 OPTIMISM – Positive outlook leading us to buy a certain asset 😃 EXCITEMENT – Being initially right in our pick, we feel excited as bulls push the market to the new highs The moment of happiness and feeling of being "a true investor" 🤑 GREED – Being thrilled we start to ignore warning signs and add more and more cash to the market believing that the market will never stop. 😕 ANXIETY – The market starts taking our gains back. Being biased and nihilistic we keep holding the position, thinking that it is just a pullback. 😩 PANIC – Tremor. We are frozen. Emotions are draining our power. We are clueless and helpless. We totally lose the sense of control. 😭 DEPRESSION – Position is closed. Money is lost. Considering trading & investment industry to be a scam. 🤔 HOPE – The dawn. The market returns back to its normal state. Aspiration & desire to start again. 😆 RELIEF – Again we start to believe in our strength. We return and the cycle repeats. Do you recognize yourself in these stages? Please, support our work with like and comment. It really helps.
OANDA:XAUUSDEducation
by UnitedSignals
26
📚 Leveraged & Margin Trading Guide + Examples ⚖️ Leveraged trading allows even small retail traders to make money trading different financial markets. With a borrowed capital from your broker, you can empower your trading positions. The broker gives you a multiplier x10, x50, x100 (or other) referring to the number of times your trading positions are enhanced. Brokers offer leverage at a cost based on the amount of borrowed funds you’re using and they charge you per each day that you maintain a leveraged position open. For example, let's take EURUSD pair. Let's buy Euro against the Dollar with the hope that the exchange rate will rise. Buying that on spot with 1.195 ask price and selling that on 1.23 price we can make a profit by selling the same amount of EURUSD back to the broker. With x50 leverage, our return will be 50 times scaled. With the leverage, we can benefit even on small price fluctuations not having a huge margin. ❗️Remember that leverage will also multiply the potential downside risk in case if the trade does not play out. In case of a bearish continuation on EURUSD, the leveraged loss will be paid from our margin to the broker. For that reason, it is so important to set a stop loss and calculate the risks before the trading position is opened. ❤️Please, support this idea with a like and comment!❤️
OANDA:XAUUSDEducation
by VasilyTrader
26
👶 Trading For Beginners | ORDER TYPES 👦👧 There are multiple ways of opening a trade in a trading terminal. Here is the list of universal order types that you MUST know: 1. Market Order A market order is a trade order to buy or sell a desired financial instrument on a current market price. In such an order type, the price is determined by the market. Constant price fluctuations and spreads make market order quite risky way of opening a trading position. 2. Limit Order A limit order is a trade order to buy or sell a desired financial instrument at a specific price level. It allows the trader to enter the market on a strict price level ignoring the price fluctuations and spreads. A limit order can be referred to as a buy limit order or a sell limit order. 3. Buy/Sell Stop Order Buy stop order is used to buy at a price above the market price, and it is triggered when the market price touches or goes through the Buy Stop leve. Sell stop order is used to sell when a specified price is reached. The selection of order types is based on a trader's trading style. Let me know in a comment section which order types do you apply in your trading! Please, like this post and subscribe to our tradingview page!
Education
by UnitedSignals
11
👶 Trading For Beginners | ORDER TYPES 👦👧 There are multiple ways of opening a trade in a trading terminal. Here is the list of universal order types that you MUST know: 1. Market Order A market order is a trade order to buy or sell a desired financial instrument on a current market price. In such an order type, the price is determined by the market. Constant price fluctuations and spreads make market order quite risky way of opening a trading position. 2. Limit Order A limit order is a trade order to buy or sell a desired financial instrument at a specific price level. It allows the trader to enter the market on a strict price level ignoring the price fluctuations and spreads. A limit order can be referred to as a buy limit order or a sell limit order. 3. Buy/Sell Stop Order Buy stop order is used to buy at a price above the market price, and it is triggered when the market price touches or goes through the Buy Stop leve. Sell stop order is used to sell when a specified price is reached. The selection of order types is based on a trader's trading style. Let me know in a comment section which order types do you apply in your trading! Please, like this post and subscribe to our tradingview page!
Education
by UnitedSignals
11
Predicting the Time-window for Turns, in all MarketsInexplicably, upon publishing this post, the Title Chart becomes distorted beyond recognition thus, all references are to this Original Chart - below Do markets trend on the medium term (months) and mean-revert on the long run (years)? Does Black's intuition bear out that prices tend to be off approximately by a factor of 2? (Taking years to equilibrate.) How does Technical Analysis , as a whole, act as a trend following system while Fundamental Analysis matters only once prices get way out of line? Is mean-reversion a sufficient self-correcting mechanism to temper irrational exuberance in financial markets? We examine these questions in the proceeding; In his 1986 piece Fisher Black wrote: "An efficient market is one in which price is within a factor 2 of value, i.e. the price is more than half of value and less than twice value. He went on saying: The factor of 2 is arbitrary, of course. Intuitively, though, it seems reasonable to me, in the light of sources of uncertainty about value and the strength of the forces tending to cause price to return to value. By this definition, I think almost all markets are efficient almost all of the time." The myth that “informed traders" step in and arbitrage away any small discrepancies between value and prices never made much sense. If for no other reason but the wisdom of crowds is too easily distracted by trends and panic. Humans are pretty much clueless about the “fundamental value" of anything traded in markets, save perhaps a few instruments in terms of some relative value. Prices regularly evolve pretty much unbridled in response to uninformed supply and demand flows, until the difference with value becomes so strong that some mean-reversion forces prices back to more reasonable levels. Black imagined, Efficient Market Theory would only make sense on time scales longer than the mean-reversion time (TMR), the order of magnitude of which is set by S√TMR∼d. For stock indices wit hS∼20%/year, makes TMR = ∼6 years. The dynamics of prices within Black’s uncertainty band is in fact not random but exhibits trends: in the absence of strong fundamental anchoring forces, investors tend to under-react to news or take cues from past price changes themselves. In fact, the notorious and unbridled reliance and un-anchored, speculative extrapolation is the mainstay of most investors, as well as Wall Street's itself, as it is the regular course of everyday "investing" across most asset classes. In the following a picture emerges (and we test it), whether market returns are positively correlated on time scales TMR and negatively correlated on long time scales ∼TMR, before eventually following the (very) long term fate of fundamental value - in what looks like a biased geometric random walk with a non-stationary drift. We have looked at a very large set of financial instruments, drawing on data sets from 1800 - 2020 (i.e. 220 years). We applied the same method to all available data in Stocks, Bonds, FX, Commodity Futures and Spot Prices, the shortest data set going back 1955. As it turns out that, in particular, mean-reversion forces start cancelling trend following forces after a period of around 2 years, and mean-reversion seems to peak for channel widths on the order of 50-100%, which corresponds to Black’s “factor 2”. Mean-reversion appears as a mitigating force against trend following that allows markets to become efficient on the very long run, as anticipated previously by many authors. Regarding the data we used for this study; Commodity Data sets - Starting date Natural Gas 1986 Corn 1858 Wheat 1841 Sugar 1784 Live Cattle 1858 Copper 1800 Equity Price data sets - Starting date USA 1791 Australia 1875 Canada 1914 Germany 1870 Switzerlan 1914 Japan 1914 United Kingdom 1693 From trends to mean-reversion The relation between past de-trended returns on scale t'< and future de-trended returns on scale t'>. Defining p(t) as the price level of any asset (stock index, bond,commodity, etc.) at time t. The long term trend over some ti scale T is defined as: mt:=1Tlog . For each contract and time t, we associate a point(x,y) where x is the de-trended past return on scale t'< and y the de-trended future return on scale t>:x:= logp(t)−logp(t−t'<)−mtt'<;y:= logp(t+t'>)−logp(t)−mtm't'. Note that the future return is de-trended in a causal way, i.e. no future information is used here (otherwise mean-reversion would be trivial). For convenience, both x and y are normalized such that their variance is unity. Remarkably, all data,including futures and spot data lead to the same overall conclusions. See in chart; As the function of the past (time) horizon t'< (log scale) for Red & White Bars, the futures daily data and spot monthly data. To compare the behaviour of the regression slope shown in the chart with a simple model, assume that the de-trended log-price pi(t) evolves as a mean-reverting Ornstein-Uhlenbeck process driven by a positively correlated trending noise m. It is immediately apparent from the dashed line in the chart that the prediction of such a model with g= 0.22, k−1= 16 years and y'−1= 33 days, chosen to fit the futures data and g= 0.33, k'−1= 8 years and gh'−1= 200 days, chosen to fit the spot data. In the short term volatility of prices is simply given by S'2k's'. Non-linear effects A closer look at the plot(x,y )however reveals significant departure from a simple linear behaviour. One expects trend effects to weaken as the absolute value of past returns increases, as indeed reported previously. We have therefore attempted a cubic polynomial regression, devised to capture both potential asymmetries between positive and negative returns, and saturation or even inversion effects for large returns. The conclusion on the change of sign of the slope around yt'<= 2 years is therefore robust. The quadratic term, on the other hand, is positive for short lags but becomes negative at longer lags, for both data sets. The cubic term appears to be negative for all time scales in the case of futures, but this conclusion is less clear-cut for spot data. The behaviour of the quadratic term is interesting, as it indicates that positive trends are stronger than negative trends on short time scales, while negative trends are stronger than positive trends on long time scales. A negative cubic term, on the other hand, suggests that large moves (in absolute value) tend to mean-revert, as expected, even on short time scales where trend is dominant for small moves. Taking these non-linearities into account however does not affect much the time scale for which the linear coefficient vanishes, i.e. roughly 2 years Conclusion Here we have provided some further evidence that markets trend on the medium term (months) and mean-revert on the long term (several years). This coincides with Black’s intuition that prices tend to be off by a factor of 2. It takes roughly 6 years for the price of an asset with 20 % annual volatility to vary by 50 %. We further postulate the presence of two types of agents in financial markets: Technical Analysts , who act as trend followers, and Fundamental Analysts , whose effects set in when the price is clearly out of whack. Mean-reversion is a self-correcting mechanism, tempering (albeit only weakly) the exuberance in financial markets. From a practical point of view, these results suggest that universal trend following strategies should be supplemented by universal price-based “value strategies" that mean-revert on long term returns. As it's been observed before, trend-following strategies offer a hedge against market draw-downs while value strategies offer a hedge against over-exploited trends.
TVC:DJIEducation
by Nemo_Confidat
8
An easy yet super efficient trading strategy for any marketAn amazing combo strategy for trading. Steps: 1. INTRUCTIONS Plot the 7, 14, 33, 60 on the chart Lets assume we use a 1h chart. For this we will plot on the support and resistance levels onto the chart using the 4hr or daily chart values. For other timeframes, change the values with a 4-8x difference. For this example I took BTCUSDT 1h, and you can see that the support and resistence on 4h is making the 30.5k - 41k channel more or less. 2. RULES Once we have established and marked the territory zones , lets get down to business. For the best results, it is best to enter the market when you find price hovering around a support or resistance level. Once price paints a confirmation candle you can enter the market, or you could wait until the 7 MA has crossed the 14 MA. Entries at MAJOR support and resistance levels are key and will provide a greater return. Always exit your trades once price returns to another support or resistance area. You can use the 33 and 60 MA as a stair stepper to get out of the market to protect your equity on your trades. However, re-entering the market once you get confirmation of the market continuing in the original direction is a safe move. Below you can find some examples for BTCUSDT 1H 3. RISK MANAGEMENT For STOP LOSS you can use the value below the support zone, while for TP you can use either the resistence point or the support zone from the 33 or 60 SMA or a multiplier of the original distance below the support zone .
Education
by SoftKill21
3
Futures BasisIn crypto the derivatives market accounts for the most volume so it's important to be aware of the dynamics of that market. There are two types of contracts that are very popular: the perpetual swap contracts and the classic futures contracts with an expiration date. The main difference between the two is that perpetuals are continuous contracts on which, in theory, you can keep your position open for as long as you want as the name would suggest. On the other hand futures contracts settle after a specific time period. In crypto the quarterly contracts are the most popular and they last 3 months of course (one quarter of the year). Quick tip: the exchanges Huobi and Okex have the most actively traded quarterly futures contracts, although Binance has gained a lot of market share too in recent times. These futures contracts, normally speaking, trade higher than the spot market (or the perpetuals which closely follow the current spot price). The further away the expiration the higher the prices are (for example December contracts trade higher than September contracts). Eventually decay happens when the expiration date starts nearing and in the end the futures contract completely converges and starts trading at the same price as the spot market. Quick tip: the vast majority of futures contracts in crypto are coin margined, although there are also a few dollar margin contracts (which use tether). The futures basis looks at that premium at which futures are trading compared to spot. The calculation is simple: (fut - spot) / spot This information can give you valuable insight in what's happening in the market. Most of the time these futures contracts from different exchanges trade at similar prices, although small differences always happen, and they move in line with spot albeit at a premium. However sometimes the futures (or futs in short) diverge a little bit more radically and they rise or decline more relatively to the spot market, or they even start moving in the opposite direction. Thus divergences can happen, both bullish and bearish. Comparing the lows and highs of the spot price and the futures prices can give you insight in how aggressive derivatives market participants are in either direction. When the futures are trading higher than the spot market, which could be considered the default setting, they are trading in what we call "contango". Nevertheless sometimes they do trade below the spot price and we call this "backwardation". When looking at historic crypto data we can easily conclude that backwardation only ever happens after a violent sudden crash or a deep sustained downwards bleed. Quick tip: these moments of backwardation have proven to be great buying opportunities more often than not. So paying attention to the futures basis can pay off, literally!
FTX:BTCPERPEducation
by ByzantiumScripts
3
📚 Leveraged & Margin Trading Guide + Examples ⚖️ Leveraged trading allows even small retail traders to make money trading different financial markets. With a borrowed capital from your broker, you can empower your trading positions. The broker gives you a multiplier x10, x50, x100 (or other) referring to the number of times your trading positions are enhanced. Brokers offer leverage at a cost based on the amount of borrowed funds you’re using and they charge you per each day that you maintain a leveraged position open. For example, let's take EURUSD pair. Let's buy Euro against the Dollar with the hope that the exchange rate will rise . Buying that on spot with 1.195 ask price and selling that on 1.23 price we can make a profit by selling the same amount of EURUSD back to the broker. With x50 leverage , our return will be 50 times scaled . With the leverage, we can benefit even on small price fluctuations not having a huge margin. ❗️Remember that leverage will also multiply the potential downside risk in case if the trade does not play out. In case of a bearish continuation on EURUSD, the leveraged loss will be paid from our margin to the broker. For that reason, it is so important to set a stop loss and calculate the risks before the trading position is opened. ❤️Please, support this idea with a like and comment!❤️
OANDA:XAUUSDEducation
by VasilyTrader
14
Tutorial | How To Get Real-time Futures Data Into TradingViewWhen you create an account on TradingView, you're pretty much set for realtime stock, forex, and crypto data. Want to know the price of Bitcoin or Apple? No problem. But futures data is a different animal. In this tutorial I demonstrate how to use a demo account from one of the integrated futures brokers to get futures quotes so that you can practice trading the futures markets using the trading features on TradingView.
CME_MINI:MNQM2021Education
by RodCasilli
79
Crude Oil Spreads: A Quick Intro.Spreads are complex instruments. This is just an introduction and some ideas to get our brains ticking over. I had started writing a guide to understanding these three types of spreads, but it just got a little long. It might be easier to do it this way: What do you see above? Here are some observations to get started: 1 All spreads topped out well before June Crude Oil topped out. From about 17th Feb, those spreads stopped gaining. Could spreads be a way to take a contrary position as a trend exhausts itself, and have a little room for error? It certainly is here (although not always the case). 2 Look at the ATR for each. Spreads show lower volatility. 3 Correlations (the CC shows the spread correlation to the underlying June contract). Correlations seem strong during a trend then do their own thing at other times. Change creates opportunity. Constant correlations are not as fun. 4 Basic spreads: bull and bears – are directional. That is, they move closely with the underlying. More complex spreads, like the fly and condor seem to be suited to shifting sentiment along the forward curve. 5 Flies and condors are very similar. The condor tends to have a little more volatility than the fly. In this case, it’s not much. - It can be a complex subject, worthy of something closer to a book, than a comment here, but it’s a start. Just a warning – going down the spread trading path might change everything. - A couple of futures markets where flies and condors are often traded: Crude, Natural Gas, Grains, Eurodollars (and most other STIRs). Options - that's a totally different chat....
NYMEX:CLU2021Education
by TheTradarien
Volume and Open interest of some CME contractsLooking at the numbers helps us figure out what goals to other market participants have? Do they rollover their positions alot? How far do they project themselves? Do they hold for months of exit after just a few days? We can see the volume of Oil popping off when the expiry is close as traders, for example terrible ETFS, close and re-open the next month and I am suspecting much of this volume are front running algos taking advantage of these rollovers. The S&P is looking more like a casino of short term gamblers than ever. And the EURUSD sees much holding relative to trading, there are no day traders in FX which echoes with the BIS report showing trader's timeframe (almost all retail investors day gamble or "swing" gamble < 7 days but they represent only 5% of the FX market maybe even less). Other notable futures: Gold with a volume of 185 thousand contracts this Monday, and open interest of 472 thousand split almost evenly between the "front" month (in practice the April contract) and June one. 10 year T Notes have an open interest of 3,780,235 contracts (378 billion usd) I think this is the second highest one. 10 year T Notes options also have an open interest of over 3.5 million. The total volume is close to 2 million for futures & 500k for options. So about 250 billion USD. I think the third biggest contract in usd terms is the e-mini S&P 500, with a daily volume typically around 3-3.5 million (> 500 billion usd). The contact volume is about the same it has been for years but the usd value has almost doubled from when the S&P was lurking in the depth at close to 2000 points. Open interest for the S&P is at 3 million for futures + 500k for options, it's sitting at around the same value as the ADV. This is the era of day traders... The largest contract is not even close. Seriously these numbers make my head turn. It's the Eurodollar (the future that represents the London interbank rate). The daily volume hoovers around 2 - 2.5 million contracts (I'm guessing around 700 billion usd). The open interest is eye popping at 25-35 million contracts (Friday it was at 11.8 million futures & 20.9 million options), it's half the GDP of China.
NYMEX:CL1!Education
by MrRenev
Understanding ETFsHello traders, in this post I will explain different types of ETFs and what is an ETF (Exchange-Traded Funds). ETF for example is a package of different stocks that have similar characteristics. One characteristic could be that they all are in the same sector. Some ETFs track indexes, commodities, and more. Those packages are listed on an exchange and are traded just like stocks. Traders and investors use ETFs to diversify with the provided indexes (or other products) with lower costs, or if the trader can’t trade in futures contracts, it is possible to use ETFs that are related to a specific future. Also, there are options on ETFs that can be used as an alternative for expensive indexes. Leveraged ETFs Most of the ETFs are trading in a 1:1 ratio, for example, NASDAQ 100 is currently at $12621 and the relevant ETF QQQ is $307.8, the difference is 1 to 40, but the returns are the same (1:1). The ETF NUGT on the other hand is moving with correlation to the gold miners index, but if the index return will be 10%, the ETF NUGT return will be 20%, because it is leveraged 2 to 1. Those kinds of ETFs are not for investors or long-term traders, only for the short term. This is because the returns are multiplied by 2. If the index will move down 7% NUGT will move down 14%. Eventually, it will move substantially lower in price because there will be a major correction of 30%+ that will cause a 60%+ drop in price. Thus, there will be a split. If you look at September 2012 you can see that NUGT price is $36000, this is because there were many splits due to the phenomenon I described above. NUGT was never really traded at $36000. In the chart, the orange line NUGT. Moving 300% between March to August, the blue line GOLD 40%. Reverse ETFs ETFs that move in the opposite direction to the index. For example, DUST is a leveraged ETF and going in the opposite direction to the gold miners index. In the chart, the green line DUST. Decreasing substantial percents due to leverage. ETFs that based on Futures There are two types: ETFs that own the commodity – those ETFs are moving almost the same as the commodity itself. For example GLD In the chart above, the blue line is the GOLD price in cash, the red line is GLD. ETFs that buy the futures of the commodity and not the physical commodity, don’t track the commodity with the same returns as the previous type, for example, VXX (VIX), USO (oil), UNG (gas). As discussed in the previous post Futures have a time premium. When you buy ETF that is based on futures, that means that you buy also the premium attached to that future. As time passes, that premium is lost, and then the ETF buys the next contract with a new time premium. As time will pass, you will lose this premium also… and so forth… This is something to be aware of.
AMEX:NUGTEducation
by ZoharCho
5
Trading Psychology - Fear and EuphoriaFew words from *Trading the Zone* combined with my little input that I felt worth sharing. Here we go! We know that *Fear and Euphoria* are two big obstacles when it comes to consistency in Trading. Either it stops us from entering the trade or may results in premature entry. Why we get trapped by these feelings? Let’s me explain for fear since Euphoria is just the opposite. We Fear, When we Interpret Market information is threatening Why it is threatening? When it’s not inline with our Expectations. There is nothing worsen feeling than unfulfilled Expectations. Why we have Expectations? Because we firmly *believe* something is gonna happen next. So ultimately *BELIEF* is the origin. So how to resolve this issue?? We start from the Origin that is belief. * Believe* - you don’t know what’s gonna happen next. Accept the psychological reality of market. Predicting market moves is predicting how millions of people interpret the market information which always may not be inline with our belief. That’s why there are always random distribution between wins and losses in trades. Edge is just the probability of happening one thing over other So accept the small losses. That’s y Risk: Reward always plays a significant part in consistency. Trade with rules we learnt not with Beliefs. Believe only that you don’t know what’s gonna happen next since every moment in market is unique! *No Expectations* - when you firmly believe that you don’t know what’s gonna happen next. Then There won’t be any expectations from the Markets. When there is no expectations from the markets then where is the potential to define market information as threatening or Painful or exciting ? There is none!! At that point, you will be in best state of mind to Perceive the market information and trade mechanically with rules and without or less influenced by fear or Euphoria!! Happy Trading! Pradeep A G
Education
by AlgoNova
VIX - Future / OptionsHello traders, a couple of facts on the VIX that you might didn’t know. VIX is a 30-day volatility measure. The calculation is based on two strips of SPX options that are used in the VIX calculation (now for example November and December option strips), the strips have a different weighting each day. Every day that passes we have fewer days in the current month and more days in the next month, for example, we have 12 days to the end of this month and 18 days in the next month and we get to 30 days, we can see that the next month has more weight. For longer-term Futures, expiring in later months they will not track VIX well. The VIX calculation can be applied to any set of options that have two strips of options in the two front-months. Because of this VIX calculation of volatility can be made for almost every stock, index, or futures. Examples: VXAPL (AAPL), VXAZN (AMZN), VXGS (Goldman Sachs), VXGOG (Google), VIXIBM (IBM), VXSLV (Silver ETF), and more. Volatility moves opposite to the direction of the stock, index, or futures almost 75% of the time. We can see in the chart that the green areas are when VIX and SPX are opposite in direction and in the red when they move in the same direction. A futures contract has an expiration date but no striking price, unlike an option contract. If a futures contract is trading at a higher price than the VIX, the futures are trading with a premium. If they trading at a lower price than VIX, the futures are trading with a discount. Example: VIX 24.3 VXZ2020 24.875 (December future) -> 24.875-24.3 = 0.575 Premium VXF2021 26.175 (January future) -> 26.175-24.3 = 1.875 Premium VXG2021 26.225 (Februry future) -> 26.225-24.3 = 1.925 Premium We can see that the prices are rising, usually when the markets are going up the longer-term futures will cost more and the futures will have premiums. If the VIX will go up and there will be a big correction or even a bear market the futures will trade with discounts. This since VIX is based on 30 days calculation. This means that the front contract (the contract this month) will have very high volatility and the long-term futures will have lower volatility because when the markets fall it is usually short but violent moves and there will be an expectation of the market to go sideways or reverse. Example: VIX 60 (December), VIX Future (January) 52, VIX Future (Febraury) 47. You can see that discounts can be quite large and the trader that would expect to profit from long-term VIX futures when the market falls, will be very disappointed. This is why usually traders buy the VIX front-month contract. One way to hedge the portfolio. (“Insurance”) Buying VIX calls compare to SPX puts. The calls are better. When buying puts on SPX about 7% out of the money, today example SPX 3567 and the strike price of the puts 3310. If the SPX will go up in price there will no longer be a 7% protection. When buying calls on VIX for protection, if the market will decline the VIX could easily go to 30 and even much higher, even if in the short term the VIX will go down. The lower the VIX when we buy the calls the effect will be much greater. Remember that in March 2020 the VIX was over 80.
SP:SPXEducation
by ZoharCho
20
The major Exchange Traded DerivativesChina continues to privatize companies, open its markets to foreign investors, and develop relations around the future silk road. In 1 month China is launching its international Copper future. It sounds interesting but I do not know if individual investors care enough for this future to be available with my broker, maybe IG will have it. As the USA declines (and perhaps Europe), China might become the "hub" for commodity derivatives (thinking of industrial metals and agri), if this is the case I expect retail traders and their brokers to catch up in only a decade or two (seriously). For this occasion let's look at the most traded derivatives around the world. 1- Agriculture *It is a non-profit, self-regulating and membership legal entity established on February 28, 1993 (when China opened itself to the free markets and emerged out of poverty). Non-profit because that's evil capitalism. Nothing is free though. So who pays? The average chinese factory worker? Haha! Back in 2018 they started opening up to foreign investors (Iron Ore, a little after their Oil contract that was the first one ever open to foreigners), the exchange also has an english website: www.chinadaily.com.cn **The Zhengzhou Commodity Exchange (ZCE) is China's first futures exchange,   Zhengzhou Airport Economy Zone is China's first Airport Economy Zone.   Zhengzhou is not a SPECIAL economic zone, it is only an economic zone. Unsurprisingly China is not big on "financial" products (interest rates & equity index) but they are big on more basic things: Agriculture & Mining. 2- Energy So ye Moscow, NYMEX (CME), and London ICE mostly. 3- Metals 4- Equity Index How many contracts would you want? Yes. India and Brazil are at the top of the list. India is famous for its overvaluations and many gambling bagholders, and Brazil for its large numbers of gambling day traders. Stocks and stock indexes (and ETFs) have by far the most individual investors, as those are supposed to be more noob friendly due to having a much lower skill floor. Think of it (lol players) as Yasuo, Master Yi and Volibear mains. For HOMM the equivalent is 3 months afk farm Necro on a giant map. They have been convinced that it was a positive sum game where everyone can make easy money. There are 2 major categories of retail investors: bagholders & day gamblers. They both consistently lose. Due to the power of compounding day gamblers lose money much faster than bagholders, which is why people advise individual investors to stick to bagholding. Bagholding also gives people more time to think it through and quit with some of their money left, while day gamblers will have lost most of their money before the initial excitement has waned off. 5- FX 6- Rates 7- Other No idea what all of this mess is. For my part I only trade a couple of those: 3 grains, 2 metals (Gold Copper), Texas Oil & NatGas, all on the CME (7 total, with some correlations). Sometimes I look at softs on the ICE and Nickel on the LME but I don't really touch them much. Rarely will get into indices, I do follow where they are going from far away. I actually am active in the smallest derivatives that make 7.4%, 5%, 4.9%, 1.6% and 1% while avoiding equities that make 50% :D But I do Forex alot, got around 10 currencies in my watchlist. With correlations and everything I would say FX is about twice to thrice as big as commodities for me. There is already plenty to do and plenty of good uncorrelated opportunities to go for. With on top of that the occasional Bitcoin or major indice or stock bet, I'd say that's about as far as someone can push it with just being coinflipping. I know that professionals hold stocks for quarters or years, Forex for a few days or a few weeks, retail just day trades everything, and I do not know for indices and commodities and rates. But I know commodities sort of behave much more like FX than equities and open interest fluctuates similarly so I would say we are looking at weeks to month in my opinion, for professionals of course, retail just day trades everything they'd day trade overnight swaps and EOD indexes if they found a way. There are alot of those futures. More than enough to have your hands full. Might have some bubbles in China in the future and if this is the case I'll be the first to know way before mainstreet gets all excited and rushes in at the top (and push it higher) as they often do. In July 2019 ZCE Apples (bigger than CME Corn) gapped down by 40%. I am not ready for this. Unless they have some "fair and profit-free" options :D I wouldn't mind getting some surprise 40% infinite gains with tiny limited losses. I guess they are not big on "evil profit driven too abstract for me to understand" speculation. Haha so how are their behinds after that 40% gap with no speculator to absorb the risk? 😉 There HAS to be broken flaws to exploit in the future. Maybe when that happens they will rollback all trades "for fairness" silly commies. Well too early to tell, we will see.
COMEX:HG1!Education
by MrRenev
2
Adding Instruments to TradingView Chart to Track CorrelationsQuick Tutorial video to show how I add and use other instruments like DXY and ES1! to track correlations across markets. These correlations are a powerful confirmation to help identify behaviour across markets, to give confident in the forex or futures instrument you are trading. I briefly mention Support & Resistance zones in this video. You can learn how I produce them in the recording of my recent live streaming class >>HERE<<
CBOT:ZB1!Education
by PBratbyOfficial
2
Next Week's Trading Plan = Last week's result: +57% R.O.I.The week that was... *** Real Time Trading *** We (and you?) have just completed 135 consecutive hours of Live Trading, while simultaneously posting the trades in Real Time on this TradingView page. This Live Trading Session(s) took place from September 13., 2020, 18:00 EST - September 18., 2020, 16:00 EST; I.e. five (5), consecutive and continuous trading days, from Sun.-Fri.. How did it all turn out? - Just as the title suggests: "+57% R.O.I". This post is a summary, as well as a repository for the *** Links to all the live posts *** made during those 135 hours. 1) If one traded along then one has probably long tallied up the results (and the money :-), so obviously, very little use to read on; 2) If one is interested to review / verify / analyze the trades (as one should!), posted during this live trading period. In which case the relevant posts are LINKED BELOW, where all the trades are posted as they were placed. ** However, it will be your task to scroll through(down) to find the relevant ** Real Time entries **, as these posts also contain other, relevant but static information - such as trade setups, etc.; i.e.: just additional, regular "stuff". The Trading System / Techniques used during these Live Trading Sessions are described in detail, in this post: "Nasdaq 100 E-mini; +2036 pts. profit the last 14 days. TUTORIAL" First: These are the LINKS to all the relevant posts containing the Live Sessions posts / markets: - These are Not in chronological order! The actual clues for the Live Trades are further down, in the dated list, *** following this First list, in Chronological Order ***. ------------------------------------------------------------------------------------------------------------------------------------------------------- Nasdaq100 E-mini THe FAANGs EURAUD EURUSD AUDJPY AUDUSD AUDNZD AUDCAD GBPJPY *** We are Not counting this one but one might want to look at it, anyways. This has missed Live Trading Week by 24 hours. Nevertheless,... it's a fair one :-) ***** ====================== ... and finally, here we go ... ================================= September 13., 2020; Sun. --------------------------------- Look for this Nasdaq100 chart: +30.25 points; Look for this EURUSD chart: 1.1834 .. and this EURUSD chart ...: -15 pips September 14., 2020; Mon. --------------------------------- Look for this EURAUD chart: ... and this EURAUD chart ...: +84.5 pips; September 15-16., 2020; Tue.-Wed. -------------------------------------------- Look for this EURAUD chart: -7 pips; Look for this EURAUD chart: +5.5 pips Look for this EURAUD chart: ... and this EURAUD chart ...: +38 pips ... and this EURAUD chart ...: +0 pips (scratch) Look for this AUDJPY chart: +52 pips Look for this EURUSD chart: -18 pips Look for this Nasdaq100 chart: +89 points; ... and this Nasdaq100 chart ...: +243.50 points; Look for this GBPJPY chart: +28 pips ... and this GBPJPY chart ...: -12 pips September 17., 2020; Thur. ---------------------------------- Look for this Nasdaq100 chart: Look for this AUDJPY chart: ... and this AUDJPY chart ...: +32.5 pips Look for this AUDUSD chart: ... and this AUDUSD chart ...: +30 pips Look for this AUDUSD chart: 0 pips (scratch) September 18., 2020; Fri. ------------------------------- Look for this Nasdaq100 chart: +198.75 Look for this USDJPY chart: +19 pips ------------------------------------------------------ Futures Totals: ------------------ Nasdaq100 E-mini Total: +561.50 points; Forex Totals: ---------------- EURAUD: +121 pips AUDJPY: +84 pips EURUSD: -32 pips USDJPY: +19 pips GBPJPY: +16 pips ------------------ Total: +208 pips ----------------------------------------- For the purposes of this Live Trading exercise, we have used $50,000 USD of our own funds. All of the trades, placed above, involved: - 2 ea. Nasda100 E-mini contracts (2x $16k margin); - 4-6 (Full sized) Forex lots ($4k-$6k margin); --- Basing the results on the $50,000 actual capital used, the one week (135 hours) long Live Trading session(s) resulted in: $21630 in Net Profit, or = 56.74% Net Return on Capital. (hence, the title of this post.) ========================================================================================================== p.s. BTW, this does not mean that we will repeat this "exercise" - as in live posting -, right away, this coming week :-) Good luck out there!
ICEUS:DX1!Education
by Nemo_Confidat
4
Liquidation Levels Trading FuturesI've seen lots of people getting liquidated on there longs on this BTC dump. This is why I think people never take into consideration risk management or don't know how it actually works. Maybe this can help a lot of people and help them clarify things. YES, the getting rich quick by leveraging is a probability, but if you ask me, I would consider it luck in the 25x to 100x than in lower leverage positions. I think the getting rich quick scheme in crypto or FX is never talked enough and should always be addressed with proper risk management. This analysis is considering you long your whole portfolio with leverage (which most people do). If you want to long with high leverage, use 1% or 2% of your portfolio, try it out in Isolated mode first and see what it is all about. Your losses will teach you how to be a better trader, but never ever lose your ammo in your first try. I'll do a follow up of this chart with potential gains by leveraging.
Education
by Goldenperro
[Beginners & Intermediate] Where to learn about trading?I will introduce this by reminding that this is not school and not a 9 to 5 job either. No one will just hand over a strategy and go "ok go make some money instead of me now", there are a few strategy out there on the internet an never know one might have an edge, but it's not even worth it to spend hours looking for something. And makes no sense, "too lazy to find one on my own so I spend hours looking for the holy grail on the internet". People got brainwashed to learn something by heart at school, go to work from 9 to 5 - this must be why there are so many day traders, they do not know how to function differently than 9 to 5 -, get a wage every month, the more you do the bigger the reward... Real life does not work like this. Even the cheetah know this. While they run at formula 1 speeds, they still stalk their prey and are real careful and plan ahead and make sure they have a good risk to reward and high probabilities of catching their (big) prey. And then they protect it. They do not leave carcasses lying around and spend all their time chasing prey like idiots. It's like with Einstein, no one told him "k now go prove that Newton gravity theory is false, this is how you will do it". There are plenty of different type of strategy, merger arbitrage, quantitative systematic, discretionary, a combination of both (I think this is what I do), stock long bias, stock short bias (haha), and so on. But in any case you have to do your own research. Arbitrage means analysing data and looking for numbers in sheets of numbers, quant & discretionary means analysing data and looking for numbers in sheets of numbers, and so on. Still you have to understand how markets work, what futures are and are not if you trade those, the different terms, compounding (it does not just mean "waow I make lots of money"), learn that after losing 20% to get back to breakeven you need to make 25%, that markets gap, markets change... Also you need to get used to tools, used to the places you'll get your info from, and constently be learning from especially at some point we do want to learn how to invest to get some passive income because we do not know if we will still be making money 5 years from now. The road is long, so be sure you are legit interested, and it is as important to have reliable sources as it is to make it fun & interesting, because the road is real long. 1- At the source Biggest exchange, and best website: The CME. ⭐⭐⭐⭐⭐ Both the best for beginners, and for advanced. www.cmegroup.com The site is huge. They have what is at human scale infinite data. And it is well designed. They even have some courses, webinars, and more. Here you can find courses for each of their asset classes, and if you select none you got generic ones too. All free. Free and reliable. The problem with trolls that sell $5000 education is it is often infested with errors, including very dangerous ones. Maybe the cme is going to get greedy seing millions of new fresh amateur liquidity providers, and start charging for their content. I hope not. Thinking of it, this sort of people is not looking for some sober information dense content, but for flashy lights and "get abs in 30 days with no efforts lose 10 pounds a week make 10% every day". www.cmegroup.com They even have an introduction to dairy, in 13 modules. www.cmegroup.com We live in the day of big data funds, and they charge a few hundred to a few thousand dollars for access to TB of data on their products. Bitcoin and a few other featured/new products are free. datamine.cmegroup.com Crypto is free xd but who cares? Crypto traders won't download this ever will they? Not like there is enough data to get anything out of it, but still can be interesting to look at. If you do not know where to start you can (and probably should if you trade futures) spend thousands of hours on the CME website alone, looking at various info and going throught courses (I'd recommend starting with just a handful of assets and getting into those + taking a quick look at others for greater understanding). The second biggest exchange group is the ICE. They operate the Intercontinental Exchange (no kidding) and the famous New York Stock Exchange. The ICE is king on a few futures: - The big non grain 4 agri: Cotton, Cocoa, Sugar, Coffee. Unless another exchange steals this it is unlikely it will ever disappear, did you know that over 1000 years ago the most traded product after gold was Kola nuts? People were already addicted to "chocolate & coffee" back then. Anything that binds to opiod receptors & is socially acceptable = invest for 100 generations. Sugar is sugar obviously. I think those are the most interesting products they have. - Brent Oil, Natural Gas variations - Equity derivatives (FTSE, FANG) - The Euribor I think those are the main ones. Their site just makes me angry. I want to punch my screen everytime I go there unless I use a direct link and go straight for the info I want. They list their futures so bad so wrong, they have them literally hidden in a list of 100 other ones no one cares about and of course why show volumes so people can get there faster or why put them at the top of the list when you can rather have people waste time every single time? There might be some things no one is looking at in some ignored assets... But one has to get past the anger... They sometimes hide the central, important info, and blind you with absolutely useless and stupid things. Even the dumbest things... I clic on one of their links then the site buttons just move! Why are they not in the same corner? Why is every page built a little differently? Not completely different, but just enough to annoy you. I go on the main page for a CME future I directly see volumes & for the past days and open interest and for each expiry, with the ICE... It's a 5 months projects, I have to clic on some links that are so not explicit at all, then there is another list of links and I always end up on the wrong one and so on. Well I think it improved, it is not as irritating and useless as it used to be. Maybe another 10 years and they enter the 21st century? Recently their charts on tradingview went from EOD to regular, I don't know how that happened, but this sort of thing can help them get into the spotlight a bit more, retail has no interest whatsoever in their futures except maybe Brent so it might not be very helpful, but it is a start. www.theice.com They offer some insights that are pretty helpful. Nah I'm joking they are useless like the rest of the site. www.theice.com Industrial metals are not popular they are less popular than some rando chinese mlm stock (with retail I mean, many of the metals have volumes of over 5 bil a day), but I will link the LME site anyway, it is well designed, and they have plenty of useful ressources. www.lme.com The biggest ones are I think Aluminum, Nickel, Zinc. Nickel has an adv of 10 billion usd which is more than silver & copper, and was very roughly twice the silver volume until recently where it exploded. Volumes have been going up, maybe in large part due to EV batteries needing this metal, and lots of mines getting opened in south america. The limitation for amateurs to get into this is it is priced in tonnes (1 future = 6) and I do not think there are brokers with minimum sizes below 1 unit (tonne). The price being $15000 and min tick size $5 eliminates alot of participants. The spread alone would already be on the min order $30. That is 1% of a 3 grands account so forget it. Another one I really liked the chart of is Zinc, but I did not look much into it. Interesting site even if it is more for advanced participants, there are no e-mini-ultra-super-micro-get-started-with-your-lunch-money-no-experience-required s&p for baby accounts like the CME did recently (e-mini was not small enough for the "legends" to gamble). For FX there is no "at the source". But interesting places would be GS website, they publish public reports sometimes, the international bankers with the imf & bis, the fed websites have alot of info, but there is no "learn trading" or market data there. And FX does not have all its info available if you are not part of a bank. So objectively it is probably harder to get into. The FED (one of them) published a report on patterns in charts, their conclusions are "sometimes head and shoulders work". They have some info. A little of verified tested and legit info is better than tons of worthless crap filled with mistakes a marketting troll put together. Morgan Stanley... Here is a pdf from them with performances from hedge funds (max drawdown, sharpe ratio, returns), shows what is possible and realistic. www.morganstanley.com Then for stocks there are all kinds of places. The nyse I never go to and is as ugly as the ice website, probably as bad too. www.nyse.com The nasdaq that was always down when I used to check. News, short interest (They showed you that half the planet was shorting Tesla a year ago), all the important stock info you would expect... www.nasdaq.com For crypto: nothing. There simply is nowhere to go to. Satoshi whitepaper maybe. The CME & Nasdaq website have a little on crypto so might as well go there check it out (I haven't, no idea what is inside). Who I would not recommend on the "at the source" side: Brokers. I mean... lol brokers come on. 2- Specialised websites There is already enough to be busy for several thousand hours in 1-, but there is more. First there is tradingview. Not sure if I wanted to put them in social networks or here. You will find all kindz of people making all kindz of gainz- I mean losses. It's a place to exchange ideas, see what others are doing, learn crowd psychology... And they have the most ergonomic convenient charting service. Support page to find how to use the tools and ... I had to link something. www.tradingview.com Babypips is offering an education on forex in 348 lessons (free), they have quizz also. Remember to never take anything as reality, in general I mean not them in particular. Have the chart & source data at the tip of your finger. Completing this should take a good 500 hours. Since you are not just rush reading it and seing for yourself on charts how things play out. Doable in 30 days if you spend 16 hours a day on it. Maybe faster if you skip the indicators part, but nah everyone should look at those at least once. Prime brokers on their PF offer indicators and pros use them (especially small funds) so if it helps... I think most PM use at least some indicators they just don't over-rely on them and not any indicator. And it is interesting, you might indirectly learn something, also early on maaaaybe they can help because you are not experienced enough to see with the naked eye. www.babypips.com Investing dot com. Now with free ebooks! www.investing.com Investopedia has all sorts of definitions and articles www.investopedia.com 3- Social networks MyFxBook contains the best systems that go from the top followed to the top discussed when they go to zero. Coinflip outliers get popular, go to zero, get most discussed, disappear. There is no big "went to zero recently" at the moment, but they happen all the time. Some might not go to zero because they found a bug with a broker and are exploiting it until it gets fixed. Some people also cheat the results are fake, if you look for it you can find it explained how it works. If seing huge results makes you sad, then stay away. I only check from time to time to see fools blow up. www.myfxbook.com www.myfxbook.com Forexfactory, pretty classic, with calendars forums and all, they have variants of the site for stocks & for commodities www.forexfactory.com EliteTraders www.elitetrader.com Trade2Win I never go there not flashy and full of dumb trolls enough for me, must mean it's half decent. I get most of my entertainement elsewhere, and I don't want to say I know everything but I don't really need tips - that are always the same ones - anymore. www.trade2win.com Stocktwits stocktwits.com Then there are also youtube channels. Some I like are: - The ukspreadbetting channel, they have interviews with traders, and for the past couple of years Mark has been pumping out videos at an inhuman rate. - MoneyWeek, especially their old videos which are also the most popular - Patrick Boyle channel, he is quantitative speculator (he analyses data and looks for pattern) that worked with Soros I discovered his channel recently he was being interviewed and cracking up about "fast car trading educators". "Patrick Boyle is a hedge fund manager, a university professor and a former investment banker." - OBVIOUSLY Peter Schiff, GoldSilver (w/ Mike Maloney), and any permabear I can get my hands on will be a favorite ^^ - Dan Pena videos for the screaming - Ricky Gutierrez, Timothy Sykes, Tai Lopez, FxLifeStyle Forex for... well let's just leave it there shall we? There are plenty of channels. The list could go on. 4- Books & other tools Math & stats sites are usually pretty safe. The sort of people that wants to get rich quick is not the sort of people that goes to those ;) They're not infested with wolfs of wall street advice. Books are boring but some I know of and are good are Market Wizards, Reminiscences of a stock operator, Extraordinary Popular Delusions and the Madness of Crowds. You can find the last 2 on the internet as free pdf. A probability calculator is here (to estimate odds of drawdown, and other things): vassarstats.net Well tradingview, excel, and the printscreen button. 5- Expensive educators I don't want to only bash them, hey even pro athletes and gamers have coaches and mentors right? It makes little sense to me for a novice that knows nothing to go pay hundreds or thousands to learn basics that are out there for free. I would at least pick someone with credentials, and be aware that because someone was a floor traders or a market maker in a bank, or a trader only supposed to execute clients orders like Nick Leeson, does not mean they know how to make money speculating (especially if they are Nick Learned his Lesson). Chances are they don't, they tried but they just can't because not every one can make it into one of the hardest games. There will always be people that want to lose 30 kilos in 30 days and want quick abs and so the scammers will keep proliferating, can't even blame them. Just get in front of a chart and grind your way up noting what happened everytime specific conditions came together checking how often it worked out and what was the payout and far did it go in the wrong direction first, find the point where the SL is the most optimal for WR & RR, run stat tools and note everything about it. Log your trades, gain experience, read about economic news, keep learning, keep analysing charts, work on your routine, get more organised, design ways to decide you will look at a specific asset, then design your method for building an opinion on it based on your vast database of probabilities, intuition, macro conditions etc. It's not that hard. You either want to be a financial speculator or you don't. And this is what it is. You can't go for a job but without doing that job and constantly looking for tricks to do anything but that job. Or just go try to become a multi millionaire golf player without ever picking up a club, at least you'll get some fresh air. Same goes for going for it but expecting the journey to last 200 hours and then that's it you are profitable and can now relax on your expensive boat delusional to the max 😆
NYMEX:CL1!Education
by MrRenev