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Impact of Presidential Election on Financial Markets.________________________________________________________________________________________________________________________________________ Hello Traders Investors And Community. Welcome to this educational idea about the Impact of Presidential Election on Financial Markets. First of all, this is not a political view at all nevertheless we are facing the next important event that can have a substantial effect on the financial markets and therefore also important for traders and investors. Coming to this conclusion the history has shown that the presidential election and its pre also as post events can be suited into a whole presidential-election-cycle in which the several stages and timeframes within the cycle affecting the performance of markets. For this case, I looked at the past data and how presidential elections affected market performances and found out some very interesting and worthwhile things about it, these data resulting from the past election data can be measured into a 1.5-Year-Presidential-Pre-And-Post-Election-Performance-Cycle and the whole 4-Years-Presidential-Election-Performance-Cycle , both cycles are measured by historical market data and have a logical and coherent approach within them as the reelected or elected party together with the president playing an elementary role within it. ________________________________________________________________________________________________________________________________________ 1.5-Year-Presidential-Pre-And-Post-Election-Performance-Cycle: As you can watch in the graph on my chart, the past data has shown that it is a meaningful factor wether the elected party gets reelected or other party gets elected. This is matching with the theory that the new elected party needs to adjust firstly to increase economy properly, however what they both have in common is the decline in the first year after election where the market has shown decrease whether under the incumbent party or new elected party. Furthermore, the graph shows that certainly after the first year since election has passed the market tends to increase where with incumbent parties the market performed better and on the contrary, with a new elected party the perfomance of the market increased also however not that big as with the incumbent party where the increase was partially four times higher. Besides that what is also really interesting here is the difference between the incumbent party and new elected in the last six month to the new election, where the market showed some steady decrease in growth however still an increase with the incumbent party while under the new elected not that much and also showed declines to the downside. ________________________________________________________________________________________________________________________________________ 4-Years-Presidential-Election-Performance-Cycle: This graph shown in the left bottom of my chart is explicating the importance of the 4-years passing after a election, where the market clearly showed a weaker performance and possible declines in the first year after election which is matching also with the first graph and 1.5-years. This can result of a first adjustment in the market to this fundamental macroeconomic event before it can regain in pace together with the elected party and economic policies. The performance increased averagely steadily in the second year after election in historical price data till it reached its peak in the third year before election as the sitting party and president going into the objectives they have set in the campaign to increase the economy and with the goal to get reelected, this data was fairly consistent, regardless of the presidents and party political leanings. In the first year the peak performance going a little bit back which is also matching with the first graph where it also counts on the incumbent party or the new one, this year is the preparation on the new election and data has shown that performance has experienced steply declines till the election countdown. ________________________________________________________________________________________________________________________________________ Conclusion: Taking all these factors into consideration we can say that the market in the first year after election begins to grow slowly and firstly adjustes to the election results as the party comes in touch with it, then the performance begins to grow after the second year, here is it also a fundamental factor if the incumbent party got reelected or a new party got elected, as the incumbent reelection showed averagely better results. This tendency to the upside reaches its peak at the third year and then falls slowly till the election countdown. These data has been really coherent and repeatedly in the past that is why the election cycle is an important measurement that should not be kept by side. At the end it has to be noted that a massive swift in politics can also transform the cycle into other performances, however, this did not happen till now. ________________________________________________________________________________________________________________________________________ Outlook: It is no more than two months till the next election is taking place and it will be an significant occurrence as historical data has shown if the incumbent party currently consisting wins the election anew or new party is going to taking place which can change performances. Not only by the fact that history has shown declines in the first year after election we should not ignore that the corona crisis is still not yet over and that there exists a gap between real economy and stocks where real economy is still damaged by the corona increase and measurements while stock market making gains, this is an unhealthy environment which can unload itself, the real economy and stock market need to grow together for providing a solid market growth, this current economic disadvantaged situation matching with the first performance year after an election which is averagely not the best can take place into an inconsistent market outlook, therefore we should not keep the decline perspective out of sight especially the weeks and months it can show up in critical movements. _______________________________________________________________________________________________________________________________________ In this manner, thank you for watching , support for more tutorials and a good day! "There are many roads to prosperity but one must be taken." Information provided is only educational and should not be used to take action in the markets. ________________________________________________________________________________________________________________________________________
COINBASE:BTCUSDEducation
by VincePrince
48
Risk-To-Reward-Calculation with Key-Components.________________________________________________________________________________________________________________________________________ Hello Traders Investors And Community. Welcome to this educational idea about the risk-reward-calculation in position trading with the 5-Key-Components determined. Today's markets constantly changing and adapting and in such environments, we need to stick to a systematic trading approach to have the long term goals realized and do not fall apart of market-making and smart money operators, when considering position-trading there are some important steps in acquiring the long-term-success we should take apart when calculating the right risk in comparison to our capital and other key-steps to measure what trading is the best for ones individual trading-system to achieve the aims we desire. Therefore I contributed the 5-Key-Components inevitable to measure one's risk-to-reward in the market and best applied in a functional trading-system. 1.) The 5 Key Position-Trading Rules 2.) Acknowledging Risk Aversion 3.) Risk-To-Reward-Calculation 4.) Risk-Reward-Ratio vs. Winrate 5.) Possibilities of Success and Ruin ________________________________________________________________________________________________________________________________________ 1.) The 5 Key Position-Trading Rules 1. First Rule: Do not hold the position longer than necessary: It is important to choose a trading-system which has good entry timing and the right opportunities to exit therefore it is the best to be in the market when volatility increases and takes profit at the important levels to not hold the position unnecessarily longer. 2. Second Rule: Aim to make as much as possible by risking as little as possible: When trading we should advance by making the most of what we have at hand, today's markets offer options with leveraged trading which can work also with smaller percentages of the deposit at hand, in this case, the leverage should be calculated right. 3. Third Rule: Only risk a small amount of capital on any trade executed: It is commonly under beginner traders to risk a high percentage of the total deposit, this is a fatal mistake as the risk grows exponentially, to achieve security of the deposit in the long-run, the maximum risk per trade should not be more than 10% from the deposit, best is 0.5-2%. 4. Fourth Rule: Don't come to the situation to meet margin calls: This means you should avoid being marginally called on any occasions, when this happens there is evidence that the trade was too risky and the stop-loss better be placed before the margin call, when it happens, it should be a time to review your trading-system. 5. Determine the maximum drawdown for every trade in advance Before every trade you should measure how your position size with the stop-loss will possibly take a drawdown in the deposit. When the risk is too high then the smaller position should be preferred, when it is still too risky than a bigger account will be a good option. ________________________________________________________________________________________________________________________________________ 2.) Acknowledging Risk Aversion This is a very important step in determining ones individual trading-systems, as traders act differently to circumstances some traders are risk-averse and others are risk-seeking, this means how the trader is reacting to risk and how much the individual would risk receiving a return. In the graph, you can see that the lesser your capital is the higher your risk-seeking, you are more ready to risk something averagely when your capital is lower, this diminishes the higher your capital is, there are different risk preferences reaching from extreme risk averter to extreme risk seeker. ________________________________________________________________________________________________________________________________________ 3.) Risk-To-Reward-Calculation In the big table in my chart you can see the risk-to-reward calculation and the values in it, the first value is the risk meaning how much you want to risk in the particular trade coming to the second value, the return is what you get in return on your trade. For example, you want to buy bitcoin at 15000 and have set the target at 15010, by the technical analysis you have determine a stop-loss at 14500, this will be a highly risky trade as you are risking to lose 500 points comparison to 10 points. The best trades are in the green section on the table beginning with trades where you gain 2 and risk 1, these trades should be the aim and preferred, the breakeven ratio determines how much trades need to go in breakeven to be long-time profitable. ________________________________________________________________________________________________________________________________________ 4.) Risk-Reward-Ratio vs. Winrate This rate is showing you how your trading develops by time, when you have a good winrate this means you are closing many of your positions in a profit on the other side when this winrate is low you closing too many positions in a loss and often be unprofitable in the long-run. What determines an excellent trader now as it is marked in the chart is when the average risk-reward ratio is high and the winrate also, this means you close many of your positions in a profit and also with the proper risk-reward-ratio. On the middle of the chart is the threshold determining low and high, you can also be profitable when your risk-reward is high and your win rate low or in reverse, what should definitely be avoided is when both the winrate and ratio are lows this means you have to adapt your trading-system for sure. ________________________________________________________________________________________________________________________________________ 5. Determine the maximum drawdown for every trade in advance This is a simple but very effective and important graphic showing the likelihood traders have for a point of ruin and how much the risk of ruin in comparison to it is, meaning when your deposit is at a level on which there is no longer possibility to continue. This graphic shows that when your capital is more your risk of losing it diminishes, on the other side when it is low the possibility for losses is more as the capital is not big to stand the losses, this is a groundstone knowledge in determining the trading-system together with risk. The graphic shows that the higher your deposit is the better you can take the risks in comparison and the lower it is the higher is the risk of losing more, this is why it is important to combine the risk together with a solid portfolio. _______________________________________________________________________________________________________________________________________ Alright, these where the 5 key-components to determine risk in markets accordingly, traders should always look for the individual situation and where the journeys should lead, therefore it is important to determine the risks in comparison to rewards which I bundled into the 5 Key-components necessary determining the risk-management in ones trading-system, these components can be combined applied, or single integrated into ones trading-system. _______________________________________________________________________________________________________________________________________ In this manner, thank you for watching , support for more tutorials and a good day! "Good luck is when opportunity meets preparation." Information provided is only educational and should not be used to take action in the markets. ________________________________________________________________________________________________________________________________________
COINBASE:BTCUSDEducation
by VincePrince
29
Liquidity Traps, and hidden ordersTraps : When price is manipulated in order to capture liquidity, with misinformation, for instance in this case the buy orders @ 139.800 were completely hidden from the market, meaning information is not available at all for retail traders, why did they do this? In order to accumulate liquidity and give fake hopes to buyers, accumulating all positions with "Fake triangles" and fake breakouts. And then killing all... What is what I noticed that gave up the trap? 1) The price entered a big resistance level with many open sale positions on the oder book, so it was extremely hard to break, however the price was still trying to go up 2) The price wouldn't go down, thing is different as why wouldn't it go up (of the huge resistance sellers had with open orders), there was no open buy orders @ 139.800, yet the price was not going down, this meant a huge hidden buy order was doing the dirty job... 3) The price entered a range, usually after finding such resistance, the price will fight a little and then fall straight down, well the price not only fought, but fought for 7+ hours, and accumulated around 4.7% in the range between 139.800 and 139.850 of all buyers in this zone. Not any sellers, why? Cause they are not going to kill sellers... The manipulator is a seller 4) Fake symmetrical triangle and resistance breakout, the price did go up, however for all the liquidity trapped in this zone the price should have exploded, not moved that little, overall even find some resistance like it did after breaking the symmetrical triangle We are never shown the whole picture as retail traders
Education
by EmilianoMesa
1
Indicator that confuses you on purposeThe algo that I’m working on creates super messy charts to discourage people from buying. The goal is to time the market, and the way this chart works is to buy only when the background is completely white. If there are lines and bars all over the place— you don’t want it. This indicator will be for investors whose strategy is to buy and hold for max gain and with minimal exposure to erratic price swings. If you only had a hundred dollars, what stock should you buy? Let's take a confused look at some charts.
NEducation
by ZombieStar
3
Market Structure with Support Resistance - #Basics #LL #LHHello Traders! I got a new education post for you. This is one of the first basics in the forex market. It is very important for you to understand. Why do we need to analyze the Structure? We do that in order to determine the trend. It is more easy to trade with the trend and not against it. Simply because you can catch more pips with one move. This is very good if you are Swing Trading but it is also great if you day trade it. Market Structure: The market creates Lower Lows (LL) and Lower Highs (LH). Also you can use Support Resistance for that. As you can see on the chart, it fits perfectly. Support became Resistance after breaking it and also there we mostly have then a LH in a Down Trend. I hope you could learn something. It is one of the basics. And if you are more advanced trader, I hope that you are reminded through this post at one of basics Thank you and we will see next time - Darius.
Education
by DariusFxTrading
gold4.23.20 This ended up being a video on gold and I never got the oil, but he gave me a chance to talk about the nuances of price action, money management, and risk reward. It will be a good video for a lot of traders because it shows a slightly different point of view that can help you once you think about this and develop your own strategy and your own sense of market dynamics. You do not have to accept everything that I say, but have an open mind and always verify through examples over the next month or so, and then refine your point of view. If this was helpful I would appreciate a thumbs up. Thanks
COMEX:GC1!Education
by ScottBogatin
Commitment of traders reportWHAT IS IT The Commitment Of Traders (CoT) is a report issued by the Commodity Futures Trading Commission (CFTC) , one of the most important trading insitutionsof the American government. The report has the purpose of transparently showing market dynamics to the all the people involved or interested in the matter. The COT report show all currently open positions (open interest) of the future and options market, where 20 or more traders hold positions for an amount greater or equal to the minimum amount amount established by the CFTC . The report is issued every Friday at 3:30 P.M. (Eastern Standard Time, hence UTC-5). Each report normally contains data until previous Tuesday. CFTC usually receives data on Wednesday morning from the reporting firms (i.e.: Future Commission Merchants, Financial Insititutions, Brokers or International Stock Exchanges). After some verifications, CFTC publish data the following Friday. For each market, data are provided in terms of existing (still open) LONG and SHORT positions. TYPES OF REPORTS There are 4 types of report: 1) Legacy It contains data split by stock exchange. This report has two different variants: "futures only", that contains data related to the futures market only, and "combined", that contains aggregated data for futures and options market. All the reported positions in this report are split in two main market actors categories: Commercials (or Large Speculators) and Non-Commercials 2) Supplemental It includes contracts related to 13 selected agricultural market commodities. This kind of report split positions in 3 market actors categories: Commercials (or Large Speculators), Non-Commercials and Index Traders. Differently from Legacy report, the Supplemental is provided in the "combined" format only, hence contains data for both futures and options market 3) Disaggregated This report contains the same data issued in the Legacy report, but with a more detailed drill down in terms of representation. First of all, it presents data split in 5 macro-categories: Agriculture, Petroleum and Products, Natural Gas and Products, Electricity, Metals and Other. Moreover, the report shows open positions/interests of 4 market actors categories: Producer/Merchant/Processor/User, Swap Dealers, Managed Money e Other Reportables. Aggregating data of this report, it is possible to obtain same data of Legacy report, hence this is a detailed view of data contained in the Legacy report. The Disaggregated, as well as the Legacy one, is available as "futures only" and "combined" variants 4) Traders in Financial Futures (TFF) This report includes contracts related to currencies, US Treasury Bonds, Eurodollar deposits, VIX shares and Bloomberg Index only. The reports shows open interests of 4 market actors categories: Dealer/Intermediary, Asset Manager/Institutional, Leveraged Funds e Other Reportables. Last, also this report is available as "futures only" and "combined" variants REPORT FORMATS Legacy and Disaggregated reports are provided in two formats: short (synthetic) and long (extended). Both these formats contain same data, but long format contains also the concentration of open positions in the hands of the major 4 and 8 market investors at the moment of data collection, while short format does not contains any data about concentration. TFF report is available in long format only, while the Supplemental is available in the short format only. Report type Scope Format Futures Combined Long Short Legacy ✓ ✓ ✓ ✓ Disaggregated ✓ ✓ ✓ ✓ TTFF ✓ ✓ ✓ X Supplemental X ✓ X ✓ Legacy report As said above, market actors in Legacy report are divided in 2 categories: Non-Commercials , or Large Speculators : they are market speculators as well as hedge funds. This category normally uses financial leverage to amplify variation of derivative asset and has an aggressive behavior in the market. They use rigid stop loss policies and, when the market falls below certain levels, they reverse positions on the other side. The main purpose of Large Speculators is not the asset they buy or sell, but to obtain a net profit from the buy/sell cycle. They normally have a trend following behavior. Commercials buy futures just because they are interested in the underlying asset and try to hedge their financial exposition related to the commercial activity with the assets they are interested in. These market actors hold more than 50% of open positions in the US futures market and normally they go against the price trend: they sell when the market goes higher and they buy when the market goes lower. Their positions on underlying assets normally anticipate market trend, hence they should be carefully monitored Non-Reportable : are the open position of small investors/traders that normally are on the wrong side of the market. This investors category is usually confused and not disciplined. They do not follow precise rules and are usually dragged by the trend, but they are slow to reverse positions when the market trend reverses. The following example contains data about "futures only" market for BUTTER, coming from Chicago Mercantile Exchange. BUTTER (CASH SETTLED) - CHICAGO MERCANTILE EXCHANGE Code-050642 FUTURES ONLY POSITIONS AS OF 03/17/20 | ----------------------------------------------------------------------------------| NON-REPORTABLE NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS --------------------------------|---------------------|--------------------------|----------------- LONG | SHORT |SPREADS | LONG | SHORT | LONG | SHORT | LONG | SHORT -------------------------------------------------------------------------------- (CONTRACTS OF 20,000 POUNDS) OPEN INTEREST: 11,597 COMMITMENTS 0 2,473 453 10,401 8,149 10,854 11,075 743 522 CHANGES FROM 03/10/20 (CHANGE IN OPEN INTEREST: 753) 0 -127 101 675 796 776 770 -23 -17 PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS 0.0 21.3 3.9 89.7 70.3 93.6 95.5 6.4 4.5 NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 47) 0 12 10 28 22 38 34 It is possible to see as in the report is provided the total amount of LONG and SHORT positions for Non-Commercial, Commercial and Non-Reportable actors. Variations from previous week are moreover reported. In addiction to LONG and SHORT positions, Legacy report contains also the SPREAD amount, that is available for Non-Commercial only, and refers to contracts that are opened LONG and SHORT at the same time. Normally a growing SPREAD value means a high level of uncertainty. If we calculate NET POSITIONS (NP) for the 3 actors categories, as it's easy to check, the report show a zero-sum scenario: NP Non-Comm = 0 – 2,473 = - 2,473 NP Comm = 10,401 – 8,149 = 2,252 NP Non-Rept = 743 – 522 = 221 NP Non-Comm + NP Comm + NP Non-Rept = -2,473 + 2,252 + 221 = 0 OPEN INTEREST value is the grand total resulting as the sum of LONG, SHORT and SPREAD positions: Open Interest = 0 + 453 + 10,401 + 743 = 11,597 Supplemental report Even the Supplemental report (called also Commodity Index Traders - CIT) shows data in the same manner of Legacy report, but the market actors are 3: Non-Commercial, Commercial and Index Traders. Non-Commercial and Commercial actors are the same, while Index Traders category has appeared for the first time in January 2007. Before that date, investors that are now reported in this category were scattered in the two existing categories (Non-Commercial and mostly in the Commercial). The creation of Index Traders category has had the purpose to separate that category from Commercials, because Index Traders are not involved in the buy/sell cycle of underlying assets, and are usually managed funds, institutional investors or swap dealers. Index traders are normally interested in passive and longstanding LONG positions, while are not interested in the short-term price fluctuations. It's not unusual that this category start buying when price is falling and technical analysis says that the price falling will be even more deep. Index Traders are hence a counter-part of speculators, who have usually a contrarian habit. Supplemental report is provided for 13 commodities: • WHEAT-SRW - CHICAGO BOARD OF TRADE • WHEAT-HRW - CHICAGO BOARD OF TRADE • CORN - CHICAGO BOARD OF TRADE • SOYBEANS - CHICAGO BOARD OF TRADE • SOYBEAN OIL - CHICAGO BOARD OF TRADE • SOYBEAN MEAL - CHICAGO BOARD OF TRADE • COTTON NO. 2 - ICE FUTURES U.S. • LEAN HOGS - CHICAGO MERCANTILE EXCHANGE • LIVE CATTLE - CHICAGO MERCANTILE EXCHANGE • FEEDER CATTLE - CHICAGO MERCANTILE EXCHANGE • COCOA - ICE FUTURES U.S. • SUGAR NO. 11 - ICE FUTURES U.S. • COFFEE C - ICE FUTURES U.S. Disaggregated report Market actors of Disaggregated report are: Producer/Merchant/Processor/User : they are involved in production, handling, packaging or transport of physical assets that is underlying to the future instrument or option. These actors use futures to cover/hedge risks associated to the activities they are involved in that are strictly related to the production of the assets Swap Dealers : they are subjects that are involved in trading swap contracts related to the commodity and uses futures market to cover/hedge risks associated with swap transactions. The counterpart of a Swap dealer could be a speculative traders, as well as an hedge fund, or a more traditional Commercial subject that is interested in managing risks associated with the commerce activities of the asset Money manager : to this category belong Commodity Trading Advisor (CTA), Commodity Pool Operator (CPO) or an unregistered fund identified by the CFTC. These subjects are delegated from their clients to do financial operations in their behalf Other Reportable : all speculative traders that are not belonging in the three previous category are included in this category Even in this case, the report shows LONG, SHORT and SPREAD positions. Comparing this kind of report with Legacy, we can see that: COMMERCIAL = PRODUCER/MERCHANT/PROCESSOR/USER + SWAP DEALERS NON-COMMERCIAL = MONEY MANAGER + OTHER REPORTABLE This explains why the report is called "disaggregated". It shows the same data but with a more level of detail especially regarding the actors that hold open positions. If we take the Disaggregated report about BUTTER for the "futures only" market coming from Chicago Mercantile Exchange (equivalent to the previous example that is showed under the Legacy report section, we see: :------------------------------------------------------------------------------------------------------------------------------------------------------ : : Producer/Merchant : : : : : Processor/User : Swap Dealers : Managed Money : Other Reportables : : Long : Short : Long : Short : Spreading : Long : Short : Spreading : Long : Short : Spreading : -------------------------------------------------------------------------------------------------------------------------------------------------------- BUTTER (CASH SETTLED) - CHICAGO MERCANTILE EXCHANGE (CONTRACTS OF 20,000 POUNDS) : CFTC Code #050642 Open Interest is 11,597 : : Positions : : 8,893 6,326 1,048 1,363 460 0 301 180 0 2,172 273 : : : : Changes from: March 10, 2020 : : 244 648 324 41 107 0 -12 -8 0 -115 109 : : : : Percent of Open Interest Represented by Each Category of Trader : : 76.7 54.5 9.0 11.8 4.0 0.0 2.6 1.6 0.0 18.7 2.4 : : : : Number of Traders in Each Category Total Traders: 47 : : 24 18 . . 4 0 . . 0 10 9 : --------------------------------------------------------------------------------------------------------------------------------------------------------- If we take the categories Producer/Merchant/Processor/User and Swap Dealers and we sum all LONG positions and then subtract all SHORT positions, we obtain an overall NET positions like this: NP = (8,893 +1,048 + 0 + 0) - (6,326 + 1,363) = 2,252 Now, if we do the same calculation for Commercial category of the correspondent Legacy report (see above) we obtain: NP = 10,401 - 8,149 = 2,252 This is the confirmation that Disaggregated report contains the split of data reported in the Legacy report, where Commercial category is divided in Producer/Merchant/Processor/User and Swap Dealers. Same calculation would demonstrate that Non-Commercial category in the Legacy report is spitted here in Managed Money and Other Reportable categories. If we now consider the Disaggregated report and we sum all LONG positions and then we subtract all SHORT positions for each actors category, we obtain: (8,893 + 1,048 + 0 + 0) – (6,326 + 1,363 + 301 + 2,172) = 9941 - 10162 = -221 Given that the grand total should represent a zero-sum scenario, e can deduce from Disaggregated report that net position of Non-Reportable subjects should be +221, hence a net LONG of 221 contracts, and that is correct, in fact it is possible to obtain the same result from correspondent Legacy report (see above) by subtracting net SHORT position for Non-Reportable actors to the amount of net LONG positions for the same actors. Hence Disaggregated report allow us to calculato also net position of Non-Reportable, even if the data do not explicitly report the value. Traders in financial futures report This report is a further view on the market and split market actors in two sides (SELL and BUY) and 4 categories: SELL SIDE Dealer/Intermediary : are financial intermediaries who earn by the commissions related to the sell of financial products. Big banks and other financial entities are involved in this activities BUY SIDE Asset Manager/Institutional : they are insitutional investors, including pension funds, insurance companies and investment portfolio managers whose clients are mainly institutional entities Leveraged funds : these are typically speculative funds (hedge funds) and various types of money managers, including the Commodity Trading Advisors (CTA) and the Commodity Pool Operators (CPO) not necessarily registered by CFTC. These subjects can be involved in hedging strategies and arbitrages on their own capital, or even third parties capital Other reportable : these are all the traders that are not included in previous categories Differently from Disaggregated report, the TFF report the positions of the mentioned actors categories are not an exact disaggregation of Commercial and Non-Commercial positions reported in the Legacy report. Here each actor belonging to one of the categories mentioned above could belong to the Commercial or the Non-Commercial category in the Legacy report, basing on the decision that CFTC takes during the report creation, that can be different time after time (i.e.: a subject that has already been considered a Commercial one in the beginning, can be shifted to Non-Commercial after a while, depending on the specific activities he is involved during the time, that can change as well). The TFF report is moreover available only in the LONG format REPORT ANALYSIS If we properly analyze data in the Commitment of Traders legacy report, we can determine the expectations of each market actor category regarding the market future. The possibility to know the net positions of Commercial subjects (institutional investors) is the basis to understand the market sentiment. Their influence is, in fact, between 50% and 75% of the entire futures market of S&P500 and from 40% and 60% of Nasdaq100. It is useful to point out that Commercial subjects, as well as the Non-Commercial, can take arbitrage or hedging positions, or, alternatively, put in place an active management of their portfolios by buying or selling futures on foreign (not US) markets, or, again, have open position on the futures' underlying assets and protect themselves from risks of price variations by taking opposite positions on the futures market. Hence the Commitment of Traders Report is an important thermometer to measure US stock exchange sentiment, but it isn't a tool that, alone, can allow us to predict how financial markets will move. It should be used (as usual) together with other indicators, tools, analysis and perspectives to have a better understanding of what is happening and a good approximation of what is going to happen (most likely). Commercial subjects are active actors in the futures' underlying asset market and generally sell when the market (price) grows and buy when the price is more convenient (low), hence their activities are contrarian to the logic of speculators. For this reason the Commercial actors are often responsible of market moves and trends. They drag prices and the market with their activities, hence they anticipate and determine the market trends. Non-Commercial subjects, viceversa, have opposite interests. They want to make money by price variations, hence they buy when the market shows growing prices and sell in the opposite conditions. This behavior is what we call "trend following" approach. Here are some typical scenarios that we can find by analyzing the Commitment of Traders report: 1) If Non-Reportable actors (small/retail traders) are LONG and Commercial are SHORT, the Non-Reportable actors are most likely going to loose money because the price will go to to the side where Commercial are pushing it (down) 2) On the maximum levels of an asset price (i.e. near significant RESITANCE levels), Non-Reportable are likely pushed to SELL their positions. Then stop loss levels are likely hit and only after the price starts his falling stage 3) If Non-Commercial are LONG and Non-Reportable are SHORT, we are likely in the middle of an UPTREND and there is more space for the price to gro further 4) If Non-Commercial are LONG and also Non-Reportable are LONG, we are likely in the "euphoric" phase of the trend, hence the trend is going to finish soon 5) If Non-Commercial are SHORT, Non-Reportable are upgrading their SHORT positions and Comemrcial slow down their LONG positions, e re likely in the terminal phase of a downtrend If we accept the hypothesis that Commercial traders hold better information on the market than the others just because they are active actors of the futures' underlying assets (it's their own business!), it is very important to monitor their behaviour in order to understand how they are evaluating the situation related to the specific commodity that is at the center of our interest. Commitment of Traders Index An interesting approach to have effective insights from the Commitment of Traders report can be obtained by calculating an index using the report data. Normally Comemrcial net positions are used to calculate the index as follows: NP (Net Position) = Long Positions – Short Positions Usually, an interval of 26 periods (weeks) is selected and the calculation to determine the index value is: COT Index = * 100 The index, expressed as a pecentage value from 0 to 100, reflects net position of Commercials on the basis of last 26 periods. It can be used as an indicator of overbought and oversold zones and can be a good tool to understand where investors are moving. The index can be also calculated for Non-Commercial or Non-Reportable positions. Last, but not least, remember that Commitment Of Traders report is released every Friday evening, but contains data up until previous Tuesday, hence a "lagging" effect should be seriously considered in all the analysis that involves it. The content of this article has solely education purposes and should be not considered trading or investement advise.
Education
by Marco_it972
FX Twilight ZoneGoing to publish a bunch of findings discovered as a result of extensive technical research on the FX market. Can't disclose too many details as I also have some serious losses to catch up with. Losses not to have been incurred completely as fair as one would think, and it's not your broker you are up against! USD bulls have a bunch of scripts running pushing everything they can out of the floating market to keep USD afloat .. overlooking one simple thing with a huge impact.. So much for a free floating market. To clarify here, if you are a USD bear you are most likely not fighting your broker or MM. That is all lies (make believe) by the USD bulls. During the course of my research I discovered how competition is evolving and I witnessed a free truly floating market probably less than ten times. While I've been on the charts 24x5 for almost 3 years now, most of the time it is informed traders pushing price as soon a trade comes in. Ever wondered why you are always on the losing end somehow? How do I know this? Without disclosing too much of my trade secrets, let's say I developed ways to distinct a free floating market from a manipulated one. The TradingView Forex chat room is used extensively to spread random wisdom made up be anyone about the FX market. Be aware!
Education
by Deep-Peat-Shark
The most terrible blue dragon in the cryptocurrencies marketDid you know that there is a terrible blue dragon in the cryptocurrency market? Some investors will say that it is the famous blue whales that constantly like to manipulate the market. Others will say that an invention of fantastic stories. The truth is, respected investor; Yes!, there is a terrible dragon in the cryptocurrency market. From the previous graphic, you will recognize your real name. But before you leave this story, know that according to the report made by coingecko, the blue dragon has grown significantly in the last period, from 54.6% to 67.0% (Current data),+11.4% approximately. That means one thing: the terrible blue dragon has become stronger. The dominance of the Bitcoin must be below 60% for new altseason.
CRYPTOCAP:BTC.DEducation
by rubikavinsider
How to Trade to Win"Those who lose - trade not to lose. Those who are successful - trade to Win." Losing Vs Winning Most traders are more focused on not losing than they are on winning. Do you understand what this means? This means you are acting not in your best interest, but against your self. By focusing on how much you can or might lose, or on not losing, you increase the likelihood of making mistakes which ultimately lead to a losing traders equation, and a negative equity curve. Profitable traders do not care about losing. They understand it is part of winning. They focus on winning. What is the best move in this moment? Should I get out or continue to hold based on what the market is telling me? Winning traders accept the risk totally and completely; before getting into the trade. In other words, they have already lost what is on the line. Therefore they act in their own best interest, not based on their thoughts about what they could lose, but based on what the market is telling them to do in this moment. Other than this psychological difference, here are a few other key components on How to Trade To Win. Defined Edge - Every trader who is making money in the market has some form of edge which he employs. Even if his edge is purely intuitive. This is extreme and rare however, and most traders have clearly defined their edge and will only trade that edge. This removes randomness. Many beginners think they are going to study the market and be able to trade the market no matter what it is doing (trade intuitively). This is simply not the case for most. The purpose of studying the market is to identify opportunities in form of an edge. An edge is a setup or context which repeats itself over time. It might occur once a day, once a week, or once a month. It does not matter. All that matters is that you only trade your clearly defined edge, and leave the randomness behind. For more information, you can read about the edge I use in every market I trade. We also describe how you can develop your own edge, and trade it in any market. Stop Doing, Relax Efforts - If you are losing in the market, chances are you are doing too much. Many beginners, and even experienced traders think they must be trading in order to be a successful trader. This leads to random trading, over trading, and mistakes which compound themselves. You end up digging a hole, and instead of looking for a way out, you look for a different shovel. The harder you try to make a profit, the more you do, the more actions you make, and the more you lose. The market rewards those who are observant, disciplined, and most importantly patient. The market takes from those who try too hard, and do too much. If you dont believe me, try as hard as you can to make money, and see how you do! By relaxing your efforts, you relax your mind. In turn relax your actions and decision making. You do not have to trade every day to be a profitable trader. It sounds paradoxical doesn't it? How can I make money trading if I dont trade? By only trading when it is appropriate like when your edge is present, you better your odds of success. Profitable trading does not come from trading constantly. Profitable trading comes from the act of non-doing, and out of a state of emptiness. Profitable trading is effortless, it comes out of waiting for just the right moment before taking action. And then waiting some more while the market proves you right or wrong. Profitable trading is not forced; it just happens. Active VS Passive Trading - This is very similar to the previous topic. Active trading is a trader who is constantly in the market, trading whatever he see's or feels right. This trader is often wrong, and when he is right he makes the mistake of exiting too early due to fear. This leads to a negative traders equation as he continues to struggle to do the right thing. An Active Trader mentality is one which does not believe in "non-doing." He believes he must, and can, do something. He is afraid of missing out and is often swayed by thoughts and emotions. So he continues trading never looking back, and at the end of the month cannot figure out why his account is in the red. A Passive Trader is the opposite. He passes on more trades than he takes. He does not care about what he misses out on. He only cares about what he takes and the actions he makes in the market. He does not force trades, he just watches the market until he knows what to do. Or he waits and waits until his edge finally sets up. He is passive in his efforts, rather than active. He does not care if he doesn't trade today, this week, or even this month. Trading is not what is important to him; winning is. He knows that profits come from sitting, waiting. Because he is willing to wait, he is peaceful. And profits continue to come into his account, effortlessly. For more information on developing this type of mentality, see below. We also detail how to understand markets through price action, how to create, define, and employ an edge, and how to develop your traders mentality to succeed in markets. If you found this helpful please like! Feel free to comment or ask questions
Education
by tradersmentality