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Trend Analysis

Friday’s SPX Options Chain Already Priced in Today’s DropToday’s sharp 2.2% SPX decline wasn’t a surprise for those who looked closely at the options metrics after Friday’s spot price fakeout . Ahead of the long weekend, market participants priced in the downside with both short- and long-term options . BEFORE TODAY OPEN Put options were nearly twice as expensive as calls at equivalent Expected Move distances before Tuesday's open! BEFORE TODAY CLOSE While today’s drop has led to some call skew on weekly options, suggesting a short-term rebound , the long-term bearish sentiment remains intact. Key unemployment data this week will be crucial for the market’s next move. If you'd like to see the option chain metrics in your charts, be sure to check out our free demo script here:
SP:SPXEducation
by TanukiTrade
How Inflation Works and Why Traders Must Understand ItInflation has become one of the most important topics in modern economics because of its recent prominence, affecting forex pairs, commodities, as well as everyday goods and services. In this post, our team will provide educational clarity on inflation, what it means, and the important definitions to understand whether you're new to markets or a savvy pro who needs a quick refresher on the topic. Before we get to the exact calculation of inflation, let us first go over the terms you need to know. By understanding the exact terms surrounding inflation, you’ll have a solid foundation to think critically about the topic. 5 Inflation Terms to Know 1. Inflation occurs when prices rise over time. Think of it like blowing up a balloon – prices get bigger when inflation expands. While it might seem bad, a low and stable inflation rate is good for the economy. Central banks, like the Fed or the Bank of England, aim to keep inflation around 2% to keep stability. 2. Hyperinflation happens when inflation gets out of control, causing prices to skyrocket and currency to become devalued. Examples include Germany before the Second World War and Zimbabwe in the 2000s. Central banks work hard to prevent it. 3. Deflation is the opposite – prices fall. While it sounds good, it can lead to job losses and economic decline, creating a deflation spiral. Central banks may lower interest rates to counteract this. 4. Reflation and disinflation describe changes in the inflation rate. Reflation occurs when inflation rises, and disinflation happens when it falls. Japan faced disinflation in the 1990s, leading to economic stagnation. 5. Zinflation is when inflation stays the same. It sounds stable but can show a lack of economic growth. Now that you understand the terms that surround inflation, you are ready to dive into the exact calculations of inflation. It’s crucial to understand that inflation is calculated based on specific economic reports for the CPI or Consumer Price Index, which measures a basket of goods like milk and other essentials. Economists calculate inflation by looking at the prices in the CPI report and then comparing those prices to prior periods. For example, if prices are going up in the CPI compared to last year, we know inflation is rising. Why is CPI Important? CPI reports are used by central banks to make decisions about interest rates. If CPI is rising too quickly, it usually points to inflation, and the central bank might raise interest rates to cool down the economy. Conversely, if CPI is falling, central banks might lower interest rates to stimulate spending. CPI is related to inflation. When CPI increases, it suggests that inflation is occurring, meaning the purchasing power of money is decreasing. This is why central banks monitor CPI closely to ensure that inflation stays within a target range, typically around 2-3%. As a trader or investor, you can use these numbers to better understand how asset prices trade relative to inflation. Thanks for reading our latest educational post about becoming a swing trader! Be sure to follow us for more updates and educational resources like this. ---Forex.com Team
ECONOMICS:USCCPIEducation
by FOREXcom
Why I Prefer Swing Trading Over Day Trading Introduction: When it comes to trading, the choice between day trading and swing trading can significantly impact your stress levels, decision-making, and overall success. In this article, I’ll explain why I choose swing trading over day trading, focusing on the benefits of a more relaxed approach that aligns better with my trading style and goals. 1. Day Trading Can Be Stressful Constant Monitoring: Day trading requires you to be glued to your screen, monitoring every market movement. This constant vigilance can lead to significant stress and fatigue, affecting both your physical and mental well-being. Emotional Pressure: The need to make rapid decisions can push traders into emotionally charged trades. The pressure to act quickly often results in mistakes, leading to losses that could have been avoided with more time and analysis. 2. Swing Trading Offers a More Relaxed Approach Less Time-Intensive: Swing trading allows you to analyze the market at a more leisurely pace. You don’t need to monitor every tick, giving you the freedom to balance trading with other life activities. Better Decision-Making: With swing trading, you have more time to evaluate market trends, conduct thorough analysis, and make informed decisions. This approach reduces the likelihood of making impulsive trades based on short-term market noise. 3. Swing Trading Aligns with Price Action Strategies Focus on Market Movements: Swing trading aligns well with price action trading, where the focus is on understanding market movements over days or weeks. This method allows you to identify and capitalize on significant trends without getting caught up in the daily fluctuations. Fewer Trades, More Thoughtful Entries: Swing traders make fewer trades, but each one is carefully planned and based on a broader market perspective. This thoughtful approach often leads to better long-term results. Conclusion: In conclusion, while day trading may appeal to those who thrive on the excitement and rapid pace of the markets, it can also lead to significant stress and emotional trading. Swing trading, on the other hand, offers a more balanced and thoughtful approach, allowing traders to focus on long-term success without the constant pressure of day trading. For these reasons, I choose to focus on swing trading, where I can maintain a healthier lifestyle and make more informed, less emotionally driven trading decisions. This approach emphasizes the importance of aligning your trading strategy with your lifestyle and psychological strengths, ultimately leading to better trading outcomes.
OANDA:XAUUSDEducation
by Mihai_Iacob
5
Beginner Chart Patterns: Head & Shoulders, Double Tops and MoreWelcome to the world of chart patterns—the place where every price action tells a story. And if you read it right, you might just walk away with profits. In this Idea, we explore the immersive corner of technical analysis where chart patterns shape to potentially show you where the price is going. We’ll keep it tight and break down the most popular ones so you’d have more time to take your knowledge for a spin and look for some patterns (risk-free with a paper trading account ?). Let’s roll. Chart patterns are the market’s version of geometry paired with hieroglyphics. They might look like random squiggles at first, but once you learn to decode them, they might reveal where the market is headed next. Here are the mainstay chart patterns everyone should start with: Head and Shoulders, Double Tops, and a few other gems. 1. Head and Shoulders: The King of Reversals First up is the Head and Shoulders pattern—an iconic, evergreen, ever-fashionable formation that traders dream about. Why? Because it’s a reliable reversal pattern that often signals the end of a trend and the beginning of a new one. Here’s the breakdown: Imagine a market that’s been climbing higher. It forms a peak (a shoulder), pulls back, then rallies even higher to form a bigger peak (the head), only to drop again. Finally, it gives one last weak attempt to rise (the second shoulder), but it can’t reach the same height as the head. The neckline, a horizontal line connecting the two lows between the peaks, is your trigger. Once the price breaks below it, it’s time to consider shorting or bailing on your long position. And yes, there’s an inverted version of this pattern too. It looks like a man doing a handstand and signals a trend reversal from bearish to bullish. That’s Head and Shoulders—flipping trends since forever. 2. Double Tops and Double Bottoms: The Market’s Déjà Vu Next up, we have the Double Top and Double Bottom patterns—the market’s way of saying, “Been there, done that.” These patterns occur when the price tries and fails—twice—to break through a key level. Double Top : Picture this: The price surges to a high, only to hit a ceiling and fall back. Then, like a stubborn child, it tries again but fails to break through. That’s your Double Top—two peaks, one resistance level, and a potential trend reversal in the making. When the price drops below the support formed by the dip between the two peaks, it’s a signal that the bulls are out of steam. Double Bottom : Flip it over, and you’ve got a Double Bottom—a W-shaped pattern that forms after the price tests a support level twice. If it can’t break lower and starts to rally, it’s a sign that the bears are losing control. A breakout above the peak between the two lows confirms the pattern, signaling a potential bullish reversal. 3. Triangles: The Calm Before the Storm Triangles are the market’s way of coiling up before making a big move. They come in three flavors—ascending, descending, and symmetrical. Ascending Triangle : Here’s how it works: The price forms higher lows but keeps bumping into the same resistance level. This shows that buyers are getting stronger, but sellers aren’t ready to give up. Eventually, pressure builds and the price breaks out to the upside. But since it’s trading, you can expect the price to break to the downside, too. Descending Triangle : The opposite of the ascending triangle, this pattern shows lower highs leaning against a flat support level. Sellers are gaining the upper hand and when the price breaks below the support, it’s usually game over for the bulls. But not always—sometimes, bulls would have it their way. Symmetrical Triangle : This is the market’s version of a coin toss. The price is squeezing into a tighter range with lower highs and higher lows. It’s anyone’s guess which way it’ll break, but when it does, expect a big move in that direction. 4. Flags and Pennants: The Market’s Pit Stop If triangles are the calm before the storm, then flags and pennants are the pit stops during a race. These patterns are continuation signals, meaning that the trend is likely to keep going after a brief pause. Flags : Flags are rectangular-shaped patterns that slope against the prevailing trend. If the market’s in an uptrend, the flag will slope downwards, and vice versa. Once the price breaks out of the flag in the direction of the original trend, it’s usually off to the races again. Pennants : Pennants look like tiny symmetrical triangles. After a strong move, the price consolidates in a small, converging range before breaking out and continuing the trend. They’re short-lived but pack a punch. Final Thoughts To many technical analysts, chart patterns are the best thing the market can do. The secret code, or however you may want to call them, they can give you insight into the dealmaking between buyers and sellers and hint at what might happen next. Whether it’s a Head and Shoulders flashing a trend reversal, a Double Top marking a key resistance level, or a Triangle gearing up for a breakout, these patterns are essential tools in your trading garden. So next time you stare at a chart, keep in mind that you’re not just looking at random lines. You’re reading the market’s mind from a technical standpoint. And if you know what to look for, you’re one step closer to cracking the code.
Editors' picks
TVC:DXYEducation
by TradingView
7
The Other Side Of Risk Management + 3 Reasons Why The Dollar- Looking for the right broker, can be a very hard thing. Because you need to know that With the wrong broker, you can lose all your hard-earned money Its not easy to find the right margin to use. Using margin is not good for beginners, but if you want you can use margin to make profit as long as you know the right risk-reward ratio Have you ever tried looking for the right broker? This has been a major challenge for me so much as, that once i find the right broker am very happy and i feel safe with the risk management strategies i am using. When you trading a currency pair like this one try to make sure you find the right broker Because the stock market is a very volatile place. The Dollar is going to rise based on 1)unemployment numbers 2)Manufacturing index 3)the fed rate cuts These indicators are the reason why this currency is a good buy this week only, and today is your last chance to get in on this global dollar currency movement. To learn more Rocket Boost this content -- Disclaimer: Please learn risk management trading is risky you will lose money whether you like it or not. -- Also if you are looking for a good broker to trade 1)Currency 2)Stock 3)Crypto check out this link here-->
Education
by lubosi
The Most Famous Traders Around the GlobeThe Most Famous Traders Around the Globe You may have come across news articles and personal stories on social media about traders who have made huge profits and achieved early retirement. Such stories can motivate you to learn and practise to achieve your personal highs. In this FXOpen article, you will find out more about the most famous traders and their success stories. What Makes a Trader Successful? It’s important to realise that success is subjective, and there is no one formula for achieving it. For some people, success is earning as much as possible in a short period, while for others, it’s about gradually saving up and building capital for retirement. Still, people who come to succeed generally share certain character and behavioural traits. Let’s consider what can positively influence trading. Experienced and successful traders: - are well-educated in their fields - have a solid trading plan - are disciplined and patient - can control their emotions - are flexible and adaptable These qualities are essential for navigating the changing markets and finding profitable opportunities, and developing these characteristics could help you on your way. Edward Arthur Seykota: an Algorithm for Success Edward Arthur Seykota is known as a “Father of Trading Systems”. This man is a legend in the world of trading, and for good reason. Ever since beginning his career as a trader in the 1970s, he has been captivated by the concept of a mechanised system for conducting trades and performing technical analysis. Ed Seykota developed algorithms for trading and used computer programs to execute trades. The profit made by his robot used between 1972 and 1988 was over 250,000% — the assets of his client grew from $5,000 to $15 million. He has been consistently profitable in the markets for more than four decades, and his success has inspired countless traders around the world. Andy Krieger: How to Hack Forex Trading One of the best day traders is Andy Krieger, a currency trader who gained notoriety in the late 1980s for his aggressive trading strategies. He worked for Bankers Trust, and he’s best known for trades against the New Zealand dollar. His primary strategy was to bet against the NZD because he believed it would be susceptible to short-selling. Krieger enlarged his risk by combining foreign currency options with his significant trading limit, took a position, and benefited from the 1987 New York Stock Exchange crash. Andy made a profit of over $300 million for his employer in just one day. Ingeborga Mootz: A Great Female Trader Ingeborga Mootz is a woman from Germany who proved that there are no age or gender restrictions on trading. Having no relevant education or experience, she became a successful investor at the age of 75. Now she is almost 100 years old and a millionaire, and she keeps advising others on how to make money in the stock market. Ingeborga Mootz used to have a humble existence, and when she married, her husband forbade her from working. Her stock market activity began after her husband’s death when she found a thousand shares of VEBA while going through his papers. She sold the shares and made a 100% profit, and trading became her point of interest. The main area that Frau Mootz looks at is banking. Richard Dennis: How to Trade a Trend Richard Dennis inspires traders with his ingenious and innovative approach to commodities trading. Dennis was a trend trader who preferred identifying trends and making trades in their direction with increasingly high leverage, maximising profits in good scenarios. Richard was born into a poor Irish family in Chicago, and he made a name for himself trading on the Chicago Mercantile Exchange at the age of 17. Within ten years, he turned a borrowed $1,600 into an astounding $200 million through commodities trading. One of his most famous experiments involved training a group of people known as “Turtles” for just two weeks. The Turtles reportedly made an impressive cumulative profit of $175 million over five years. Bill Lipschutz: How to Learn From Mistakes and Manage Risk Bill Lipschutz began his trading career after graduating from Cornell University in the late 1970s. During this period, he managed to turn a modest investment of $12,000 into a staggering $250,000. However, there was a setback, and one bad trading decision caused him to lose his entire stake. This experience taught him a valuable lesson in risk management that he has carried through his career. In 1981, Lipschutz took a job as a currency trader at Salomon Brothers. At the time, forex trading was only growing in popularity. He quickly established himself as a very successful trader and, by 1985, was making the company more than $300 million a year in profits. He eventually became Salomon’s chief currency trader and held this position until his departure in 1990. Final Thoughts All these experienced traders who have achieved success differ from each other in biography, trading style, and strategy. The amounts they have earned are also different. It is important to remember that these are the exceptions rather than the rules, and most traders face losses while trading. However, what you can learn from them is that they possess some specific qualities such as risk management skills, emotional control, loss acceptance, discipline, and flexibility. You can develop these skills as well, and to do this, open an FXOpen account and start your journey. To boost your performance, consider using the advanced trading tools offered on our TickTrader platform. We are sure that they will be helpful for trading, learning and skill development. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
5
Don’t Overlook Simple Technical Analysis Tools Like Trend LinesIn this tutorial, we’ll explore the significance of trend lines in technical analysis using a real chart example from XAU/USD (Gold Spot). 1. Understanding Trend Lines: A trend line is a straight line that connects two or more price points and then extends into the future to act as a line of support or resistance. Trend lines are one of the simplest tools in technical analysis, but they can provide valuable insights into market trends. 2. Identifying the Trend Line: In the attached chart, you can see a clear upward trend line (in orange) that has been tested multiple times. Each time the price touches this line and bounces back, it confirms the trend's strength. 3. Spotting the Break: Notice how the trend line was broken after providing support 3-4 times. This break is significant because it signals potential weakness in the ongoing trend. When a trend line, especially one that has been tested several times, is broken, it often suggests that the previous trend may be pausing or even reversing. 4. Interpreting Pullbacks: You’ll observe some strong pullbacks before the trend line break. These pullbacks can sometimes lead traders to believe that the trend will continue. However, the inability of the price to stay above the trend line after these pullbacks further indicates that the trend might be losing momentum. 5. Next Steps After a Break: After the trend line is broken, it’s important to watch how the price behaves. The break can lead to a consolidation phase where the price moves sideways, or it could signal a complete trend reversal. In the chart provided, the price appears to be consolidating below the trend line, suggesting that the bullish momentum is slowing down. Key Takeaways: Trend lines are simple yet powerful tools for identifying and confirming market trends. A trend line break after multiple supports can signal a trend's weakness and potential reversal. Strong pullbacks may occur within a trend, but a break of the trend line is a stronger signal to watch. Keep in mind that while trend lines are helpful, they should be used in conjunction with other indicators and analysis techniques for more robust trading decisions.
OANDA:XAUUSDEducation
by Tanakorn_Koomrampai_CMT_CFTe
This Simple Strategy Could Make You a Fortune in the Gold Marketprice action of Gold Spot (XAU/USD) in relation to the trendlines and patterns indicated. Chart Analysis 1. Weekly Flag Trendline: - The first chart shows a trendline forming a "flag" pattern on a higher time frame (possibly weekly or daily). This flag appears to be a bullish continuation pattern, indicating that after the consolidation within the flag, the price might continue in the direction of the prior trend, which seems to be up. 2. Price Action Inside the Flag: - Within the flag, there is a period of consolidation marked by the parallel trendlines. The price has been respecting these lines, creating higher lows and lower highs, indicating indecision or preparation for a breakout. 3. Potential Breakout Zones: - Key breakout zones are marked by the upper resistance of the flag pattern around the 2,530 level and the lower support trendline of the flag around the 2,470 level. A breakout above the upper resistance could signal a continuation of the prior uptrend, while a break below the lower support could indicate a reversal or deeper pullback. 4. Smaller Patterns: - On the second chart (1-hour time frame), there's a more detailed view of recent price action with a potential bearish flag or pennant forming, suggesting a temporary pullback or consolidation within the larger flag. This smaller pattern appears to be within a trading range bounded by the horizontal support and resistance levels. 5. Key Support and Resistance Levels: - The charts show horizontal support around the 2,433.301 level, which aligns with a historical low that could serve as a significant support level. Similarly, the resistance level is around 2,530, where the price has repeatedly failed to break above. 6. Current Market Context: - The price is currently hovering around 2,497, near the middle of the trading range, suggesting indecision. This midpoint could be a neutral zone where the price could move in either direction based on upcoming market momentum or news. Trading Strategy and Considerations - Entry Points: - If considering a bullish scenario, a long entry could be planned near the lower support line of the flag, around 2,470, with a stop loss slightly below the flag's support to manage risk. A breakout above the 2,530 resistance could also provide a good entry point for a continuation of the uptrend. - For a bearish scenario, a short entry could be considered if the price breaks below the 2,470 support level, confirming a breakdown from the flag pattern. - Risk Management: - The proximity of the price to both upper and lower boundaries of the flag pattern provides clear levels for stop placement. This helps in managing risk effectively, keeping losses contained if the trade goes against the initial bias. - Monitoring Price Action: - Watch for potential breakouts from the smaller patterns within the flag, as these could provide early signals of the larger move's direction. It would also be essential to keep an eye on volume changes, as increased volume could confirm the validity of a breakout or breakdown. By aligning your trades with these patterns and key levels, you can take advantage of the potential setups provided by the price action within these consolidating formations. Ensure to adapt to new market conditions and stay disciplined in executing your trading plan.
Editors' picks
OANDA:XAUUSDEducation
by Adlercon333
2
Stock feedback loopStock market is a adaptive system or a stock, with feedback loops (for inflow, outflow function). Where nobody knows the outcome or future, but feedbacks (corrections or resistance) gives tells (makes inflows or outflows). Without a common leader. Economists think in models (price is the result of supply-demand, or inflow-outflow) that helps to explain system behavior (short term moves), but models are just ideas to explain complex world (models work until they dont). System thinkers study the stock not aggregate behavior . Looking at markets trough perspective of "eco system" helps better understand the drivers or moving forces?
FOREXCOM:SPX500Education
by citsvar
Quarter Theory: Intraday Trading Mastery - Part 1 IntroGreetings Traders! In today’s video, we’ll be introducing Quarter Theory Intraday Trading Mastery, a model grounded in the algorithmic nature of price delivery within the markets. We’ll explore candle anatomy and learn how to predict candle behavior on lower timeframes to capitalize on intraday trading opportunities. This model will also help us identify the optimal trading sessions and execute trades with high probability, all while effectively acting on market bias. This video will focus primarily on the foundational content, with practical examples to follow in the next video. In the meantime, I encourage you to practice these concepts on your own to deepen your understanding. This video is part of our ongoing High Probability Trading Zones playlist on YouTube. If you haven’t watched the previous videos in the series, I highly recommend checking them out. They provide crucial insights into identifying market bias, which Quarter Theory will help you act on effectively. I’ll attach the links to those videos in the description below. Premium Discount Price Delivery in Institutional Trading: Mastering Institutional Order-Flow Price Delivery: Quarter Theory Mastering Algorithmic Price Movements: Mastering High Probability Trading Across All Assets: Best Regards, The_Architect
OANDA:NAS100USDEducation
by The_Archi-tect
Seasonal Strategies: Trading Natural Gas with a Tactical Edge1. Introduction Natural Gas Futures (NG1! and MNG1!) hold a significant place in the energy market, acting as a key barometer for both seasonal and macroeconomic trends. These futures contracts are not just tools for hedging energy prices but also present potentially lucrative opportunities for traders who understand the underlying seasonal patterns that influence their movement. Seasonality is a powerful concept in trading, particularly in commodities like Natural Gas, where demand and supply fluctuations are often tied to predictable seasonal factors. 2. Understanding Seasonality in Natural Gas Seasonality refers to the predictable changes in price and market behavior that occur at specific times of the year. In the context of commodities like Natural Gas, seasonality is particularly significant due to the cyclical nature of energy consumption and production. Factors such as weather patterns, heating demand in winter, cooling demand in summer, and storage levels contribute to the seasonal price movements observed in Natural Gas Futures. For this analysis, daily data from November 14, 1995, to August 30, 2024, has been meticulously examined. By calculating the 21-day moving average (representing a month) and the 63-day moving average (representing a quarter), bullish and bearish crossovers have been identified. 3. Analyzing Bullish and Bearish Crossovers Bullish and bearish crossovers are critical signals in technical analysis, representing points where momentum shifts from one direction to another. In our analysis of Natural Gas Futures, such crossovers provide a clear indication of the monthly and quarterly trends. The data reveals distinct patterns in the frequency and magnitude of bullish and bearish crossovers across different months: Bullish Crossovers: Certain months, particularly March, April, and September, show a high number of bullish crossovers. This suggests that these months are historically strong for upward price movements, offering potential buying opportunities. Bearish Crossovers: On the other hand, months like May, June, October, and November are marked by a higher frequency of bearish crossovers. These periods have historically seen downward price pressure, which could present short-selling opportunities. The below chart further illustrates these patterns, highlighting the months with the most significant bullish and bearish activity. 4. Key Seasonal Patterns in Natural Gas The analysis of Natural Gas Futures reveals distinct seasonal patterns that vary significantly from month to month. By understanding these patterns, traders can strategically plan to time their trades by aligning with the most opportune periods for either bullish or bearish movements. January to February: Mixed Signals Historically showing a balanced number of bullish and bearish crossovers. This suggests that while there are opportunities for both long and short trades, caution is warranted as the market can be unpredictable during this period. March to April: Bullish Momentum We see a shift towards more bullish activity. While there is still some bearish potential, the overall trend favors upward movements. Traders might consider looking for long opportunities during this period. May to June: Bearish Pressure The market shows signs of bearish pressure indicating a potential shift in momentum. July, August and September: Summer Bulls July and August: The bullish trend tends to be back but with a higher degree of volatility which may involve sudden market reversals. September: Showing frequent up-moves with strong percentages. This month offers opportunities for traders to re-enter the market on the long side. October to December: Volatile and Bearish Bearish momentum and strong down-moves opening the door to shorting opportunities. Traders should be especially cautious in December with very high volatility in both directions. These seasonal patterns provide a roadmap for traders, highlighting the months that are historically more favorable for either long or short positions in Natural Gas Futures. 5. September Seasonality Analysis: A Potential Buying Opportunity September has historically been one of the most bullish months for Natural Gas Futures. Despite the common perception that autumn marks a period of declining demand for natural gas as the summer cooling season ends, the data reveals a different story. Current Market Opportunity Current Price: With the continuous contract of Natural Gas Futures (NG1!) currently trading around 2.18, the historical trends suggest that this could be a valid entry point for traders looking to capitalize on a potential price rally. Historical Patterns: September has witnessed some of the most robust bullish activity, with the data showing a clear pattern of price increases. On average, September has seen up-moves of 36.45%, making it a standout month for bullish opportunities. Trade Setup Entry Point: Entering the market around the current price on NG1! of 2.18. Target Price: Based on the historical average up-move of 36.45%, traders could set a target price around 2.98. Stop Loss: To manage risk, a stop loss could be placed 11.28% below the entry price, around 1.93. Probability of Success: Historical data suggests a high probability for this trade where 11 out of 13 trades produced bullish moves. Conservative Approach For traders seeking a more conservative strategy, setting a target at the UFO resistance level of 2.673 (instead of 2.98) offers a more cautious approach. 6. Trading with a Tactical Edge: Risk-Reward Analysis The risk-reward ratio compares the potential profit of a trade to the potential loss. In our September example: Risk: The stop loss is placed 11.28% below the entry price at 1.93, limiting potential downside. Reward: The target is 36.45% above the entry price at approximately 2.98. This setup offers a risk-reward ratio of about 1:3.2, meaning that for every point of risk, the potential reward is 3.20 points. Such a ratio is generally considered favorable in trading, as it allows for a greater margin of error while still maintaining profitability over time. Point Values for Natural Gas Futures When trading Natural Gas futures, it is essential to understand the point value of the contracts. For standard Natural Gas futures (NG), each point of movement in the price is worth $10,000 per contract. This means that a move from 2.18 to 2.98 represents a potential gain of $8,000 per contract with a potential for risk of $2,500 per contract. For Micro Natural Gas futures (MNG), the point value is one-tenth that of the standard contract, with each point of movement worth $1,000 per contract. Therefore, the for same trade plan, the potential for reward and risk per contract would be $800 and $250 respectively. 7. Discipline and Emotional Control Successful risk management also requires discipline and emotional control. It's essential to stick to your trading plan, avoid impulsive decisions, and manage your emotions, especially during periods of market volatility. Fear and greed are the enemies of successful trading, and maintaining a level-headed approach is crucial for long-term success. 8. Conclusion The analysis of seasonality in Natural Gas Futures reveals a rich landscape of trading opportunities, especially when approached with a tactical mindset that incorporates probability and risk-reward analysis. By understanding the historical patterns that have shaped the market over the years, traders can position themselves to capitalize on the most opportune moments, whether the market is poised for a bullish rise or a bearish decline. This September, in particular, presents a compelling case for a potential buying opportunity. Ultimately, successful trading requires more than just identifying patterns—it demands a disciplined approach to risk management, a clear understanding of market dynamics, and the ability to adapt to changing conditions. By integrating these elements into your trading strategy, you can enhance your ability to navigate the complexities of the Natural Gas market and achieve consistent, long-term success. As you apply these insights to your own trading, remember that while historical data provides valuable guidance, it is not a guarantee of future results. Always approach the market with caution, stay informed, and continuously refine your strategy based on the latest information and market conditions. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
NYMEX:NG1!Education
by traddictiv
2
Understanding The Gambling Mindset In TradingGambling addiction is a pathological and uncontrollable urge to gamble, characterized by an inability to manage emotions and a failure to stop in time, often leading to intense emotional outbursts in response to negative outcomes. Initially, this term was used within the context of gambling to describe a situation where an individual experiences rage and loses control over themselves and their surroundings, often resulting in rapid financial loss. However, with the rise of various tools and strategies in Forex and prop trading, this term has also become relevant for traders. 📍 How to Learn to Conquer Your Impulses Signs of Gambling Addiction: 1. Irresistible Urge to Bet: A compulsive need to place bets or open positions at any cost, often without grasping the potential consequences. This feeling is driven by a deep-seated excitement and the inner voice saying, “I just want to!” 2. Intense Emotional Responses: Dramatic fluctuations in mood, often resembling hysteria, can occur alongside the betting behavior. 3. Despair and Euphoria: A cycle of self-destructive feelings, manifesting as despair or euphoric highs, regardless of financial outcomes. It's important to recognize that gambling addiction yields no positive results, whether a trader wins or loses money. 📍 Causes of Gambling Addiction: 1. Illusion of Easy Profits: Many brokers use aggressive marketing techniques, such as promotions and bonuses, to attract newcomers. Initial successes in trading can create a false sense of euphoria, leading traders to become overconfident. This complacency can result in careless mistakes and a quick depletion of their accounts. Experienced traders understand that a few profits should not lead to complacency. 2. All-In Betting Mentality: Traders who have something to lose and lack self-control may find it difficult to admit defeat. This can lead to placing high-stakes bets in the hope that luck will ultimately favor them. It’s not uncommon for desperate traders to resort to loans, further exacerbating their financial situations. 3. Innate Psychotype: Certain personality traits may predispose individuals to gambling addiction. Those who thrive on risk may be more susceptible to compulsive trading behaviors. In trading, a clear sign of gambling addiction is a reliance on risky strategies, such as the Martingale system, paired with a lack of a coherent trading strategy or effective risk management practices. These tendencies can lead to significant financial harm and emotional distress. 📍 Consequences of Gambling: • Loss of Deposit: This is often the immediate financial consequence, leading to significant monetary losses for traders. • Self-Disappointment: Many traders experience profound disappointment not just with their trading outcomes, but also with themselves. This can lead to feelings of discouragement, stress, and apathy. • Emotional Turmoil: The emotional rollercoaster of trading can be intense, characterized by highs of euphoria and lows of despair. 📍 How to Reduce Emotional Dependence in Forex Trading: 1. Invest Only What You Can Afford to Lose: Limit your investments to funds that won't impact your financial stability if lost. This helps alleviate pressure and allows for a more rational approach to trading. 2. Set and Adhere to Limits: Establish clear profitability targets and consistently stick to them. If your target is met, close the position without awaiting a potential trend reversal. 3. Recognize and Learn from Mistakes: Develop the ability to assess unprofitable positions realistically. Close losing trades rather than clinging to the hope of a reversal. 4. Maintain Emotional Control: If you experience anger or a strong urge to recover losses, take a break from trading. Stepping back can help clear your mind and reduce impulsive decisions. 5. Develop a Risk Management Strategy: Create a clear plan that details your lot sizes, risk per trade, and stop-loss lengths. Ensure you test this strategy using a demo account to refine your approach without financial risk. Accountability. Remember that in 90% of trading failures, the responsibility lies with the trader, not the broker or the trading platform. Recognizing your role in trading outcomes can empower you to make informed and responsible decisions moving forward. 📍 Summary Individuals struggling with gambling addiction, heightened emotionality, and an inability to calculate risks should refrain from participating in trading. Forex operates as a zero-sum game, where the financial resources of some traders are transferred to others. Success in this environment is reserved for those who approach trading with a cold-blooded, pragmatic mindset and the ability to analyze situations several steps in advance. Continuous improvement in knowledge and emotional discipline is essential for achieving success in the Forex market. Emphasizing strategic decision-making and risk management is crucial for long-term prosperity in trading. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment 📣
Education
by Lingrid
2
Geometry: Using Chords to Predict Trend EndpointsIdentify Key Points : Start by pinpointing significant highs and lows within the trend. These will be the endpoints of your chords. Draw Chords: Connect these significant highs and lows with straight lines (chords). These chords represent potential paths the market might follow. Analyze Chord Patterns: Uptrend : Draw chords connecting higher lows to higher highs. This helps visualize the upward momentum and potential reversal points. Downtrend : Draw chords connecting lower highs to lower lows. This helps identify the downward momentum and potential support levels. Sideways Trend : In a sideways trend, chords can connect alternating highs and lows, helping to identify consolidation zones. Looking at the EUR currency index, we can see the chord being used to monitor the trend critical points, lower highs and lower lows, validating a weaker EUR. Conclusion Expect a rise in pairs paired with EUR, such as USD, GDP. Keep in mind that it’s also important to validate the strength of the other economies before deciding on a trade.
TVC:EXYEducation
by DjMaxCapital
Pattern Recognition Series Episode 1: GOLDHere's an in-depth look at Volume Spread Analysis. We use tape reading to gauge future price movements based on the magnitude of previous price movements. This helps us determine the driving force of the market and position ourselves on the same side as the large operators within any market. The key is understanding what VSA allows us to see. Volume = activity therefore Ultra High Volume (UHV) shows the activity of not only the public but also the Large Operators of that particular asset. This video shows that the demand in the upward trend channel diminished while the supply increased giving me the confidence to trade in alignment with the largest of the two opposing forces. By use of Bar by Bar Volume Spread analysis the operator then uses each bar to quantify the upcoming price movement. Climactic volume is a sign that prices are likely to reverse and that a stopping action has occurred. When analyzing UHV you want to assess the Effort (volume) and the Result(price). Remember the markets abide by the laws of Supply and Demand, Effort vs Result, Cause and Effect, and the Law of Attraction. I hope you guys enjoy the video! Happy Trading! -J Hair
OANDA:XAUUSDEducation
by JHair20
Transition of Support to Resistance and Vice Versa(Video 6 of 6)During these 6 videos, we explored and analyzed the prevalent trends in the market and how upward and downward trends develop. We introduced methods on how to work with sideways trends. Additionally, we discussed two scenarios that can enhance the probability of new trend formation.Finally, in this video, we introduced support and resistance zones to enhance your understanding of the formation of market highs and lows and analyzed their relationship with the existing trends. Thanks for watching!
OANDA:XAUUSDEducation
by SpaceIchimoku
Trading Lucrative-Heads 'N' Shoulders Patterns : Silver 1 HR Heads 'N' Shoulders' Patterns can be very lucrative and a pattern to keep in mind every trading day. They work on all time-frames. Often I see market structure price reversals on the 1 minute timeframe all the way down to 10 seconds. They will be easier to trade on the higher time frames as their price-action can be super-fast on these very low timeframes. Depending on how you apply risk to reward in your trading, they will be more lucrative on the higher timeframes and more reliable because more traders see them on these bigger timeframes right up to weekly and monthly charts. Here is what you need to know: * Take advantage of the tradingview 'All Charts' pattern recogniser. This is what most traders including professional-traders would be using because it eliminates subjectivity. * Draw your neckline from the bottom of left-shoulder across and beyond where the right shoulder comes down (price will be below to the left of the right shoulder & your exact point for the left shoulder will be under & to the right of left shoulder) * Most often price will in the first instance after the right shoulder is formed, break through the neckline and then retest above the neck line or below the neck line if its a bullish Inverse Head 'N' Shoulders pattern. Seeing this retest occur will give the setup more reliability. (Note: Price does not always Retest especially if price is selling or buying from a strong resistance or support area, respectively) * Your trigger to buy or sell is on the retest/retracement above or below neckline, look for an increase in volume and/or a strong reversal candle like a pin-bar or engulfer. (Your reward is generally the same distance as the neckline below the head) * I hope this helps in your own trading. Trading is risky. Please don't rely solely on my financial analysis or trade setups.)
EIGHTCAP:XAGUSDEducation
by Easy_Explosive_Trading
Books on trading and Profitunity strategy by Bill WilliamsIn this article, I will share books that were useful for me in the process of studying trading and the Profitunity trading strategy by Bill Williams. Bill Williams "Trading Chaos 1 and 2" ♡ The first and third books by Bill Williams contain complete and up-to-date information on the Profitunity strategy. The second book "New Trading Dimensions" is intermediate and less relevant. The book Trading Chaos 1 includes trading psychology (an integral part of trading), the basics of understanding the markets, candlestick patterns (divergent bars and determining the trend based on a pair of bars, the market facilitation index, volume and squat bar), Elliott waves (characteristics, determining waves using the MACD 5/34/5 indicator, an analogue of the modern Awesome Oscillator, and the Fibonacci ratio), fractals, trading in waves (impulses 1-3-5 and ABC correction). And also very important topics — how to work with your internal structure and how our brain functions (Chapter 11). The book Trading Chaos 2 (co-authored by Bill Williams' daughter Justine Gregory) includes a description of the Alligator indicator in combination with the Awesome Oscillator, divergent bars and fractals. And also tools for working on yourself - morning pages (Chapter 13, from the book by Julia Cameron "The Artist's Way") and autogenic training for traders by Johannes Schultz (Appendix 3). Tom Hougaard "Best Loser Wins" ♡ The book greatly expands the perception of markets, the approach to trading and deeply describes the psychology of trading. The book was first published in 2022 and perfectly complements the books by Bill Williams. John J. Murphy "Technical Analysis of the Futures Markets" A basic book on classical (linear) technical analysis, which also contains up-to-date information on Elliott Wave Theory in addition to the corresponding section in the book by Bill Williams "Trading Chaos 1". Alexander Elder "Trading for a living" (How to Play and Win on the Stock Exchange) A book on the psychology of trading and classical chart analysis, includes a detailed description of popular indicators and a description of the basic strategy "Three Screens" (analysis of the chart on the senior and junior timeframes), as well as an important topic "Risk management". Steve Nison "Japanese Candlesticks" A basic book on classical candlestick (bar) analysis. Thomas DeMark "Technical Analysis - a new science" Constructing trend lines based on the support price minimums and maximums described in the book led me to search for an indicator that displays such bars, as a result, I first became acquainted with the Bill Williams Fractals indicator, even before I became acquainted with his strategy. Theodore Dreiser "The Financier" ☽ A novel published in 1912 based on the life story of the American millionaire Charles Yerkes (1837-1905). The book shows how the financial and economic environment surrounding the main character (Frank Cowperwood) already from childhood forms in him the psychology of a businessman and stock dealer... Robin Sharma "The 5 AM Club" ☆ This book is not about trading, but about healthy habits. But for me the book became useful, including in trading, because I made the following conclusion for myself - it is important to rest (take breaks) every day, and not only on weekends and vacations. And it is worth starting with the fact that after waking up there is free time (about 1 hour) before business activity begins, i.e. either wake up earlier, or move all things forward, so that you can start your day easily. And taking breaks in trading is very important, so I recommend paying attention, for example, to the algorithm for removing limitations using neurographics. (◉ ‿ ◉) There are many good books, as well as good strategies, but I am sure that only independent deep study, practice, good concentration and self-control will allow you to find your own understanding of the markets and your own approach to successful trading.
CME_MINI:ES1!Education
by grigorykov