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EUR/USD_SPT - EUR/USD

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EURUSD_SPT trade ideas

What Is the Over-the-Counter (OTC) Market and How Does It Work? What Is the Over-the-Counter (OTC) Market and How Does It Work? The over-the-counter (OTC) market is a crucial yet often misunderstood part of the financial system. Unlike centralised exchanges, OTC markets offer a decentralised way to trade various securities, from bonds to currencies. This article explores how the OTC market works, its instruments, and the opportunities and risks it presents for traders and investors alike. What Is the OTC Market? The over-the-counter market meaning refers to the OTC marketplace, a decentralised network where financial assets are traded directly between buyers and sellers, rather than through a centralised exchange like the NYSE. This OTC definition highlights that trades happen via private negotiations, often facilitated by brokers or dealers. OTC markets cover a wide range of assets, including bonds, derivatives, and unlisted stocks. This market is popular for assets that are either too niche or illiquid to be traded on traditional exchanges. For example, many corporate bonds and complex derivative products are commonly traded OTC. One of the key features of the OTC market is its flexibility. Since it’s not bound by exchange rules, traders can customise contracts, including factors like trade size and terms. However, this also means less transparency, as there’s no central exchange to standardise prices. Investors also face greater counterparty risk—the risk that the other party in a trade may default. Prices can vary, and buyers often face wider bid-ask spreads due to lower liquidity. Despite this, OTC market trading plays a crucial role in global finance, especially for institutions looking for bespoke solutions or access to less commonly traded assets. Although not as accessible to retail traders, it’s vital for institutional investors, corporations, and hedge funds. How Does the Over-the-Counter Market Differ from Exchanges? The over-the-counter market and traditional exchanges both facilitate the trading of securities, but they operate in fundamentally different ways. Check out how they differ: 1. Centralisation - OTC: Decentralised, with trades occurring directly between two parties, typically via brokers or dealers, often through phone or electronic means. - Exchanges: Centralised, with all trades happening in a formal, regulated environment (e.g., the NYSE), ensuring consistent pricing. 2. Regulation - OTC: OTC trading is regulated but with fewer reporting requirements and more flexible trading terms. - Exchanges: Highly regulated, with strict oversight from government bodies (e.g., SEC) to provide transparency and protect investors. 3. Pricing Transparency - OTC: Prices are negotiated and can vary between trades. This lack of a central order book means there’s often less price visibility. - Exchanges: Transparent pricing with public order books and visible trade histories, ensuring all market participants see the same prices. 4. Liquidity - OTC: Liquidity can be lower, and bid-ask spreads can be wider, particularly for less frequently traded instruments. - Exchanges: Typically higher liquidity with narrower spreads due to the larger pool of buyers and sellers. 5. Contract Standardisation - OTC: Contracts can be customised to suit the needs of the parties involved, which is common with derivatives. - Exchanges: Contracts are standardised in terms of size, quality, and other conditions, offering uniformity across trades. 6. Counterparty Risk - OTC: Higher counterparty risk since there's no intermediary guaranteeing trades. - Exchanges: The exchange itself acts as an intermediary, reducing the risk of default. Different OTC Markets The OTC market is decentralised, but it has several key venues or platforms where securities are traded. Each market offers a different level of access and regulation. Key over-the-counter market examples include: OTCQX This is the top-tier OTC market, where companies must meet higher financial and reporting standards. It’s known for featuring well-established companies, including international firms and large corporations that don’t wish to list on major exchanges but still want access to US investors​. OTCQB Often called the "Venture Market," this tier caters to smaller or growing companies. It has less stringent requirements than OTCQX but still requires regular financial reporting and compliance with some SEC guidelines​. Pink Open Market Also known as the "Pink Sheets," this is the most speculative and riskiest OTC market. Companies listed here have minimal financial requirements, making it home to smaller, more volatile firms. Investors should approach this arena with caution due to the higher risk of lack of transparency​. Forex, Bonds, and Commodities Since OTC markets are decentralised, they are not as heavily regulated as exchange-traded markets. However, they are still subject to regulatory oversight in key jurisdictions to ensure transparency, protect participants, and prevent fraud. Types of Instruments Traded on the OTC Market The OTC market is home to a wide variety of financial instruments, many of which don’t fit neatly within the rigid structures of formal exchanges. These instruments are often more customised or involve companies that aren’t listed on major exchanges. Derivatives The OTC market is one of the primary venues for trading derivatives—an instrument based on the price movements of an underlying asset. OTC derivatives examples include CFDs, swaps, forwards, and options. These contracts are often tailored to meet the specific risk management needs of the parties involved. For instance, interest rate swaps help companies hedge against changes in borrowing costs​. The key difference between exchange-traded and OTC derivatives lies in standardisation: exchange-traded derivatives are standardised, while OTC derivatives are customised to suit specific requirements. Unlisted Stocks Shares of smaller companies that don’t meet the listing standards of major exchanges are traded OTC. These stocks can range from well-established foreign companies (through mechanisms like American Depositary Receipts) to speculative, early-stage firms​. Bonds Government and corporate bonds are frequently traded over the counter. Since bonds are typically issued in large quantities and often have specific terms, the OTC market allows for more flexibility and customisation compared to exchanges. This also includes municipal bonds, which are important for financing public projects​. Commodities Some commodities, such as gold or oil, can also be traded OTC, offering buyers and sellers a flexible way to arrange deals that aren’t subject to standardised exchange rules​. Currencies The foreign exchange (forex) market, the largest OTC market globally, involves the trading of currency pairs. While it’s a specialised space, it’s essential for international trade and finance​. Want to explore a world of currency pairs and stock and commodity CFDs? Head over to the TickTrader trading platform by FXOpen to get started. Advantages and Disadvantages of OTC Markets The OTC market offers both significant advantages and notable disadvantages, making it an important but complex space for investors. Advantages - Flexibility: OTC markets allow for greater flexibility in terms of trade size, timing, and contract structure. This is particularly valuable for derivatives and bonds, where customised terms are often crucial for hedging or managing financial risks​. - Access to Niche Markets: Many securities traded OTC, like unlisted stocks or foreign bonds, aren’t available on major exchanges. This provides investors with access to a broader range of opportunities, particularly in niche or emerging markets​. - Less Stringent Requirements: For companies, the OTC market offers a way to raise capital without the heavy regulatory burden of a stock exchange listing. This makes it a viable option for smaller or newer companies looking to grow​. Disadvantages - Lower Transparency: One of the biggest downsides of OTC trading is its lack of transparency. Prices are often not publicly available, making it harder for investors to gauge fair value​. - Higher Counterparty Risk: Since there is no centralised clearinghouse, the risk that one party might default on a trade is higher in OTC venues. This can be particularly risky in volatile conditions​. - Liquidity Issues: Liquidity can be much lower in OTC markets, especially for niche or less frequently traded securities. This means that finding a buyer or seller at the desired price may be more challenging, resulting in wider bid-ask spreads​. The Bottom Line The OTC market offers unique opportunities for traders seeking flexibility and access to specialised securities. However, it comes with its own risks. Understanding these factors is key to navigating this dynamic marketplace. To potentially mitigate risks, traders choose regulated, well-established brokers with a long history. To explore trading opportunities in the forex, stock, and commodity markets, consider opening an FXOpen account and gain access to four advanced trading platforms, blazing-fast execution speeds, and competitive trading costs. FAQ Is Forex an OTC Market? Yes, forex is an over-the-counter (OTC) market. It operates through a global, decentralised network where currencies are traded directly between participants, rather than through a central exchange. Retail traders access this market via brokers, allowing them to trade currency pairs 24/5. What Is OTC in the Stock Market? In the stock market, the OTC meaning refers to trading securities outside of formal exchanges. These are often smaller companies that don’t meet the requirements for major exchanges like the NYSE and are traded via a broker-dealer network. What Are Examples of OTC Financial Products? Examples of OTC financial products include bonds, derivatives like swaps and options, unlisted stocks, and currencies. These products are traded directly between parties, often through brokers, without a central exchange. What Is an Example of an OTC Platform? An example of an OTC platform is OTC Markets Group, which facilitates the trading of unlisted stocks through tiers like OTCQX, OTCQB, and Pink Open Market. What Is OTC in the Crypto Market*? In the cryptocurrency market*, OTC trading involves large transactions of digital assets conducted directly between buyers and sellers, often through brokers, bypassing traditional exchanges for greater privacy and flexibility. *At FXOpen UK, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules. They are not available for trading by Retail clients. 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
1
Market Analysis: EUR/USD TumblesMarket Analysis: EUR/USD Tumbles EUR/USD declined from the 1.0450 resistance and traded below 1.0300. Important Takeaways for EUR/USD Analysis Today - The Euro started a fresh decline below the 1.0350 support zone. - There is a key bearish trend line forming with resistance at 1.0320 on the hourly chart of EUR/USD at FXOpen. EUR/USD Technical Analysis On the hourly chart of EUR/USD at FXOpen, the pair struggled to clear the 1.0450 resistance zone. The Euro started a fresh decline and traded below the 1.0350 support zone against the US Dollar. The pair declined below 1.0300 and tested the 1.0225 zone. A low was formed near 1.0224 and the pair recently attempted a recovery wave. There was a minor recovery wave above the 1.0280 level. The pair climbed above the 23.6% Fib retracement level of the downward move from the 1.0458 swing high to the 1.0224 low. The pair is now trading above 1.0285 and the 50-hour simple moving average. On the upside, the pair is now facing resistance near the 1.0320 level. There is also a key bearish trend line forming with resistance at 1.0320. The next key resistance is at 1.0340. The main resistance is near the 1.0365 level or the 61.8% Fib retracement level of the downward move from the 1.0458 swing high to the 1.0224 low. A clear move above the 1.0365 level could send the pair toward the 1.0460 resistance. An upside break above 1.0460 could set the pace for another increase. In the stated case, the pair might rise toward 1.0500. If not, the pair might resume its decline. The first major support on the EUR/USD chart is near 1.0280. The next key support is at 1.0225. If there is a downside break below 1.0225, the pair could drop toward 1.0200. The next support is near 1.0150, below which the pair could start a major decline. 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.
by FXOpen
1
Reasons for Bullish EURUSD for 2025This is my first trade for the year. I'm looking for buys and the 4hrs demand zone seems to be a good start. The trade will go well. Enter if you see it on time. I'm also looking at a 2nd entry, below 1.022 but I'm not sure it will come there. Looking at it because of probabilities of trading. Same is applicable for GBP AND AUD TRADE RESPONSIBLY Why do I think the year will be bullish. 1. Seasonality: DXY is usually bearish the year BTC makes a new all time high. It will either continue the cycle or it will create a new outlook; I favour continuing the cycle. 2. Similarity: looking at gold price action from August 2020 to October 2022, you'll find a similarity. They trended for 2 years, a false breakout and a reversal. Same scenario is playing out now. Although I think contrary to XAU, eur will break to the downside but for now, we go up to clear the upper part of the range. 3. Trump's presidency: Trump is always for making things okay for the average American. That means a weaker dollar. He is already clamoring for a lower interest rate. These are good economic conditions and they all will make dollar weaker against other currencies. He is also pro-crypto and that means weaker dollar. 4. Crypto bull run: As I said earlier, DXY is usually bearish for 6 months or more during crypto bullrun, that hasn't happened yet, neither the bullrun nor the DXY weakness. We are still in for the long ride.
Long
by UGBOR
1
EURUSD: a clear road to parityDuring the previous week markets were celebrating the New Year, with only a few days spent in trading. For this reason, investors would have to wait another week or two to get the latest currently significant data related mostly to inflation. Data posted for the US include the S&P Global manufacturing PMI final for December, which was standing at 49,4 a bit higher from expected 48,3. The ISM Manufacturing PMI in December was at the level of 49,3 a bit higher from forecasted 48,4. Data posted for the Euro Zone and Germany include HCOB Manufacturing PMI final for December, which was 42,5 for Germany and 45,1 for the Euro Zone, both in line with expectations. The Unemployment rate in Germany in December was standing at 6,1%, unchanged for the previous month. During the first trading week of the year, the US Dollar gained in strength. The 1,04 support line remained under pressure. This represents a historically important level, whose breach to the downside would lead to eurusd parity in the coming period. Since the end of the previous year, the market was testing this level, however, the level sustained, bringing the currency pair back toward the 1,05 levels. Since there was no strength for the higher grounds, the currency pair reverted again toward the 1,04 level. During the previous week, the support line has been clearly breached, leading eurusd to the lowest weekly level at 1,023. Still, the pair is ending the week at 1,0308. With the latest move, the RSI reached its clearly oversold market side, and is currently gearing for a short reversal. The moving average of 50 days still strongly diverges from MA 200, leaving no space for a potential cross in the near term period. By looking at the charts, it could be noted that the currency pair is on a tricky road right now. Since the end of the previous year it was clear that the 1,04 would be a target of the market in the coming period, however, it could not be predicted that the market would so swiftly turn its look toward the next support line. The last time when markets were on this territory was in November 2022. Based on these movements, charts are showing that there is no significant level between 1,024 and 1,0. This brings us to a conclusion of a high probability that the breach of 1,024 level would certainly lead toward the final parity of currencies. However, for the moment, charts are showing a potential for a short term reversal. In this sense, the level of 1,04 would be tested for one more time. Important news to watch during the week ahead are: EUR: HCOB Composite and HCOB Services PMI final for December in both Germany and the Euro Zone, Inflation rate in Germany preliminary for December, Inflation rate flash in December for the Euro Zone, Unemployment rate in the Euro Zone in December, Retail Sales and Factory Orders in Germany in November, Industrial Production in Germany in November, Retail Sales in the Euro Zone in November, USD: S&P Global Composite PMI final for December, S&P Global Services PMI final in December, ISM Services PMI in December, FOMC Minutes will be posted on January 9th, Non-farm Payrolls in December, Unemployment rate in December, Michigan Consumer Sentiment
by XBTFX
EURUSD Weekly Market Outlook EUR/USD pair, with an Entry at 1.03520 and And Next Target at 1.05014 such as the 2H timeframe, Based on the market conditions, or the technical pattern it's essential to keep in mind that trading decisions should be based in the analysis. 🤙Key Points 👊 🤙Current Price 1.03520 🤙Resistance Zone 1.05014 Market Conditions: Check if there are any major news events or economic reports scheduled that could affect the pair's movement. Would you like me to Share the analysis with you Rate Share your Idea What's Going On Thanks.
Long
by FxJennefir
17
EURUSD Price Hi Traders Here is overview of EURUSD Publish on 08 January 2025 Support Zone 1.02800 – This level is crucial as it represents the point where price may find buying interest, preventing further downward movement. If the price drops to this zone, it may be an opportunity for bulls to re-enter. Resistance Zone 1.04370 – This level marks a potential barrier for upward movement. If the price reaches this point, sellers may become active, pushing the price lower. Keep an eye on price action around these levels to understand the next potential move. PS Support with like and Comments for more insights.
Long
by majestic_Gold_Traders
1
EURUSD → The bears are stepping up the pressureFX:EURUSD continues to form a downtrend. The price updates the local minimum, reaching the target indicated last year :). What's next? Fundamentally, the situation is weak due to Trump's policy towards the euro zone. The strong dollar also increases the bearish pressure on the market. Technically, the priority figure is the downtrend and the previously broken consolidation boundary - 1.033. It is this zone that the price is currently aiming for as a zone of interest. Resistance levels: 1.033, 1.0448 Support levels: 1.022 Both technically and fundamentally the situation is weak, therefore, the emphasis on strong resistance levels from which the fall may resume. Regards R. Linda!
Short
by RLinda
1
Lingrid | EURUSD in Bearish TREND. New LOWER LowsThe price perfectly fulfilled my last idea. It hit the target. FX:EURUSD currency recently made an impulsive move, breaking through the significant level at 1.03000. On the 1H timeframe, the market formed a long-tailed bar, indicating buying pressure or a potential pullback. I anticipate that the market to roll back towards the resistance zone marked by November's low. I expect the market to bounce off this resistance zone and the downward trendline, which would present an opportunity for trend continuation. There is also a possibility that the price may form an ABCD pullback pattern. My goal is support zone around 1.02500 Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Short
by Lingrid
1
UPDATE of EURUSD, What's next ?Hello Traders, Hope you're doing great. let's go for Updating EURUSD analysis: as you can see, our last analysis is in good profit and if tomorrow's NFP come as forecast or better than expected, we may see 1.01 until next week. The only thing that causes risk for this trade is that TVC:DXY rejected multiple times from 109.300 and if it can't stabilizes above this number, we may see an upward correction in EURUSD. so may you ask what do we do now ? close our position or hold it ? which one ? I suggest you if you open your sell position with me, so close at least half of your position and move Sl to your entry point. And finally tell me what do you think ? UP or DOWN ? leave your comment below this post. If this post was helpful to you, please like it and share it with your friend. THANKS.
by aminrzb
2
EURUSD - possible sells with the Data release?Here is our analysis on EURUSD . Possible shorts in play. As we are anticipating the news release today, we can still assume the TVC:DXY will remain bullish. If the News and Data release is positive for the US Dollar , we could see more downside on the pair. With the new H4 just opening and the previous closing strongly bearish, we can assume that EURUSD will continue going down. Our Entry is sitting at 1.03272 with SL (Stop Loss) at 1.03587 . If we break above our SL we would most likely reverse and this trade idea would be invalidated. Our TP (Take Profit) is sitting at 1.02642 and if broken + the positive news and data release, we could see the price digging even deeper . PARAMETERS - Entry: 1.03272 - SL: 1.03587 - TP: 1.02642 KEY NOTES - EURUSD is bearish. - DXY (USD) still remains bullish and holds strength against other pairs. - Positive news for the US could result in even lower prices on EURUSD. Happy trading! FxPocket
Short
by FxPocket
1
Learn What is Confirmation Bias | Trading Psychology Basics In this educational article, we will discuss one of the most common cognitive errors of newbie traders - a confirmation bias. In order to better understand that term, I want to start with the example: Let's say that after doing some research, you are highly convinced that Bitcoin is bullish and that it is a decent investment. You decide to buy that from 90.000 level, expecting the exponential growth. Instead of growing, however, the market starts falling rapidly. Rather than closing your position in loss, you decide to do a new research and execute the analysis, you start looking for the proof of your pre-existing beliefs. You completely neglect the voices of Bitcoin sceptics and ignore bearish clues on the price chart. You consider only the facts that support a bullish outloo k, not letting you accept the other point of view. You become a victim of a confirmation bias. Unfortunately, such a psychological trap frequently prevents a closing of a trading position in time, leading to substantial losses. Confirmation bias is a common psychological error that makes a subject overvalue the information that upholds his existing beliefs and undervalue the opposing one. Here are the most common symptoms of that trap: 1️⃣One is neglecting the objective facts. 2️⃣One is interpreting information in a way to support the existing beliefs. 3️⃣One is considering only the facts that conform with his point of view. 4️⃣One is completely ignoring the information that challenges his beliefs. The only way to beat a confirmation bias in trading, is to learn to analyze the market from sellers' and from buyers' perspective . Your task is to compare the view of the 2 sides, and pick the one that is stronger, holding in mind the fact that everything can change. You should always remember of the changing nature of financial markets and be ready to always reassess your views. ❤️Please, support my work with like, thank you!❤️
Education
by VasilyTrader
1
EURUSD Next Week PredictionThe forex pair EUR/USD (Euro vs U.S. Dollar) is currently trading at 1.03070 and is expected to move upwards with a target price of 1.09500, offering a potential gain of over 400 pips. The analysis is based on the falling wedge pattern, a bullish reversal pattern that typically signals an upcoming upward breakout. Before reaching the target, the price is expected to complete a retest, likely near the breakout level of the wedge. This retest confirms the validity of the breakout and strengthens the upward momentum. Traders should watch for confirmation signals during the retest, such as bullish candlestick formations or increased buying pressure. If the retest holds, it increases the probability of the pair achieving the target. Risk management is crucial to protect against potential false breakouts. This setup aligns with technical analysis principles, emphasizing the importance of patience and disciplined trading. A successful trade could yield significant returns in alignment with the bullish projection.
Long
by AndrewsMarket-Mastery
Bullish bounce off 50% Fibonacci support?EUR/USD is falling towards the support level which is a pullback support that aligns with the 50% Fibonacci retracement and could bounce from this level to our take profit. Entry: 1.0335 Why we like it: There is a pullback support that aligns with the 50% Fibonacci retracement. Stop loss: 1.0265 Why we like it: There is a pullback support level. Take profit: 1.0442 Why we like it: There is a pullback support level. Enjoying your TradingView experience? Review us! Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Everest Fortune Group’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Everest Fortune Group.
Long
by VantageMarkets