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US100 ~ 4H Bullish Pennant (1H update)CAPITALCOM:US100 tapped & held above confluence. US Flash Manufacturing & Services PMI release could bring in some big swings in either direction...however intuition tells me majority of implied volatility will manifest next week with US data points: Wed - CB Consumer Confidence Thurs - Final GDP (q/q) | Unemployment Claims Fri - Fed Chair Powell Speech | Core PCE Price Index (m/m) | Revised UoM Consumer Sentiment & Inflation Expectations Play-by-play looks the way..
CAPITALCOM:US100
by BlueHatInvestor
US2000: Thoughts and AnalysisToday's focus: US2000 Pattern – Descending Triangle Pattern Support – 1840 Resistance – 1870 Thanks for checking out today’s update. Today, we have run over US2000, breaking down the overall price picture, levels, and patterns and incorporating moving average and RSI into the analysis. The Russel isn’t a market I normally watch or trade, but the descending triangle pattern did catch my eye today. Overall price sits in a range, but it has broken a trend on the inside and set up a LH. These patterns are normally seen as bearish after a trend break, but support looks rather firm at this stage. With the FOMC coming up later this week, watch out for a false breakout lower that closes higher. This could set up a higher breakout. If sellers continue to push at support, look for a solid close-through support with a new failed rally that sets a new weekly low. It’s going to be interesting to see which side gets the win here. Have a great day and good trading.
U
by Eightcap
NDQ100: Thoughts and analysisToday's focus: NDX100 Nasdaq Pattern – Higher lower support point (LH Inc) Support – 15,320 - 14,690 Resistance – 15,520 – 15,822 Thanks for checking out today's update. Today, we have run over the NDX100 on the daily chart. We have started with the overall picture and worked our way into the current short-term perspective with things we are watching and levels we view as important. Over the subsequent few sessions, we feel that 15,520 support is key for buyers, and we would like to see them not only hold that area but form a rally that can retest 15,320 resistance. A break could get the short-term trend back up and running, but a good close below that support level could suggest the up trend could be in danger, and we may even see a new move back down to test 14,690 if sellers can really get going. Have a great day and good trading.
N
by Eightcap
Nasdaq: support bounce to feed new continuation?Today's focus: NASDAQ (NDQ100) Pattern – Continuation Support – 15,015 Resistance – 15,435 • The Nasdaq led US indices on Monday, adding 1.05% • Could this be the start of a new continuation higher? Hi, and thanks for checking out today’s analysis. Today, our focus is on the NDQ100 index, and we are watching to see if yesterday’s rally and support hold could be the beginning of a new continuation pattern. In our last report, we discussed whether price could return to the main trendline after breaking its fast trend. From here, we want to see buyers continue to push forward. Today’s retail sales at 8:30 could be a factor, and we feel that overly strong data could hurt stock indexes. A move back to support would be a worry and could show that buyer strength is not that strong currently. If we we see price continue to rally, 15,435 could be a first test. Another news item to watch this week will be the FOMC meeting minutes. Buyers will be looking for a dovish tone from the Fed to help support upward momentum. Have a great day and good trading.
NLong
by Eightcap
Nasdaq: Price levels and price pattern analysis Today's focus: Nasdaq /NDX100 Pattern – Ascending Triangle Possible targets – 15,600, 16,500 Support – 15,000 Resistance – 15,220, 15,250 Today we are looking at the Nasdaq/NDX100 as price sits in a continuation pattern just below key resistance. This is an interesting set-up as we have key US inflation data coming out today, and interest rates remain a hottish topic. We have broken down the price action and pattern in today’s video and how this connects to the CPI data. There’s no guarantee that a drop will drive buyers onward, but it could also be a driver that continues buyer momentum and could set up a new test and break of the pattern. We will be watching the core figure as it’s been the most stubborn of the three. Y/Y is expected to drop to 3.1% and the Core to 0.3%. The CPI data is due at 8:30 am ET / 10:30 pm AEST. Have a great day and good trading.
N
by Eightcap
Mastering CFD Trading: A Comprehensive Beginner's GuideContracts for Difference (CFDs) have garnered significant attention as derivative products that offer traders the ability to speculate on the price movements of various assets without the need to own them physically. These financial instruments emerged in the latter part of the 20th century, propelled by the advent of the internet revolution, which revolutionized trading by facilitating swift and convenient short-term transactions. CFDs have since become an integral part of the repertoire offered by prominent brokers, providing traders with enhanced leverage and access to an extensive range of markets that encompass stocks, indices, currencies, and commodities. This broad market coverage has contributed to the popularity and widespread adoption of CFDs among traders seeking diverse investment opportunities. The historical roots of CFDs can be traced back to the late 1980s and early 1990s. It was during this period that derivative trading witnessed significant advancements, driven by technological progress and regulatory changes. The introduction of electronic trading platforms and the availability of real-time market data allowed traders to execute trades swiftly and efficiently, leading to the development of CFDs as a viable financial instrument. The operational mechanics of CFDs are relatively straightforward. When trading a CFD, the trader enters into a contract with a broker, mirroring the price movements of the underlying asset. This contract stipulates that the trader will pay or receive the difference in price between the opening and closing positions of the CFD. If the price of the underlying asset moves in the trader's favor, they stand to make a profit. Conversely, if the price moves against their position, they may incur a loss. One of the key advantages of trading CFDs is the ability to utilize leverage. Leverage allows traders to control a larger position in the market with a smaller initial investment. This amplifies potential gains, but it is important to note that it also magnifies potential losses. Traders should exercise caution and employ risk management strategies when using leverage in CFD trading. Furthermore, CFDs offer traders the flexibility to profit from both rising and falling markets. Through a process known as short-selling, traders can speculate on price declines and potentially profit from downward market movements. This ability to take both long and short positions provides traders with opportunities to capitalize on market trends and volatility. However, it is crucial to acknowledge that CFD trading carries inherent risks. Due to the leverage involved, losses can exceed the initial investment, potentially resulting in significant financial losses. Moreover, CFD trading is subject to market volatility, and sudden price movements can lead to rapid and substantial losses. Throughout this comprehensive article , we shall delve into the historical backdrop of CFDs, elucidate their operational mechanics, and present an evaluation of the advantages and disadvantages associated with trading these financial instruments. History Of CFD: Towards the conclusion of the 20th century, the landscape of exchange trading underwent a profound transformation, thanks to the advent of the Internet. This revolutionary technology empowered traders to engage in rapid short-term trades with unparalleled ease. Consequently, intraday trading emerged as a prominent trend, and astute brokers swiftly recognized the burgeoning demand for this segment among individual traders. However, a significant predicament persisted within the trading realm - exchanges were highly specialized and compartmentalized. Currency exchanges, stock exchanges, and futures exchanges operated as distinct entities, precluding traders from capitalizing on opportunities across multiple asset classes. For instance, a trader operating with a currency broker lacked the means to profit from futures or stocks. While opening multiple accounts with different companies was a possible solution, it was far from optimal. Furthermore, another obstacle loomed large: high leverage was imperative for generating profits through short-term transactions, yet traditional stock exchanges were averse to the risks associated with margin trading. In response to these challenges, visionaries at UBS Investment Bank conceptualized a new trading instrument known as the contract for difference (CFD). This innovative derivative allowed traders to profit from the price fluctuations of various assets without the need to physically own them or conduct transactions on the underlying exchanges. Traders could now conveniently engage in trading shares, oil, and other commodities using a single broker. Additionally, CFDs provided the desired leverage for short-term trading, overcoming the limitations imposed by traditional stock exchanges. Over time, CFDs became widely available, offered by popular brokers operating in diverse markets, including the forex market. Presently, this versatile financial instrument is successfully utilized by both short-term traders and long-term investors, catering to a broad spectrum of trading styles and planning horizons. The flexibility and accessibility of CFDs have made them an indispensable tool in the arsenal of market participants seeking to capitalize on price movements and maximize their trading potential. CFD Leverage Explained: One of the notable features of CFD trading is the availability of margin trading, which enables traders to borrow funds from their brokers. This concept is closely tied to the notion of leverage, which has a significant impact on the trading process. Leverage allows traders to control larger positions in the market with a smaller amount of their own capital. To illustrate the concept, let's consider an example. Suppose a trader utilizes a 1:50 leverage. This means that with just $1,000 of their own funds, they can open a position equivalent to $50,000. In this scenario, the borrowed funds provided by the broker amplify the trader's purchasing power, enabling them to access larger market positions. The level of leverage available in CFD trading varies depending on the underlying asset being traded. For instance, when trading shares, the leverage typically ranges up to 1:20. On the other hand, for commodities like oil, leverage can often reach as high as 1:100. It is important to note that when comparing leverage in CFD trading to leverage in forex currency pairs, the ratios may appear different. A 1:20 leverage in CFDs might seem relatively lower when contrasted with the leverage commonly available in forex trading. However, it is crucial to consider these ratios within the context of their respective markets. In traditional stock markets, equity leverage is typically limited and rarely exceeds 1:2. This means that traders in those markets have less flexibility in terms of controlling larger positions with a smaller amount of capital. In contrast, CFDs provide traders with significantly higher leverage, allowing them to amplify their potential gains and losses. It is important to approach leverage in CFD trading with caution and exercise risk management strategies. While leverage can magnify profits, it also amplifies potential losses. Traders should be mindful of the increased risk associated with higher leverage levels and consider their risk tolerance and trading strategies accordingly. Comparing leverage ratios across different markets provides insights into the varying degrees of flexibility and risk exposure available to traders. Understanding and utilizing leverage effectively is an essential aspect of CFD trading, enabling traders to optimize their trading strategies and potentially enhance their profitability, while remaining cognizant of the associated risks. How CFDs Work: Let's break down the scenario provided to understand the implications of trading CFDs compared to traditional stock ownership. Assuming the Ask price per share is $171.23, a trader purchasing 100 shares would need to consider additional costs such as commissions and fees. In a traditional brokerage account with a 50% credit on margin, this transaction would require a minimum of $1,263 in available funds. However, with CFD brokers, the margin requirements are typically much lower. In the past, a 5% margin was common, which would amount to $126.30 for this trade. When opening a CFD position, the trader will immediately experience a loss equal to the size of the spread at the time of the trade. For example, if the spread is 5 cents, the stock price must rise by 5 cents for the position to reach the breakeven level. If the trader owned the stock directly, they would make a 5 cents profit. However, it's important to consider that owning the stock directly would entail paying a commission, resulting in higher overall costs. Now, let's consider the scenario where the offer price of the stock reaches $25.76. In a traditional brokerage account, positions could be closed at a profit of $50, resulting in a 3.95% return on the initial investment of $1,263. However, in the case of CFDs, when the price reaches the same level on the national exchange, the bid price on the CFD may be slightly lower, let's say $25.74. Consequently, the profit from trading CFDs would be lower since the trader must exit the trade at the bid price. Additionally, the spread in CFD trading is typically wider compared to regular markets. In this example, the CFD trader would earn approximately $48, resulting in a 38% return on the initial investment of $126.30. It's worth noting that these figures are specific to the example provided and may vary depending on various factors, including the specific brokerage, market conditions, and the pricing dynamics of the underlying asset. Why Trade CFDs / Pros And Cons Of Trading CFDs Indeed, one of the significant advantages of trading CFDs is the expanded range of tradable instruments compared to the classical forex market. While the forex market primarily deals with currencies, CFDs provide traders with the opportunity to trade a wide array of assets. Most brokers now offer CFDs on various instruments such as gold, stocks, and stock indices, greatly diversifying the available trading opportunities. However, it is important to note that CFDs are not a direct replacement for the underlying assets. Although the price of a CFD contract reflects the price movements of the underlying instrument, there may be differences in the actual returns. These differences can be attributed to factors such as spreads, commissions, and other costs associated with CFD trading. Speaking of commissions, it is crucial to consider that CFD commissions may differ from those applied to the underlying asset. This distinction becomes particularly relevant in longer-term trading scenarios. Traders need to carefully evaluate the commission structure and any associated fees when assessing the overall costs of trading CFDs. Now let's delve into the main advantages and disadvantages of trading CFDs: Pros of CFD Trading: 1 ) Expanded Market Access: CFDs provide access to a wide range of markets, including stocks, commodities, indices, and more, allowing traders to diversify their portfolios and capitalize on various asset classes. 2 ) Leverage and Margin Trading: CFDs offer the potential for higher leverage, allowing traders to control larger positions with a smaller initial investment. This amplifies potential profits (as well as losses) and can enhance trading opportunities. 3 ) Ability to Profit from Both Rising and Falling Markets: CFDs enable traders to take advantage of both upward and downward price movements. Through short-selling, traders can speculate on price declines and potentially profit from falling markets. Cons of CFD Trading: 1 ) Counterparty Risk: When trading CFDs, traders are exposed to counterparty risk, as they enter into contracts with the broker rather than owning the underlying assets. If the broker encounters financial difficulties or fails, it can impact the trader's positions and funds. 2 ) Potential for Higher Costs: CFD trading may involve additional costs such as spreads, commissions, and overnight financing charges. These costs can impact overall profitability, especially for longer-term trades. 3 ) Market Volatility and Risk: CFDs are subject to market volatility, and sudden price movements can result in rapid and substantial losses. The use of leverage in CFD trading can amplify both gains and losses, making risk management crucial. It is essential for traders to consider these pros and cons when deciding to engage in CFD trading. Adequate risk management strategies and a thorough understanding of the underlying markets and associated costs are essential for successful and informed trading decisions. Risks Of Trading CFDs: Trading CFDs (Contracts for Difference) involves inherent risks that traders should be aware of before engaging in such activities. Understanding these risks is essential for making informed decisions and implementing appropriate risk management strategies. Here are some of the key risks associated with CFD trading: Leverage Risk: CFDs allow traders to access larger market positions with a smaller initial investment. While leverage can amplify potential profits, it also magnifies losses. Traders need to be cautious and manage leverage effectively to avoid significant financial setbacks. Market Risk: CFDs are directly linked to the price movements of underlying assets, which can be influenced by various factors, including economic indicators, news events, and market sentiment. Rapid price fluctuations can lead to substantial losses, especially if positions are not managed appropriately. Counterparty Risk: When trading CFDs, traders enter into a contractual agreement with the CFD provider. This exposes them to counterparty risk, which refers to the possibility of the provider failing to fulfill its obligations. It is crucial to choose a reputable and regulated CFD provider to minimize this risk. Operational Risk: CFD trading platforms can experience technical issues, such as system outages or errors, which may prevent traders from executing trades or managing positions effectively. Traders should be prepared for such operational risks and have contingency plans in place. Liquidity Risk: In certain cases, CFD markets may lack sufficient liquidity, meaning there is a limited number of buyers and sellers. This can make it challenging to enter or exit positions at desired prices, particularly during volatile market conditions. Traders should be cautious when trading illiquid CFD markets. Hidden Costs: Some CFD brokers may impose additional fees and charges, such as overnight financing fees or spread mark-ups. These hidden costs can reduce profitability over time, and traders should carefully review the fee structure of their chosen CFD provider. To mitigate these risks, traders are advised to implement risk management techniques, including setting stop-loss orders to limit potential losses, conducting thorough market analysis, and continuously monitoring positions. It is also crucial to conduct due diligence when selecting a CFD provider, ensuring they are regulated and offer transparent pricing structures and reliable customer support. By understanding and effectively managing these risks, traders can enhance their chances of success and navigate the complexities of CFD trading more confidently. Choosing A Broker For CFD Trading: When selecting a broker for CFD trading, certain parameters take precedence. These include: 1 ) Reliability and Reputation: When it comes to CFD trading, the importance of a broker's reliability and reputation cannot be overstated. Given the instrument's relative lack of popularity, there may be instances of limited liquidity, which increases the temptation for unethical practices such as manipulating charts or altering quotes. It is crucial to choose a broker known for their trustworthiness and positive reputation. 2 ) Variety of CFDs for Trading: It is advisable to thoroughly examine the broker's website and review the comprehensive list of available contracts. Ensure that the list includes the specific CFDs you intend to trade. Having access to a wide range of CFD options allows you to diversify your portfolio and pursue various trading opportunities. 3 ) Contract Specifications: Identify the CFDs in the broker's list that you plan to trade frequently. Pay attention to the contract specifications, including spreads, commissions, and swaps, as they should align with your trading style and objectives. If you require high leverage, verify the leverage availability for each CFD category. By carefully considering these parameters, you can make an informed decision when choosing a broker for CFD trading. This will contribute to a more satisfactory trading experience and help you align your trading strategy with your goals. Conclusion: Contracts for Difference (CFDs) provide traders with a gateway to a diverse range of popular exchange-traded assets. Through a single CFD broker, traders can engage in trading activities involving stocks, indices, and even cryptocurrencies. The key to achieving success in CFD trading lies in the trader's level of proficiency in understanding the intricacies of specific instruments. The most favorable outcomes are typically attained by individuals who concentrate their efforts on a particular asset class or even a specific instrument within that class. By acquiring comprehensive knowledge and a deep understanding of the various factors that influence prices, traders can surpass market performance and reap the rewards they rightfully deserve. This focused approach enhances their ability to make informed decisions, seize profitable opportunities, and maximize their potential gains in the CFD market.
COINBASE:BTCUSDEducation
by FOREXN1
12
Platinum, could this be a new swing higher?Today's focus: Platinum Pattern – Support hold, trend break Possible targets – 1070 Support – 993 Resistance – 1035, 1070 Today’s update is on Platinum. We have run over our thoughts and levels we are watching. Yesterday’s solid rally has held support and has started to test support after breaking the current downtrend. Will we see buyers clear resistance and confirm the trend break? Thanks for stopping by. Good trading, and have a great day.
EIGHTCAP:XPTUSDLong
by Eightcap
USD buyers ready to test resistance again?Today's focus: USD Index Pattern – Continuation Possible targets – 105.60 Support – 103.40 Resistance – 104.20 Today’s update is on the USD index. Do we have a new uptrend? For us, we want to see resistance beaten. If we can see a break, this could set up a new move to 105.60 and a break of that level take price out of its consolidation range and gets an uptrend going. For now, we have a short-term up trend, but buyers have more work to do to confirm it overall. If we see a new retracement, we want to see support hold. A move back to 102.70 is a worry if you’re on the short-term bull side. With momentum back in the buyer’s court, will we see a break of resistance? Thanks for stopping by. Good trading, and have a great day.
Editors' picks
EIGHTCAP:USDXLong
by Eightcap
10
US30 Analysis, can support hold for buyers?Today's focus: US30 Pattern – Support point, descending triangle. Possible targets – Downside 31,840 Upside 31,160 Support – 33,033 Resistance – 33,705 Thanks for checking out today’s update. Today’s analysis is over the US30 daily as price sits around support in a descending triangle pattern. Yesterday price broke lower after buyers failed to beat Monday’s high. The debt ceiling issue continues to look like the key issue, with price reacting negatively after no ground was made on Tuesday. This could continue to drive momentum, and bad news could equal downside risk, while a deal could give buyers plenty of drive. This week’s meeting minutes are another factor; traders will be looking for more clues on rates and how the Fed is seeing inflation atm. We are also hoping to hear more about how the banking issues are factoring into the Fed’s view. Thanks for stopping by. Good trading, and have a great day.
U
by Eightcap
Oil continues to test key resistance after the OPEC surge. Oil continues to hold firm on Wednesday after a strong surge on Tuesday that saw close to two percent added after sellers looked to test the new floor set up by buyers after the stunning gains seen after OPEC's surprise production cuts. Since the news price has sat in a range between $79.65 and HKEX:81 , maybe we would have seen a new test lower to see how firm the gap was. No, buyers made a new push yesterday, breaking out of the mini range, but now continue to be held back at key resistance. Early in the LON session, buyers are trying to push, but resistance remains in play for now. Looking at yesterday's momentum, if we can see it continue, could this be the move that finally clears this level of resistance? We feel that if we do see a break, this could open up buying, and there's a chance we could see the low 90s possibly tested. The drivers behind the rally are firm, but traders will need to keep an eye on the US response if we see oil trading back at certain levels, as this will start to impact their continuing war with inflation. What do you think? Could we see USOUSD trading back at HKEX:83 - HKEX:85 this week or next? Good trading.
EIGHTCAP:USOUSDLong
by Eightcap
US30 starting to stall at resistance. Hi traders, this is just a general observation, not a trade idea. Tonight we noticed that the US30 has started to fade at a previous level of resistance. With the Core PCE to come, could an expected jump to the upside add to the small seller momentum we are starting to see? This week we have seen some decent buying so far, but could today’s action be a small hint at profit-taking starting to come in? If we see new buyer demand appear and price makes a new high today, then this idea could be canceled. If we do see a pullback today and it remains at or above the trendline and moving average, this could set up a possible buy idea next week if buyer momentum continues. Have a great weekend and good trading.
UShort
by Eightcap
Will the FOMC continue the US30s run higher?Traders will be looking forward to today’s FOMC seeking future direction on rates as inflation starts to cool but remains high. The new banking crisis has also significantly influenced the markets over the last several weeks. Stocks have been one of the markets hardest hit by the uncertainty thrown up by the banking crisis. The US30, in particular, has been hard hit, and sellers cut just over 7% off the index in four weeks. Looking at recent price action, we can see some buyer confidence returning after bailouts, and political action was taken to help stop the rout. The US30 held support and broke its tight range yesterday with a 0.98% rally. Inflation and rates had been key influences before the banking issues arose. Today’s FOMC could play an important role in the short term. Rates are now basically priced in with a 25-point increase, and Fed trackers see a 15% chance of a hold at an 85% chance of a 25-point increase. The statement for us is the important part unless we see a hold which would be unexpected and should give the US30 a boost through its trendline. If the Fed remains hawkish and discounts the banking issues, this could set off selling with worry over higher rates and possible inaction to support the sector. If the message is more to the dovish side, we will be looking for further upside from the new up leg, and hopefully, a break of the current trend could show signs that the correction could be starting to wain. Minor resistance remains at 32,600, and support is seen at 31,850. Price continues to hold a series of LHs and LLs, but a new push higher could break that pattern. The short term comes down to the fed message, which will be released at 05:00 am AEDT with the Federal funds rate. The press conference follows at 05:30 am.
ULong
by Eightcap
Can GER30 buyers resume the trend? Hi, and welcome to today's GER30 update. Yesterday buyers fought back from the range low to post a solid session that could be stage one in a new leg higher that could continue the current trend. Buyers still have some work to do. We want to see a break of yesterday's high and a break of the current resistance and highs set last week. A new trend point has started forming, but buyers still have to confirm it. We can see price has started to confirm, and the moving average and CCI are supporting possible higher prices, but for now, buyers need to take that final step. A piece of key data may have an impact, and that's today's US CPI data. The CPI data will be released tomorrow at 12:30 am AEDT. If the data matches or comes in lower than expected, this could boost stocks. If it comes in worse than expected, this could favor sellers. 15,500 is the current resistance, and support is seen at 15,260. If buyers can break yesterday's high, that's a solid first sign, but we feel the market will be waiting on the CPI data before we see some real direction. Good trading.
GLong
by Eightcap