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Without this, you will not become a profitable trader Yes, this is risk management. Without proper risk management, your trading strategy based on levels, indicators, patterns, etc.will not make any sense. Any trading strategy should be supported by strict risk management, where the maximum allowable losses per transaction and the risk ratio are observed:the profit is always more than 1/2. You don't have to be right in every trade. It's just that your profit in successful transactions should be greater than the losses in unprofitable transactions. This correct use of risk management will lead you to success. ____________ The example shows one of the real scenarios of any trading system where the rules of risk management are observed: Deposit of 10,000$ The risk per transaction is -1% (or -100$) Total trades: 4 profitable trades = +14% 10 losing trades = -10% Total: +4% (or + 400$) Even though only 30% of the total number of profitable transactions, we still have a profitable result. Learn risk management and become a consistently profitable trader. ❤️ Please, support our work with like & comment! ❤️
Editors' picks
OANDA:XAUUSDEducation
by UnitedSignals
128
XAG/USD EVERY SUNDAY LIVE ZOOM ANALYSISThe gold & silver market is pushing significantly higher, following a significant miss in the U.S. labor market with fewer jobs created in August. Friday, the U.S. Labor Department said that 235,000 jobs were created last month. The data was weaker than expected as consensus forecasts called for jobs gains of 720,000. While the headline data saw a significant miss, the Labor Department included substantial revisions to its June and July numbers. June's employment numbers were revised up by 24,000 to 962,000 from the previous estimate of 938,000. Meanwhile, July's data was revised up to 1.053 million jobs compared to the initial estimate of 943,000. However, some economists note that the strong revisions are not enough to take the full sting out of the disappointing headline numbers. Meanwhile, the U.S. unemployment rate dropped to 5.2%, down from July's reading of 5.4%. The unemployment rate fell in line with expectations. The gold market has broken through critical near-term support levels in initial reaction to the weaker-than-expected employment data. December gold futures last traded at $1,827.10, up nearly 1% on the day. Not only was job growth weaker last month, but positive for gold, wage inflation continues to creep higher. The report said that wages rose 0.6% in August, up from July's 0.4% increase. Economists were expecting to see a 0.3% increase. A lot of focus had been placed on the August employment numbers. Many Federal Reserve officials noted that a strong number could prompt them to launch their plans to reduce their monthly bond purchases. However, some economists say the disappointing data could force the central bank to delay those plans. "This disappointing report will make it a closer call than we expected for a September tapering announcement from the Fed," said Katherine Judge, senior economist at CIBC. Paul Ashworth, chief U.S. economist at Capital Economics, said that the latest employment numbers puts the Federal Reserve in a very difficult position. He noted that the economic data shows the COVID-19 pandemic and the spreading Delta Variant is impacting the current recovery. “Even allowing for the fact that first estimates for August often disappoint on the downside, the extent of the slowdown in jobs growth all-but rules out any tapering announcement at this month's FOMC meeting and, if this weakness persists, then it could be pushed into early next year. XAG/USD EVERY SUNDAY LIVE ZOOM ANALYSIS UK 18:00
OANDA:XAGUSDEducation
by globalsymmetrygroup
1
Trading psychology & becoming a profitable trader over timeIf you find the analysis useful, please like and share our ideas with the community. Any feedback and suggestions would help in further improving the analysis! Is it true that in the markets, over 90% of traders lose money? Likely! In that case, only a small percentage of traders remain profitable over a longer period. Although some people perceive trading as akin to speculating, it definitely isn’t! Over the course of years of professional trading, one thing is clear: Trading is more about discipline and psychology than drawing support and resistance lines on the charts. The fundamental principles of a trading mindset could be categorized as follows, in their order of importance: Preservation of capital Consistent profitability Pursuit of higher returns Preservation of capital is the most crucial aspect of trading. Everytime we trade, we put the capital at risk. We need to be prepared with ways to mitigate the risk even before entering the trade. If the capital is lost, we will be thrown out of the markets. Winning and losing will continue to be part of the game. It is essential for us to make sure that we never lose more than we win. To determine the viability of any trade, traders most often use a criteria called risk versus reward. This simple criteria allows one to judge whether entering the trade is worthy enough. If the risk versus reward for a particular trade is 1:3, in simple terms it means the trader would risk $10 for a potential profit of $30. Entering unnecessary trades without looking at the risk v/s reward can be disastrous. Although there might be some winning trades, in the long-run such traders almost always end up burning their capital. Consistent profitability as concept comes as a natural succession to the preservation of capital principle. Capital doesn’t remain static. It is either gained or lost. One needs to be consistently profitable to gain capital. In order to achieve this, one needs to preserve the gains and minimize the losses. Assume that a trader only enters trades where the risk/reward is at least 1:3. If the trader wins 1 in every 3 trades, he still ends up being profitable. ( Take a look at the table in our chart ) By banking 50 percent of total returns each time you go from a negative to a positive return within your measuring period, you both increase the amount of available capital after each gain and increase the probability that you will remain profitable. In actual practice, you might decide to bank 50 percent of the net from each profitable trade as long as your performance was positive, but the results would not be substantially different. The basic idea is to never put all your profits at risk. It is fine to double up on a profitable position, but not if it means putting all your gains at risk. The pursuit of superior returns The pursuit of superior returns involves more aggressive risk taking, and only with a portion of profits, never initial trading capital. Most people might think aggressive risk taking involves altering the basic risk/reward criterion. To the contrary, it is foolish ever to ignore or underweigh potential risk. Profits, once accrued, are essentially the same as capital, and must be preserved. But once you have achieved a comfortable level of profits, it is appropriate to increase the size of positions by risking a portion of profits. If you win', you dramatically increase your returns. If you lose, you are still profitable, and can continue to pursue consistent profitability until you reach a higher risk plateau once more. A successful trader never lets her emotions get the better of her. As stated by Victor Sperandeo in his book ‘Principles of Professional Speculation’, a traders' commandments should be as follows: Do not overtrade. Do not take a loss home. Never add to a bad trade. Never let a profit become a loss. Always figure your stop loss before you initiate a trade. Don't be a one-way trader. Be flexible. Add to profitable trades when appropriate. The best time to buy or sell is after consolidations and a break above or below range prices. Parts of this post have been referenced from Victor Sperandeo's book, ‘Principles of Professional Speculation.’ ---------------------------------------------------------------------------------------- Do give a follow and leave a like in case you like our posts. Keep supporting:) -Mudrex
Education
by Mudrex
12
XAU/USD - CHART ANALYSIS - NFP ! The gold market still has a path to $2,000 in the second half of the year as the precious metal is undervalued in a world awash with liquidity, according to the latest research from Bloomberg Intelligence (BI). In a report published Wednesday, Mike McGlone, senior commodity strategist at BI, said that within the metals complex, gold appears to have the most potential when compared to other assets like copper and aluminum. "Copper and aluminum are reaching upper range price caps, but we see gold as a discounted bull market with improving fundamental underpinnings," he said in the report. "The copper-to-gold ratio has reached the highest level in about seven years and a rare disparity vs. declining U.S. Treasury bond yields, which we expect will be resolved by a resumption of the precious metal outperforming the industrial. Looking at aluminum, McGlone said that tightening supply and demand fundamentals are helping to push prices to $3,000 per tonne; however, similar to copper's run to $10,000, he added that aluminum’s rally appears to be unstable. He said that the industrial metal complex faces some challenging near-term hurdles. "Supply elasticity is proving strong for copper, indicating headwinds for the industrial-metal sector, but ESG, electrification and decarbonization trends should maintain the group's upper hand vs. most other commodities, with the exception of precious metals," he said. "Among the most supply-constrained commodities, gold and silver have the relative advantage heading toward the end of 2021 of having experienced sharp corrections within more enduring bull markets, as we see it." While there is plenty of bullish sentiment surging through precious metals markets, gold prices continue to struggle to find consistent momentum. The precious metal is holding support above $1,800 an ounce, but it has been unable to push above $1,820 an ounce. December gold futures last traded at $1,810.80 an ounce, down 0.29% on the day.
OANDA:XAUUSDEducation
by globalsymmetrygroup
IMPROVE YOUR TRADING | Simple Flowchart For You to Follow 🧭📍 A short ⚠️disclaimer before we start: the rules that will be discussed in this post are applicable only for technicians - traders that are relying on price action/structure/etc. Also, we assume that structure levels do work and for us, key levels are considered to be the safest trading zones/points. In order to increase the accuracy of your predictions analyzing different financial markets, you must learn to identify the direction of the market.📈 The identification of the market trend must be based on strict & reliable & testable rules. It can be based on technical indicators or price action Personally, I prefer to rely on price action. Here are a couple of examples of how I identify the market trend: There are three main types of market trends: Bullish Trend Bearish Trend Sideways Market Depending on the current direction of the market, on the chart, I drew a flow chart✔️ that will help you to act safely. ➡️Sideways market signifies consolidation & indecision. Usually being in such a state the market tends to coil in horizontal ranges. To trade such a market safely, the best option for you will be to wait for a breakout of the range & wait for the initiation of the trend. ➡️Once you spotted a bullish market, do not rush to buy. Your task will be to identify the closest strong structure support. You must be patient enough to let the price reach that support first (and by the way, there is no guarantee that it will happen) and then you must wait for a certain confirmation. Please, check the article about different types of confirmations: Only once you get the needed confirmation you can buy the market. ➡️The same strategy will be applicable to a bearish market. Spotting a short rally it is way early to just sell the asset from a random point. You must find the closest strong structure resistance and wait for the moment when the price will approach that. Then your task will be to wait for a confirmation and only when you got the reliable trigger you short the market. 🦉Try to rely on this flow chart and I promise you that you will see a dramatic increase in your trading performance. And even though it may appear to you that this flow chart is TOO SIMPLE, in practice, even such a set of rules requires iron discipline and patience. Thank you so much for reading this article, I hope you enjoy it! ❤️Please, support it with like and comment. Thank you!
Editors' picks
FOREXCOM:XAUUSDEducation
by VasilyTrader
163
Global events - the last 18 Months. I recently posted a timeline of Bitcoin events as well as record several videos on the current Elliott Wave moves around Bitcoin, DXY and a few Forex pairs. Here’s a link to the Bitcoin timeline; Looking back at the last 18 months or so now, I wanted to cover some of the significant events that have taken place, which would have had some (but not as much as you think) of an effect on the Elliott counts as a whole. For those of you not familiar with Elliott, there is a link in the ‘related ideas’ section covering the basics. So, let’s go back in time; Brexit announced back in 2016 – carried through and completed in 2020. Thus, kicking off the year with a fair size event, the global markets not quite sure what the fall out would be, where the damage would come and of course if there where to be profitable positions to obtain. An awful lot of hesitation & fear seen in the market. Jump forward to the next big event; although COVID-19 was technically pre 2020, the real effects did not start to emerge until early 2020 when the world went into LOCKDOWNS, crazy mayhem soon followed and has not really disappeared since. After the world starts to go mad! A few other things happen during this period! - Oil goes negative for the first time in HISTORY - Gold hits $2,000 - S&P creates an all-time high If this was not enough to cause global confusion, we also had an interesting period in the United States. All though there are plenty of other events that have shaped this last 18 months or so, you can clearly see with so much – the charts will be a little more sporadic, a little harder to read. So, although methods such as Elliott and Wyckoff are still very powerful. Even Wyckoff Schematics got a good run in the social media platforms! (Probably kicked that off in March) 😉 Interesting times ahead - @TradingView community, take care of yourself and keep in mind! It’s been a crazy 18-months, 2 years! **(This is not a trade idea, even a bias - it's just highlighting how insane these last 18-months have been) For education on Wyckoff and Elliott - see my bio below; Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
TVC:DXYEducation
by Mayfair_Ventures
Today’s Notable Sentiment ShiftsHigh-Beta – AUD, CAD and NZD benefited from rising commodity prices on Tuesday, as markets set aside concerns about the spread of the Delta coronavirus variant. The notable outperformer in the commodities complex was oil prices, with WTI approaching $68 per barrel, up almost $2.50/+3% on the day. Indeed, following today’s strong performance in WTI, TD Securities noted that: “With the impact on demand fueling chatter that OPEC+’s next monthly output hike could be delayed, and China’s “Zero-Covid” strategy appearing to have quickly contained the outbreak, crude oil could once again have a solid footing to challenge the $70s.”
OANDA:WTICOUSDEducation
by thunderpips
5
AUDUSD - How To Trade This Channel! 😍 📚AUDUSD is in a really nice channel where price is respecting both the limits of the channel. We saw a nice bounce off the channel support and looks like we'll be heading towards the channel resistance very soon. The basic rules of trading within a channel are the following: - Buy on bounce off channel support - Sell on rejection off channel resistance - Stoploss outside of the channel - Targets should be the outer limit of the channel ** For descending channels, the move down will always be bigger than the move up ** For ascending channels, the move up will always be bigger than the move down Do your best to identify channels in your trading - easy trades! Goodluck and as always trade safe!
Education
by WicktatorFX
5
Most Powerful Formation in Technical Analysis Sideways Channel!Hey traders so in the last lesson we spoke about how the Head & Shoulders pattern is great for spotting tops and bottoms in the market. Today I want to introduce you to the most powerful formation in all of technical analysis called The Narrow Sideways Channel. This is every traders dream to learn how to catch the big moves and profits that make history in the markets. They don't happen very often but when they do the market can explode and we can catch the big move before it happens. If you ever see one of these on your charts get ready to strap in your seatbelt because it will be a wild ride! Enjoy! Trade Well, Clifford
BITSTAMP:BTCUSDEducation
by TradeTheIndex
1
MrRenev portfolio exposedHere is my current short term portfolio. This might give the reader an idea of how a moderately diversified short term portfolio might look. I use various tools (including turbos, options...) so it's hard to say how much I have in, but I know how much of original risk I got. Which is today €500. I added my little XRP bag from earlier this year to my crypto holdings to get to exactly 500. It makes more sense to build a PF looking at risk rather than the size that doesn't mean anything by itself. Of course I have some winners and I have trailed my stop so this is why I precise "original" risk, that's the risk when I opened the position. The whole thing is maybe €40,000 with €25,000-€30,000 in Forex which would make it around 70% but it is less volatile, in "risk" terms it's actually 30%. Entry stops are tight (for example 0.50% with FX, 2% with S&P, 1% with commodities depends). I am sure I have 25 to 30K in FX, it's the rest that is hard to evaluate. Here is the detail: 30% - Forex: 2 longs on the Yen, 2 shorts on AUD, and short USDZAR. 25% - Commodities: Gold, Platinum, Natural Gas. All long. 23% - Indices: All in the S&P500 long, pyramided in since April. 12% - Crypto: Mostly Bitcoin. And a bit of XRP (it's less than 6 month old). 10% - Stocks: Pfizer & Moderna. I also have a few stocks & cryptos that I hold long term and have not listed here. And cash in the bank. And physical goods in my house. I even have stamps and a few old coins. I don't check on it every day, or week, or month, or year, but I really don't care about the long term stuff, I am focussed on the long term. Looks like I have found a perfect trick to not worry. I am not "ultra" diversified, but some billionaires have hinted that diversification may be for idiots. If you saw Ray Dalio present his "holy grail" you know that (roughly) you get a huge improvement in risk adjusted returns going from 1 to 5 (good) positions, a little more improvement going from 5 to 10, and it basically flatlines past 10 positions no matter how much you add. This is universally true, I'm sure it can be proven by a mathematician and the limit of growth will be Euler's number 2.718 (like maybe the stdev can only be improved 2.718X?), no matter how many uncorrelated positions are added. The reasons for having dozens of positions is either you're such a whale you have to, or you're trying to attract clients and plenty of positions makes you look pro and justifies the cost and also makes it look too complicated to do for a novice. My positions shown here are all short term, with: FX and Commodities and Stocks (65%) all under 2 months S&P500 and Crypto (35%) all under 6 months I have been long US indices since September or October of 2020 but it was tech100 and I closed it all since then. 33% of my holdings are correlated to the US stock market but I am in the green on the S&P and have guaranteed stops, I have pyramided into my winner over time, so there is actually no major risks there. I am not a professional risk manager and I don't give advice but I don't think I have crazy risks. No single instrument (a currency, an indice) ever has a leverage over 5 (when adding all pairs or all correlated indices). The max leverage I have been using on a position ever as far as I can recall is 2 (0.25% stop loss with a leverage of 2 = risk of 0.50% on the single position). Anyone who understands elementary school level maths should be able to understand the problem with too much volatility: A 3% drawdown takes a 3.09% profit to get back to breakeven. This is 3% more (3.09% is 3% more than 3%). A 10% drawdown takes an 11.11% profit to get back to breakeven. This is 11.11% more. A 30% drawdown takes a 42.9% profit to get back to breakeven. This is 42.9% more. A 70% drawdown takes a 233.33% profit to get back to breakeven. Good luck. Simply since this is short term there will be much more volatility, so careful with leverage! (Indeed, if a long term portfolio had say 15% deviation happen every 100 years, the short term one could have this every 100 months or even 100 weeks). And then there are the black swan events... They don't happen but when they do it stings. And in one's career they WILL happen. Bill Hwang got destroyed by having 5 leverage on all his money, concentrated in a few stocks. The "Swiss Franc Tsunami" was a 15% drop. You'd have to be a complete mongrel to get wiped out, that would require over 6 leverage on a single currency. Legend james Cordier had next to 100 leverage divided between only half a dozen commodities, he was riding at least a 10X on NatGas alone. Even if you had 10 leverage on stocks but distributed in 10 a 20% gap down wouldn't wipe you out it's very unlikely they ALL gap down. Don't go 10X in stocks even if diversified, that was just for the example, in the EU it's not even possible anyway max is 5. I even posted ideas for some of those positions With Bitcoin I think I post everything. Not sure. Almost 1 year ago, "buy area visited", hah I actually bought the very bottom. As I said this is nearly 1 year old but I moved to the S&P500 back in April to catch a new swing. 2 different trades within a long term bull bias. Buying pullbacks with tight stops you get stopped often but you also buy the very bottom often. I probably mentioned my transition to the S&P500 somewhere but without details and I don't write every single time I add or take profit or reduce my position. Might add a bit to crypto if it keeps going. Hopefully I get to short GME soon, should reduce my overall stock risk, maybe. It can always shoot up while the rest crashes down, I don't think this is likely it's a 1/100 thing, it does happen, and you want to make sure you'll survive it, but it doesn't happen that often so it's worth taking the risk. Typicall I might have something like this: 10 positions 2 wins I'm trailing (> 5R) 3 little wins trying (2.5-4.5R) 5 positions around my entry (between -1R and 2.5R) I rarely see red in my accounts, losers go quite fast. So mostly I look at positions in the green. It has the benefit of feeling good. Losers hold losers, that simple. Individual positions are very volatile, I might see a currency pair have a drastic move against me and crush my soul, but then I log in my accounts and I see my overall profits have not moved much, while the 1 pair was crashing 3 other ones sligthly went up. So it makes it more of a slow and steady growth rather than some hysterical bipolar game.
Education
by MrRenev
3
Technical Analysis Vs Fundamental AnalysisTA Vs FA Both Technical and Fundamental analysis seeks to evaluate an asset. In my opinion, these 2 major analysis methods are similar more than you think! FUNDAMENTAL ANALYSIS The FA involves the financial analysis of an asset by focusing on the underlying factors that affect that asset. The assumption behind fundamental analysis is that the market does not always value assets (shares commodities, crypto, etc) correctly in the short term. Fundamental analysers try to identify the intrinsic value of assets to buy at a discount or sell at a high. They believe their investment will pay off over time once the market realises the fundamental value of an asset. TECHNICAL ANALYSIS: The technical analysis seeks to evaluate a company by: Using historical price, and Using Volume data to assess where the price of a security or market will move in the future. This means technical analysers are looking at past patterns and trends to see if they are repeatable in the future. one of the most important items in TA is the trend which shows a continuation of the current situation. WHY DO I THINK THESE 2 ARE VERY ALIKE? As mentioned, Fundamental analysis tries to identify the true value of an asset. For example for a company share price, FA will look at the company's balance sheet, cash flow statement, earnings reports, etc. The technical analysis considers that there is no need to do this hard work as a company’s fundamentals are already accounted for in the price, and the information is reflected in the company’s charts. So we need to look at charts and use indicators to find the best entry prices and the market will follow the trend. Many times if a financial report surprises traders we will see a spike in the price and depending on the nature of that news and other reports price may change direction or continue the previous trend.
NYSE:ASHEducation
by apadanaforex
2
The cicles of the volume peaks for intraday trading GOLDThese are the most volume supported price action times, which give a clear direction and positioning of big traders that move the markets. Between 14hrs and 15hrs (UTC+1) there is a high volume entry. Entrys must be done before that time or during the entry of volume , which is a gradual process until it reaches the highest point of the peak. That understanding of the movement and the pattern of human behavior behind is one of the most important aspects of technical analysis and must be mastered.
TVC:GOLDEducation
by mecoserra2008
Gold: How to Combine Technical & Fundamental To Get Best ResultsWhat Does Market Really Follow? We all know that market is normally run by based on Technical Analysis, Fundamental Analysis, and Trading Sentiment. If you want to get a high result on your trade, you must combine these 3 analyses. As USD and Gold both are safe-haven currencies and reserve currencies as well. USD and Gold have a negative co-relation. If the USD rise, Gold will drop. If the USD drops Gold will rise. Which Fundamental Factors Are Responsible for Golds Move? 1. US Economical Reports 2. World Wide Economic Conditions 3. Man-made or Natural Disaster (For the moment Covid Situations) 4. Political or Economic Crisis 5. Central Bank's Rate Decision and some other reasons. What to Do Firstly? You must have a look at US economic reports. US job Market Report, CPI, Manufacturing Reports, and FED economic Overview. If most of the fundamental reports are positive from the USA, that means fundamentally USD is in a good position, which means Gold has a chance to drop. especially CPI / Inflation reports are important for hiking bank rates. So, if you see recent most of the high-impact reports are positive, that means gold has more chance that it will drop and FED is going to deliver the hawkish statement. FED's hawkish statement will give an extra benefit to USD what is negative for Gold. What to Do Secondly Now see your technical chart. A trading view has many awesome tools to draw your Technical Charts. Personally, I do follow pure price action. Based on your chart analysis, find an entry rate, exit rates, and where the stop loss and profit should be put. You can use any kind of technical tools, indicators of what is suitable for you. What To Do Thirdly? To get the trading sentiment, Option expiry and Cot reports will help you a lot. Especially cot reports are free, so check last cot reports. Day Traders usually follow non-Commercial contract positions. if you are a day trader checks a non-commercial contract. if most of the contracts are in a short mode, that means banks, hedge funds, and other financial authorities are selling more. commercial contracts are also very important. because they are big guns and big companies. you should also check their position. Non-Reputable contracts are not really important. How Will I Combine Technical and Fundamental Analysis and implement to my trade? This is the final part. If you see most of the US economic reports are positive in recent months, especially job market reports, manufacturing reports, and Inflation reports. In this case, most of the time FED delivers a hawkish statement. So, you think for Buying USD and Sell Gold. If you see US Economic reports are not supportive, then think about selling USD and buying Gold. This is the first part. I will write details about it in my second part. till then keep reading. If you think this article helped you then, like, comment, and share with your trader's community.
TVC:GOLDEducation
by Gold_Trading_Expert
4
The Importance of Understanding the Commodities MarketIn this educational post, I'll be explaining the reason why both investors and traders need to understand the commodities market. The commodities market is a market in which raw, hard, and soft commodities are traded. Examples of commodity assets include gold, oil, wheat, grain, copper, and even livestock. While these aren't commonly traded markets among retail investors, understanding assets within the realm of commodities can provide an edge in trading and investing. Benefits to Investors - The primary reason that investors needs to understand the commodity market is because it helps provide an overall picture of the entire financial market. - For instance, in the case of Nickel, Copper, Zinc, and other industrial metals, the price action differs depending on the market cycle, and certain metals are sensitive to, and heavily affected by specific industries. - Popular commodities like Gold and Oil’s price action reflects the overall market trend and sentiment. - As such, a retail investor with a deep understanding in commodities is capable of looking at the stock market from a different angle. - Secondly, understanding commodities provides a huge advantage in terms of portfolio management. - How 'well' you have invested, isn't simply determined by your annual return. - Your sharpe ratio (your return divided by the volatility) tells a more accurate story. - In order to succeed as a retail investor, you need to focus on increasing your sharpe ratio, or your risk adjusted return. - And the best way to do so, is to diversify, specifically by looking at the correlation between certain assets. - There are a plethora of assets in the commodities market that provide a great hedge / means of diversification against the stock market. - Leveraging this knowledge will help investors design a portfolio that provides them great risk-adjusted-returns. Benefits to Traders - The commodities market can be a great opportunity for traders, as long as they spend their time getting used to the market. - Normally, when the stock market is overbought, or when it demonstrates sideways action, traders often make the mistake of overtrading. - Traders enter positions at suboptimal levels, because they have no option but to trade at the stock market. - However, understanding the commodity market gives them an edge. The best analogy to explain this, is like playing online poker. - When playing poker, the player waits for good hands to appear, so he can make a bet in his favor. - When he plays online poker, he can have multiple games going on at once, and play the game where he gets the upper hand. - In the same vein, when a trader knows how to trade commodities, instead of waiting for a good entry in the stock market, he can simply trade assets within the commodities market. - If you think stocks are overvalued, there’s a chance for you to move onto gold, silver, oil, or even industrial metals. - You can take a look at multiple assets, and find one that has a good risk/reward ratio right now. Conclusion The commodity market is a market that is huge in size, yet often overlooked my many, if not most retail traders and investors. However, understanding which assets are traded, their price action (in relation to other assets), can help both investors and traders acquire an edge.
Editors' picks
TVC:USOILEducation
by Michael_Wang_Official
7
Impact of Fed Unchanged Interest Rate and Gold PricesHere I tried to show the movement of the day when Fed announces its unchanged Interest Rate decisions during the last 6 times. As you can see, the gold prices had been quite volatile during the last Fed decision on June the 16th and shed 1.45%. Since then, the yellow metal has not been able to overcome the loss and is in the downward trend. Please note that this is shared for educational and informational purposes only and is not intended for financial decisions. If you like the idea, please like and comment :)
OANDA:XAUUSDEducation
by UnknownUnicorn621491