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BTC: How Will Bitcoin React To Trump Testing Positive?After a few of the most uneventful news this week, Friday (Oct. 2) has brought a couple of interesting developments that are rather unexpected. Just a few hours ago, United States President Donald Trump announced on Twitter this morning that he and First Lady Melania Trump had tested positive for COVID-19, an unexpected movie plot twist that has sent shudders down into the global economy at the time of writing. Will Bitcoin become the safe haven for investors after such an incident? We are shunned by such an incident as well, but let's dive into some of my deeper thoughts on both sides of the spectrum, as we are seeing gold decouple from Bitcoin. Overview / Current Aftermath / Technical Analysis: At the time of writing, Bitcoin has fallen 2.5% as the news broke out dropping from $10,660 to $10,300, and is now stabilizing on the short term with a slight bullish divergence on the one hour time frame. From a technical standpoint, we can assume there needs to be some form of a recovery bounce; however, there was a larger fall when the BitMEX news broke a few hours before that, where Bitmex has been accused of preventing money laundering. There has been a minor recovery to the $10,450 levels at the time of writing which has put the asset back to weekly support near the 20MA. From a larger perspective, the 20MA has acted as a strong support for Bitcoin, but with more unexpected global crisis looming, we aren't sure of the outlook on Bitcoin. As Bitcoin has been a traditional safe haven investment, we have been witnessing Bitcoin slowly align with traditional equities markets, where we aren't seeing the true decoupling from the stock markets. Looking at the larger picture and time frame, Bitcoin is still within its range-bound channel and this reaction by the news-selling bears has been just a blip. But what about the short term? We can expect some form of reaction most certainly during and after the hours of US trading hours, whether it will be up or down - we do not know for certain. Gold prices has spiked over a percent in a short time span following the news taking the precious yellow metal back over $1,900/oz again. Highlighting the investor flight from risk was a drop in Bitcoin, with Bitcoin down by more nearly 4% on the day, while Ethereum fell by 6-8%, respectively. US futures on the S&P 500, Dow Jones and Nasdaq 100 traded around 1-1.5% lower, suggesting the major indices will fall at the start of trade later on today, while oil suffered the heaviest blow, sliding by more than 3%, as investors fled risk-linked assets. Even the US dollar came under strong pressure to the benefit of typical safe haven assets such as the Japanese yen, gold and US Treasuries - all of which are up at the time of writing, respectively. Bullish Perspective: Analysts who have been less critical of Bitcoin and other cryptocurrencies in the past seem to believe that BTC won’t be too drastically affected by today’s chaotic news cycle–after all, it hasn’t been (at least, not yet.) As stated by Joseph Young, a crypto market analyst from Forbes, has stated, "...BitMEX charge and Trump contracting COVID-19 couldn’t take Bitcoin far below the $10k level even briefly... The resilience of Bitcoin during this cycle is quite impressive.” Similarly, Marcel Burger, founder of crypto investment consultancy boutique Burger Crypto, wrote on Twitter that “Trump testing positive on COVID and the entire market tanks again. Bitcoin also dealing with bad news around Bitmex (founders arrested), but actually manages to control the damage. Pretty bullish to me.” The election cycle will continue to have a big effect on crypto prices, but how far? That is only determined by time and the equities market. It’s true–BTC’s +/-5% immediate reaction to either (or indeed, both) of these events could almost be considered a non-reaction in the history of an asset that is known for its extreme volatility. Still, the real reaction to these two events–and to their related affairs–could still be on the horizon as we still haven't seen a real reaction by traditional markets such as the SNP500 during opening hours. For example, Trump’s COVID case will likely have a significant effect on the US Presidential election cycle, which, in turn, could have a big effect on the price of Bitcoin, instead. While even before Trump tested positive for COVID, the American election cycles were having an increasingly powerful effect on cryptocurrency prices; and it isn’t all sunshine and beautiful angels. Most people have always more or less re-invested back into Bitcoin, eventually, as we have witnessed in August, for example. Bearish Perspective (Higher Probability): While both the BitMEX indictment and Trump’s COVID case made it into the New York Times today, one of these just might be more significant than the other. Both have immediate and long term effects on Bitcoin, regardless of how Bullish Bitcoin may be. Indeed, while the BitMEX's case is more specific to the cryptocurrency world, Trump’s COVID contraction seems to be having a more powerful effect on crypto markets on the immediate term. The BitMEX news has caused a 3% fall in the price of Bitcoin. Prices rebounded before Trump’s COVID Tweet sent them back down again. Together, these two stories still acted as a negative effect for Bitcoin prices in the immediate follow up. If traditional financial markets are any indication of what’s coming for BTC and other cryptocurrencies (and, historically speaking, they have been - even more so currently during the COVID-19 pandemic), further price drops could be on the horizon - short term and long term. Markets outside of the cryptosphere are reacting to Trump’s COVID announcement similarly to the way that they reacted to the widespread lockdowns in March: for example, gold is continuing its rally to the upside, continuing the rebound that began ahead of Tuesday’s presidential debate due to the uncertainty and uneventful news that followed. Stock markets, however, can be a completely different story. If our analysis on Bitcoin and the Stock Market's correlation continues to be true, we may see further downfall for Bitcoin. The BBC reported just a few moments ago that, “(the) stock market futures showed that all three of America’s main indexes – the Dow Jones, the S&P 500 and the Nasdaq – are set to drop by at least 1.5% each when trading begins on Friday...” A number of analysts, including the X Force Global, are predicting that BTC will go the way of the stock market, just as it did when the COVID financial crisis began in March of this year. These eventful news will only exaggerate the price drops. Trade Safe. X Force
BITSTAMP:BTCUSDEducation
by XForceGlobal
11
UNDERSTAND MACRO-FINANCE!WHILE ALL PRICES HAVE RISEN SINCE 1913 (THE CREATION OF THE FEDERAL RESERVE), SOME HAVE DONE SO MORE THAN OTHERS! THE FINANCIAL SYSTEM HAS BECOME SO LARGE AND COMPLEX THAT IT IS IMPOSSIBLE TO TRACE THE ACTUAL SIZE OF THE ENTIRE MONEY SUPPLY ( M3 )! WHEN IT COMES TO ESTIMATION, YOUR GUESS IS AS GOOD AS ANY EXPERT'S! THE ONLY WAY TO DETERMINE IF M3 IS RISING OR FALLING IS BY LOOKING AT THE PRICE OF OIL , THE PRICE OF THE 1-MONTH TREASURY BILL AND THE YIELD CURVE, ALL OF WHICH INDICATE THERE WAS A DEFLATIONARY PERIOD AT THE BEGINNING OF 2020! STOCKS, WHICH ARE THE MOST FINANCIALIZED ASSET CLASS, HAVE SEEN THE GREATEST INCREASE IN PRICE, BECAUSE MUCH OF THE CREDIT THAT THE FINANCIAL SYSTEM CREATES BIDS UP THEIR PRICE BEFORE ANYTHING ELSE! COPPER AND OIL , THE PRICES OF WHICH ARE MUCH MORE IMPACTED BY SUPPLY AND DEMAND CONDITIONS WITHIN THE REAL ECONOMY, HAVE BARELY MOVED IN COMPARISON AND REFLECT THE LACK OF REAL ECONOMIC GROWTH FOR THE PAST HALF CENTURY! GOLD , FOR ANYONE WHO CONSIDERS ITS PRICE EVEN REMOTELY ELEVATED, HAS BARELY EVEN KEPT UP WITH THE INCREASE IN M2 (WHICH INCLUDES PHYSICAL CURRENCY, CHEQUING ACCOUNTS AND SOME SAVINGS ACCOUNTS). THROUGHOUT HISTORY, THE MARKET CAPITALIZATION OF GOLD HAS ALWAYS EVENTUALLY MATCHED THE TOTAL MONEY SUPPLY, AND THEREFORE THE PRICE OF GOLD MUST INCREASE BY SEVERAL TIMES EVEN FROM HERE TO BE VALUED CORRECTLY!
TVC:SPXEducation
by UnknownUnicorn4195243
The financial world different market participantsHolding periods are at record lows and people are whining about it. Time to talk a bit about who participates in the market. 1- Liquidity ********************************** Something like half of the trading volume is done by specialists & HFT firms as well as a couple of scalpers which is a name for retail traders that hold for a few minutes to gracefully provide liquidity to real traders. It is not something "shocking", investing requires market makers as intermediaries and an exchange or at least reputable liquidity providers (banks, I said reputable not honest) as well as some rules, and derivatives trading has had this - or most of it - since at least 1750 BC. Yes, HFT are pigs and have no shame front running big funds or sniping day traders which is a name for another group of retail traders, but back in the "floor" days they did just the same, today everything is electronic and smooth, costs have gone down, reactions are better etc. Algos have caused big crashes, so let's hope man does not lose control and we do not end up screwing the markets that we need with technology. 1 issue with HFT is they are undercapitalized, the head of global markets research at Goldman Sachs says they are less capitalized than just 1 major bank. This causes them to aggressively adjust their bids when the market price drops. Back in 1987 human specialists had to beg their banks to give them more money to buy during the crash or the entire world would collapse. You should be able to easilly find an interview of Tom Sosnoff about it. I wonder what would happen if this happened today... The FED in hindsight would print infinite money and give it to hft? The players in this categories are various market makers that we call HFT, as well as to a much lesser degree a few retail traders called scalpers and front running algos. 2- Intraday ********************************** This, if my sources are correct, represents another 30% or close to 30% of stock volume. This had a boom in the 80s and 90s, and again recently with crypto and now tech stocks. Most of the people behind this are brokers that spend alot of money to acquire new clients. "Educators" or "influencers" that refer new suckers to brokers get paid up to hundreds of dollars per client (I should have just done this rather than tryhard). The amount of quant funds infesting the market AND the success they have is directly correlated to how much retail traders (especially day traders) are around and also how much money these day traders are losing. You could say they are all day traders but this should be divided in 2 groups: the technical "day traders" which are all retail, and the professional "quants" that abuse day traders. The biggest quants that made big money are Jim Simons & George Soros quants from the 80s and 90s as I said technical analysis and day trading were very popular. Might have wanted to keep that for myself idk. Bah no one cares. 2 major groups: Day traders & quants. Also much more rare penny stock pump and dumps can be included. 3- Short term participants (days to weeks) ********************************** Once again, alot of the money being extracted here comes from retail investors using random strategies called technical analysis. > Pre rolls. One group of participants that exploit flaws on very small timeframes (days) are all the pre-roll strategy investors. They exploit commodity ETFS that all lose money over time and have to sell their 1! positions at fixed times to then buy on 2! These funds regularly blow up, and lately the Oil fund USO was in the news because it became so big the regulators made it diversify its oil position, what got it so big is a very big supply of dumb money getting all excited at very low Oil prices thinking it was free money (below $20 then below $10 then even negative). Professionals that use these strategies made hundreds of millions from both dumb ETF "investors" as well as retail swing and day traders that jumped at the opportunity to get ran over. Alot of these profits/losses are actually being covered by Interactive Brokers of which dumb clients turned a few hundred thousands into decamillion losses. And they are a prime broker with a barrier to entry (2 years verified experience and $10000 in capital). As usual regulators, after alot of dumb money got hit hard, started an "investigation". USO suckers lost tens of millions months ago, the profit has been taken that's it, but they do not know it yet. According to Robintrack, most retail investors 6 months later are still bagholding what was supposed to be a quick swing trade. Pre-roll traders will sell on 1! before the ETF sells and also buy on 2! before they buy, and sell after the big operation moved the price. In the case of the huge Oil crash, fund traders bought before the price collapse and ended up buying back from idiots that "bought cheap". They made money not by "crashing the price", they made money by holding their winners while dumb money was underwater. This dumb money is actually fortunate that there were short sellers to buy from them so close to expiry. I am not sure regulators with their "investigations" understand this simple concept. From the website etfdailynews: “I make a living off the dumb money,” says Emil van Essen, founder of an eponymous commodity trading company in Chicago. Van Essen developed software that predicts and profits from pre-rolling. “These index funds get eaten alive by people like me,” he says. Quick! Investigations! "The trading house is now the focus of investigations by regulators on both sides of the Atlantic, Bloomberg reported." markets.businessinsider.com Stupid morons. And there's never investigations when "stonk price go up" or when dumb money gets lucky (making them confident and about to lose big). Remember Wirecard... No investigation here. Gee it really blows my mind just imagining the incredibly mind-bogglingly moronic less-than-human mouth breathers that come up with these "investigations". Can't wait for Bitcoin & Tesla investigations. > Trend Followers. "The trend is your friend". "Just follow the trend this is what good boys & girls do". Did trend following get to people heads. It was very popular in the 80s & 90s. Some famous trend followers made gigantic returns exploiting dumb money (not sure all of them knew it). Trend following was the holy grail at the end of this period and even to today (people have slow brains or something), but it has not - or barely - worked for the last 20 years (all of this is about to change imo thought). Today the holy grail is index passive investing , who is making this possible are central banks, and the suckers are honest hard working americans that lose purchasing power while passive investors get fatter. One of the most famous trend followers is Richard Dennis, which in the 70s to 80s turned $1600 into $200 million, in about 10 years. I doubt he had a clue what he was doing and I think it was both lucky timing and lucky with randomly using the right strategy. After making big gains he was really excited and thought every one could make money with no brain (money grows on trees as we all know). "Wow making money is really easy". Typical Dunning-Kruger, except his peak of mount stupid lasted way longer than for other people. He got rekt in the late 80s, got back in his feet and made some profit in the 90s but much less (and never thought of trying to learn something new). Then after the 2000 bubble exploded he just lost money and disappeared. He is probably selling courses now. The sort of general way it all comes together over a period of a few months or years with medium term funds, trend followers & quants versus dumb money: Here is an example from investopedia with sugar: Those are big returns in just about 3 months. A quote from a quant website. "CTAs by being patient trend-followers took advantage of the random methods of chart traders and profited at their expense. Some that are new to trading are not aware of the frenzy in the 90s about intraday trading mainly financed by brokers. Systematic traders took advantage of it and made large returns. But after the random intraday and swing traders were driven out of the market, CTAs have had problems generating returns. There is scarcity of retail dumb money at this point." The 80s & 90s were the period where George Soros and Jim Rogers made monster gains in commodities too. George Soros kept making big profits after that period, Jim Rogers has not. Since 2000 trend followers have been suffering. I got into trend following a few months ago it is going all right. It is making a comeback imo, but I do not think it will last long. It might, we will see. I trust myself to be able to adapt. When this stops working I also have my strategy I have been exploiting for years. If both stop working (unlucky) gee well I'll adapt, SOMETHING ought to be working. I'll survive. I mostly do what I do with Forex thought and it is a different world. If trend following does not work just go for reversals 🤦‍♂️ It's so lame to get famous and get the glory but you were actually bad and you end up losing and have no clue why and just end up selling books and trading courses 😂 So on the short term we got retail swing traders that use random strategies, fomo gamblers, and the systematic trend followers & pre-roll people that abuse them. Also hedgers, and a couple of short term hedge funds that probably do not make money on average. 4- The medium term : Around 1 year ********************************** I heard hedge & mutual funds had median holding periods of 9 to 12 months, I also heard they had holding periods of 17 months. I will assume this is not counting the losers, especially if they have a low winrate, that would mean a TF much below the reality. Retail is completely absent here. There are various strategies. "Strategic" stock picking. Bull bias, bear bias (on the market in general, so they are looking for stocks to buy, or to sell). "Short sellers" (Enron, Tesla, ...). Hedge funds also exploit random day & swing traders and made big profits in the 80s and 90s then last 20 years as retail investing declined have made less, but hedge funds did not go from 100 to 0, it is more tame than trend followers. Recently some hedge funds have struck gold. Bill Ackman made 100R ($2.6 Billion) when the S&P crashed after coronavirus lockdowns. He made big money with price go down, so of course really dumb people cried and accused him of dricing down the price during a CNBC interview ("spreading FUD") probably soon investigation and bla bla bla. Where are all the investigations when some clown says that Tesla is a revolution and going up 1000 fold? Where are the investigation in Max Keiser saying silver and later bitcoin would rule the world? "Oh no no need for investigation when price go up 🤤" 5- The long term: 10, 20, 30 years ********************************** 2 categories: - Private high net worth. Value investors like Warren Buffet, Charlie Munger, even thought they run a company, an example of a private investor is Phil Town which has a youtube channel and writes book he is not very famous but ye that's a private investor why would they be famous? Should they take a megaphone and shout their net worth on the top of buildings? - Bagholders: Can either be retail investors that thought "Buy & Hold" meant "Buy garbage & Forget", I doubt they are aware 96% of US stocks go to zero, well 100% on a long enough horizon but we are looking at less than 3 decades here. Or can be day & swing traders that bought something stupid (USO, Bitcoin...) and refuse to cut their losses so they turn their gambles into long term bagholds. Bill Ackman is a famous bagholder, when he is wrong he is SO WRONG and he just keeps on holding his bags all the way to zero which is really crazy. Warren Buffett early in his carreer has been on rare occasion been a bagholder, what he calls his worse mistake cost him according to himself at least 100 billion, he just kept trying to get that textile company to be worth something. The company Warren Buffett bagheld is called Berkshire Hathaway. Buffett actually rarely holds for more than 2 years, and half of his purchases are sold under 1 year. He has a 100% turnover! From the paper linked below, "we observe a median holding period of a year, with approximately 20% of stocks held for more than two years. At the other end of the spectrum, approximately 30% of stocks are sold within six months." papers.ssrn.com So he loses (or breaks even sometimes perhaps) 80% of the time. But when he wins... you know... 150R. Important: if I got this (didn't read the whole thing) they only looked at what was in his quarterly fillings! Who knows what grandpa B bought and sold within weeks! It is very hard to find what stocks Warren Buffett quickly exited without going over quaterly reports, every one touches themselves at his returns, wants to know what he holds to copy, looks at winners which is almost useless but out of tens of millions of die hard fans it's like not a single one gives a damn about looking at his cut losses, due to low IQ. It is truly mind boggling that over 90% of retail investors just transformed LOOK FOR GREAT COMPANIES AT GOOD PRICES, BUY AND HOLD WINNERS, into "Never surrender never give up just buy absolute garbage down 90%, buy and forget, hold the bag to zero over the long term it will eventually go up". You could literally tell them exactly what to do they'd end up losing all of their money and dying of food poisonning somehow because they are handicapped. Buffett holds for 7.5 year on average (or he did in 2010), with 80% of stocks held for less than 2 years, and 20% held for more with a couple held for several decades. He ain't holding for 50 years or a century. 6- The very long term ********************************** Big pension funds, insurance funds, sovereign wealth funds, mega bagholders (owners of ponzi shares held those to their death dreaming they would magically regain value)... The big, big, BIG boys. They do very little volume in markets because they rarely participate, but when they do they move entire markets. They move alot of money at once, and while random retail traders & quants do big volume day after day, they mostly cancel each other out. The over 1 trillion dollar "NOK" fund owns 1.5% of world shares, and when they do something you can feel it. Socialism (they are not really socialist but whatever) works really well when you have immense wealth. Over 1 trillion for 5 million inhabitants. They hold 2.6% of EU stocks and "only" 1% of american stocks. There is talk that they may sell EU stocks to buy NA holdings, mostly USA obviously. "Norway wealth fund may move $50 billion into U.S. stocks from Europe" www.investing.com That would really help push the price up and help jump start a bubble. 50 billion is just a small adjustment for them. "The central bank has said its advice was not based on any particular view on future return in individual markets or regions." They don't really care. They are trying to preserve the country wealth and are just doing small adjustment ("small"). They hold forever. "The minority centre-right cabinet of Prime Minister Erna Solberg must seek approval from parliament for any major strategic shifts at the fund, a process that could take months to complete and which may involve making compromises." No day trading here... I am old why am I focussing on Norway... Those are the current biggest wealth funds (made of 1 or more funds for the country) in the world: China 2,250,000 million usd - Origin: their bags come from sending free goods to fat americans. They believe they will get something in return. UAE 1,350,000 million usd - Origin: Oil & Gas. Hehehe a few months ago I remember an idiot telling me arab countries were poor 3rd world countries. Norway 1,100,000 million usd - Origin: Oil from the sea. Crossed 10 trillion NOK recently I think. Their children have their future covered. Saudis 900,000 million usd - Origin: Oil from the sand. During an interview the wealth manager Yasir Al-Rumayyan said he wanted to grow it to 2 trillion. Future gambles to take advantage of? Those were the big famous ones. Then you got Singapore, more arab countries... The USA have a (LOL!) 200 billion wealth fund (and 30 trillion liabilities). Talk about a pyramid scheme. If you look at the biggest fund from any source by AUM who do you have at the top? 1- FED - 7,000,000 million usd (but really you can just put an infinite sign here) 2- BOJ - 5,200,000 million usd bigger than the US one relative to population what a scam 3- PBC - 5,150,000 million usd biggest baghodlers in the world (I'm just kidding don't cry China) Then you got plenty of multi trillion US state owned funds (sounds pretty communist to me, I wonder why they are pushing the price up at the people's expense), Japanese megacorps & banks, China communist groups/banks, European banks. Some middle east holders of course. And then a grand total of 0 african country is present in the top 100. Banks really dominate the world. They hold all the capital. It would be a real shame for passive investors & tiktok robinhood holders if the US communist funds that hold over $10 trillion were to liquidate their assets to cover the US foreign liabilities (China) and to pay for social programs wouldn't it? A reaaaal shame 🙃 What is this? I am feeling tingles. Team Biden! It's just a shame they have all these toxic ultra racist, anti business & anti family views. Quick! someone tell the clueless socialist woke crew the US are holding trillions that could more than cover their student debts and social programs! Special mention: Blackrock is the world largest asset manager overseeing more than 7 trillion. And they work hand in hand with the FED.
NYMEX:CL1!Education
by MrRenev
Risk management in trading €$¥Hello my friend | Welcome Back. Please support this idea with LIKE if you find it useful. *** What is market risk? Market risk is the capacity for your trades to result in losses due to unfavourable price movements that affect the market as a whole. There are several factors that can cause market risk, but movement in any of the following can exert major pressure: Stock prices Interest rates Foreign exchange rates Commodity prices What is liquidity risk? Liquidity risk is the possibility that you may be forced to trade an asset at a worse price than you anticipated. For example, when trying to sell an illiquid stock you may struggle to find a buyer, meaning that you have to sell your stock for less than its current market value. In some markets, liquidity risk can even mean that your trade negatively affects the price of the asset you are buying or selling. This is generally more of an issue in emerging or low-volume markets, where there may not be enough people in the market to trade with. How to manage your risk Risk management is the process of identifying, analysing and reducing risk in your trading decisions. Usually, it involves developing a trading plan that helps you decide what to trade, when to trade and where to place your stop losses. Here are three tips on how to manage risk: 1. Assess risk vs return In general, trading strategies focus on weighing up a trade’s potential risk against its potential return. If a trade has greater risk, it should carry the chance of a greater return to make that risk worthwhile. For example, government bonds are considered a safe, low-risk investment – but when compared to corporate bonds, they offer lower rates of return. This is because the risk of investing in a corporate bond is higher, so to compensate for the added risk investors are offered a higher rate of return. 2. Understand each market’s risks It’s important to ensure you understand the factors that influence different markets, so you can base your dealing strategies on relevant information. Improve your success rate by learning more about the markets you’re dealing on and exploring new strategies. Our trading skills section is a great place to learn about all the markets we offer. 3. Keep learning Learning to trade successfully while managing your risk is a continual process – and one of the best ways of ensuring that you are always improving is by starting a trading diary. By keeping track of which trades and strategies have worked in the past, you can build on your successes and learn from your failures.
OANDA:XAUUSDEducation
by Saeed966
6
Head and shoulders typesHello my friend | Welcome Back. Please support this idea with LIKE if you find it useful. *** The head and shoulders chart pattern is a popular and easy to spot pattern in technical analysis that shows a baseline with three peaks, the middle peak being the highest. The head and shoulders chart depicts a bullish-to-bearish trend reversal and signals that an upward trend is nearing its end. The pattern appears on all time frames and can, therefore, be used by all types of traders and investors. Entry levels, stop levels and price targets make the formation easy to implement, as the chart pattern provides important and easy to see levels.
Education
by Saeed966
8
Bitcoin set to smash ATH in the next 8 to 12 WKS thanks to......Astronomical returns possible: Bitcoin set to smash ATH in the next 8 to 12 WKS thanks to "Big Oil" signal after SPX setting ATH's >> WK 16 DEC 19 63% 8 WKS >> WK 25 SEPT 18 437% 11 WKS >> WK 28 JAN 13 1383% 10 WKS. The only time signal did not work was when bitcoin MACD histogram was in red. CAVEAT: WTI Crude Oil Weekly MACD line (source HIGH) has not yet closed >0. Big Oil signal still needs to confirm. NOT ADVICE. DYOR.
TVC:USOILEducation
by Felix000
What Are Fibonacci Retracements and Fibonacci Ratios?How Fibonacci Ratios Work Before we can understand why these ratios were chosen, let's review the Fibonacci number series. The Fibonacci sequence of numbers is as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc. Each term in this sequence is simply the sum of the two preceding terms, and the sequence continues infinitely. One of the remarkable characteristics of this numerical sequence is that each number is approximately 1.618 times greater than the preceding number. This common relationship between every number in the series is the foundation of the ratios used by technical traders to determine retracement levels. The key Fibonacci ratio of 61.8% is found by dividing one number in the series by the number that follows it. For example, 21 divided by 34 equals 0.6176, and 55 divided by 89 equals about 0.61798. The 38.2% ratio is discovered by dividing a number in the series by the number located two spots to the right. For instance, 55 divided by 144 equals approximately 0.38194. The 23.6% ratio is found by dividing one number in the series by the number that is three places to the right. For example, 8 divided by 34 equals about 0.23529. Fibonacci Retracement and Predicting Stock Prices For unknown reasons, these Fibonacci ratios seem to play a role in the stock market, just as they do in nature. Technical traders attempt to use them to determine critical points where an asset's price momentum is likely to reverse. Fibonacci retracements are the most widely used of all the Fibonacci trading tools. That is partly because of their relative simplicity and partly due to their applicability to almost any trading instrument. They can be used to draw support lines, identify resistance levels, place stop-loss orders, and set target prices. Fibonacci ratios can even act as a primary mechanism in a countertrend trading strategy. Fibonacci retracement levels are horizontal lines that indicate the possible locations of support and resistance levels. Each level is associated with one of the above ratios or percentages. It shows how much of a prior move the price has retraced. The direction of the previous trend is likely to continue. However, the price of the asset usually retraces to one of the ratios listed above before that happens. The following chart illustrates how a Fibonacci retracement appears. Most modern trading platforms contain a tool that automatically draws in the horizontal lines. Notice how the price changes direction as it approaches the support and resistance levels. Fibonacci Retracement Pros and Cons Despite the popularity of Fibonacci retracements, the tools have some conceptual and technical disadvantages that traders should be aware of when using them. The use of the Fibonacci retracement is subjective. Traders may use this technical indicator in different ways. Those traders who make profits using Fibonacci retracement verify its effectiveness. At the same time, those who lose money say it is unreliable. Others argue that technical analysis is a case of a self-fulfilling prophecy. If traders are all watching and using the same Fibonacci ratios or other technical indicators, the price action may reflect that fact. The underlying principle of any Fibonacci tool is a numerical anomaly that is not grounded in any logical proof. The ratios, integers, sequences, and formulas derived from the Fibonacci sequence are only the product of a mathematical process. That does not make Fibonacci trading inherently unreliable. However, it can be uncomfortable for traders who want to understand the rationale behind a strategy. Furthermore, a Fibonacci retracement strategy can only point to possible corrections, reversals, and countertrend bounces. This system struggles to confirm any other indicators and doesn't provide easily identifiable strong or weak signals. The Bottom Line Fibonacci trading tools suffer from the same problems as other universal trading strategies, such as the Elliott Wave theory. That said, many traders find success using Fibonacci ratios and retracements to place transactions within long-term price trends. Fibonacci retracement can become even more powerful when used in conjunction with other indicators or technical signals. Investopedia Academy's Technical Analysis course covers these indicators as well as how to transform patterns into actionable trading plans.
Education
by Saeed966
6
How to Trade the Head and Shoulders PatternThe head and shoulders chart pattern is a reversal pattern and most often seen in uptrends. Not only is head and shoulders known for trend reversals, but it’s also known for dandruff reversals as well. In this lesson, we’ll stick to talking about trend reversals and leave the topic of dandruff for another time. Head and Shoulders A head and shoulders pattern is also a trend reversal formation. It is formed by a peak (shoulder), followed by a higher peak (head), and then another lower peak (shoulder). A “neckline” is drawn by connecting the lowest points of the two troughs. The slope of this line can either be up or down. Typically, when the slope is down, it produces a more reliable signal. In this example, we can easily see the head and shoulders pattern. The head is the second peak and is the highest point in the pattern. The two shoulders also form peaks but do not exceed the height of the head. With this formation, we put an entry order below the neckline. We can also calculate a target by measuring the high point of the head to the neckline. This distance is approximately how far the price will move after it breaks the neckline. You can see that once the price goes below the neckline it makes a move that is at least the size of the distance between the head and the neckline. We know you’re thinking to yourself, “the price kept moving even after it reached the target.” And our response is, “DON’T BE GREEDY!” Inverse Head and Shoulders The name speaks for itself. It is basically a head and shoulders formation, except this time it’s upside down. A valley is formed (shoulder), followed by an even lower valley (head), and then another higher valley (shoulder). These formations occur after extended downward movements.
Education
by Saeed966
2
Some unpopular commodity spreadsCotton & Cocoa have daily volumes of about 500 million usd or more. The rest (except maybe xpt & xpd I have no idea about) have volumes of 1 or several billions. They are unpopular with alot of funds & retail because they (retail & fund clients I guess) cannot really day trade those, too expensive, and they cannot buy & hold for growth those. They are monthly or quarterly contracts, there is no growth like with stocks or gold. But this is real speculation, and what markets were created for thousands of years ago. There is a real need for us to absorb volatility/risks and there is an associated reward. The costs range between 5 to 10% of ATR which is acceptable if one picks the high probability moves in strong markets (not sideways) and goes for big moves, not some 15 minute chart ones. Out of 3 grains + 4 soft + gold copper nickel + natgas oil = 12 if we can catch one nice move a year for each that's equivalent to 1 a month and it's a big deal. Maybe 2 losers 1 winner on average, with the rare occasional painful gap maybe. 12 times 4R minus 24 times 1R counting spreads, that's 24R. With 1% risk then this means 27% return. On top of FX if you can handle all of that. I think this is realistic. As a pro trader with a decent account risk would rather be 0.5% or less because what serious professional wants some huge drawdowns in his capital makes no sense, that 24R becomes 12.7%. I think this is realistic from what I have seen & heard around but well only way to know what we can probably get out of it is look at our own track record. 1/10R spread means every 10 trades 1R is lost, so there is no place for breakeven overtrading. “Do not trade every day of every year.” - Jesse Livermore A dozen commodities plus a dozen currencies... This means less time to spend on the big aspects of this activity: money management, risk management, avoiding blowing up, doing all sorts of estimates, knowing yourself, getting out of losers and moving on, staying in winners... I don't think ~25 in the radar is that huge when fulltime, of course as long as they got added 1 by 1 progressively, studied & known well, and being able to stay away of dead markets and only look at the potentially interesting ones. For example Corn was completely off the radar all of may & june and it is one of the most violent ones last 6 months. NatGas was just nasty for the whole first half of 2020, Oil well you probably know, Silver before going up was in accumulation for years, I could go on... You're not really watching the whole watchlist at all time, maybe really 1/3 so rather than 12 currencies + commodities it is 4+4 and really you pay full attention to up to 3-4 analyse read read read prepare calculate list scenarios get ready etc and the rest is just on the side not 100% focus. More than this is getting a bit ridiculous in my opinion, especially for a single person. “It is much easier to watch a few than many” - Jesse Livermore again “Big movements take time to develop” - Same guy Damn, plenty of quotes on being patient and my favorite is Livermore again 😂 “There is a time to go long, a time to go short and a time to go fishing.” “I don’t think you can get to be a really good investor over a broad range without doing a massive amount of reading. I don’t think any one book will do it for you.” - Charlie Munger “I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime.” - Jim Rogers “Beware of trading quotes.” - Andreas Clenow With experience and good organisation you learn when to look and when not to, and also understand you do not have to check every news and every chart all the time to catch every move, fearing to miss out is plain dense once you understand how this really works and what it really is. A couple of winners in a year is all it takes. Those that aim for more than this... They are the ones that fail. George Soros if I am correct just made a couple of big one sided bets, he started with Jim Rogers mostly in commodities (after working as an arbitrage trader on european stocks & 10 years as an investment VP), they made stupid returns and then he did FX? Gosh I might have it all wrong but it's something like that, and he is famous for his big win on the GBP, his big losses on the rubble & Thai Baht. Oh wait no he crashed Thailand kek. He got slapped hard in the face as he kept shorting small & medium cap stocks after Trump election. And didn't he short Bitcoin? Or buy? The markets really only offer a couple of opportunities once in a while, not 50 a month. I do not think the spreads get lower than this. Going for a couple of ATR (in moves that take 1-3 weeks) and not trying too often to get in (gets very expensive) it is not that bad. No retail day traders that want to get poor quick is the best part. Nickel is not available on tradingview, have to look at it via broker or investing.com (they use tradingview charting service). Rest is all here. Nickel really trending for long for the past year+ tvc-invdn-com.akamaized.net
TVC:PALLADIUMEducation
by MrRenev
Here are a few tips every one should knowHere's a couple of tips from me that might help in your trading. Those are just my opinions and all are belong to me. Practice think practice think review old ones repeat repeat repeat. It takes a whole lot of thinking and a whole lot of practicing to be good. Give your brain practice all the time like a muscle, and just repeat over and over. Look at examples, past trades, re-read what to do and what not to, re-read all your rules over and over, not until you know them, until forever or they'll just fade away. The more you hammer it in the better you get. Be logical DO NOT FOMO AND INSIST (or enjoy lose lose lose and then miss the final move that is a winner). Mistakes are really expensive. Best to miss out and not force and go look at something else, possibly analyse that one you missed and understand why you missed it, and how to fix, maybe by simplifying the way you detect those. Spend a whole lot of time analysing markets... Try really hard to really think every trade through... do not waste time on "meh" setups. Missing out is not that big of a deal imagine you get 10 of those a month, that's 120/year, now imagine you miss out 2/month you still get to 96/year and you had more time to spend on the 96. And you can still learn something from what you missed out on. Better than losing sanity from looking at charts hunting for setups all the time (and ending up forcing trades and bleeding capital). Price action is not physics. A "weak uptrend" is really what they call a long bull market that ran over countless bears that are all underwater in much pain, and often it ends up with bears giving up and a massive green candle up. And same, a "strong uptrend" is what they call price action with no bears. They did not vanish into another dimension, they just are not present in the market right now. But they are around. Which means they could be just around the corner and all jump in at the same time and reverse the price. In general I think the best is to not go against a "weak" trend ever. What is weak and what is strong enough? That's for you to find out. If you want to go against a pullback it is generally better to enter on vertical price action. People when they see violent price action get scared and remove their orders. The opposite is the right thing to do. Slow price => remove order. Violent price => GOOD, bring it on. Of course you will get run over from time to time. This is your job as a speculator. Speaking of weak trends, do not just use a price stop, but also a time stop: Price just goes nowhere for a long while => Get out. There is no reason for risk ever to be over 2% , and those are reserved for top stuff. Usually around half a percent is good especially when starting, then it can be scaled as the acc grows and even increased progressively to 1% to get a decent sized account. If you really are very certain of your strategy and want to go fast and cannot contain yourself then it is perfectly fine ok I understand you can risk more than a small 2% that barely will make you any money who wants to be spending hundreds of hours to make $50 :) Go for it. Make sure you can not lose more than all of your money, such as with using options or stocks that can only go to zero. At that point the strategy does not even matter. Also make sure you use alot of money, that you spent years to save up. And then keep taking trades until you lose everything. You really have to make sure it is very painful and you go into despair and lose all hope. Trust me when I say with 99% certainty you will really learn your lesson and won't require to learn it again. You will then not ever want to "go quick" again. 99% efficiency guarenteed. You won't have these stupid urges to risk big. If your spouse leaves you it is even better. Leaves a scar that won't heal as a permanent reminder. And consider yourself lucky that you only lost everything.
Education
by MrRenev
1