A Simple Method Of Evaluating Trade Setups For Everyone - PART IThis is a simple example of how anyone can attempt to understand price action, trade setups, and determine if the current trade setup is valid for any trading action.
Unless you have a trading system that helps you identify highly successful trade setups, most people struggle to find opportunities before they turn into breakout trends (up or down). Ideally, most traders want to get into trades before the big breakout, or breakdown, happens.
This video, part I of an extended series, will help you learn to use simple tools to identify qualified trade setups from invalid setups.
You can trade whatever you want. But remember, the trend is your friend, and learning to understand price theory, trends, channels, and support/resistance is all you need to make better decisions.
Watch this video to see if it helps you. Over the next few weeks, I'll create more videos highlighting simple techniques to help you become a better trader. I'll review dozens of charts and highlight what works and what doesn't.
Trading is a matter of managing risks while attempting to generate profits. This will be a great way for me to share my thoughts with all of you while trying to help you learn techniques to help you build solid skills.
Hope you enjoy this first video.
Commodities
Mechanical Consistency Weekly Review 8; +8% Return.04 Sep to 08 Sep 2023
TL;DR
Total Profit of approximately $800 (around +800%) for the 1st week of September 2023.
Total 8 trades, 6 wins & 2 loss.
1-hour Timeframe, Oanda, XAUUSD(Gold), $10,000 Capital, $200/ 2% per trade.
Mechanical Consistency Trading Strategy; Purely rule-based strategy, zero guesswork, zero analysis.
Disclaimer: I am not a financial advisor. The content for this article is purely for educational/research purposes only and is merely based on my personal opinions.
Please note: There will be affiliate links in this article. But it will only benefit both of us. If you do not wish to participate under my affiliate links, please feel free to Google them separately. Cheers!
I'm truly thankful for yet another successful week employing my mechanical consistency strategy. My retracement trades are consistently delivering the expected results, while any losses I've incurred can be attributed solely to my mean reversion trades on Tuesday. Let's review every day.
Monday (04 September 2023)
1x Win Trade
Daily bias: Downtrend
I was only able to trigger a retracement trade on Monday, but it turned out to be a highly profitable one. Despite the slowing down at night, I was fortunate that the price continued its downtrend the following day, reaching my desired profit level.
Tuesday (05 September 2023)
2x Lose trades
Daily bias: Downtrend
The only losing days I've had this week were both due to my mean reversion trades. These trades carry significant risk since they go against the prevailing trend, relying on a rebound to reach my 21 SMA+EMA level. Unfortunately, the downward trend proved to be stronger, resulting in losses.
Wednesday (06 September 2023)
1x Partial win & 1x full win trades
Daily bias: Downtrend
Contrastingly, I managed to secure a profit with my two mean reversion trades on Wednesday. Fortunately, the price did rebound successfully in both cases, albeit with the first trade yielding a partial profit and the second trade lasting until Friday morning. Nonetheless, I'm quite satisfied with the overall outcome.
Thursday (07 September 2023)
0x trade
Daily bias: Downtrend
There were no trades on Thursday as my mechanical consistency strategy did not trigger any of my limit orders. It was yet another stress-free day for me.
Friday (08 September 2023)
1x partial win 2x solid win trades
Daily bias: Uptrend
Friday turned out to be quite a rollercoaster day for me, with three consecutive trades triggering throughout the day. Fortunately, all of these trades ended in profit. The first mean reversion trade yielded a partial win, the second mean reversion trade was an immediate victory with zero drawdowns, and the third retracement trade delivered a profit by Monday morning.
Endnote
While I encountered some losses with my mean reversion trades due to their inherent risk of going against the trend, I also enjoyed significant profits from retracement and mean reversion trades that went as planned. Despite the fluctuations, my mechanical consistency strategy helped maintain a stress-free approach to trading, and I ended the week on a positive note, with successful trades on Friday. This experience reinforces the importance of a well-rounded trading strategy and the need to adapt to market conditions while remaining disciplined and focused on long-term goals.
Learn My Strategy For Free
As a full-time working individual, I do not have the time to constantly monitor the charts and look for the "perfect" trading opportunity. This is why I adopted the mechanical trading strategy to earn extra money. This approach eliminates the need for extensive technical or fundamental analysis and removes any guesswork. It is a 100% Mechanical rule-based strategy, ensuring disciplined and consistent decision-making.
If you want to learn my strategy, please visit my blogging site, link in bio. Thank you!
Mechanical Consistency Weekly Review 7; +3% Return.I avoided trading on Non-Farm Payroll Day! 28 August to 01 Sep 2023
TL;DR
Total Profit of approximately $300 (around +3%) for the 4th week of August 2023.
Total 5 trades, 3 wins & 2 loss.
1-hour Timeframe, Oanda, XAUUSD(Gold), $10,000 Capital, $200/ 2% per trade.
Mechanical Consistency Trading Strategy; Purely rule-based strategy, zero guesswork, zero analysis.
Disclaimer: I am not a financial advisor. The content for this article is purely for educational/research purposes only and is merely based on my personal opinions.
Please note: There will be affiliate links in this article. But it will only benefit both of us. If you do not wish to participate under my affiliate links, please feel free to Google them separately. Cheers!
What an exhilarating week it’s been with the Non-farm payroll report dominating the market’s volatility! The intense fluctuations led to rapid outcomes in some of my trades, with some resulting in quick wins and others in losses. Let’s dive into a review of this action-packed week!
Monday (28 August 2023)
0x Trades
Daily bias: Uptrend
Thanks to the market movements of the previous week, we didn’t initiate any new trades this time around. It turned out to be a stress-free day for me!
Tuesday (29 August 2023)
1x Win & 2 Lose trades
Daily bias: Uptrend
This week kicked off positively with a substantial profit from the first retracement trade. However, the intense volatility pushed past both my mean reversion trades, causing them both to end up in losses.
Wednesday (30 August 2023)
1x Partial win trade
Daily bias: Uptrend
After a significant bout of volatility the day before, the price settled into a narrow range, a pattern that became evident during the first half of Wednesday’s trading session. It wasn’t until later in the day that the price triggered my mean reversion trade. Fortunately, I was able to secure partial profits at Take Profit 1 before it resumed its upward trend.
Thursday (31 August 2023)
1x Solid win trade
Daily bias: Uptrend
The price remained confined within the narrow range, which worked in our favour as it triggered a retracement trade. I held onto the trade overnight, and by Friday, I successfully closed it with both take profit levels reached!
Friday (01 September 2023)
0 trade taken
Daily bias: Downtrend
Non-Farm Payroll typically takes place on the first Friday of each month, and it’s a known fact that the market becomes extremely volatile when this economic data is released. Traders often face significantly widened spreads, which can be detrimental to their trading strategies. Personally, I steer clear of trading on Non-Farm Payroll days, even if the setup aligns perfectly with my usual trade conditions. The heightened spread can trigger my stop-loss even when the price is far from my actual stop-loss level, making it a risk I’d rather avoid.
Endnote
In summary, the trading week was marked by the Non-Farm Payroll report’s influence, resulting in a mix of wins and losses. The previous week provided a break from stress, while trading saw a profitable retracement trade and losses in mean reversion trades. A narrow price range on Wednesday allowed for partial profits, and the week ended positively with a successful retracement trade reaching both take profit levels. I will avoid trading on Non-Farm Payroll days due to heightened volatility and widened spreads, mitigating risks from unpredictable market reactions to economic data releases.
Learn My Strategy! (FREE)
As a full-time working individual, I do not have the time to constantly monitor the charts and look for the “perfect” trading opportunity. This is why I adopted the mechanical trading strategy to earn extra money. This approach eliminates the need for extensive technical or fundamental analysis and removes any guesswork. It is a 100% Mechanical rule-based strategy, ensuring disciplined and consistent decision-making.
If you want to learn my strategy, please visit my blogging site, link in bio. Thank you!
Mechanical Consistency Weekly Review 5; +9% Return.TL;DR
Total Profit of approximately $900 (around +9%) for the 2nd week of August 2023.
Total 9 trades, 8 wins & 1 loss.
1-hour Timeframe, Oanda, XAUUSD(Gold), $10,000 Capital, $200/ 2% per trade.
Mechanical Consistency Trading Strategy; Purely rule-based strategy, zero guesswork, zero analysis.
Disclaimer: I am not a financial advisor. The content for this article is purely for educational/research purposes only and is merely based on my personal opinions.
Please note: There will be affiliate links in this article. But it will only benefit both of us. If you do not wish to participate under my affiliate links, please feel free to Google them separately. Cheers!
We had a beautiful trading week for 2nd week of August. Most of my predetermined parameters got triggered and reached my take profit without much drawdown. Let’s break it down.
Monday (14 August 2023)
I encountered my first loss of the week when the initial mean reversion trade didn’t go as planned. The price swiftly plummeted, triggering my stop loss and prompting me to initiate my second mean reversion trade. Fortunately, I managed to bounce back and secure some profit from take profit 1 before the price continued its downward trend.
Tuesday (15 August 2023)
My daily bias, determined by the 21 EMA, indicated a clear downtrend. I executed both trades flawlessly. The first mean reversion trade unfolded precisely as anticipated, allowing me to capture profits at each stage. The second trade, a retracement play, experienced an immediate reversal shortly after entry, with almost no drawdown. It was the ideal trade setup I had been hoping for!
Wednesday (16 August 2023)
The daily bias continued to favor a downtrend. While Tuesday’s trade remained open, my parameters signaled another retracement trade, and both trades successfully reached all of my predetermined take profit levels. As the trading day neared its end, I was triggered into a mean reversion trade at 127%. Fortunately, I managed to secure some profits before ultimately closing the trade on Thursday.
Thursday (17 August 2023)
The daily bias remained in a downtrend. Most of my attention on Wednesday was dedicated to managing the ongoing trade from that day. However, once I closed out the Wednesday trade, I was able to initiate a standard retracement trade that successfully reached both of my pre-set take profit levels, resulting in a substantial profit. Later that same night, my mean reversion trade was triggered, and I had to manage it until Friday.
Friday (18 August 2023)
Even though market sentiment began to show signs of shifting towards the upside, my daily bias remained in a downtrend. I successfully closed my Thursday’s trade with a profit and promptly initiated a standard retracement trade, reaching the first take profit level and securing a breakeven point at the entry price, just before the market began its upward momentum.
Endnote
As I navigated a market with a prevailing downtrend, while also observing hints of a shift in market sentiment towards the upside. Despite these challenges, I executed my trades with precision, closing out profitable positions and making the most of favourable retracement opportunities without any market analysis + zero guesswork, purely using a mechanical system that I developed, backtest and forward testing. Same strategy, same system day in and day out!
As a full-time working individual, I do not have the time to constantly monitor the charts and look for the "perfect" trading opportunity. This is why I adopted the mechanical trading strategy to earn extra money.
This approach eliminates the need for extensive technical or fundamental analysis and removes any guesswork. It is a 100% Mechanical rule-based strategy, ensuring disciplined and consistent decision-making.
Here's how it works: Immediately after the 1st-hour candlestick closes either below or above the 21 EMA (Exponential Moving Average), you place precise Buy/Sell limit orders. Once all parameters are meticulously set, you can confidently attend to your daily routine, including your day job, while entrusting the market to dictate the trades.
If you want to learn my strategy, please visit my blogging site, link in BIO. Thank you!
THE ART OF RANGE MANAGEMENT - WITH THE TREND OR AGAINST Hey Everyone,
Here at GVFX, we are currently buying dips. What that means is that we buy on the dips and therefore only concentrate on long positions/buys with the odd sells for fun. As mentioned before, having both sell and buy positions open in your account will affect your psychology and in turn, your trading decisions.
Now a question that typically arises here is why would it still be advisable to buy when the market is pushing down? Firstly, let me assure you that the same algorithms, experience and strategies that we use to achieve a 97% hit rate with our bullish directional bias also gives us the heads up, or down if you will, on when the market is going down. Don't think for a moment that we only know how to analyse a bull market or up trends. We share targets/signals for both buys and sells but choose not to hedge out of choice. Our published results remain consistently profitable month in month out!!
In my experience, in the current market conditions, it is much safer to get out of a stuck buy position than a stuck sell position. That's not to mention the clean PSYCHOLOGICAL PROFILE that is achieved when trading in just one direction. And although hedging can in theory work, it requires years of experience and in the end, is simply not worth the effort. I am more than capable of hedging effectively but the fact that I do not should tell you something.
Let us look at an example to further answer the question highlighted above. When you have short-term bearish momentum down, we take buys from key supports or MAs which act as dips. Remember that the market does not go up or down in a straight line (with the rare exception of short-lived parabolic moves). So, when the market is going down and hits one of our key levels, a buy from that point will go back up for 20 to 30 or 30 to 40 pips (this number of pips has been calibrated based on back testing) before resuming back down.
You can think of it like this. The market moves in a zigzag manner. The zig is that part of the leg which is going down to create lower lows (if the downward trend is continuing). The zag is that part of the leg which takes a breather and pushes back up with momentum for our entry and quick pip-take range to create a lower high (if the downward trend is continuing) before heading back down again. We catch the right and safest waves (buys) in and out and surf to success. When price hits a key structural support or stops creating lower lows and lower highs, we then reassess for entries with a wider range of pip capture.
Hope this post helps our followers to understand how we keep our psychology strong!!
GoldViewFX
XAUUSD TOP AUTHOR
Mechanical Consistency Weekly Review 4; +10% Return.I humbly apologize for the extended hiatus, as I was navigating through some profoundly personal challenges. Despite the setbacks, I’m pleased to share that my trading endeavours have not only persisted but also yielded remarkable results. Miraculously, each of our trades has culminated in a profitable outcome, marking a pristine 100% success rate. Allow me to delve into the details below.
Monday (07 August 2023)
My mechanical strategy was executed flawlessly, defying its initial parameters geared towards an upward trend. I managed to secure profits at Take Profit 1 and adeptly adjusted the stop loss to breakeven just as the price trajectory began to shift in a downward direction.
Tuesday (08 August 2023)
By looking at the very first candle of the day, I changed my strategy bias to align with the emerging downward trend. This astute shift allowed me to initiate a mean reversion trade, effectively attaining success at Take Profit 1 while seamlessly riding the ongoing downward trajectory.
Wednesday (09 August 2023)
Maintaining a downtrend bias, my strategy once again demonstrated its prowess by executing a trade during the retracement phase, flawlessly achieving both designated take profit levels without incurring any drawdown whatsoever.
As the day progressed, my strategy seamlessly activated a mean reversion trade, hitting the bullseye with Take Profit 1. Furthermore, I skillfully managed to conclude the remaining trade at a slight deviation level come Thursday.
Thursday (10 August 2023)
Similar to Tuesday, my strategy adeptly initiated a trade during a retracement, adeptly securing gains from both take profit levels. This time around, the trade unfolded over a span of approximately 2 days, culminating in a graceful and satisfying closure.
Friday (11 August 2023)
During this period, our trading activity remained non-existent. The absence of substantial trading volume resulted in an inability to generate price movement of significance.
Endnote
This week was truly exciting for me. It’s the first time in my 4 years of experience that I’ve won every single trade in a week. This success proves without a doubt that my consistent mechanical strategy works perfectly, which has made me much more confident in my trading approach.
KOG - JACKSON HOLE Part 1Jackson Hole Symposium:
What is the Jackson Hole Symposium?
The Jackson Hole symposium (Economic Policy Symposium) is held in Jackson Hole, Wyoming USA. It is an event attended by the worlds top financial professionals including ministers, bankers and academics. It is a closed event so no press are allowed access to the meetings or talks. Instead, press conferences are held throughout the event where any comments from financial professionals usually move the markets and cause extreme volatility.
This is not the usual analysis we provide. Instead, what we wanted to show you is the last 3-4yrs of market data illustrated on the charts, giving you an idea of what this event can do and cause on the markets. In this example, on Gold.
So, lets start with last year, 2021. We can see the price was at a similar price point to where we are today, just slightly higher at around the 1780 level. The early sessions were quiet, however, after a retest of the low look at the aggressive move to the upside! Price started at 1780 and the move completed at 1836. 500+ pip move in a matter of days.
Lets look at the top right chart, 2020. Again, look at the choppy price action, the whipsaw up and down, then the rested of the low before an aggressive move to the upside. Price started at 1904 and the move completed at 1994. 900pip movement in a matter of days.
Now 2019, a slow start in the early sessions, all of a sudden, a rested on the low and then another aggressive move to the upside. Price started at 1491 and completed the move 1557. Over 500pip movement in a matter of days!
What we’re trying to show you here is that its going to be a very difficult event to trade for new traders. Its going to be choppy, its going to be volatile, its going to whipsaw and its likely to move. If you’re caught the wrong side of it its going to kill your account. Best practice here is to let the market make the moves it wants to, wait for the price to settle in whatever level they want to drive it to, once this has happened then look for the setup to get in to the trade.
Hope this helps.
As always, trade safe.
KOG
Short Dated Options to Deftly Manage Oil Market Shocks"Volatility gets you in the gut. When prices are jumping around, you feel different from when they are stable" quipped Peter L Bernstein, an American financial historian, investor, economist, and an educator.
Crude oil prices are influenced by a variety of macro drivers. Oil market shocks are not rare events. They appear to recur at a tight frequency. From negative prices to sharp spikes in volatility, crude oil market participants "enjoy" daily free roller-coaster rides.
Precisely for this reason, crude oil derivatives are among the most liquid and sophisticated markets globally. This paper delves specifically into weekly CME Crude Oil Weekly Options and is set out in three parts.
First, what’s unique about short-dated options? Second, tools enabling investors to better navigate crude oil market dynamics. Third, a case study illustrating the usage of weekly crude oil options.
PART 1: WHAT’S UNIQUE ABOUT CME CRUDE OIL WEEKLY OPTIONS?
Macro announcements such as US CPI, China CPI, Fed rate decisions, Oil inventory changes and OPEC meetings drive oil price volatility.
Sharp price movements can lead to premature stop-loss triggers. When prices gap up or gap down at open, stop orders perform poorly leading to substantial margin calls.
Weekly options enable hedging against these risks with limited downside and substantial upside.
Closer to expiration, options prices are sensitive to changes in the prices of the underlying. Small underlying price moves can have outsized value creation through short-dated options.
Hedging with weekly options allows investors to enjoy large upside potential. Short duration vastly reduces the options premium burden. This high risk-reward ratio has made short-dated options popular among both buyers and sellers.
The daily traded notional value of Zero-DTE options (Zero Days-To-Expiry, 0DTE) have grown to USD 1 Trillion. Among S&P 500 options, 0DTE options comprise 53% of the average daily volume (ADV), up from 19% a year ago.
In 2020, CME launched Weekly WTI options with Friday expiry (LO1-5), offering robust, round-the-clock liquidity and enabling precise event exposure management at minimal cost.
These weekly options are now the fastest growing energy products at CME with ADV growing 69% YoY with June 2023 ADV up 136% YoY.
Building on rising demand, CME added weekly options expiring Monday and Wednesday. At any time, the four nearest weeks of each option are available for trading.
Weekly options settle to the latest benchmark CL contract and like other CME WTI products, they are physically deliverable ensuring price integrity.
Each weekly WTI options contract provides exposure to 1,000 barrels. Every USD 0.01 change per barrel change in WTI represents a P&L change of USD 10 in premium per contract.
PART 2: EIGHT TOOLS TO BETTER NAVIGATE CRUDE OIL MARKET DYNAMICS
Highlighted below are eight critical tools across TradingView and CME enabling investors to better navigate oil market dynamics.
1. OPEC+ Watch
OPEC+ Watch charts the probability of different outcomes from OPEC+ meetings. Probabilities are derived from actual market data & represent a condensed consensus market view of forthcoming meetings.
2. News Flow
TradingView’s News section collates the key market developments impacting crude oil.
3. Forward Curve
TradingView maps crude oil prices across the forward curve exhibiting oil’s term structure.
Augmenting the forward curve chart is a table CL contracts across various expiries with technical signals embedded in them enabling investors to spot calendar spread trading opportunities.
4. TradingView Scripts
Supported by a vibrant community of script creators, TradingView has curated scripts catering to the specific needs of crude oil traders.
OIL WTI/Brent Spread by MarcoValente: Shows the spread between WTI and Brent crude. This spread is growing in importance with growth in US oil exports.
Seasonality Indicator by tradeforopp: Presents seasonal price trends along with key pivot points to guide traders.
5. Economic Calendars
TradingView’s economic calendar highlights upcoming economic events segmented by dates and with countdown timers to help traders better manage their portfolios.
Augmenting, TradingView’s calendar is CME’s Economic Events Analyzer which lists key events specifically impacting energy markets and highlights the relevant weekly options contract.
6. Options Expiration Calendar
CME’s Options Expiration Calendar is a comprehensive yet condensed view of upcoming expiration dates of WTI options, even those that are not listed yet.
7. Daily/Weekly Options Report
CME’s Daily/Weekly Options Report profiles volumes and OI by strike price for weekly options supplying key stats such as Put/Call ratio and key strike levels at a glance.
8. Strategy Simulator
CME’s strategy simulator allows investors to simulate diverse options strategies. Selecting the relevant instruments and adding each component of the overall position automatically calculates the payoff while still allowing modification of key statistics such as volatility based on user inputs.
The below shows the payoff of an ATM straddle position for the upcoming Monday weekly option.
It also allows simulating various market conditions. Selecting price trends such as up fast, up slow, flat, down slow, down fast can simulate the changes in P&L.
PART 3: ILLUSTRATING USAGE OF WEEKLY CRUDE OIL OPTIONS
Why does CME list weekly options expiring on Monday, Wednesday, and Friday?
Each of these address specific macro events. OPEC meeting outcomes are typically announced over the weekend leading to gaps in prices on Monday. EIA weekly crude oil inventory data are released on Wednesdays. Key US economic data such as CPI and Non-farm payrolls are released on Fridays.
Use Case for Options expiring on Monday
These can be used to hedge against downside risk associated with weekend events.
For instance, in April, OPEC+ announced major supply cuts at their meeting on Sunday. This led to WTI price spiking 4% at market open.
This can lead to “gap risk.” Gap risk refers to the risk that markets may open sharply above or below their previous close. Since, price never passes the levels in between, stop loss orders fail to trigger at set levels resulting in more-than-anticipated realised losses.
Such gap risks from weekend news can be managed through Monday weekly options which provides a predictable and resilient payoff with limited downside risk.
Use Case for Options expiring on Wednesday
Oil inventory reports by EIA (U.S. Energy Information Administration) and API (American Petroleum Institute) are released every week on Tuesday and Wednesday respectively. Major misses/beats against expectations for these releases can result in large price moves.
Wednesday options come in handy to better manage volatility stemming from these shocks or surprises.
Weekly options provide superior ROI on small moves when compared to futures. Favourable price moves deliver larger payoffs from position in weekly options than futures and shorter expiries allow for much lower premium than monthly options.
Illustrating with Back tested Results
On June 14th, Crude price fell by 1.7% (USD 1.2) to USD 68.7/barrel upon release of inventory data that showed a larger than expected inventory build-up.
In the lead up to this data release, a crude oil participant could either (a) Short Crude Oil Futures, or (b) Long Weekly Crude Oil Put Option.
Summary outcomes from these two strategies are tabulated and charted below. The results speak for themselves. Short dated long put option is capital efficient, prudent, and credible as a risk management tool. That said, participants must evaluate the risk return profile taking into consideration market liquidity and volatility levels, among others, when choosing between instruments.
KEY TAKEAWAYS
In summary,
1) Weekly Options can be cleverly deployed to hedge against shocks in oil markets.
2) TradingView & CME provide a rich suite of tools to deftly navigate the oil market dynamics.
3) Weekly options expiring on (a) Monday helps manoeuvre developments over the weekend, (b) Wednesday helps to manage inventory data linked shocks, and (c) Friday enables investors to trade and hedge around key US economic data.
MARKET DATA
CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
Strifor || Education: Break LevelHello traders❗️ This is Viktor and Strifor team❗️ We welcome you to our learning content, where we briefly talk about the main things and learn how to apply our knowledge in practical trading.
The topic of today's lesson is Break Level . So, let's see what it is☝️
❗️To get know more about levels support this video with a like and a comment, follow us and trade with us👍🚀
Magic of Fibonacci Levels ✨In the realm of technical analysis, few tools capture the imagination of traders as effectively as Fibonacci retracements and extensions. Derived from the famous Fibonacci sequence, these levels offer insights into potential price reversals, extensions, and trend continuation points. In this article, we'll delve into the world of Fibonacci levels and explore how to use them to enhance your trading decisions.
Understanding Fibonacci Retracements:
Fibonacci retracement levels are like hidden treasures ✨ along a price trend. These levels, calculated from a swing high to a swing low, create horizontal lines that indicate potential support and resistance levels. The most common retracement levels are 23.6%, 38.2%, 50%, 61.8%, and 78.6%.
How to Use Fibonacci Retracements:
Identify a Trend: 📈📉 Begin by spotting a clear trend, either upward or downward.
Select Swing Points: 🏞️ Locate the pivotal swing high and swing low within the trend.
Plot Fibonacci Levels: 📏 Put those retracement levels on your chart, and watch as they highlight potential support or resistance areas.
The Application:
Support Levels: 💪🛡️ During an uptrend, traders often see retracement levels as potential buying zones.
Resistance Levels: ☔ In a downtrend, these levels can be seen as possible areas to consider short trades.
Understanding Fibonacci Extensions:
Fibonacci extensions act like a crystal ball 🔮 projecting potential price targets or levels where the trend might extend. Extension levels include 161.8%, 261.8%, and 423.6%.
How to Use Fibonacci Extensions:
Identify a Trend: 📈📉 As with retracements, spot a well-defined trend.
Select Swing Points: 🏞️ Determine the significant swing low and swing high within the trend.
Plot Fibonacci Extension Levels: 📏 Add those extension levels to your chart, projecting potential price targets.
Few examples :
The Application:
Projection of Trend Continuation: 🚀 Fibonacci extensions hint at where a trend might continue in its existing direction.
Price Targets: 🎯 Traders often utilize extension levels to pinpoint potential price areas before a reversal might occur.
Conclusion:
Fibonacci retracements and extensions are like wizardry in the trader's toolkit. By grasping these levels and their applications, traders can create more informed strategies for entry, exit, and target levels. Remember, while Fibonacci levels are magical, they work best when combined with other technical indicators and chart patterns. As with any trading strategy, practice, experience, and risk management remain essential. With careful consideration and diligent analysis, Fibonacci levels can sprinkle a touch of enchantment to your trading endeavors. 📊✨
Mechanical Consistency; Gold (XAUUSD) Trade Review for 02 AugHi, This is a trade review for 02 Aug 2023.
Here are some details for the trades.
OANDA:XAUUSD
1-hour time frame
2% per trade
1 open trade.
Disclaimer: Not Financial Advice! I'm just sharing my trading journey. Please take it as educational content. Thank you!
On Wednesday, we came close to securing a successful winning trade. The price exhibited a retracement to the 50% Fibonacci level before initiating a downward movement, resulting in the establishment of a new lower low. As of now, my second trade has been triggered and is actively in progress.
As a full-time working individual, I do not have the time to constantly monitor the charts and look for the "perfect" trading opportunity. This is why I adopt the mechanical trading strategy to earn extra money.
This approach eliminates the need for extensive technical or fundamental analysis and removes any guesswork. It is a 100% Mechanical rule-based strategy, ensuring disciplined and consistent decision-making.
Here's how it works: Immediately after the 1st-hour candlestick closes either below or above the 21 EMA (Exponential Moving Average), you place precise Buy/Sell limit orders. Once all parameters are meticulously set, you can confidently attend to your daily routine, including your day job, while entrusting the market to dictate the trades.
If you want to learn my strategy, please visit my blogging site, link in BIO. Thank you!
Mechanical Consistency; Gold (XAUUSD) Trade Review for 01 AugHi, This is a trade review for 01 Aug 2023.
Here are some details for the trades.
OANDA:XAUUSD
1-hour time frame
2% per trade
1 loss, 1 win (trade still open with take profit 1 achieve) Net -1% currently.
Disclaimer: Not Financial Advice! I'm just sharing my trading journey. Please take it as educational content. Thank you!
Tuesday, Gold fails the upward push and falls below the market structure, triggering and losing my first trade. Luckily, the price is able to hold at my 2nd trade level. Retracing back to my first take profit level, recovering half of my loss. The 2nd is currently still open with 0 risk running.
As a full-time working individual, I do not have the time to constantly monitor the charts and look out for the "perfect" trading opportunity. This is why I adopt the mechanical trading strategy to earn extra money.
This approach eliminates the need for extensive technical or fundamental analysis and removes any guesswork. It is a 100% Mechanical rule-based strategy, ensuring disciplined and consistent decision-making.
Here's how it works: Immediately after the 1st-hour candlestick closes either below or above the 21 EMA (Exponential Moving Average), you place precise Buy/Sell limit orders. Once all parameters are meticulously set, you can confidently attend to your daily routine, including your day job, while entrusting the market to dictate the trades.
If you are interested to learn my strategy, please visit my blogging site, link in BIO. Thank you!
Mechanical Consistency; Gold (XAUUSD) Trade Review for 31 JulyHi, This is a trade review for 27 July 2023.
Here are some details for the trades.
XAUUSD
1-hour time frame
2% per trade
2 Solid Wins, net around +5.5%
Disclaimer: Not Financial Advice! I'm just sharing my trading journey. Please take it as educational content. Thank you!
Monday's trading was exceptionally successful with both trades yielding outstanding results. The first trade was executed flawlessly, experiencing minimal drawdown before quickly hitting its target for a satisfying profit. The second trade was triggered right after the first's successful exit and continued its momentum into Tuesday morning, reaching its initial take profit level. However, due to the potential impact of the ongoing trade on the new setup, I had to make a prudent adjustment to the second trade's take-profit level.
As a full-time working individual, I do not have the time to constantly monitor the charts and look out for the "perfect" trading opportunity. This is why I adopt the mechanical trading strategy to earn extra money.
This approach eliminates the need for extensive technical or fundamental analysis and removes any guesswork. It is a 100% Mechanical rule-based strategy, ensuring disciplined and consistent decision-making.
Here's how it works: Immediately after the 1st-hour candlestick closes either below or above the 200 EMA (Exponential Moving Average), you place precise Buy/Sell limit orders. Once all parameters are meticulously set, you can confidently attend to your daily routine, including your day job, while entrusting the market to dictate the trades.
If you are interested to learn my strategy, please visit my blogging site, link in BIO. Thank you!
Mechanical Consistency Weekly Review; -2.2% Return.Hi, Here's a weekly trades review on my mechanical consistency strategy.
Here are some details for the trades.
XAUUSD
1-hour time frame
2% per trade
3 win, 4 lose;
Net Lose -2.2%
The week started out great but ends horribly after wiping out all my profit from Monday and Tuesday. Let's review each day.
Monday's trade was executed beautifully, price went into profit almost immediately triggering the entry and reaches my first take profit soon after. After shifting stop loss to entry, the trade retraces back and just went I thought the trade was over. The price holds and triggered my Tuesday trade and head down to profit with close to zero drawdown, hitting all my take profit levels.
Tuesday trade was cut short after taking profit 1 has been reached and hit my stop loss level at entry. But still it was a good trade!
Wednesday trades ended net zero, the first trade lose immediately, hit my stop loss and triggered 2nd trade at the same time. Luckily, the 2nd trade is able to hit my first take profit level before going further up.
Thursday is the most disappointing trades of the week, wiping out all my profit for this week. Because of the strong US data, Gold price fells sharply wiping all my trades within seconds.
Friday did not trigger in any trades. Most because of my trade setup parameters.
Even we ended up losing only -2.2% of the capital. I am still in profit for the entire month of July. I will be sharing monthly trades review soon. As long as we do not deviate from my mechanical strategy, we can and will still profit in the long run. Take it as an investment instead of day job.
Disclaimer: Not Financial Advise, just sharing my trading journey. Please take it as educational content. Thank you!
If you are interested to learn my strategy, please visit my blogging site, link in BIO. Thank you!
Mechanical Consistency; Gold (XAUUSD) Trade Review for 27 JulyHi, This is a trade review for 27 July 2023.
Here are some details for the trades.
XAUUSD
1-hour time frame
2% per trade
3 lose, net -3R / -6%
Due to the robust US data, Gold experienced a significant decline, resulting in a substantial setback. Unfortunately, all three of my carefully positioned mechanical trades ended up losing -3R, erasing all the profits I had accumulated this week. Nevertheless, dwelling on the past won't be productive. Instead, I remain committed to my strategy without any deviations or changes. It's worth noting that I've extensively backtested this consistent mechanical approach, and it has proven to be profitable over the past year.
Moving forward, I am optimistic that the upcoming week will yield better results. Staying focused and disciplined will be key to achieving success. Let's look ahead with confidence and hope for a more favourable outcome next week!
Disclaimer: Not Financial Advise, just sharing my trading journey. Please take it as educational content. Thank you!
As a full-time working individual, I do not have the time to constantly monitor the charts and look out for the "perfect" trading opportunity. This is why I adopt the mechanical trading strategy to earn extra money.
This approach eliminates the need for extensive technical or fundamental analysis and removes any guesswork. It is a 100% Mechanical rule-based strategy, ensuring disciplined and consistent decision-making.
Here's how it works: Immediately after the 1st-hour candlestick closes either below or above the 200 EMA (Exponential Moving Average), you place precise Buy/Sell limit orders. Once all parameters are meticulously set, you can confidently attend to your daily routine, including your day job, while entrusting the market to dictate the trades.
If you are interested to learn my strategy, please visit my blogging site, link in BIO. Thank you!
Mechanical Consistency; Gold (XAUUSD) Trade Review for 26 JulyHi, This is a trade review for 26 July 2023.
Here are some details for the trades.
XAUUSD
1-hour time frame
2% per trade
1 win & 1 lose, net -0.2R (-$40)
My mechanical strategy is still working as intended. Although the first trade ended up losing but the second trade manages to perform and reduce the overall loss to -0.2R. I am still confident that the strategy will work in the long run.
Disclaimer: Not Financial Advise, just sharing my trading journey. Please take it as educational content. Thank you!
As a full-time working individual, I do not have the time to constantly monitor the charts and look out for the "perfect" trading opportunity. This is why I adopt the mechanical trading strategy to earn extra money.
This approach eliminates the need for extensive technical or fundamental analysis and removes any guesswork. It is a 100% Mechanical rule-based strategy, ensuring disciplined and consistent decision-making.
Here's how it works: Immediately after the 1st-hour candlestick closes either below or above the 200 EMA (Exponential Moving Average), you place precise Buy/Sell limit orders. Once all parameters are meticulously set, you can confidently attend to your daily routine, including your day job, while entrusting the market to dictate the trades.
If you are interested to learn my strategy, please visit my blogging site, link in BIO. Thank you!
SUPPORT & RESISTANCE Hey Everyone,
Support and resistance is one the most talked about price action component when it comes to technical chart analysis.
What is support and resistance?
Support and resistance are areas where price fails to continue to rise or drop. Historical areas of rejections create levels of support and resistance. These levels are expected to stop price from a continuation. - SEE EXAMPLE BELOW
How can we use support and resistance?
Support and resistance levels can be used to take trades from and to close trades on. We will cover the basics of drawing the levels and also identifying rejections and breakouts using support and resistance levels.
First and foremost traders draw support and resistance in many different ways. We will cover one of the methods we use to support our signals and trades, which is called "CANDLE BODY CLOSE"
See examples below on how to draw the levels, identify rejections and also the breakout strategy.
CANDLE BODY CLOSE SUPPORT AND RESISTANCE
Failure to close above a level with the candle body forms level of resistance and failure to close below a level with the candle body forms support. Also areas of rejections.
CANDLE BODY CLOSE BREAKOUT
A candle that is able to close above a resistance or below a support level with the body and not just the wick confirms a breakout of the level for a continuation.
This is a fantastic simple way to chart support and resistance levels, that can also be used to support entries and exits by identifying the wick rejections and the candle body breakouts.
As always, we will continue to share our chart ideas and useful educational tips for traders. Please don't forget to like, comment and follow to support us, we really appreciate it!
GoldViewFX
XAUUSD TOP AUTHOR
TOMMY XAU | BASIC MARKET STRUCTURE Good afternoon gold gang!
Thought id jump on here to talk to you about basic market structure, as its the basis for any strategy and super important to learn.
We can identify that the market moves 3 ways ..
up trend
down trend
sideways (consolidation)
I prefer to trade when the market is trending in either direction. I determine this by looking at the monthly and weekly candles.
In a trending market, i am looking to identify areas that the market can reverse from. If we are making a higher high for example .. I can identify that price is likely to pull back down to the key level it started its ascent from. From there i can wait for confirmations on the lower time frame to take a trade in the direction of the trend.
obviously this doesnt work everytime .. news etc .. but its always good to have it in the back of your mind the phase of the market you are currently in.
you will find with my strategy .. that price will make new structure points around my key levels ( the ones i place on my chart)
Hope this helps some of you out .. back to basics is sometimes the way to go if you are getting overwhelmed with information
Have a great sunday and see you tonight for the outlook
tommy
💰 Exploring the Potential of Investing in Precious Metals.Throughout the ages, the allure of rare and captivating metals like gold, silver, platinum, and palladium has remained unwavering. Their scarcity, exquisite aesthetics, and enduring nature have made them objects of desire. While these metals are commonly associated with ornamental jewelry, their utility extends far beyond adornment, finding applications in various industrial and technological realms. Moreover, precious metals have long been regarded as a safeguard against inflation and a sanctuary for investors amidst economic upheaval. Consequently, the trading of these invaluable commodities has evolved into a pivotal component of the global financial landscape, witnessing the exchange of billions of dollars each passing day. In this exposition, we embark upon an exploration of the fundamentals of precious metals trading: the mechanisms at play, the influential factors shaping prices, and the diverse avenues through which investors can partake in this exhilarating and ever-evolving marketplace.
The vast realm of metals is neatly divided into two distinct groups: ferrous and nonferrous. The former encompasses iron, manganese, and chromium, although experts occasionally question the inclusion of the latter metal. This classification extends to alloys containing elements from these primary ferrous metals.
Understanding Precious Metals
From an official statistical perspective, ferrous metals command an overwhelming share, reaching up to 90%. One would naturally assume that such metals enjoy significant demand on stock exchanges. However, in reality, a majority of transactions occur outside the realm of these exchanges, transpiring directly between buyers and sellers. Consequently, the ferrous metals market and its liquidity do not boast the most favorable conditions.
Within this category, certain metals hold a prominent position in exchange trading, namely: gold, silver, platinum, palladium, copper, aluminum, zinc, and nickel. Amongst these, gold and silver reign as the favored choices among traders and investors.
To comprehend the market of precious metals in its entirety, it is imperative to examine it through two essential lenses: the functional aspect and the institutional perspective. Ultimately, the market represents a harmonious amalgamation of diverse spheres, encompassing not only extraction, production, and processing but also the final sale to consumers.
The price of precious metals is subject to the influence of various factors, encompassing:
Supply and demand dynamics: The fundamental principles of supply and demand exert a significant impact on precious metal prices. Limited supply coupled with high demand typically drives prices upward.
Economic indicators: Economic data, including inflation rates, interest rates, and GDP growth, can shape the price trajectory of precious metals. For instance, during periods of elevated inflation, investors often seek refuge in precious metals as a store of value, leading to increased demand and subsequent price appreciation.
Geopolitical events: Geopolitical occurrences like wars, trade conflicts, and political instability have the potential to sway precious metal prices. When geopolitical tensions escalate, investors frequently turn to precious metals as a safe haven, fueling demand and subsequently driving prices higher.
Currency fluctuations: Since the price of precious metals is commonly denominated in US dollars, fluctuations in currency value can impact metal prices. For instance, if the US dollar strengthens, precious metal prices may experience a decline as they become relatively more expensive for buyers using other currencies.
Investor sentiment: The sentiment and outlook of investors can play a vital role in shaping precious metal prices. Bullish sentiment may lead to increased buying activity, resulting in price surges. Conversely, bearish sentiment may prompt investors to sell their holdings, leading to price declines.
To summarize, the price of precious metals is influenced by a multifaceted interplay of factors, ranging from the core dynamics of supply and demand to geopolitical events and currency fluctuations.
Investing in precious metals offers several avenues for investors to participate in the market. Here are three of the most popular approaches:
Stocks: Investors can purchase shares in mining companies engaged in the extraction of precious metals like gold, silver, platinum, and palladium. The stock prices of these companies often correlate closely with the underlying metal's price, as their profitability is tied to production costs and market demand.
Exchange-Traded Funds (ETFs): Precious metal ETFs enable investors to buy shares in a fund that holds physical precious metals, such as gold or silver. These funds aim to track the price movements of the respective metal, providing a convenient means of exposure to the market without the need for physical storage and transportation of the metals.
Contracts for Difference (CFDs): CFDs are financial instruments that allow investors to speculate on the price fluctuations of precious metals without owning the physical metal itself. By entering into a contract with a broker, investors can buy or sell the metal at a predetermined price on a future date. CFDs are a more speculative approach, involving leverage and potentially significant losses if the metal's price moves unfavorably.
The potential earnings from trading precious metals can vary greatly and are highly dependent on individual factors and market conditions. It's important to note that trading in precious metals can be subject to volatility and fluctuations, and there are no guarantees of specific earnings. While gold and silver have demonstrated a long-term upward trend, it is crucial to approach trading with realistic expectations.
Over the long term, precious metals have historically shown the potential for favorable returns. However, short-term gains can be less predictable. It's important to have a long-term perspective and not expect significant profits within a short period. Patience and a strategic approach are key when investing in precious metals.
It's worth mentioning that the scarcity of precious metals, especially gold, has a significant impact on their value. As the available supply diminishes over time while demand remains steady or increases, the price per unit tends to rise. This trend is driven by the basic principles of supply and demand.
In summary, while precious metals can offer good returns over the long term, it's important to manage expectations and understand that substantial earnings may take years or even decades to materialize.
Investing in precious metals offers both advantages and disadvantages. Here are the key pros and cons to consider:
Advantages:
Safe haven investment: Precious metals, particularly gold and silver, are often viewed as safe haven assets during economic uncertainty or market instability. They can act as a hedge against inflation, currency devaluation, and geopolitical risks.
Diversification: Precious metals provide diversification benefits to an investment portfolio. They have a low correlation with traditional assets like stocks and bonds, which can help reduce overall portfolio risk and enhance stability.
Tangible assets: Precious metals are physical assets that can be held directly, offering a sense of ownership and security for some investors. Having tangible assets can also provide a potential alternative during times of financial crisis or disruptions in the banking system.
Disadvantages:
Volatility: Precious metal prices can be highly volatile, experiencing significant price swings within short periods. This volatility can pose risks, especially for short-term traders or those seeking quick profits.
Limited income potential: Unlike stocks or bonds, precious metals do not generate income through interest payments or dividends. Their value primarily relies on price appreciation, which may limit their long-term growth potential compared to income-generating investments.
Storage and insurance costs: If investing in physical precious metals, storage and insurance expenses can add to the overall costs of ownership. Proper storage facilities and insurance coverage are necessary to protect the value of the assets, which can eat into potential returns.
Market manipulation concerns: Critics argue that the precious metals market may be susceptible to manipulation by large players or governments, potentially leading to artificial price movements that may not reflect true supply and demand dynamics.
It's important for investors to carefully weigh these advantages and disadvantages, taking into account their financial goals, risk tolerance, and the broader investment landscape. Consulting with a financial advisor or conducting thorough research is recommended before making any investment decisions in precious metals.
Are Precious Metals A Good Investment For You?
Determining whether precious metals are a good investment for you requires considering various factors such as your financial goals, risk tolerance, and investment timeframe. Here are some key points to consider:
Diversification: Precious metals can serve as a valuable component of a diversified investment portfolio, as they often have a low correlation with other asset classes. This diversification can help mitigate risk and stabilize portfolio performance.
Inflation protection: Precious metals are historically considered a hedge against inflation since their value tends to rise when the purchasing power of fiat currencies declines. If protecting against inflation is a priority for you, investing in precious metals could be advantageous.
Volatility: It's important to recognize that precious metals can experience significant price volatility, which may not align with the risk tolerance of every investor. If you are uncomfortable with substantial price fluctuations, other investment options may be more suitable.
Liquidity: Precious metals generally offer high liquidity, meaning they can be easily bought or sold on major exchanges. This accessibility allows for flexibility and quick access to funds when needed.
Long-term perspective: Investing in precious metals, particularly gold, often yields gradual and steady returns over the long term. Patience is crucial when investing in these assets, as their growth tends to occur gradually rather than in short-term bursts.
Considering these factors, it is recommended to conduct thorough research, assess your individual circumstances, and consult with a financial advisor before deciding if precious metals are a suitable investment for you.
Exploring Seasonality in Crude Oil PricesWhat rises, must fall. What comes down, goes up again. This rings most true for crude oil prices. Both secular and seasonal trends are at play in crude oil prices.
Demand for oil moves in tandem with global economic activities. Key secular trends impacting oil markets over this decade was covered in our previous paper . These range from falling demand from developed markets, and rising demand in emerging economies, among others.
While secular trends unravel over a longer time, seasonal cyclical effects can be observed over a short term.
This paper will explore consumption patterns driving annual seasonality in crude oil prices. In Part two of this paper, we will illustrate trading crude oil derivatives to harness opportunities arising from seasonality.
CRUDE OIL SUPPLY CHAIN: AN OVERVIEW
Gluts and shortages, economic growth and contractions, and geopolitics impact crude oil prices. Different events impact various segments of the supply chain. The global crude oil supply chain is complex and intricate. It can broadly be classified into Upstream, Midstream, and Downstream.
Upstream and midstream sectors drive crude oil supply. Upstream outage or shortage affects available supply which are sometimes evened out by the midstream through adequate inventories.
Downstream and midstream drives demand. End consumer demand is observed in distribution. Refineries adjust output based on their margins which in turn is derived from crude oil prices and refined product prices.
WHAT DRIVES SEASONALITY?
Seasonality in demand for refined products impact crude oil prices. Higher demand for refined products (gasoline, diesel, and kerosene) is observed in summer because of travel. While lower supply is caused by maintenance linked pauses in downstream during winter.
Crude oil inventory shifts can be segmented into four phases, namely: (1) Inventory Build Up (Feb - May), (2) Summer Travel Spikes Demand (Jun - Aug), (3) Demand Shrinks & Supply Contracts (Sep - Nov), and (4) Winter led demand spike (Dec - Jan).
This seasonality is evident in US crude oil inventory shifts as exhibited below.
Impact of seasonality is not always directly apparent or predictable. Why? Crude oil is so deeply intertwined with global economics. Shocks, if any, can have an outsized impact on prices and volatility. Also, supply cuts from majors oil producers and GDP shifts in major consumers have jumbo effect on prices. Consequently, other factors moderate or nullify impact of seasonality.
The below chart shows the average price behaviour of Crude oil from the start of each year over the past twenty (20) years by using CME front month crude oil futures price data from TradingView.
Orange bars in the above chart represents average monthly price change measured over last twenty years. Meanwhile, the white bar shows monthly price change for the same period but after excluding the outliers. Outlier years include 2008 (global financial-crisis), 2020 (pandemic), and 2022 (Russia-Ukraine conflict).
Crude prices go bullish on higher demand by refineries starting in March and continue to rise through the summer months as demand for refined products remains high driven chiefly by increased travel.
However, by August, sufficient refined product inventories dampen demand. With refineries slowing for maintenance, crude demand declines leading to a moderation in price. Finally, a small uptick is observed in December as demand starts to rise again during peak winter.
The average monthly returns for each month are displayed below. However, note that the standard deviation for these averages is non-trivial indicating that month-of-the-year effect on crude oil prices is uncertain and, in many cases, statistically insignificant. This conclusion is also arrived at based on various academic research papers.
METHODS TO HARNESS CRUDE OIL SEASONALITY
Three most common methods to harness gains from seasonality include: a. Futures (highest upside and highest downside), b. Call options (upside limited relative to futures and limited downside risk), and c. Call and/or Put Spreads (limited upside and limited downside).
Traders can deploy options to express a directional view with unlimited upside and limited downside. In a long options position, the downside is limited to the premium paid.
Conversely, a short position in options involves selling an option. This offers upside limited to the premium collected but exposed to unlimited downside.
TRADE SET UP ILLUSTRATIONS
From July until November, based on historical observations over the last twenty years, crude oil prices tend to fall. We could set up a trade using the December contract month of CME Micro Crude Oil Futures which expires on Nov 17th:
1. Short Futures: Short Futures position in MCL Dec 2023 contract (MCLZ3) at USD 70 per barrel with the anticipation that prices will fall by November.
2. Long Puts: Long Put options on MCLZ3 at a strike of USD 69 per barrel with a hypothetical options premium of USD 3 per barrel.
3. Bear Call Spread: Bear Call Spread with a net premium of USD 1 per barrel on MCLZ3 comprising of a short call option at a strike of USD 71 a barrel (collecting options premium of USD 5 per barrel) and a long call option at a strike of USD 73 a barrel (paying options premium of USD 4 per barrel).
The Bear Call Spread profits a fixed amount equal to the net premium when both options expire out of the money. When only the short call options expires in the money, the position loses by having to pay the options buyer. However, when both options expire in the money the profit from the long option partially offsets this loss resulting in a capped downside.
Each CME Micro Crude Oil Futures contract represents one hundred barrels of crude oil. Accordingly, the above three trade set ups are illustrated across various price scenarios as shown below.
Please note that these illustrations do not include (a) transaction costs comprising of exchange trading and clearing costs and brokerage fees, and (b) capital costs associated with margins required for establishing these positions.
MARKET DATA
CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
Target reached! Crude Oil ReviewPrice bounced strongly above the 67.31 support level towards our take profit target - but how did we do it?
Join Desmond in this analysis review where he covers the reason why this setup worked nicely.
Please be advised that the information presented on TradingView is provided to FXCM (‘Company’, ‘we’) by a third-party provider (‘Name of third party provider). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Name of third party provider.
The speaker(s) is neither an employee, agent nor representative of FXCM and is therefore acting independently. The opinions given are their own, constitute general market commentary, and do not constitute the opinion or advice of FXCM or any form of personal or investment advice. FXCM neither endorses nor guarantees offerings of third party speakers, nor is FXCM responsible for the content, veracity or opinions of third-party speakers, presenters or participants.
High Risk Investment Warning
Trading Forex/CFDs on margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you.
Forex Capital Markets Limited (www.fxcm.com):
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
FXCM EU LTD (www.fxcm.com):
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
FXCM Australia Pty. Limited (www.fxcm.com): **
Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763), please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com
FXCM Markets LLC (www.fxcm.com):
Losses can exceed deposits.
Target Reached! XAGUSD ReviewPrice reversed strongly from our resistance level to the support level at 22.20. But how did it happen?
Join Desmond in today's analysis review to have a quick recap on the elements that led to this strong reversal.
Please be advised that the information presented on TradingView is provided to FXCM (‘Company’, ‘we’) by a third-party provider (‘Name of third party provider). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Name of third party provider.
The speaker(s) is neither an employee, agent nor representative of FXCM and is therefore acting independently. The opinions given are their own, constitute general market commentary, and do not constitute the opinion or advice of FXCM or any form of personal or investment advice. FXCM neither endorses nor guarantees offerings of third party speakers, nor is FXCM responsible for the content, veracity or opinions of third-party speakers, presenters or participants.
High Risk Investment Warning
Trading Forex/CFDs on margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you.
Forex Capital Markets Limited (www.fxcm.com):
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
FXCM EU LTD (www.fxcm.com):
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
FXCM Australia Pty. Limited (www.fxcm.com): **
Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763), please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com
FXCM Markets LLC (www.fxcm.com):
Losses can exceed deposits.
