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Introducing Minds! 5 Things you need to know.Social media has evolved to become an essential tool for traders and investors. Staying up to date with market narratives, sharing and reading top ideas, and directly collaborating with others all serve to make the medium an extremely important part of the research process. That’s why today we’re thrilled to announce the next step in that evolution - Minds! In today’s post, we’re going to highlight a few ways to use Minds to improve the way you follow, share, and chat about your favorite symbols. After all, in markets, information is everything and this is another tool to build into your workflow: 1.) Think of Minds as a feed created by your peers – full of their opinions, notes, and shared news topics, all relevant to whatever ticker you’re currently looking at. 2.) Minds can be used to quickly measure the general sentiment for any symbol. Ask yourself what people are talking about and if it’s bullish or bearish. 3.) Accessible from any symbol page, or from the right rail (with the thought bubble icon), this unique format allows you to chat with other members of the community alongside your chart. Watch the chart and social conversation at the same time. 4.) Want feedback about a specific symbol? Head to the Minds feed for that symbol and share your questions or comments . Other traders will eventually see your posts on the Minds feed. They can then comment, upvote and downvote to let you know what their initial reaction is. This feedback can be used to improve your understanding of a symbol. 5.) Minds can be used to quickly catch up on all the news about your favorite symbols. Head to a Minds feed and examine what people are saying. Is there breaking news? Links? Charts? Something else? Over time these feeds will become essential newsfeeds for you. Minds is currently in beta, so please send us any feedback you have! Know that we are working diligently to improve it. Finally - while Minds is open to all users to read, follow, and vote, only paying members (Pro, Pro+, and Premium) can currently post to the Minds feed and leave comments, similar to the other social tools on our site. Let us know how you like it, and get out there and post your first Mind today! Happy Holidays! 😎🌲 -Team TradingView ❤️❤️

Education

Our take on AI-generated Pine Script™The fact that GPT can generate Pine Script™ code has garnered much attention lately. While the perspective of making natural language requests to an AI to generate code is understandably attractive, it is unfortunately not something traders should use as a substitute to learning to program, or to finding a freelancer who will program for them if they are not interested in learning to code. Simply put, the core of the problem lies in the fact that code generated by software like GPT is unreliable, and that only someone who already knows Pine can analyze it and make the inevitable changes required for it to work as intended. Would you rely on code you cannot trust to trade your money? Those who can answer "yes" to that question are gamblers — not traders — and they most probably won't be reading this publication anyway. Because you are reading this, we assume that you are, or hope to become a trader, in which case elementary risk management would dictate that you consider GPT-generated Pine code with suspicion and not use it to make your trading decisions. Some of the typical problems you can expect of GPT-generated Pine Script™ code is that its logic will not do what you asked it to do, and that it will frequently fail to compile because its syntax is malformed, among other reasons because it mixes up different versions of Pine. Consequently, we have decided not to allow requests to fix GPT-related code in the Q&A forums where PineCoders answer programming questions. We believe this is the best way to support our community's all-important volunteers who contribute their valuable time and knowledge to help Pine programmers facing programming challenges. Our Q&A forums are not indicator-writing services for traders who do not code in Pine. For that, traders can use our list of Trusted Pine Script™ Programmers for Hire to find a reliable freelancer they will pay to do the work for them. Our Q&A forums for Pine Script™ programmers are: • Stack Overflow • "PineCoders Pine Script™ Q&A" room on Telegram • "Pine Script™ Q&A" chat on TradingView If you are interested in learning Pine Script™, start here . Whether you program or not, do not miss the opportunity to explore our 100,000-strong Community Scripts published by TradingViewers who so graciously share their work with our community. Disclaimer This publication is not intended as a dismissal of GPT-3. Originally designed to process requests to generate text, the successive versions of GPT have turned out to be increasingly adept at producing relatively good quality text, so much so that it is often difficult for humans to detect that a program wrote it. See on the chart above, for example, its own text on the subject we explore in this publication, or this paper it wrote about itself . We can certainly foresee many uses for GPT-generated text, although it does bring to light challenging ethical questions. Look first. Then leap.

TEducation

Understanding Trends In Markets: Why They Develop The prime example of a Trend on the S&P will help you understand and be ready for any future move.. Especially when you are looking at it the right way. In this video we go from the very start to where we are now to understand how the market develops based on market news and sentiment and what to look for in the future. Trade Small and Trade Safe.

Education

08:31

by WillSebastian

Trading BTC : Dunning Kruger Effect 🐸Hi Traders, Investors and Speculators 📈📉 Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year. Daytime job - Math Teacher. 👩🏫 Have you ever wondered what it takes to be a good and profitable trader? Have you wondered how long it will take before you would have mastered the art f trading? Myself and Dunning Kruger will let you in on a little secret - the journey of pretty much every person that has ever started trading is explained in the chart above. The Dunning-Kruger effect, in psychology, is a cognitive bias whereby people with limited knowledge (in a given intellectual or social domain) greatly overestimate their own knowledge or competence in that domain relative to objective criteria or to the performance of their peers or of people in general. This happens in trading all the time. In fact, we probably all started there if we're being honest . So - What causes the Dunning-Kruger effect? Confidence is so highly prized that many people would rather pretend to be smart or skilled than risk looking inadequate and losing face. Even smart people can be affected by the Dunning-Kruger effect because having intelligence isn’t the same thing as learning and developing a specific skill. Many individuals mistakenly believe that their experience and skills in one particular area are transferable to another. Many people would describe themselves as above average in intelligence, humor, and a variety of skills. They can’t accurately judge their own competence, because they lack metacognition, or the ability to step back and examine oneself objectively. In fact, those who are the least skilled are also the most likely to overestimate their abilities. This also relates to their ability to judge how well they are doing their work, hobbies, etc. The Dunning-Kruger effect results in what’s known as a double curse : Not only do people perform poorly, but they are not self-aware enough to judge themselves accurately—and are thus unlikely to learn and grow. So how can we prevent ourselves from falling into this trap? Here's a few things to keep in mind: To avoid falling prey to the Dunning-Kruger effect, you should honestly and routinely question your knowledge base and the conclusions you draw, rather than blindly accepting them. As David Dunning proposes, people can be their own devil’s advocates, by challenging themselves to probe how they might possibly be wrong. Individuals could also escape the trap by seeking others whose expertise can help cover their own blind spots, such as turning to a colleague or friend for advice or constructive criticism. Continuing to study a specific subject will also bring one’s capacity into a clearer focus. 💭Practice these habits to ultimately escape the double curse: - Continuous learning. This will keep your mindset open to new possibilities, whilst increasing your knowledge over time. - Pay attention to who's talking about what. Is the accountant talking about bodybuilding? - Don't be overconfident. This is self explanatory. I hope you enjoyed this post today! Please give us a thumbs up 👌 _______________________ 📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍 We thank you for your support ! CryptoCheck

Education

by CryptoCheck-

Updated

ADX: How to use this under-the-radar tool.Hey everyone! 👋👋 In this video, we're taking a look at the ADX Indicator. We break down how it works, how to interpret its output, common uses for it, and ways that it can help you find and screen for opportunities you like. Feel free to drop some questions below in the comments! Remember - nothing in this video constitutes advice, our only goal is to educate you about the markets and how to use our platform more broadly. Cheers! -Team TradingView ❤️❤️ Check out more information about the ADX in our help center here .

Education

08:26

HOW TO DETERMINE THE TREND Hello everyone! Today I want to discuss with you the methods of trend identification. Finding a trend is an important task, because it is by trading according to the trend that you can earn a lot of money. PATTERNS Thanks to the patterns, you can understand where the price will go. There are many patterns confirming the trend: flag, pennant, wedge, and so on. The exit from these patterns is the confirmation of the strength of the main trend. Follow the patterns, they will help you find the trend. MA Moving Average is an important trend indicator and is quite clear and simple. The moving average is used by analysts in large banks and funds for a reason. The main trend indicator is the price rebound from the moving average. If the price bounces from the moving average towards the trend, then the trend is strong. CHANNELS The trend pushes the price in one direction and even the corrections become shorter. Under such conditions, the channel boundaries are directed towards the trend. Channel breakouts also occur in the direction of the trend, which is a confirmation of the trend. FIBONACCI Thanks to the Fibonacci levels, you can identify good entry points. It is enough to stretch the grid to the price impulse. This trend helps to open a position with a good entry point. And what methods do you use to identify the trend? Traders, if you liked this idea or if you have an opinion about it, write in the comments. I will be glad 👩💻

Education

The birth of the chart. The evolution of the tape Last time we studied how the exchange price is formed, and we found out that it is important to learn how to read charts correctly in order to analyze price changes correctly. Let's see how a chart is made and what it can tell us. Everyone who went to school probably remembers: to draw a function, we need the X and Y axes. In stock charts, the X-axis is responsible for the time scale, and the Y-axis is responsible for the price scale. As we already know, a chart is built on the basis of data from a tape. At the previous post , we have produced the following tape: FB $110 20 lots FB $115 5 lots FB $100 10 lots Actually, in addition to ticker, price and volume the tape also fixes time of trade. Let's add this parameter to our tape: FB $110 20 lots 12/08/22 12-34-59 FB $115 5 lots 12/08/22 12-56-01 FB $100 10 lots 12/08/22 12-59-02 That's it. Now this data is enough to put points on the chart. We draw three points, connect them with straight lines and get a chart. At one time, this was enough, because trades on the exchange were not frequent. But now some popular stocks, such as Apple or Google, have hundreds of trades per second with different prices. If the minimum division on the X scale is one second, what price point should we put if there were many trades at different prices in one second? Or let's place all the points at once? We will discuss that in the next post. And now, as a postscript, I want to show you some pictures describing how the tape was born and evolved. Here is a picture of a stock player, looking through a tape with quotations, which is given by a special telegraph machine. Each telegraph machine is connected by wires which, like a spider's web, entangle New York City. 1930's broker's office with several telegraph machines and a quotation board. An employee of the exchange looking through a tape of quotes. It won't be long before all this is replaced by the first computers. We'll continue today's theme soon.

Education

VIX Index The Volatility Index VIX is one of the most popular methods for determining stock market emotions. In full, it stands for CBOE Volatility Index, the volatility index of the Chicago Board Options Exchange. The market is an emotion, always has been, always will be. Robots? Great, but they are created by people with emotions. And a trader needs a method that allows him to identify these emotions. That's where the VIX index comes in. It is based on the volatility of options on the S&P 500 Index. Yes, yes, it's actually an index for an index, this happens in the markets. The VIX index is also known as the Fear and Greed Index. The index is expressed as a percentage and indicates the probability of the S&P 500 index moving over a period of 30 days, where the probability level is 68% (one standard deviation from the normal distribution curve, aka the Gaussian curve). Let's say that if the VIX is 15, therefore the expected change in the S&P 500 index over the course of a year, with a 68% probability, is less than 15% up or down. What does that have to do with emotion? For that, we need to understand the forces that underlie any strong market movement. Greed is the desire to possess more and more than is really needed. Whether it be money, goods, services, or any material values. According to a number of scientific studies, greed is the product of a chemical reaction in our brains that causes common sense to be discarded and sometimes causes irreversible changes in both the brain structure and the body. Perhaps someday a pill for greed will be invented, but for now, everyone is greedy without restraint. Greed is as addictive as smoking or drinking alcohol. "He has pathological greed," "he's the greediest guy the world has ever seen," are all victims of a very common mania. The average trader comes to the market and he is subjected to the strongest emotional influence, caused by the very brain "chemistry". He wants more and more and more, all the time. He wants more numbers on the account. He can't stop, he can't control himself. As the result, brokers and different near-market agents use this obsession with pleasure, exploiting his mental disease. Similar effects are associated with the emotions of "happiness" and euphoria. As a result, such traders' brains are constantly bombarded with emotional temptations and endless financial carrots, just as narcotic substances give the effect of not getting high at all but of temporary relief. The dot-com bubble This is a classic example of market greed. The Internet bubble led to millions of investors continuously pouring money into Internet companies between 1995 and 2000, despite the fact that most of them had no future. It got to the point of absurdity. Some companies were getting hundreds of millions of dollars just for creating the website "XYZ dot com". Greed bred greed, led to a colossal overestimation of assets and their real value. Investors, obsessed with making easy money, invested insane amounts of money in nothing. The inflated bubble naturally burst and took all the money of the greedy people with it. The Financial Crisis of 2008 The book "The Big Short: Inside the Doomsday Machine" by Michael Lewis (and the movie "The Big Short ") tells the story of how a few people profited from the massive greed of others. An instrument like CDS (Credit Default Swap) turned into a crazy financial pyramid scheme with a turnover of over $62 trillion. In the financial crisis of 2007-2010, the volume of this market shrank threefold another bubble driven by greed and obsession burst at the seams, and the financial world shuddered and shrank dramatically. Only a few people made a fortune as they worked against the greed of the crowd. Fear An uncomfortable state of constant stress, waiting for the worst fate and constant threat. The dot-com bubble also demonstrated this emotion well. To cope with the horrific results of the dot-com bubble, out of fear, investors took money out of the stock market and put it into the safest possible instruments, like stable investment funds or government-backed funds. These funds were not very profitable, but their main advantage in the eyes of investors was minimal risk. This is an example of how investors ruined all of their long-term investment plans because fear forced them to hide their money literally under their pillow. These assets did not generate income, but remained conditionally safe. How to read VIX The correlation between the VIX and the S&P 500 is quite clear. Let's compare the values, where the blue line is the VIX and the orange line is the S&P 500. As we can see, a decrease in the VIX corresponds to an increase in the S&P 500, while an increase in the VIX (fear) in contrast is a signal of a collapse of the S&P 500. Statistics show that there is an inverse correlation between the VIX and the S&P 500, as the VIX moved in the opposite direction from the S&P 500 more than 80% of the time between 2000 and 2012. Where the VIX peaks, there is a decline in the S&P 500 and all the associated effects that affect both the dollar and other currencies. So, if the VIX is less than 20, investors are less worried, the volatility of the S&P 500 is expected to be low. If the VIX is greater than 30, investor fear increases as option prices on the S&P 500 rise; hence, investors pay more to hedge their assets. A typical picture is, for example, the VIX is at an ultra-low 10 and the S&P 500 is breaking new growth records. This is all an indication of an impending collapse of the S&P 500. However, if the Central Banks change monetary policy accordingly, this VIX level could very well become the new "normal" value. One scenario to use is to wait for the VIX to consolidate above 30 and enter the SPX on its decline. When investors have a scare, it's an indication of a panic sell-off. Let's look at some real examples. Since the beginning of this year, the VIX Index has been hitting fear records, reaching a high of 30. In theory, this means a drop in the SPX index. Well, why in theory? In practice it worked out 100%, the SPX index really collapsed spectacularly. Conclusion As we know, the S&P 500 index, which we have already studied, is the "king" index. It not only shows the state of the U.S. economy and stock market, but also indirectly shows the state of a mass of other assets, from interrelated indices to the value of the dollar. Because of correlation, Fear and Greed indices can be adapted to everything, both indices and currency pairs. It is one of the most popular stock indicators, unique in its kind and actively used for long-term market forecasts.

Education

History of the American Dollar. Ups and Downs 1825-1906: US begins market operations to maintain the gold standard. 1924-1931: US engages in number of market operations, including buying foreign currencies, to maintain the gold standard. 1934-1961: US Treasury creates the Exchange Stabilization Fund (ESF), conducts frequent operations directly in foreign exchange markets. 1971: Nixon Administration ends USD convertibility to gold, which had become unsustainable due to the large supply of dollars outstanding relative to gold reserves. 1973: US conducts intervention against German mark. 1974: US conducts intervention against Japanese yen. 1976: The USD officially becomes: fiat currency. 1977-1979: Very easy monetary policy weakens the USD. US intervenes often to support USD. 1979: Fed announces change in its open market procedures to combat inflation and, partly, to support a weakening USD. 1980-1981: US intervenes to tame strengthened dollar. 1985: Major economies agree in the Plaza Accord to devalue the USD relative to the JPY and DEM. In the following weeks, US intervenes often, selling dollars for other G5 currencies. 1987: Major economies sign Louvre Accord to halt USD depreciation. In coordinated interventions, US intervenes often to buy USD. 1988 - 1990: US intervenes repeatedly after G7 statement on importance of maintaing exchange rate stability. 1990: USD appreciates on a backdrop of solid economic growth and dormant inflation. 1991-1992: US and European central banks intervene often against the backdrop of a US recession and weakening USD. 1993: US intervenes to buy dollars and sell yen. 1994: Fed unexpectedly starts rate hiking cycle on an improving economy following the recession. US intervenes repeatedly to support the USD. 1998: US intervenes to purchase yen in a coordinated intervention to support Japan's economy following the Asian financial crisis. 2000: Dot-com bubble bursts. leading to recession. 2000: Coordinated G7 FX intervention to support the Euro, initiated by the ECB. 2001: 9/11 attacks increase overall uncertainty. Fed lowers rates to prop up the economy. 2002: Japan intervenes, selling yen for dollars, often supported by the Fed and ECB. 2004-2006: Fed tightens policy to curb inflation. 2008: Global Financial Crisis ushers in an era of exceptionally easy monetary policy in the US, much of the developed world, and some EMs. Flight to safety strengthens the USD. 2010: Euro sovereign debt crisis unfolds. 2011: US. UK and European central banks sell yen in a coordinated intervention following a sharp rise In FX volatility as a result of an earthquake in Japan. 2011: Standard & Poor's downgrades US sovereign debt; flight to safety nevertheless boosts USD in the months that follow. 2014: USD begins to rally on the back of stronger growth relative to other major economies and divergence in DM monetary policy. 2015: Fed begins raising rates. 2015: China surprises global financial markets by devaluing the renminbi for three consecutive days. 2017-2018: USD depreciates on the back of convergence in global growth, President Trump's sentiments for a weaker Dollar, and strength in other major currencies, particularly the euro. 2018-2019: USD rallies on tax reform and Fed's continuing tightening cycle. 2020: COVID-19 spreads globally; recession begins. March 2022: Fed begins raising rates again. July 2022: Dollar reaches parity with the euro for the first time since 2002. Source: Federal Reserve Board, Congressional Research Service, Haver Analytics, various news sources, Goldman Sachs GIR. Regards, R.Linda!

Education

10 reasons most traders lose money Hey everyone!👋 Trading & investing is not easy. If it were, everyone would be rich. Here’s a couple time-honored reasons that traders lose money, and some tips to help you get back to basics. Lack of knowledge 📘 Many traders jump into the market without a thorough understanding of how it works and what it takes to be successful. As a result, they make costly mistakes and quickly lose money. Poor risk management 🚨 Risk is an inherent part of trading, and it's important to manage it effectively in order to protect your capital and maximize your chances of success. However, many traders don't have a clear risk management strategy in place, and as a result, they are more vulnerable to outsized losses. Emotional decision-making 😞 It's easy to feel strong emotions while trading. However, making decisions based on emotions rather than rational analysis can be a recipe for disaster. Many traders make poor decisions when they are feeling overwhelmed, greedy, or fearful and this can lead to significant losses. Lack of discipline 🧘‍♂️ Successful trading requires discipline, but many traders struggle to stick to their plan. This can be especially challenging when the market is volatile or when a trader is going through a drawdown. Create a system for yourself that's easy to stay compliant with! Over-trading 📊 Many traders make the mistake of over-trading, which means they take on too many trades and don't allow their trades to play out properly. This leads to increased risk, higher brokerage costs, and a greater likelihood of making losses. Clearly articulating setups you like can help separate good opportunities from the chaff. Lack of a trading plan 📝 A trading plan provides a clear set of rules and guidelines to follow when taking trades. Without a plan, traders may make impulsive decisions, which can be dangerous and often lead to losses. Not keeping up with important data and information ⏰ The market and its common narratives are constantly evolving, and it's important for traders to stay up-to-date with the latest developments in order to make informed decisions. Not cutting losses quickly ✂️ No trader can avoid making losses completely, but the key is to minimize their impact on your account. One of the best ways to do this is to cut your losses quickly when a trade goes against you. However, many traders hold onto losing trades for too long, hoping that they will recover, and this can lead to larger than expected losses. Not maximizing winners 💸 Just as it's important to cut your losses quickly, it's also important to maximize your winners. Many traders fail to do this, either because they don’t have a plan in place, telling them when and how to exit a trade. As a result, they may leave money on the table and miss out on potential profits. Not Adapting 📚 Adapting to changing market conditions is paramount to success in the financial markets. Regimes change, trading edge disappears and reappears, and the systems underpinning everything are constantly in flux. One day a trading strategy is producing consistent profits, the next, it isn't. Traders need to adapt in order to make money over the long term, or they risk getting phased out of the market. Overall, the majority of traders make losses because they fail to prepare for the challenges of the market. By educating themselves, developing a solid trading plan, and planning out decisions beforehand, traders can improve their chances of success and avoid common pitfalls. We hope you enjoyed! Please feel free to write any additional tips or pieces of advice in the comments section below! See you all next week. 🙂 – Team TradingView

Education

Interest Rate Futures and the First Cash Settled Contract CME: Eurodollar Futures ( CME:GE1! ), CBOT: Treasury Bond Futures ( CBOT:ZB1! ) This is the second installment of the Holidays series “Celebrating 50 Years of Financial Futures.” Before 1970, commercial banks did business by accepting short-term deposits at low regulated rates and offering longer-term business and personal loans at higher rates. Double-digit inflation changed all that. Federal Reserve eliminated interest rate ceilings on time deposits under 3 months in 1970, and on those over 3 months in 1973. Banks incurred huge loss from a negative spread with deposit rate higher than loan rate. Fast forward to 2022, we find ourselves in a high inflation and an inverted yield-curve environment again. The overnight Fed Funds rate (4.00%) is nearly 500 basis points higher than the 10-Year Treasury Note (T-Note) yield (3.51%) as of December 4th. Rising interest rates increase the financing cost from businesses to households alike. The Fed’s six consecutive rate hikes from March to November 2022 contributed to significant drawdown in the value of stocks, bonds, and commodities. If you bought $100,000 of Treasury bonds (T-bonds) in January, its market value could drop as much as 30% with bond yield jumping to 3.5% from 1.5%. If you owe $10,000 in credit card debt, monthly interest rate charge could run up to 25% a year from 15%. Like foreign exchange, interest rate is not a physical commodity. It is a right to holders of an interest-bearing product, and a liability to its issuer. The above examples show that both buyer and seller could have large financial exposure to changes in interest rates. To hedge interest rate risks, futures contracts were invented in Chicago futures markets, namely, Chicago Board of Trade (CBOT) and Chicago Mercantile Exchange (CME). CBOT Ginnie Mae Futures Government National Mortgage Association is a US government supported entity within the Department of Housing and Urban Development (HUD). The nickname “Ginnie Mae” come from its acronym GNMA. GNMA issues Ginnie Mae certificates, a type of mortgage-backed passthrough securities. Investors receive interest and principal payments from a large pool of mortgage loans. Since timely payments are backed by the full faith and credit of the US government, Ginnie Mae bonds are considered default risk free and have an AAA credit rating. Although they are free from default risk, holders of Ginnie Mae bonds are exposed to interest rate risk, as bond price moves inversely with bond yield. Sensing the need from savings and loans, mortgage bankers, and dealers of mortgage-backed securities, CBOT launched Ginnie Mae Bond Futures in October 1975. This was the first time a futures contract was based on an interest-bearing instrument. At contract expiration, futures buyers would receive actual Ginnie Mae bonds from futures sellers. While the Ginnie Mae contract has since delisted, it paved the way for the successful launches of other interest rate futures contracts in the 1970s and 1980s. CME Treasury Bill Futures Treasury bills (T-bills) are short-term securities issued by the US Treasury to help finance the spending of the federal government. New T-bills with maturities of thirteen, twenty-six, and fifty-two weeks are issued on a regular basis. The secondary market for T-bills is active, making them among the most liquid of money market instruments. In May 1972, the International Monetary Market (IMM) division of the CME launched foreign exchange futures, the first financial futures contract. In January 1976, the IMM listed futures contract on 90-day (13-week) T-bills. It was the first futures contract for a money market instrument. Nobel laureate Milton Friedman rang the opening bell on T-Bill Futures launch day. Upon maturity, seller is required to deliver T-bills with a $1 million face value and thirteen weeks left to maturity. Contracts for delivery in March, June, September, and December are listed. At any one time, contracts for eight different delivery dates are traded. T-bills do not pay explicit interest. Instead, they are sold at a discount to redemption value. The difference between the two prices determines the interest earned by a buyer. T-bill yields are quoted on a discount basis. Futures contracts are quoted on an index devised by the IMM, by subtracting the discount yield from 100. Index values move in the same direction as T-bill price. A rise in the index means that the price of a future delivered T-bill has risen. The formula for calculating the discount yield is: Discount Yield = ((Face Value - Purchase Price) / Face Value) X (360 / Days to Maturity) CBOT Treasury Bond Futures In August 1977, CBOT launched futures contracts on the T-Bonds. At the time, the birth of T-bond futures hardly seemed like a breakthrough. Financial futures were still in their infancy. Soybeans and corn were king in the CBOT trading pit. But all that changed in October 1979 when the Fed moved to strangle runaway inflation with a revised credit policy. The Saturday night massacre, as it was dubbed, ended decades of interest-rate stability. Interest rates bounced like a Ping Pong, affected by money supply, world events and inflation. Trading of T-Bond futures took off like a rocket. In addition to the traditional T-Bond futures (ZB) with 15-year maturity, CBOT also lists a 20-Yr T-Bond futures (TWE) and an Ultra T-Bond (UB) with 30-year maturity. In the Mid-curve, the T-Note suite includes 2-Yr Note (ZT), 3-Yr Note (Z3), 5-Yr Note (ZF), 10-Yr Note (ZN), and Ultra 10-Yr T-Note (TN). On December 2, 2022, daily volume of the first T-Bond futures was 388,370 contracts, while open interest reached 1,170,800 contracts. Daily volume of all CME Group interest rates futures and options contracts (IR) reached 13,786,454 lots, contributing to 54.1% of Exchange total. IR open interest was 78,244,297 lots, representing 70.4% of Exchange total. Cash Settlement Comes to Futures Market Up until now, futures contracts were settled by physical delivery of the underlying commodities. • Buyer of 1 CME Live Cattle may pick up 35 cows (40,000 pounds) from Union Stockyard in Chicago southside or take delivery at a cattle auction in Wyoming. • Seller of 1 CBOT Soybean contract would ship 5,000 bushels of the grain to a licensed grain elevator in Illinois, Iowa, or Kansas. • For CME Pork Bellies, settlement may involve title changes of warehouse receipt from seller to buyer for 40,000 pounds of the frozen meat in a cold storage. Even financial futures required physical delivery at that time. • For British Pound/USD contract, it is £62,500 in pound sterling. • For Ginnie Mae contract, it is $10 million worth of Ginnie Mae certificate. • T-Bond futures calls for delivery of treasury bonds with face value of $100,000 and maturity of no less than 15 years. As we discussed in “The Bogeyman in Financial Contracts”, there is inherent risk in the physical delivery mechanism. No matter how robust its original design is, industry evolution could outgrow capacity, rendering delivery failure under extreme market conditions. In December 1981, CME launched Eurodollar futures, the first contract with cash settlement feature. Cash settlement alone can be viewed as a financial revolution. Why? • It significantly reduces transaction cost, which in turn enhances the risk transfer or hedging function in futures. • It allows non-commercial users to participate in futures. Broader participation improves liquidity, and the price discovery as well as risk management functions. CME Eurodollar Futures Eurodollars are dollar-deposits held with banks outside of the US. There are two types of Eurodollar deposits: nontransferable time deposits and certificates of deposit (CDs). Time deposits have maturities ranging from 1 day to 5 years, with 3 months being the most common. Eurodollar CDs are also commonly issued with maturities under a year. Technically, buyer of Eurodollar future contract is required to place $1,000,000 in a 3-month Eurodollar time deposit paying the contracted interest rate on maturity date. However, this exists only in principle and is called a “Notional Value”. Cash settlement means that actual physical delivery never takes place; instead, any net changes in the value of the contract at maturity are settled in cash on the basis of spot market Eurodollar rates. Unlike T-bills, Eurodollar deposits, the underlying of Eurodollar futures, pay explicit interest. The interest paid on such deposit is termed an add-on yield because the depositor receives the face amount plus an explicit interest payment when the deposit matures. In the case of Eurodollar, the add-on yield is the London Interbank Offered Rate (LIBOR), which is the interest rate at which major international banks offer to place Eurodollar deposits with one another. Like other money market rates, LIBOR is an annualized rate based on a 360-day year. Price quotations for Eurodollar futures are based on the IMM Eurodollar futures price index, which is is 100 minus the LIBOR. In the following four decades, all financial futures are designed with cash settlement. Eurodollar futures paves the way for equity index futures, which were launched in February 1982 at Kansas City Board of Trade (KCBT) and April 1982 at CME. Without cash settlement, can you imagine how to deliver 500 different stocks on a market-weighted basis for the S&P 500 futures? Or 2,000 stocks for the Russell 2000? Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trade set-ups and express my market views. If you have futures in your trading portfolio, check out on CME Group data plans in TradingView that suit your trading needs www.tradingview.com

Education

by JimHuangChicago

👻5 INDICATORS FOR BEGINNERS👻 🍉Moving Average A moving average helps cut down the amount of noise on a price chart. Look at the direction of the moving average to get a basic idea of which way the price is moving. If it is angled up, the price is moving up (or was recently) overall; angled down, and the price is moving down overall; moving sideways, and the price is likely in a range. A moving average can also act as support or resistance 🍉Bollinger Bands Bollinger Bands are a form of technical analysis that traders use to plot trend lines that are two standard deviations away from the simple moving average price of a security. The goal is to help a trader know when to enter or exit a position by identifying when an asset has been overbought or oversold. Bollinger Bands were designed by John Bollinger. Bollinger Bands help by signaling changes in volatility. For generally steady ranges of a security, such as many currency pairs, Bollinger Bands act as relatively clear signals for buying and selling 🍉Relative Strength Index (RSI) The relative strength index (RSI) is a momentum indicator used in technical analysis. RSI measures the speed and magnitude of the pair’s recent price changes to evaluate overvalued or undervalued conditions in the price of that pair. It can also indicate pairs that may be primed for a trend reversal or corrective pullback in price. It can signal when to buy and sell. The RSI is displayed as an oscillator (a line graph) on a scale of zero to 100Traditionally, an RSI reading of 70 or above indicates an overbought situation. A reading of 30 or below indicates an oversold condition. 🍉MACD(Moving Average Convergence Divergence) The concept behind the MACD is fairly straightforward. Essentially, it calculates the difference between an instrument's 26-day and 12-day exponential moving averages (EMA). In calculating their values, both moving averages use the closing prices of whatever period is measured. On the MACD chart, a nine-period EMA of the MACD itself is also plotted. This line is called the signal line, which acts as a trigger for buy and sell decisions. The MACD is considered the "faster" line because the points plotted move more than the signal line, which is regarded as the "slower" line. 🍉On-Balance Volume (OBV) On-balance volume (OBV) is a technical trading momentum indicator that uses volume flow to predict changes in the price. The theory behind OBV is based on the distinction between smart money – namely, institutional investors – and less sophisticated retail investors. As mutual funds and pension funds begin to buy into an issue that retail investors are selling, volume may increase even as the price remains relatively level. Eventually, volume drives the price upward. At that point, larger investors begin to sell, and smaller investors begin buying. 🌺Hope u like my article. Please tell me what is YOUR favortie indicator? Love, Anabel❤️ Please, support my work with like and comment! Love you, my dear followers!👩‍💻🌸

Education

by AnabelSignals

Investors' Holy Grail - The Business/Economic Cycle The business cycle describes how the economy expands and contracts over time. It is an upward and downward movement of the gross domestic product along with its long-term growth rate. The business cycle consists o f 6 phases/stages : 1. Expansion 2. Peak 3. Recession 4. Depression 5. Trough 6. Recovery 1) Expansion : Sectors Affected: Technology, Consumer discretion Expansion is the first stage of the business cycle. The economy moves slowly upward, and the cycle begins. The government strengthens the economy: Lowering taxes Boost in spending. - When the growth slows, the central bank reduces rates to encourage businesses to borrow. - As the economy expands, economic indicators are likely to show positive signals, such as employment, income, wages, profits, demand, and supply. - A rise in employment increases consumer confidence increasing activity in the housing markets, and growth turns positive. A high level of demand and insufficient supply lead to an increase in the price of production. Investors take a loan with high rates to fill the demand pressure. This process continues until the economy becomes favorable for expansion. 2) Peak : Sector Affected : Financial, energy, materials - The second stage of the business cycle is the peak which shows the maximum growth of the economy. Identifying the end point of an expansion is the most complex task because it can last for serval years. - This phase shows a reduction in unemployment rates. The market continues its positive outlook. During expansion, the central bank looks for signs of building price pressures, and increased rates can contribute to this peak. The central bank also tries to protect the economy against inflation in this stage. - Since employment rates, income, wages, profits, demand & supply are already high, there is no further increase. - The investor will produce more and more to fill the demand pressure. Thus, the investment and product will become expensive. At this time point, the investor will not get a return due to inflation. Prices are way higher for buyers to buy. From this situation, a recession takes place. The economy reverses from this stage. 3) Recession : Sector Affected : Utilities, healthcare, consumer staples - Two consecutive quarters of back-to-back declines in gross domestic product constitute a recession. - The recession is followed by a peak phase. In this phase economic indicators start melting down. The demand for the goods decreased due to expensive prices. Supply will keep increasing, and on the other hand, demand will begin to decline. That causes an "excess of supply" and will lead to falling in prices. 4) Depression : - In more prolonged downturns, the economy enters into a depression phase. The period of malaise is called depression. Depression doesn't happen often, but when they do, there seems to be no amount of policy stimulus that can lift consumers and businesses out of their slumps. When The economy is declining and falling below steady growth, this stage is called depression. - Consumers don't borrow or spend because they are pessimistic about the economic outlook. As the central bank cuts interest rates, loans become cheap, but businesses fail to take advantage of loans because they can't see a clear picture of when demand will start picking up. There will be less demand for loans. The business ends up sitting on inventories & pare back production, which they already produced. - Companies lay off more and more employees, and the unemployment rate soars and confidence flatters. 5) Trough : - When economic growth becomes negative, the outlook looks hopeless. Further decline in demand and supply of goods and services will lead to more fall in prices. - It shows the maximum negative situation as the economy reached its lowest point. All economic indicators will be worse. Ex. The highest rate of unemployment, and No demand for goods and services(lowest), etc. After the completion, good time starts with the recovery phase. 6) Recovery : Affected sectors: Industrials, materials, real estate - As a result of low prices, the economy begins to rebound from a negative growth rate, and demand and production are both starting to increase. - Companies stop shedding employees and start finding to meet the current level of demand. As a result, they are compelled to hire. As the months pass, the economy is once in expansion. - The business cycle is important because investors attempt to concentrate their investments on those that are expected to do well at a certain time of the cycle. - Government and the central bank also take action to establish a healthy economy. The government will increase expenditure and also take steps to increase production. After the recovery phases, the economy again enters the expansion phase. Safe heaven/Defensive Stocks - It maintains or anticipates its values over the crisis, then does well. We can even expect good returns in these asset classes. Ex. utilities, health care, consumer staples, etc. ("WE WILL DISCUSS MORE IN OUR UPCOMING ARTICLE DUE TO ARTICLE LENGTH.") It's a depression condition for me that I couldn't complete my discussion after spending many days in writing this article. However, I will upload the second part of this article that will help investors and traders in real life. This article took me a long time to write. I'm not expecting likes or followers, but I hope you will read it. @Money_Dictators

Education

by Money_Dictators

Updated

🟢STOP AND LIMIT ORDERS EXPLAINED🟢 ✴️Types of orders in trading There are two main types of order: entry orders and closing orders. An entry order is an instruction to open a trade when the underlying market hits a specific level, while a closing order is an instruction to close a trade when the market hits a specific level. ✴️Stops vs limits A stop order is an instruction to trade when the price of a market hits a specific level that is less favourable than the current price. On the other hand, a limit order is an instruction to trade if the market price reaches a specified level more favourable than the current price. ✴️Stop orders explained You can use stop orders to close positions and to open them, by using either a stop-loss order or a stop-entry order. ✴️Stop-loss orders A stop-loss order is the common term for a stop closing order – an instruction to close your position when the market value becomes less favourable than the current price. ✴️Stop-entry orders A stop-entry order enables you to open a position when the market reaches a value that is less favourable than the current price. If you were opening a long position, you’d place your stop-entry order above the current market price. And if you were opening a short position, you’d place your stop-entry order below the current price. Although it may seem strange to open a trade at a worse price, stop-entry orders can enable you to enter a trade once a trend has been confirmed. This helps you take advantage of market momentum. ✴️Limit orders explained Like stop orders, limit orders can be used to open and close trades. ✴️Limit-entry orders A limit-entry order enables you to enter a trade when the market hits a more favourable price than the current price. For long positions, this would be below the current price level and for short positions this would be above. ✴️Limit-close orders A limit-close order enables you to close a trade at a more favourable price – which would be at a higher level for a long position and a lower level for a short position. The major drawback of a limit order is that there is the possibility it will not be filled if the market never reaches your order level – in this case the order would expire. If you had placed a limit-entry order, it is possible that your trade would never be executed. And if you had placed a limit-close order, your trade would not be closed automatically. 😊Thank you for reading, guys😊 ✅Like and Subscribe for more education✅ Do you like this post? Do you want more articles like that?

Education

by ProSignalsFx

Is Trading Like Playing Poker? Is trading a form of gambling? With hesitance, I would say yes. However, I would rather call trading a form of strategic gambling as both require elements of risk, reward, strategy and decision making. In the next two weeks or so, I’m planning to publish a new online FREE book called “Poker Vs Trading”. Who knows, by the end of it all you may take up professional poker playing as well as trading… Let’s start with the similarities. SIMILARITY #1: We can choose when to play (Strategy) Traders and poker players don’t play every hand that is dealt to them. With poker, when a hand is dealt, we can choose to either play the hand, based on how strong it is, or we can choose to fold and wait for the next hand… With trading, we wait for a trading setup based on the criteria of our strategy i.e. MATI Trader System. You’ll then have the exact criteria and money management rules to follow in order to take a trade or wait for the next trade. SIMILARITY #2: Amateur poker players and traders tend to go the ‘tilt’ (Emotional roller-coaster) Emotions are a main driver which leads to traders losing their cash in their account or poker players losing their chips very quickly. With poker, you get players who let their emotions take over where they start betting high with an irrational frame of mind. These emotions lead them to losing their chips very quickly. This is when they enter the state of what is called ‘going the tilt’. With trading, amateur traders also tend to act on impulse and play on gut, instinct, fear and greed after they’ve undergone a losing streak or a winning streak. This often leads them to: ~ Taking a series of losses. ~ Losing huge portions of their portfolio. ~ Holding onto losing trades longer than they should. ~ Entering a mindset of revenge trading. SIMILARITY #3: We know when to hold ‘em and when to fold ‘em (Cut losses quick) We have the choice to reduce our losses when it comes to betting a hand or taking a trade. With poker, if the players start upping the stakes and you believe you have a weaker hand in the round, you can choose to ‘fold’ and lose only the cost of playing the ‘ante’. With trading, if you’ve taken a trade and it turns against you, you have a stop loss which will get you out at the amount of money you were willing to risk of your portfolio… SIMILARITY #4: We know the rake (Costs involved) There are always costs associated with each trade we take or each hand we play, which eats into our winnings. With poker, it’s the portion of the pot that is taken by the house i.e. the blinds and the antes. With trading, it’s the fees charged by your broker or market maker, in order to take your trade. These fees can be either the tax, spread and/or the brokerage. SIMILARITY #5: Aggressive trading and betting before the flop (High volatility) There will always be a time of strong market moves and high betting. With poker, you get times where players like to bet aggressively and blindly before the flop is revealed. It’s these times that lead to the amateur poker players losing their chips very quickly. With trading, you get economic data i.e. Non-Farm-Payrolls, black swan events and Interest Rate decisions when big investors and traders like to drive the market up or down before the news even comes out. NOTE: I ignore both forms of hype as it is can lead to a catastrophic situation. SIMILARITY #6: We bet and trade based on the unknown Every bet and trade we take and play is based on incomplete information of the future. With poker, we are dealt hands then bet on decisions based on not knowing what cards our opponents have and/or what is shown on the river. We then have the options to call, bet, raise or fold during the process.With trading, we take trades based on probability predictions without knowing where the price will end up at. This is due to new information which comes into the market including (demand, supply, news, economic indicators, micro and macro aspects). SIMILARITY #7: We lose A LOT! (Losses are inevitable) Taking small losses are part of the game with both poker and trading. With poker, it is important to wait patiently until you have a hand with a high probability of success. Some of the best poker players in the world, fold 90% of the starting hands, they receive. Some professional poker players can go through weeks and months without a win. With trading, we can lose over 40% to 50% of the time. In general, I expect around two losing quarters a year. I know that when there are better market conditions, it will make up for the small losses. SIMILARITY #8: You must learn to earn (Education is vital) You need to understand and gain as much knowledge as you can about poker and trading before you commit any money. With poker, you need to understand: • The rules of the game. • The risk per move. • The amount of money you should play per hand. Once you know these points, you’ll be able to develop some kind of game plan with each hand you play. With trading, you need to understand: • The MARKET (What, why, where are how?)NB* • The METHOD (What system to follow before taking a trade). • The MONEY (Risk management rules to follow with each trade) • The MIND (The frame of mind you must develop to succeed) SIMILARITY #9: Perseverance is the key ingredient to success You need to take the time and have the determination to become a successful trader and poker player. With poker, you’ll need to keep at it and apply strict money management rules with each hand played. With trading, you’ll need to know your trading personality, know which trading method best works you and understand your risk profile… I’ll leave you with a quote from Vince Lombardi (American football player, coach, and executive): “Practice does not make perfect. Only perfect practice makes perfect” Do you think trading is like poker? If you enjoyed this daily lesson follow fore more! Trade well, live free. Timon MATI Trader

Education

Volume Profile: Everything You Need To Know Hey everyone! 👋 If you have been in the market for some time, you may have heard of a tool called “Volume Profile”. Today, we are going to take a deeper look at this tool, explain how it works, and leave you with a few tricks that you can use to supercharge your analysis. What is Volume Profile? 🤔 Volume Profile is an advanced charting tool that displays trading activity at specific price levels over a specified time period. On the chart, it plots a horizontal histogram to reveal areas where significant trading volume happened. Differences vs. Traditional Volume 👀 The core difference between Traditional Volume and Volume Profile is how they consider volume with respect to the time and price. In other words, Traditional volume tells you when volume happened, and Volume Profile tells you where it happened. Volume Profile Terminology 🔤 The Volume Profile tool has several unique components & terminology that you should know about: Point of Control (POC) – The single price level in a given time period where the most volume traded. Profile High – The highest reached price level during the specified time period. Profile Low – The lowest reached price level during the specified time period. Value Area (VA) – The range in which a specified percentage of all volume was traded during the time period. Typically, this percentage is set to 70%. Value Area High (VAH) – The highest price level within the value area. Value Area Low (VAL) – The lowest price level within the value area. Tips & Tricks 😎 Just like with most other tools or studies, Volume Profile has a number of uses. One common strategy is to analyze where previous period value areas are vs. the current price. If current prices are outside of a previous period's value area, then it can be assumed that an asset is trending. If price is still within a previous period's value area, then some may label that asset as being in a consolidation. Determining trend and consolidation are often used in conjunction with trend following and mean reversion execution strategies, respectively. Another common strategy is to use "Virgin" Point of Control (VPOC's) as key levels in an asset. VPOC's are levels that haven't yet been retested and remain untouched by current price action since they were formed. The idea here is that if there was lots of action at a certain price, then it's likely that the market's biggest participants have positions from that level. This can cause predictable behavior which keen-eyed traders can take advantage of. Looking to get access to Volume Profile on your chart? There's still some time left in our Cyber Monday sale . Act fast! Thanks for reading! Cheers! - Team TradingView ❤️

Education

Learn How to Apply Multiple Time Frame Analysis Hey traders, In this article, we will discuss Multiple Time Frame Analysis. I will teach you how to apply different time frames and will share with you some useful tips. Firstly, let's briefly define the classification of time frames that we will discuss: There are 3 main categories of time frames: 1️⃣Higher time frames 2️⃣Trading time frames 3️⃣Lower time frames 1️⃣Higher time frames are used for identification of the market trend and global picture. Weekly and daily time frames belong to this category. The analysis of these time frames is the most important. On these time frames, we make predictions and forecast the future direction of the market with trend analysis and we identify the levels, the areas from where we will trade our predictions with structure analysis. 2️⃣Trading time frames are the time frames where the positions are opened. The analysis of these time frames initiates only after the market reaches the underlined trading levels, the areas on higher time frames. My trading time frames are 4h/1h. There I am looking for a confirmation of the strength of the structures that I spotted on higher time frames. There are multiple ways to confirm that. My confirmations are the reversal price action patterns. Once the confirmation is spotted, the position is opened. 3️⃣Lower time frames are 30/15 minutes charts. Even though these time frames are NOT applied for trading, occasionally they provide some extra clues. Also, these time frames can be applied by riskier traders for opening trading positions before the confirmation is spotted on trading time frames. Learn to apply these 3 categories of time frames in a combination. Start your analysis with the highest time frame and steadily go lower, identifying more and more clues. You will be impressed how efficient that strategy is. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️

Education

by VasilyTrader

Gauging Market Sentiment on Risk Using the IG/HY Spread When the spread between High-Yield (HY) debt and Investment Grade (IG) debt contracts or expands, this can be perceived as the market demanding more or less compensation for the risk it perceives to be present in owning the HY debt against the IG corporate debt. (HY-IG) = Risk On/Risk Off market sentiment. Generally speaking HY debt a.k.a. Junk Debt, is considered more risky than IG debt. Because of this increased risk, the market demands a higher yield for taking on HY debt, also known as a ‘risk premium’ or ‘premium’ over the alternative investment opportunities the market provides. This yield premium on HY/JunkBonds can be viewed as ‘extra incentive’ for bids to take on the ‘riskier debt’. When this spread (white) contracts, we can see that the market (yellow) has a tendency to go up (risk on) and when the spread (white) expands we can see the market (white) has a tendency to go down (risk off). This is only one of many indicators I use to gauge ‘market risk sentiment’ and I thought I would share it. (Not financial advice.)

Education

by Firewalker_Charts

Alerts: 3 reasons they can make you a better trader Hey Everyone! 👋 We hope you’re enjoying Black Friday week and have helped yourself to some of the great discounts we are offering. We only do this once a year, so it really is the best time to get a plan! Now, let’s jump into today’s topic: Alerts . While alerts have a ton of potential applications when it comes to trading, they are often underutilized because it can take some time and ingenuity to build a system where they can work well. Let's take a look at some reasons that that investment is well worth it . 1. They can help build good habits 💪 Stop us if this sounds familiar: you hear an awesome investment story, and then immediately go out in the market and purchase the asset, with no plan in place. While this can work, it’s not a great strategy for long term success, because in reality it can be extremely hard to sit in that position without a plan and trade it efficiently. You may choose to exit the position based on nothing more than momentary greed or fear, and moves like that can prevent consistency and long-term profitability. Alerts are great because they can take out the guesswork of entering and exiting a position. Simply set alerts for the prices you would like, then place a trade if, and only if, the conditions are met. Then, let the market do its thing and let the probabilities work in your favor. Alerts can turn the experience of trading from a constant search for ideas - and always feeling behind - into a relaxing job of waiting for your own pre-approved conditions to trigger before taking action. In short, alerts can make you much more well prepared for the market’s ups and downs. 2. They increase freedom and reduce anxiety 🧘 There is a well-known maxim in trading and in life that states that negative emotions are felt twice as strongly as positive emotions. This factoid has lots of applications, but it can be especially useful to understand as a trader. Consider the following investors: A dentist who checks quarterly reports from his brokerage A position trader who checks his positions once a month A swing trader who checks his positions once a week A Day trader who checks his positions once a day, if not more Given the natural volatility that markets experience, which market participant is least likely to be mad or upset? The dentist. Why? Because he is receiving less data points from the market. Even world class day traders are exposed to tens or hundreds of negative situations in their positions on a day-to-day basis as a result of volatility, which they cannot control. This level of negative stimulation can reduce mental health and trading effectiveness. Alerts allow well prepared traders with some edge to step back from the markets and allow the trades to come to them. 3. Our alerts don’t let anything fall through the cracks ✅ While the previous two points are benefits when it comes to price alerts, our alerts also step the game up considerably when it comes to user utility. Once you have setups that you like to trade, you can set alerts on trendlines, technical indicators, customizable scripts, and so much more, so you can ensure that your favorite setups aren’t being missed. This can be as simple as a long-term investor setting RSI alerts on Dow 30 stocks, in order to buy dips in strong names, to as complex as an intraday futures spread scalper setting alerts for pricing inefficiencies within his top 40 contracts. Our customizable alerts can really allow well organized traders to capture every opportunity as they see it. And there you have it! 3 reasons to take advantage of alerts, and all of the awesome benefits they bring. Thanks for reading and stay well! Love, Team TradingView ❤️❤️

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Celebrating 50 Years of Financial Futures This is a Thanksgiving Special Report. Swiss Franc ( CME:6S1! ), Canadian Dollar ( CME:6C1! ), Japanese Yen ( CME:6J1! ), British Pound ( CME:6B1! ), Mexican Peso ( CME:6M1! ) In May 1972, International Monetary Market (IMM), a division of the Chicago Mercantile Exchange (CME), launched futures contracts on seven currency pairs. This was the world’s first financial futures instrument, a futures contract based on something other than physical commodities. What has made a Midwestern Exchange, known mainly for its Pork Bellies contract, a frontrunner in financial innovation? Bretton Woods System and its Collapse At the end of World War II, the United States and its allies created the Bretton Woods System. Essentially, it was a global monetary system governed by fixed currency exchange rates. The US dollar was backed by gold, at a fixed rate of $35 per troy ounce. Other currencies were pegged to the U.S. dollar. In 1955, one dollar was exchanged for 0.3572 British Pound, 4.2 Deutsch Mark, 3.3 France Franc, 0.986 Canadian Dollar, 360 Japanese Yen, 625 Italy Lire, etc. Each country was responsible for maintaining its exchange rate within 1% of the adopted par value by buying or selling foreign reserves when necessary. The U.S. was responsible for maintaining the gold parity. Its big commitment was allowing anyone with $35 to exchange for an ounce of gold at the US Treasury window. As global inflation rose sharply in the 1970s, many countries could not maintain the official peg. They responded by redeeming dollars for gold at the US Treasury window. With US gold reserve depleting rapidly and a gold run looming, in August 1971, President Richard Nixon announced the "temporary" suspension of the dollar's convertibility into gold. This marked the breakdown of the Bretton Woods. Central banks around the world were no longer obligated to peg their exchange rates to the US dollar. Leo Melamed and Milton Friedman With fixed rates, there was no exchange rate risk in international trade. However, flowing rate exposes importers and exporters to significant uncertainty to the amount of dollar or foreign currency they will receive or are obliged to pay for. Since its founding in 1898, CME has been the place where producers, processors, merchants, and commercial users come together to hedge price risks for a wide range of commodities. Leo Melamed, then Chairman of the CME, was convinced that the futures market is the solution to tackle the rise in exchange rate volatility. Leo set up an International Monetary Market division within the CME and prepared for new futures contracts derived from foreign exchange rates. Initially, this breakthrough idea found no friends on Wall Street. According to Leo, one investment bank president tossed it out saying he didn’t want the Chicago “Pork Belly Shooters” to contaminate the FX market. Leo met with Milton Friedman, a well-respected economics professor at the University of Chicago. Milton fully supported the ingenious design and published a feasibility study, “The Need for Futures Markets in Currencies” in 1971. Milton Friedman (1912-2006) won the Nobel Prize in Economic Science “for his research on consumption analysis, monetary history and theory and the complexity of stabilization policy” (the Nobel Committee). This changed everything. When Leo went to Washington to lobby the idea of listing foreign exchange futures, Treasury Secretary George Shultz said, “If it’s good enough for Milton, it is good enough for me.” George Shultz (1920-2021) served as Secretary of State in the Regan Administration and as Treasury and Labor Secretary under Richard Nixon. He was also the Dean of Graduate School at the University of Chicago, and a good friend with Milton Friedman. If you are interested in the story of FX futures, you may find it online and at Leo’s 1996 memoirs, “Escape to the Futures”. Foreign Exchange Futures On May 16, 1972, IMM simultaneously launched seven futures contracts based on the US dollar exchange rates to British Pound ( CME:6B1! ), Japanese Yen ( CME:6J1! ), Canadian Dollar ( CME:6C1! ), Swiss Franc ( CME:6S1! ), Mexican Peso ( CME:6M1! ), Deutsch Mark and Italy Lira. Five of those original FX contracts are still actively trading at the CME. Deutsch Mark and the Lira have been delisted since Germany and Italy joined the Euro currency. The new contract, Euro/USD FX ( CME:6E1! ), becomes the most active CME FX future contract. FX contracts saw exponential growth in trading volume in the next fifty years. In the first 9 months of 2022, average daily volume for all FX futures and options reached 983,000 lots, according to the CME Group. On November 15th, Euro FX alone traded 359,000 lots and had an open interest of 683,293 contracts. My writings on TradingView include a number of trade ideas on FX futures contracts. Please take a look if you haven't yet. FX Futures were the start of a “Financial Revolution” in the futures industry. The next few years saw new breeds of futures contracts, including interest rate futures between 1975 and1977 and equity index futures in 1982. During the holiday season, I would start a series on the leaders and innovators at CME, CBOT and KCBT. They brought GNMA Futures, T-Bill and T-Bond Futures, Eurodollar Futures, Value-Line Index Futures and S&P 500 Futures to life and revolutionize the financial derivatives world as we know it today. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trade set-ups and express my market views. If you have futures in your trading portfolio, check out on CME Group data plans in TradingView that suit your trading needs www.tradingview.com

Education

by JimHuangChicago

What Are The Pros And Cons of Intraday vs Swing Trading Hello traders, There is not such a good or bad timeframe. Like cooking, everything depends on how you use the ingredients for your meals. Intraday timeframes Pros Earlier entries Earlier exits => losers are smaller compared to losers with SWING trades You make your daily goals earlier With Intraday trading, we're not impacted by contracts expiration, rollover, over-weekend, overnight fees It's rarely boring (especially with indices trading) Leverage isn't needed Perfect for beginners or small capital Cons More in/out entries => you have to enter, exit, enter, exit until the real move happen You have to be more reactive and accurate when taking a position or exiting. Swing timeframes Pros More time to react and prepare We don't need to be too accurate with our entries and exits You're less impacted by news/events/rumours/tweets - They have a real visible impact on intraday but generally don't change a thing for the swing trend Cons Bigger drawdown by design Forces to hold trades over multiple days/weeks. In a range, we pay a lot in funding/rollover fees before the real move happens. Being double digits percent down because of fees isn't pleasant. Big capital required to afford to lose a few percentages sometimes with those trading fees 1 click takes 5 seconds. Then you wait and wait and wait and wait, and then look on Twitter for ideas to invalidate your entries. When your favorite guru shares a contrary setup, you follow his/her call and wreck yourself. You really need patience with SWING trades. If the patience for you is an issue, I'd stick with Intraday. Have a great day Dave

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How to find High Probability trades?Hi all, hope you guys are doing well. In this post, we are going to see how we can combine different indicators/concepts to create confluence zones and find high-probability trades. Introduction A trade that has a greater chance of success than a regular trade is called a high-probability trade. Obviously, it's our assumption that some trades have higher chances of success as compared to others because they have more supporting factors. Nevertheless, a high probability trade can also result in a loss. How to find high-probability trades? There are a few things that you can observe to find a confluence of various important factors such as a support/resistance level, demand/ supply zone , Fibonacci level, moving averages, volume , RSI , etc. Depending on your knowledge and trading style, the confluence zone can be derived using a combination of various different concepts or indicators. In this post, I am going to share the factors that I look at for finding good trades. How to find confluence zones? In order to find the confluence zones, you need to understand the concepts and the indicators, then combine them together to create the whole picture. It's like building a jigsaw puzzle - first, you need to identify the individual pieces, and then you need to put them together. Let’s dive into all of these concepts one by one. 1. Market structure Market structure is simply a basic form of understanding how the markets move. The price action is how the market moves based just on price, without the consideration of trends and how they may continue. But the market structure is focused mainly on the trend. I have covered market structure in various different threads that you can read here: a) Introduction to Market structure b) Bullish market structure c) Bearish market structure 2. Consolidation before Breakout If a stock consolidates before giving a breakout, there are higher chances that it will be a true breakout. This is because all the residual supply gets absorbed at the resistance zone and most of the pending demand orders get filled. Ideally, once a stock goes into consolidation, one of the two processes occurs: Accumulation Distribution In layman’s terms, - If demand is more aggressive than supply, then the price rallies, which confirms accumulation. - Similarly, if the supply is more aggressive than the demand, then the price falls down, which confirms distribution. If you are struggling with identifying the breakouts, be sure to read this post. 3. Support-Resistance levels S/R levels are critical parts of trend analysis because they are used to highlight important zones. The fact that these levels flip roles between support and resistance can be used to determine the range of a market, trade reversals, bounces, or breakouts. These levels exist due to the influx of buyers and sellers at key junctures. Flip zone acting as resistance: Flip zone acting as support: If you are looking for an in-depth tutorial on support and resistance, please check out my old guide here: 4. Supply-Demand zones S/D demand zones are one of the most important things that I look at while charting. The stronger the S/D zone, the higher the chances of a reaction. Always look for these zones in the direction of the major trend. 5. Location of 200MA or 200EMA Always observe the position of 200MA/ EMA with respect to price. Once the price interacts with the moving average, study the reaction. If you are looking for a long trade, then look for a positive reaction as the price reacts with the moving average. 6. Overlap with a Fibonacci level A lot of times, the price will come back to a Fibonacci level. You need to observe the price behavior near these levels. If you are not familiar with the Fibonacci tool, please check my old guide on Fibonacci retracement and extension. 7. Candlestick pattern and the size of the candles The candle spread plays an important role in determining the strength and mood of the underlying trend. In layman's terms, big-bodied candles indicate strength and small-bodied candles act as noise. In any case, the candlestick pattern and candle spread should only be viewed at an important level. The context plays a crucial role. 8. Chart patterns This is pretty self-explanatory. If you trade patterns, you can combine them with other factors to strengthen your analysis. 9. Volume expansion Ideally, at the time of the breakout, the volumes should rise. The volume can be deceiving and we need to see orderflow for a clear picture. Obviously, the majority of us are not looking at the orderflow and hence the volumes can be deceiving. But, for a normal trader, the simple volume indicator is more than enough. So, these are mainly all of the factors that I look at while analyzing the charts. Please note that the usage of the concepts will vary with charts. Sometimes only 3-4 factors may be at play and the other times, 6-7. High Probability trade checklist: 1. Market structure 2. Consolidation before the Breakout 3. Support-Resistance levels 4. Supply-Demand zones 5. Location of 200MA or 200EMA 6. Overlap with a Fibonacci level 7. Candlestick pattern and the size of candles 8. Chart pattern 9. Volume expansion In the example above, you can notice the following things: 1. The market structure was bullish before the breakout, which was evident from the formation of higher highs and higher lows. Don't confuse the internal structure (Low time frame structure) with the external structure (High time frame structure). 2. The price was consolidating in the rectangle / parallel channel for a good amount of time. 3. When the price reached the previous demand zone, the selling pressure started to decrease and the buyers started to step in. 4. When the price interacted with 200MA/ EMA, there was a strong reaction to the upside. This means that the buyers want to take the price higher. 6. The buying interest can be seen by an increase in the volume in the last few sessions before the breakout. The volume can be deceiving and we need to see orderflow for a clear picture. But in general, you do not need to complicate this, just use volumes in conjunction with other factors. 7. We always look for some reversal or indecision candlesticks in the confluence zone. In the chart above, at the point of interaction with the moving average and the demand zone, we can see the formation of exhaustion candles. Again, we need to look at these patterns only at specific important levels (like support or resistance levels) and disregard the formations in between the levels. 8. When the price broke above the previous major resistance with a massive bullish candle, there was a heavy volume expansion. More examples: You can read and revise this post until you understand all the concepts. Thanks for reading. I hope you found this helpful! 😊 Disclaimer : This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk. Happy learning. Cheers! Rajat Kumar Singh (@johntradingwick) Community Manager (India), TradingView

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by johntradingwick

My crazy partner is Mr. Market!We are used to the fact that the world's most prominent investors are known for their outstanding deals, returns and stability of results over a long time horizon. Yes, all this is certainly a sign of excellence, but no investor has gained his popularity through books. The books he wrote. This man created his writings back in the 1930s and 1940s, but they still inspire anyone who has taken the path of smart stock investing. You've probably guessed by now who we're talking about. It's the humble author of The Intelligent Investor and Warren Buffett's teacher, Benjamin Graham. It's amazing that after many years, this book is still considered the bible of investing on the basis of fundamental analysis - Graham wrote such a thorough description of how a person investing in stocks should think. His insight into the market can be useful to anyone who is exposed to this chaotic environment. To understand Graham's philosophy, imagine that the market is your business partner "Mr. Market." Every day he stops by your office to visit and offer you a deal on your mutual company stock. Sometimes he wants to buy your stock, sometimes he wants to sell his own. And each time he offers a price at random, relying only on his gut. When he panics and is afraid of everything, he wants to get rid of his shares. When he feels euphoric and blind faith in the future, he wants to buy your share. That's the kind of crazy partner you have. Why is he acting this way? According to Graham, this is the behavior of all investors who don't understand the real value of what they own. They jump from side to side and do it with the regularity of a "maniac" every day. The task of the prudent investor is to understand the fundamental value of your business and just wait for another visit from the crazy Mr. Market. If he panics and offers to buy his stock at an extremely low price - take it and wish him luck. If he begs to sell him the stock and calls an unusually generous price - sell it and wish him luck. Of course, after a while, it may turn out that Mr. Market was not bad at all and made a very profitable deal with you. But the fact is that on the long horizon of time his luck will be washed away by a series of stupid things he will inevitably do. As for you, rest assured that tomorrow you will meet another Mister. So, as Graham has taught us, is teaching us, and will continue to teach us - you just have to be ready for it. Understanding the fundamental value of the company, this meeting will bring you nothing but pleasure!

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