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Forex Fundamental AnalysisHello! Today I want to talk about a topic that is rarely discussed, but important at the same time - fundamental analysis of the forex market. News, GDP, interest rates - all this affects the market and everyone needs to be able to understand this. What is fundamental analysis Forex fundamental analysis is a way of analyzing a currency, making predictions based on data that is not directly related to price charts. There are two types of influence of fundamental indicators on the price : Short term. Fundamental information has an impact on the market within minutes or hours. Long term. Fundamental factors, the impact of which on currencies lasts from 3-6 months. Used for strategic positions. Several basic levels are used for conducting FA. The level of the national economy. Comprehensive analytics of economic and political indicators of the country. Industry. The volumes of supply and demand, prices, technologies, as well as production parameters are studied. Individual currency level. Financial statements, management technologies, business strategies, competitive environment are assessed. The classical scheme of fundamental analysis looks like this : An analysis of global financial markets, the presence of signs of a crisis and force majeure events, an examination of the situation in the economy and politics of the leading world powers is carried out. Economic indicators and the general level of stability of the region (industry), the analyzed currency or other instrument are assessed. The degree of influence of regional and world economic indicators on the dynamics of the selected financial instrument in the short and medium term is determined. Main fundamental factors When using FA directly to open trading positions, the following points will be decisive (in descending order of importance) : Interest rates of central banks (CB). Macroeconomic indicators. Force majeure situations, market rumors, news. Central bank rates According to the theory of macroeconomics, increasing interest rates cause currencies to rise in price, while falling interest rates make them cheaper. However, there are situations in the Forex market in which a decrease in the rate becomes the reason for the strengthening of the currency. Foreign exchange market interventions Currency interventions are an important tool in the analysis. Central Banks resort to such a measure very rarely, but you should not ignore this phenomenon. Macroeconomic indicators For any country without exception, there are data of constant importance: the level of GDP; inflation rate; trade balance. These reports are expected by the market. The approach of their publication dates gives rise to a lot of rumors that fuel the trading frenzy. Such an environment often creates situations in which the release of specific numbers does not cause almost any reaction, since the market has already beaten them in advance. However, as FA practice shows, this happens only when the existing trend is not subject to change. In the case when the published data differ significantly from the forecast, the market response can be very violent. This is especially true of the moment of the general reversal of the current trend. Important macroeconomic indicators In simple words, a macroeconomic indicator is expected news, showing up-to-date data on the main indices of the financial and economic state of the state. The advantage is that each trader can know in advance the moment of release of any data from the economic calendar. These indicators affect the rate in the short term and are suitable for trading on medium and short term timeframes. Types of macroeconomic indicators Trade balance. This indicator reflects the volume of exported goods to imported ones. A positive balance is called when exports are higher than imports. Assumes a strengthening of the exchange rate, due to the fact that rising exports increase the demand for the national currency of the exporting region. Discount rate of the National Bank. On its basis, interest rates on deposits and loans are formed. When the national bank rate rises, the currency strengthens; when it falls, it weakens. Gross domestic product. The volume of GDP is obtained by summing up the entire range of services and goods that were produced in the country per capita. However, an increase in GDP always leads to the strengthening of the national currency against other currencies. Inflation. The growth of this indicator leads to the depreciation of the national currency. Unemployment Rate. As a rule, an increase in the indicator is followed by a decrease in output, an increase in inflation and a negative change in the trade balance. For this reason, the data on unemployment has a strong pressure on currencies, and an increase in the figure causes a depreciation. Macroeconomic indicators One of the most common mistakes in trading is trying to trade on weak news. Therefore, you need to understand which data pertains to you. Macroeconomic indicators One of the most common mistakes in trading is trying to trade on weak news. Therefore, you need to understand which of the data are important. Important market data includes : money supply; balance of payments deficit (Balance of Payment Deficit); trade balance deficit (Balance of Trade Deficit); unemployment rate (Unemployment Rate); a significant fall or rise in the rate of inflation (Rate of Inflation); fluctuations in the volume of GDP; change in key rates; emergencies (natural disasters, unexpected events in politics or Second stage of analysis An assessment of the numbers predicted in the calendar for future data. Analysis of the market reaction to this event. This is done in order to understand the price behavior at the news release. For example, when the exchange rate of a currency dependent on news is growing steadily even before the release of figures and at the same time positive data is predicted, one should not expect sharp fluctuations in the exchange rate at the time of the release of the information. And if the forecast turns out to be wrong, then the market can react with a powerful reversal of the current trend. Decision-making. There are two options for entering a trade. The first is to use the situation to open an order on the current trend before the release of the news with constant trailing stops to protect the position. The second is to wait for the release of the data and make trading decisions according to the situation. Results Fundamental indicators certainly affect the price, but each in its own way. It is worth remembering this and not running to open a position just by seeing some news. Analyze, try to understand the possible reaction of the market to the news. Use all the information, be objective and then you will be better than most. Good luck! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
Education
by Lingrid
45
How to find accurate analysts on TradingViewHey everyone! 👋 Last week, we put out a post about some of the authors that are gaining momentum on our platform, which led to lots of great feedback from the community. And, while we plan on releasing those “compilation” lists on a monthly basis going forward, we thought it would be nice to highlight other ways you can find insightful / skilled authors who are trading the same things you’re trading. Let’s jump in. Step 1 : Open a chart of whatever you like to trade. This can be any asset, on any timeframe higher than 15 minutes - we don’t allow people to post on timeframes lower than 15 minutes. Step 2 : Enable Visible Community Ideas Head to the right rail, and make sure you’ve selected the idea stream tab. This is the shaking lightbulb icon. From this menu, select the lightbulb at the top. This will make all of the ideas published for your symbol and timeframe appear on your chart! If you don’t see anything, try going to a more ‘common’ symbol or timeframe. Check out the daily chart for AAPL or BTCUSD. Step 3 : Who nailed the tops and bottoms? With the visual interpretation of the long and short idea callouts, it should be easy to spot who’s been doing a good job of figuring out what's going to happen next. Who was first to the big run? Who was right to take some profits? Once you’ve found someone who seems to do a good job at this, it's absolutely crucual to see how their other ideas have done! Be sure to go to their profile and check to see if most of their ideas have been accurate, or if they got lucky with one real winner. Step 4 : Follow them! This is a really easy way to build up high quality information flow, and buttress your process of idea generation. Even if the poster doesn't do a good job of trading their own ideas, there could still be an advantage in it for someone with good trading practices. A highly curated stream of follows can actually be a source of significant alpha! Bonus Step 5 : Clean up your idea stream. One thing you can also do is limit the visible ideas on your chart to people you follow. This should make it entirely obvious if someone you’re following is constantly wrong. If so, you can remove them easily from your idea generation feed by unfollowing them. Make the idea feed work for you, not overwhelm you! See you all next week :) -Team TradingView
LEducation
by TradingView
66
Charts can really help during periods of uncertaintyRussia invades Ukraine is the headline and every market in the world it feels like is moving and it is very easy to feel overwhelmed almost to the point of panic, a very quick glance around the markets can see that gold is up, stocks down, the US Dollar is up, and oil looks to be heading above 100. It's hard to know where to focus one’s attention or even where to start and it really helps to be able to just look at some charts and put some of these moves in context. Yes, the price of Crude Oil is high, but it’s been higher – back in 2011 and 2012 it was regularly above 110 and in 2008 we were a lot nearer to 150. The stock markets are down a lot, take a look at a chart and see where the support is – I wrote about this recently. For the S+P, the base of the cloud is nearer to 3875…the 200-week ma is down at 3387. By the way a good thing to note is that during periods of uncertainty that markets tend to mean revert to their long-term moving averages and in particular I like to watch to 55 and 200- week moving averages – if you are not a sophisticated chart watcher – no bother, if you just know where these 2 moving averages are you can use these as a proxy for a target zone. The 2020 high on gold was nearer to 2030 BUT we know that gold is in a long term up move and the chances are we are going to make a new high. What do we use if we are in all-time highs for targets, there are many techniques - Fibonacci extensions, point and figure (probably my favourite), channels, and patterns to name but a few are all ways to give you upside targets. I have a Fibonacci extension on the topside at 2110 ish, but I also have another more important target nearer to 2150. So, my advice is do not panic – LOOK AT A CHART!! Disclaimer: The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
SP:SPXEducation
by The_STA
32
My Trading Strategy in 4 simple steps.Today I will explain step by step the process I use to develop setups. This is how my strategy works. And this can be applied to any asset and using any technical tools. This is as close as I can get to using an empiric approach to define my trading opportunities. Let's start. My trading strategy is composed of 4 steps: 1) Whats the context of the price? Here, I want to understand all the characteristics of the current situation I'm observing. Mainly I will try to define this in the Daily chart. Examples: * Are we making a new ATH? * Are we inside a 300 days correction? * Is the price above or below a Daily trendline? * Are we inside a small correction or a 50%+ decline? 2) Now that I understand my context. Can I look for similar situations in the historical data of this asset? I only work with assets with enough historical data to conduct this type of analysis. If I'm able to find at least 2 previous situations with similar characteristics to what I'm looking for, I proceed with the next step. Here I use the Weekly and logarithmic chart to identify these situations. 3) Do I see a consistent pattern that I can use to trade in those similar situations in the past? Here I will use lower timeframes like the 4HS chart, and I will look into more details in those similar situations. I will try to find something objective, like "The first retest after the breakout of the most external line of the corrections. If I see consistent behavior and a good risk to reward ratio, I will proceed with the final element of my strategy. 4)Define the pattern I'm waiting for and the execution process in advance. At this stage, I want to say, "I'm waiting for this," and this is how I will trade it. This includes: *Entry level *Stop level *Break-even level *Take profit level. *Risk. And this is it. At this stage, my setup can be executed or canceled depending on the price behavior, but in a nutshell, this is the system I have been using for the last 3 years, and I can say that this has, on average, a win rate of 50% and an average risk to reward ratio of 2. I hope this information was useful. Feel free to share your view in the comments or any doubt you may have. Thanks.
BITSTAMP:BTCUSDEducation
by ThinkingAntsOk
101
A Story About Simplicity and Moving Average Envelopes CBOT:ZB1! First, a short story. I like simple stuff. Maybe it's just me (I don't think so) but the more complex my process becomes, the worse the trading results. In 1987, four years into my career, I used a combination of Wyckoff and Elliott to make a series of very profitable bond market calls for my institutional clients. I spent my days and nights obsessed with counts, counter counts, alternate counts, Wyckoff sequences, oscillator nuances…. In other words, all the shiny complex things were in play. Needless to say, I came out of the experience a legend…. in my own mind. In retrospect, I had loads of confidence but very limited real knowledge or experience. It's counter intuitive, but the success of 1987 was detrimental to my growth as a trader/analyst. After the great results/luck during the tumult of 1987, 1988 proved difficult. My Elliott count became muddied, I often misread the Wyckoff price volume relationships and while not disastrous, my results turned quite ordinary. As the results worsened I responded by adding ever more complexity to what was an already complex routine. To make a long story short, as complexity increased, results worsened. To suggest that I became frustrated would be an extreme understatement. I questioned my future as a technician/trader. I remember walking into my office one morning after a particularly bad week and deciding that things had to change. I decided to immediately begin simplifying my process. I retreated to basics. Happily for me, as I eliminated complexity I found better results. Over the next few years I continued to simplify and to refine my risk management approach. By simplifying and becoming less risk tolerant I became an effective trader/analyst. Simplicity is robust, it is typically fractal, and reduces difficult decisions to ordinary. Simplicity is also a process. Most only arrive there after a long journey. Moving average envelopes certainly fall into this "simple is simply better" approach. • Construction is simple and intuitive. • Construction is easily adapted for any market or time frame. ○ This is important because every market has a specific character. Some trend for long periods while others chop and mean revert with regularity. ○ Importantly, character changes over time. It had been four years since I last updated my bond moving averages, the changes were significant. ○ Part of this probably has to do with the level of Fed involvement. I don't think I had significantly updated my bond envelopes for nearly thirty years prior to this adjustment. ○ Part of this has to do with the level of interest rates. At lower levels of rates, prices are generally more volatile as durations (a measure of rate sensitivity) become longer. ○ Because the envelope construction is revisited periodically it remains current to changes in market state and condition. ○ Don't assume that envelope settings that work on 30 year futures will work on 10s or 5s. Differences in duration create large differences in volatility ○ Also, the settings that work well on futures won't translate to yields. Using percent change (envelope tops and bottoms are placed at percentages of the moving averages) on a percentage is just wrong. I see supposedly financially literate people do this all the time… what the hell? Building the Envelopes: • The average and the width of the band is an eyeball approximation. Nothing fancy. • Choose one of the available moving average envelope studies available. I used one created by H-potter. • Set average 1 up so that the upper and lower bands follow the price action closely. • Set average 2 up so that the upper and lower bands generally tag the next higher perspective swing points. • Set the third average up so that the upper and lower bands tag the highs and lows of the next more volatile set of swings. • I often add a fourth set of bands that tag the next higher perspective highs and lows. • Don't get carried away. Keep it simple and intuitive. • I am intentionally not providing my settings. I don't think they are important but I think its important for you to go through the process for the particular market and time frame you are working in. How I use the Envelopes: • Convergence of the upper or lower bands suggest that the market has become overbought or oversold. • Odds of correction, even if laterally, expand significantly when the band extremes converge. • You would never buy or sell based upon the convergence. But you might reduce a long/short position or begin monitoring for reversal behaviors as the bands come together. • I generally use the warning of an extended trend given by the bands to begin closely monitoring price action, searching for tradable setups with good risk reward characteristics. Conclusion: Simplicity can provide a real edge while complexity often becomes a headwind to success. This simple moving average envelope system can be modified for nearly any market or time frame and is adaptive over time. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
CBOT:ZB1!Education
by CMT_Association
46
TYPES OF FIBONACCI's & WHEN TO USE THEM 📐📏 Hey traders, In this article we will discuss two very popular Fibonacci tools: Fibonacci retracement and extension. 1️⃣Fib.Retracement tool is applied to identify a completion point of a retracement leg within an impulse. As you know price action has a zig-zag form. For example, in a bullish trend, the price tends to set a higher high then retrace and set a higher low before going to the next highs. In a bearish trend, the price tends to set a lower low and retrace to a lower high. With retracement levels, we are trying to spot the point from where the next impulse in a bullish or bearish trend will initiate based on the last impulse leg. Fib.levels that we will apply are: ✔️0.382 ✔️0.5 ✔️0.618 ✔️0.786 The retracement levels will be drawn based on XA impulse leg. From its low to high if the impulse is bullish and from its high to low if the impulse is bearish. From one of the above-mentioned levels, a trend-following movement will be expected. One should apply different techniques to confirm the strength of one of these levels. 2️⃣Fib.Extension tool is applied to identify a completion point of the impulse. In a bearish trend, the extension levels will indicate a potential level of the next lower low based on the length of the last bearish impulse. Fib.levels that we will apply are: ✔️1.272 ✔️1.414 ✔️1.618 The extension levels will be drawn based on XA impulse leg. From its low to high if the impulse is bullish and from its high to low if the impulse is bearish. From one of the above-mentioned levels, a retracement leg will initiate. One should apply different techniques to confirm the strength of one of these levels. Of course other ways of application Fib.Retracement and Extension levels exist. However, these two are the most common. How do you use these levels? ❤️Please, support this idea with like and comment!❤️
BITSTAMP:BTCUSDEducation
by VasilyTrader
161
Beware False Breakouts! How To Spot Them...Investors should use basic Technical Analysis for powerful decision making. I see it as a challenge to demonstrate how useful knowledge of one simple pattern can be to identify price reversals. Recognizing this pattern and acting on it will save much money and headache! Both traders and investors need to be on guard for false breakout reversals. Seeing this pattern in action can provide an excellent profit target, entry point, or prevent major drawdown! In this video I look at examples in the Silver ETF AMEX:SLV , Spotify stock NYSE:SPOT , and Forex Euro/Dollar pair FX:EURUSD for false breakouts and what follows. I am excited to make this video for my viewers and for Best of Us Investing!
NASDAQ:AAPLEducation
by norok
72
Credit Monitoring Basics: A Must Have SkillThese data series are all available in the Trading View platform. Since the turn of the year the price of LQD, the investment grade corporate credit ETF, has declined nearly 10 points (-7.3%) and since early August is down 13 points (-10%). The important question is…. Why? Knowing how to monitor credit is an important skill, particularly since so many in the commentary or advice business so misunderstand it. In this post I want to provide basic tools that will allow you to perform a down and dirty evaluation. Why is credit so important? The Federal Reserve is much more sensitive to credit distress than they are to equity distress. If companies are unable to secure funding, they may face liquidity problems, and liquidity problems have the potential to become systemic. In 2008 and again in 2020 credit markets were, in essence, frozen. Particularly in 2008, even short term funding markets froze. There were plenty of offers but in many cases no bids. Being an old bond guy, I may be prejudiced, but credit makes the economy go and in general terms is much more important to short term functionality than equity. I think the Fed is more responsive to credit market functionality than it is to equity distress. Listening to the angst of the want-to-be macro analysts or simply looking at the price of credit ETFs like LQD or HYG might lead one to believe that credit was generating an economic warning or danger sign. That narrative is, at least for now, false. Corporate bond yield has two primarily components: • Base rate: In the case of fixed coupon corporates the base rate is the nearest maturity on-the-run (most actively traded) U.S. Treasury (TR). The base rate is generally thought of as the risk free rate. • Spread to the base rate: The spread above the base rate compensates credit investors for the higher risk of default and downgrade and the wider bid-offer (liquidity) spreads involved in corporate trading. • For instance: 10 year Treasuries yield 2.00% and a ten year XYZ corporate security is offered at 120 basis points (bps) to TR. All-in-yield for XYZ is 3.20%. Because there are two primary constituents of a corporate yield, price change can be driven by two things. • Changes in the base rate. In other words, changes in treasury yields. • Changes in the credit spread. Spreads widen/narrow to the base rate as investors seek additional/less compensation for default, liquidity and downgrade risk. Normally the primary driver of changes in corporate ETFs and indices is change in the base rate/treasury yields. Said another way, TR yields are more volatile than corporate spreads. • Big changes in Treasuries equate to big changes in corporate bond prices. Chart 1: This is a long term chart of IEF (7-10 year Treasury ETF) plotted with LQD (the investment grade bond ETF). • You can see how closely the two correlate. • There will be some difference due to differences in duration (a measure of rate sensitivity) of the index versus the duration of the Treasury and changes in the spread component. • But, clearly, changes in Treasury rates have an outsized influence on corporate bond rates/prices. Chart 2: Option adjusted spread of the ICE BofA Investment Grade (IG) and High Yield (HY) Corporate Index's: • The OAS offers a way to assess the credit spread component of a corporate bonds yield. • Investment grade index is +1.08% to the base rate. • High yield spread is +3.44% to the base rate. ○ There is more default risk in high yield, so the compensation, or spread to the base rate, is correspondingly higher than that of IG. • Both IG and HY spreads remain very near historic lows with very little evidence that credit investors are growing fearful of default, downgrade, or liquidity risk. Chart 3: All in yield BBB corporate index (top), BBB OAS or credit spread (center) and ten year treasury note yields (bottom). • The all-in-yield, of the ICE BofA BBB index has risen significantly over the last few months. ○ Remember that in a bond, higher yields equate to lower prices. So a higher all-in-yield means that corporate bond prices are lower. • BBBs are the lowest rating category of the Investment grade index and are more sensitive to the ebb and flow of default and downgrade risk than the investment grade index as a whole. • While the all-in-yield has risen sharply over the last few months the OAS has barely budged from support. Investors are not yet demanding more compensation for default risk. The change in corporate pricing has been driven by the sharp rise in rates. Bottom Line: To understand the state of the credit market, you have to assess both changes in rate and changes in the spread. Hopefully you now have the tools to do a down and dirty assessment of your own. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
AMEX:LQDEducation
by CMT_Association
40
Harmonic Patterns of Technical Analysis !!!👨‍🏫In this post, I tried to show you the most important Harmonic Patterns of Technical Analysis . These patterns are more valid at higher timeframes. Please do not forget the ✅ ' like' ✅ button 🙏😊 & Share it with your friends, Thanks, and Trade safe. What is Harmonic Pattern ❗️❓ Harmonic patterns are chart patterns that form part of a trading strategy, and they can help traders to spot pricing trends by predicting future market movements. They create geometric price patterns by using Fibonacci numbers to identify potential price changes or trend reversals Harmonic Patterns of Technical Analysis: 🦇 Bat 🦇 Harmonic Pattern: The Bat pattern is a retracement and continuation pattern that occurs when a trend temporarily reverses its direction but then continues on its original course. It gives you the opportunity to enter the market at a good price, just as the pattern ends and the trend resumes and has a bullish and bearish version. It is similar to the Gartley pattern but completes at an 88.6% Fibonacci retracement of the X-A leg. A true Bat pattern will include each of the following: the AB=CD pattern or an extension of this pattern; a 161.8% to 261.8% Fibonacci extension of the B-C leg; an 88.6% Fibonacci retracement of the X-A leg. One way of trading a bullish Bat pattern is to place your buy order at point D (the 88.6% retracement of the X-A leg) Place your stop loss just below point X. Draw a new Fibonacci retracement from point A-D of the completed pattern and take profit at the point where the price will have retraced 61.8% of the distance between A-D. To trade a bearish Bat pattern (a short/sell trade), simply invert the pattern and your orders. 🦇 ALT Bat 🦇 Harmonic Pattern: The Alternate Bat Pattern is a precise harmonic pattern™ discovered by Scott Carney in 2003. The pattern incorporates the 1.13XA retracement, as the defining element in the Potential Reversal Zone (PRZ). The B point retracement must be a 0.382 retracement or less of the XA leg. The Alternate Bat pattern™ utilizes a minimum 2.0 BC projection. In addition, the AB=CD pattern within the Alternate Bat is always extended and usually requires a 1.618 AB=CD calculation. The Alternate Bat pattern™ is an incredibly accurate pattern that works exceptionally well in the RSI BAMM divergence setup. 🦋 Butterfly 🦋 Harmonic Pattern: The Butterfly is a reversal pattern that allows you to enter the market at extreme highs or lows. It is similar to the Gartley and Bat patterns but the final C-D leg makes a 127% extension of the initial X-A leg, rather than a retracement of it. To trade the Butterfly, enter the market with a long or short trade at point D of the pattern – the price should reverse direction here. Place your stop loss just below (bullish trade) or above (bearish trade) the 161.8% Fibonacci extension of the X-A leg. For an aggressive profit target, place your take profit order at point A. For a more conservative profit target, place your take profit order at point B. 🥇 Gartley 🥇 Harmonic Pattern: The Gartley pattern is a retracement pattern that occurs when a trend temporarily reverses direction before continuing on its course. It includes the AB=CD pattern in its structure and gives you the chance to go long (bullish Gartley) or short (bearish Gartley) at the point where the pattern completes and the trend resumes. It relies on Fibonacci levels, which determine how far price retraces or extends during the formation of the patterns – MetaTrader 4 can automatically add these levels to your chart. To trade using the Gartley pattern, place your buy order at the point where the C-D leg achieves a 78.6% retracement of the X-A leg. Place your stop loss just under point X. Draw a new Fibonacci retracement from point A-D of the completed pattern and take profit at the point where the price will have retraced 61.8% of the distance between A-D. 🦀 Crab 🦀 Harmonic Pattern: The Crab is a reversal pattern that allows you to enter the market at extreme highs and lows. It is similar to the Butterfly pattern but the final C-D leg makes a deeper 161.8% extension of the initial X-A leg. To trade the Crab, enter the market with a long or short trade at point D of the pattern – the price should reverse direction here. Place your stop loss just below (bullish trade) or above (bearish trade) point D. For an aggressive profit target, place your take profit order at point A. For a more conservative profit target, place your take profit order at point B. 🦈Shark🦈 Harmonic Pattern: The structure of a shark pattern has an impulse leg (X-A) and a retracement leg (B). In this case, the retracement has no particular value. The continuation leg (C) has to get to a Fibonacci extension of 113 percent of the B-A leg, but shouldn’t go beyond the 161.8 percent mark, a retracement for X-C follows afterward. The shark pattern so obtained has to get to an extension of 88.6 percent of this retracement, but should not be more than 113 percent. The next Fibonacci extension will be B-C, which is an extension of the A-X leg, within the 161.8 to 224 percent range. But as far as entering a trade goes, it is different from other harmonic patterns, for example: The entry point should be at an extension of 88.6 percent of the O-X leg, and the stops will follow up at point C Targets can be at 61.8 percent of the B-C leg It is not difficult finding the zone to enter trades. This is the area where the X-C Fibonacci retracement and the B-C Fibonacci extension overlap The main factor that differentiates between the harmonic shark and other patterns is that it depends on the 88.6 percent and the 113 percent reciprocal ratios. Once the price point at D is created, prices decline or rally very quickly. Therefore it needs active management of the trade. In other words, you simply cannot set up the harmonic shark pattern and come back a while later to trade it. By that time price would have gone a major distance. 3️⃣ Three 3️⃣ Drives Harmonic Pattern: The three drives pattern is a reversal pattern designed to highlight times when the market is exhausted in its current move. The pattern has a bullish version and a bearish version. The pattern is composed of three waves or drives that complete at a 127% or 161.8% Fibonacci extension. The trade is entered in the opposite direction to the overall move when the third drive is completed at a 127% or 161.8% Fibonacci extension. The stop loss goes below the 161.8% Fibonacci extension for a buy and above the 161.8% Fibonacci extension for a sell. Draw a new Fibonacci retracement from the start of the pattern to the completion point of the pattern and take profit at the point where the price will have retraced 61.8% of that distance. 🔁 AB=CD 🔁 Harmonic Pattern: The AB=CD pattern helps you identify when a price is about to change direction so that you can buy when prices are low and sell when they are high. The pattern consists of three legs, with two equal legs labeled AB and CD, together they form a zig-zag shape – hence its nickname, the 'lightning bolt'. It can be used in any financial market and in any time frame. When a market is trending upwards, the first leg (A-B) is formed as the price rises from A to B. At point B, the price switches direction and retraces down sharply to form the B-C leg – ideally a 61.8% or 78.6% retracement of the price increase between points A and B. The price then continues its original uptrend, forming a C-D leg that should be the same length as the A-B leg. Once you have decided where you think the pattern will complete (point D), you should place a sell order at this point and look to profit from a price reversal. Place your stop loss a few pips above point D. Drawing a new Fibonacci retracement from point A to D of the completed pattern and a take profit at the point where the price will have retraced 61.8% of the distance between A and D. You would approach a downtrending market with a bullish (buy) trade at point D in exactly the same way – the pattern and your trading orders will simply be reversed.
BITSTAMP:BTCUSDEducation
by pejman_zwin
56
Human vs MachinesChart patterns detection needs an extensive learning process and experience, no matter if you are a human or a machine! Machine Learning Workflow: There are five core tasks in the common ML workflow: 1. Get Data 2. Clean, Prepare & Manipulate Data 3. Train Model 4. Test Model 5. Improve Since the chart patterns, beta version indicator has been released, I started working with it to find out how it works. In the following examples, you will see the comparison between my pattern (left side) and platform pattern (right side)! I activate the triangle, pennant, and wedge pattern indicator..! 1- Daily chart: machines did not detect anything: 2- 4 hours chart: machines did not detect anything: 3- 4 hour charts: I changed the regular time to extended hours! Finally, the machine detects something..! Educational point: There are hundreds of thousands of indicators and oscillators out there, some work, some don't! The question is: Are you able to use them correctly and increase their performance??? Think about it..! Best, Moshkelgosha DISCLAIMER I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
NASDAQ:RIVNEducation
by Moshkelgosha
30
Techniques For Getting Better Prices 🎯Hey everyone! 👋 Last week, we posted an idea about the three main order types that market participants use: Market orders, Limit orders, and Stop orders. This week, we thought we’d take it a step further, and discuss some of the more advanced techniques that professional traders use to get better prices, using those three order types. 🎯 Technique 1: Use Limit-Thru orders instead of Market orders 📈 This is a popular technique among traders in nearly all scenarios. If you’re looking to “take” liquidity (you’re the aggressor in the trade), using a Limit-thru order is almost always a better option than using a Market order. Limit-thru orders are so-named because they are Limit orders - “I would like to purchase shares at this price and no worse” - but the aforementioned price is above the best offer. For example, Let’s look at AAPL again. Let’s say the stock is bid at $175.01 and offered at $175.03. A buy Limit-thru order could be priced at $175.05. A Limit order like this is “thru” the price of the best offer, and is thus “marketable”. The reason that Limit-thru orders are often better than market orders is because of market microstructure. If you place the Limit-thru order as described above, then you might not get a full fill, but you won’t pay drastically more than you expected. With a market order, the market maker might fill you on your first set of 100 shares, and then move up offers on other exchanges where you get the rest of your fills. The BATS exchange is closer to Manhattan than the NY4 datacenter, which houses a lot of the bigger exchange servers. This means that your order may hit BATS before the other exchanges. If a market maker knows that there is buying interest in something, they will fill the first 100 shares of something, then out-run your order to other exchanges that have more liquidity and potentially move up their offers, getting you a worse price. This doesn’t always happen, but the way the markets are set up allows for antics like this. Pros will often use Limit-thru orders (where the order price is offer+0.02c, for example) to sidestep these issues. The same is true when reversed for selling assets. Technique 2: Work your orders. 💪 Fun Fact: The Orderbook you see may not be the real Orderbook. It’s true! When it comes to the market for any given security, there are two types of limit orders: “Lit” orders, and “Dark” orders. When looking at the depth of market, you are only seeing some of the picture! Sometimes, there will be hidden orders in between the price you want and the price that’s shown. By placing your order within the spread, it’s possible to get better prices than you would have otherwise from dark orders / pegs / etc. Additionally, if you place your order in between the spread, you become the new best price on your side. This may encourage someone looking to take the opposite side of the trade to come and meet you where you are. This is especially true in options markets where spreads are often wide and slow moving. Working your orders (posting them, and moving them around) will almost certainly get you better fills than hitting the best posted price on the other side of the trade. Just make sure you don’t miss the move while waiting to get filled! Technique 3: Use the Orderbook to your advantage. 🧾 It’s rare when it happens, but occasionally non-sophisticated market participants will “show their hand” in the market. This typically involves one large lit limit order that sticks out like a sore thumb in an orderbook. If this person begins to signal aggression, you might be able to score an awesome price on the assets you’re looking for. For example: Let’s say that you’re looking to buy some AAPL stock, and you pull up the orderbook (depth of market). From here, you can see that there’s a massive sell limit order that is slowly moving it’s price lower and lower in an attempt to get filled. This kind of obvious sell pressure can lead to a significant price move as the market front runs all of the liquidity the whale is looking for. This may continue for some time until the whale starts getting paid. When this happens, the stock has likely found a local area of demand, which is probably a much better price than what you were expecting when you pulled up the order ticket. Bottom line, it can make sense to take advantage of these situations if you see them before sending out orders. That’s it! Some tips and tricks for getting better prices using orders and the orderbook. -Team TradingView 💘 If you missed it, this was the beginner idea from last week:
NASDAQ:AAPLEducation
by TradingView
53
Why You Should Learn To Trade Interest RatesIf you're trading this market right now you have to keep your eye on Interest Rates. Why? Interest Rates have the largest web in the market. They impact every market we trade (even crypto :) What rates are doing not only impact the markets we trade, they impact us in everyday life. In this video I go over the best way to trade interest rates and even if you're not interested in trading interest rates, I go over the best markets to keep up on your quotes to see what rates are doing. Past performance is no guarantee of future results.  Derivatives trading is not suitable for all investors. 
CBOT_MINI:2YY1!Education
by anthonycrudele
27
Indexes - What are they and how do they work?Index tracks performance of multiple assets that are grouped together. One of the first people to introduce the concept of indexing were Charles Dow and Edward Jones when they created the Dow Jones index in 1896. This concept allows for an easy tracking of performance of any particular sector within the economy. For example, the Nasdaq 100 index tracks performance of hundred biggest tech companies in the U.S.; similarly, the Russell 3000 index tracks three thousand largest companies in the United States. These indexes contain U.S. securities which account for over 90% of U.S. corporate equity; therefore, analyzing an index provides an investor with information about the overall health of the economy or particular sector. Diversification Generally, investing in indexes is associated with lower risk than investing in stocks. This is because indexes are structured in such a way that they diversify risk by tracking performance of multiple assets rather than by tracking performance of one single asset. For example, if an investor's portfolio consists of shares of a single stock company and the value of those shares drops, then it directly affects the portfolio in a negative way. However, if an investor owns an index tracking performance of 10 companies instead of a one stock title, then the investor's risk is diversified among ten companies instead of one single company. Therefore, an index tends to perform well as long as the majority of its components perform well. Similarly, when the majority of companies incorporated within an index perform poorly then the index tends to reflect it. Illustration 1.01 Illustration above depicts the monthly chart of Hang Seng Index (Ticker: HSI). It is observable that the index performed well in the long-term. Though, massive drops in the index are observable too in 1997, 2000, 2007, 2015 and 2018. Source: www.tradingview.com Value of the index and weight distribution The value of an index is dependent on its underlying holdings; further, it can be based on the price, market-cap or any other metric related to these assets. There are various methods on how to weight an index which plays an important role in how it performs. For example, in an unweighted index all its components have equal significance, regardless of their size. However, in a market-cap weighted index these components hold significance that is proportional to the size of their market-cap. Therefore, a volatile move in a big company would have a bigger impact on the overall performance of an index as opposed to the volatile move in a small company. Most indexes are price-weighted and market-cap weighted. Indexes as financial assets Generally, indexes tend to move in trends and produce good results over a long-term period. Index investing is preferable for inexperienced and passive investors because it tends to outperform active management in the long run. Additionally, it takes off psychological pressure that is associated with an actively managed portfolio while providing more free time to an investor. Exposure to an index can be gained by investing in index futures, options, CFDs, ETFs and other derivatives. Major indexes include: Dow Jones Industrial Average - thirty large U.S. companies that trade on the NYSE and NASDAQ. Nasdaq 100 - hundred biggest tech U.S. companies that are publicly traded. Standard & Poor 500 - five hundred biggest companies in the U.S. that are publicly traded. Russell 2000 - two thousand smaller companies that comprise the Russel 3000 index. Russell 3000 - three thousand biggest companies in the U.S. that are publicly traded. DAX 40 - forty biggest German companies that trade on the Frankfurt Exchange. Hang Seng Index - sixty biggest companies that trade on the Hong Kong Exchange. Seasonality and trends Indexes tend to move in cyclical trends and less often in trading ranges. They are less prone to the effects of calendar and industrial seasonality when compared to stocks and commodities. Change in components Since their inception many indexes have changed the composition of their underlying assets. For example, the Dow Jones Industrial Index started as Dow Jones Transportation Average in 1896 and consisted of only twelve companies. These companies operated mainly in railroads, cotton, tobacco, gas and oil sectors. However, eventually new companies were added to the index until it reached the total number of thirty companies in 1928. Since then the composition of the index changed several times; although, the number of companies stayed the same. This concept of rebalancing indexes is common to many other indexes; and it usually occurs on a quarterly basis. Illustration 1.02 Picture above shows the monthly chart of the Nasdaq 100 Index (Ticker: NDX) between 1995 and 2006. Companies included in this index changed over time. Nowadays, the Nasdaq 100 index includes such companies as Alphabet, Apple, Microsoft, Intel, Tesla, etc. Source: www.tradingview.com If you have not read our previous articles on stocks and commodities, please feel welcome to do so. They are attached to this idea. Additionally, feel free to express your own thoughts and ideas in the comment section below. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.
SP:SPXEducation
by Tradersweekly
43
Big Four Macro Overview: Part 5For more detail please refer to the first four pieces in the series (linked below) and the accompanying charts. Markets entered 2022 with well established trends and trading ranges, but I believe that the coming year holds significant potential for change. This is particularly true in the equity and treasury markets. Because much of the outlook hinges on inflation (see below) it will be particularly important to monitor inflation related markets. Importantly, while it's easy to make the case that rates should rise significantly this year, modern financial history suggests that rising rates are likely to break the most vulnerable financial link. If that link has the ability to create systemic disruption, rates will fall again, even if inflation is high, as the market runs to the quality of treasuries. In my opinion, the most important trend of the last four decades has been the decline and subsequent quiescence in the inflation rate. Falling and low inflation allowed Treasury rates to decline. Falling Treasury rates supported equity valuations and home prices. They also enabled the wholesale financialization of the economy and allowed both public and private entities to add leverage without consequence. Importantly low and steady inflation also created the negative correlation between treasury and equity. Without that correlation 60/40 and risk parity strategies may well be in danger. Inflation: My working thesis has been that many of the trends that supported disinflation have reversed and that rising inflation will act as a headwind to investment for the next decade. Going into 2020 I believed that the stage for higher inflation had already been set and that higher inflation would result in higher rates and ultimately equities. Consider that in early 2020: • The output gap had closed for the first time since the Great Financial Crisis. • The economy had just reached full employment with a U-3 Unemployment rate @ 3.5%. • Wages as measured by the Employment Cost Index were rising @ +4.4% YOY rate. • The Cleveland Fed Median CPI had recently set a 10 year high. If not for the pandemic, by early 2021. the Federal Reserve would have been forced to respond to rising inflation by increasing rates. Instead, Covid crushed the demand side of the economy, derailing the growing inflation. Now the extreme fiscal and monetary response combined with disruptions in logistics and labor have combined to create very high inflation. While I think that many of the issues creating this burst of inflation are moderating, the same set of factors that were reversing in 2020 are still in place. In short, I believe that the broader trend has changed and that when everything settles out, will end up significantly in excess of the Feds 2% average target. Bottom Line: Above trend growth in inflation and monetary/fiscal tightening suggest higher volatility and a significant chance that many of the trends that have defined the last few decades will falter. My sense of the economy is that the best growth has already occurred as the result of historically supportive fiscal and monetary policies and now both paths are turning restrictive (see the second part of this series for a more in depth discussion) and markets will likely reflect that reality. Rates: • Bonds remain in a bull market defined by a broad declining channel, but rising inflation could easily change the trend. The most likely catalyst to end keep rates below 3.25% would be a financial accident created by higher rates. Equities: • SPX remains in a technical bull market and there are no overtly bearish behaviors evident in the longest perspectives. However short term weakness can easily morph into a bear market. Commodities: • Goldman Sachs Commodities index is in the center of a broad 14 year range, bounded essentially by the low set during the financial crisis and the resultant 2011 high. range. The most notable/useful current chart feature is the clear uptrend from the 2020 pandemic low. Until that uptrend is broken, the most immediate trend is to higher prices. US Dollar: • The wide macro range, 70.70 - 121.02 has contained price action over most of my trading career but volatility is more cyclical than price. These periods of low vol. set up conditions that often lead to explosive moves. Now, back to the charts! Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
ECONOMICS:USIRYYEducation
by CMT_Association
57
How Different Order Types WorkHey everyone! 👋 Today we wanted to take a look at the 3 main order types that exist when it comes to interacting with the markets, and explain a bit more about what they do, and when they are useful. Sound good? Let’s jump in! 🚀 Before we talk about the different order types that you might see when you place a trade through TradingView’s platform, it’s important to understand how almost all markets work in the first place. When it comes to any market, at any time, there is a “BEST BID”, and a “BEST ASK”. 🔢 The BEST BID is the highest price that someone is willing to pay for a given asset, and the BEST ASK is the lowest price that someone is willing to sell a given asset for. Let’s think about that again. When it comes to stocks, for example, your broker will present you with a consolidated marketplace of orders (orderbook) for a given stock. Let’s say you’re in the market for some Apple shares. You can see that the stock is “trading at” $175.50. What does that mean? It means that the lowest price that someone is willing to sell their Apple shares might be around $175.52, and the highest price that someone is willing to pay for Apple shares might be around $175.49. 💹 How are these market participants making their intentions known? By placing LIMIT ORDERS. ⌛ 1.) A LIMIT ORDER is a type of order that you send to the trading venue when you’d like to buy or sell something at a certain price. In the Apple example above, let’s say that you’d like to buy some Apple, but you don’t want to pay a penny more than $175.25. When you enter this order and click “send”, your order goes to the venue, and JOINS the orderbook, at the price of $175.25. You are now “LIVE” and in the market. Your broker will deduct the cash it would require to fulfill that order from your buying power while your order is live. Next question: If people have their limit orders out in the order book, how would price ever work its way down to you? 🔽 There are a couple ways, but one of them is most common: MARKET ORDERS ⌚ 2.) A MARKET ORDER is an order that is sent to the market and immediately takes action to buy or sell an asset at whatever the prevailing prices are. Lots of people use market orders because they virtually guarantee that you will get the resulting position you want, instantly. The downside is that once you send a market order, you can’t control the price you get. Prices may change in an instant, and you may end up with a position at a price that you no longer want. Back to our example: if you’re waiting to get filled with your order in AAPL, buying shares at $175.25, then whoever pays you will be crossing the spread, probably with a market order. 💵 Let’s assume that you get filled by buying shares in AAPL at $175.25, and you’d like to get out of your position if the stock trades under $175. In this case, you’d use a STOP ORDER. 🛑 3.) STOP ORDERS are orders that you send to the market that live on Nasdaq/NYSE servers. They have a trigger price, and once the trigger price is hit, they execute a Limit Order or a Market Order based on your inputs. These are STOP LIMIT ORDERS, and STOP MARKET ORDERS. This sounds complicated, but it’s more simple than it sounds. Again; back to our example. Let’s say that you get filled on your buy in AAPL at 175.25, but then your stop order gets hit at 174.99 (you wanted to get out if the stock went under 175). If the stop order is a market order, you will get hit out of your position, no matter the price. Simple as that! ✅ Next week, we will be covering some of the order techniques that professional traders use to get better prices. 🦾 Stay safe out there! -Team TradingView 👀
NASDAQ:AAPLEducation
by TradingView
45
How To Use Bitcoin Futures To Hedge Your CryptoYou are either a trader or a HODL'er. Since I am a trader I don't like to sit in massive swings in my spot Bitcoin positions, I like to use Micro Bitcoin Futures to hedge my spot position to minimize the risk and also maximize my long position in spot. In this video I explain how I am currently hedging my long Spot Bitcoin position using Micro Bitcoin Futures, Symbol MBT. Past performance is no guarantee of future results. Derivatives trading is not suitable for all investors.
BEducation
by anthonycrudele
40
2 Types of Flags / Trading Range and Channels as FlagsWe have two flags in trading: First: Horizontal flags (Trading Range). These flags are the strongest type of flag. Horizontal flags indicate that the opposite side of the trend is incapable of creating a highs/lows opposite trend. Second: Flag with minor highs/lows. This type of flag is weaker than the first one. The opposite side of the trend was able to create the opposite highs/lows (Minor highs/lows). Flags Tips: 1) Before trading with flags, always check out the trend before them. Trends must be strong so the possibility of flag breakout increases. 2) After checking the trend before flag, check out the candles within flags. Less than 20 bars in Horizontal flags is acceptable but more than 20 bars make the market Neutral with 50-50 chance of breakout. Also in flags with minor highs/lows you have to check the latest major high/low and the opposite side must not reach that major high/low otherwise trend may be reversed. According to the points mentioned about flags, we examine the bitcoin chart: If we zoom out on the chart, we see a large trading range that we have already had a strong uptrend. This range is an ascending flag but has more than 20 candelabra, which indicates that both sides of the market are active. Within this range, a tight downtrend channel has formed over the past few weeks. It is true that we do not have a downtrend before this channel, but we consider it an ascending flag and expect it to break upwards.
Education
by AmirSoraya
83
Traders vs Gamblers: Know the main differences!Hey, fam! Happy Friday and welcome on another educational post. The topic is the following: differences between a trader and a gambler. We are gonna go through 6 crucial points and elaborate how traders are different from gamblers. 1) As a trader, one’s aim is to focus on the next 100 trades instead of the next 10. Long-term success, profitability, and consistency are two of the main things traders should target. However, a gambler’s wish and desire is to make quick money. 2) A successful trader/investor has a backtested trading plan that he sticks to and optimizes along the way, adapting to changing market conditions. On the other hand, gamblers like to trade based off what other people think and tweet, or by simply opening a random Buy/Sell position and hoping it plays out successfully. 3) Profitable traders always diversify their portfolio and risk no more than 1-2% per trade. On the contrary, gamblers go “full margin mode” on a single trade without setting a Stop Loss and end up blowing their accounts and blaming the markets. 4) Chasing markets and rushing the process is not what real traders do. Instead, they follow their plan and wait for the price to play out and match their entry criteria before executing. Nonetheless, gamblers like to overtrade, open positions based on nothing, make biased decisions. 5) When enduring a loss or two (or three), traders neither get emotional nor try to revenge the markets. They know that if they obey risk management principles and open high risk-to-reward positions, they will cover all their previous losses and get back to making profits. Gamblers, on the other hand, get angry and start attempting to revenge the market by making foolish decisions and entering many illogical trades. 6) Last but not least, if you want to be successful and profitable in this field, you have to treat trading as a business and take things seriously. Those that think markets are a playground or a casino machine will never succeed in this space.
BITSTAMP:BTCUSDEducation
by Investroy
255
Lets Talk ARKK Weekly Baby! Capitulation! One of the most important chart patterns is the buying and selling climax. A classic example of the pattern, in the form of a potential selling climax (S/C) is showing up in the daily and weekly charts of ARKK. Climaxes are exhaustion patterns, they develop as the last needful seller (weak hands) capitulates and hits the bid. Sellers are essentially exhausted. 1) Selling climaxes exhaust the available supply and often mark an important change in the market state. a. Even if they don't mark the end of a trend, they often lead to a period of consolidation. It is not unusual to see a trading range develop after the completion of the secondary test. b. Climaxes are fractal, appearing in literally every time frame. c. Climaxes appear after a long period of trend. 2) Climaxes typically appear concurrently with terrible news flow. a. Late last week I overheard an obviously frustrated fund manager on Bloomberg state that "I'm liquidating and going back to the real fundamentals." Down nearly 60% over the course of the last year he, and many other investors were finally throwing in the towel. 3) Climax patterns occur on extremely heavy volume. a. A clear reversal bar (often a key reversal) is typically evident. b. But modern climaxes can take several days to complete. c. Often the liquidated shares are distributed from weak hands, to strong hands. d. The new buyers are not necessarily long term investors and they often take advantage of the reaction rally to take trading profits. 4) There is often a sharp rally just prior to the selling climax. Wyckoff labeled this as preliminary demand (P/D), a point where strong handed longs are beginning to accumulate shares. The P/D is an alert to begin monitoring for a selling climax. In the case of ARKK, this P/D warning did not occur. 5) Immediately following the S/C is the automatic rally (A/R). Since sellers have been exhausted, the A/R can often cover significant ground. Buyers of the selling climax often use this rally to sell a portion of the position built during the climax. 6) In the case of ARKK, there is a micro test of the S/C. The successful test set the stage for the A/R. 7) A much larger secondary test separated in time must be completed before the S/C can be trusted. Its important to note WHERE the behavior is occurring. In past entries, I have talked about building confluences of support and resistance to create zones. These zones can then be monitored for patterns that are consistent with a change in trend. 1) Price is resting at the bottom of both short term and intermediate trend channels. I generally view channel tops and bottoms as more reliable indicators of overbought and oversold than most of the momentum suite of indicators. The two channel bottoms formed a support confluence in the 61.81 to 63.63 area. 2) There is a clear three wave move (A-B-C) that can be used to generate Fibo extension targets. I use the A-B-C pattern to generate three targets, 1, 1.382, 1.618%. The distance is then projected from the top of C. In this case the tool generated equality with the first wave at 63.38. You can use the Trend Based Fib Extension tool in MV to generate the calculation. 3) The three levels (two channels and 1 Fibo) produce a support confluence in the area between 61.81 and 63.38. This is the zone where the S/C occurred. Most momentum oscillators are deeply oversold. I have included the weekly RSI to illustrate. Note the curl higher. Odds are good that the selling in ARKK is essentially exhausted now. My guess, given the broader backdrop, is that it will form a trading range lasting several weeks, maybe months that will allow strong hands to redistribute shares before beginning a fresh markdown. But, opinion not withstanding, I will follow the evidence and clues as they build. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
CBOE:ARKKEducation
by CMT_Association
92
How To Find New Stocks To TradeHey Everyone! 👋 Ever get tired of looking at the same tickers? Looking to learn about different sectors of the economy? Want to broaden the number of assets you trade? Check out our Sparks . We created Sparks to quickly inspire you to dig deeper, to find new and interesting opportunities in markets. Sparks are curated watchlists built around interesting themes. Here are a few examples: AI Stocks : For when you want to bet on the rise of the machines 🤖 Legacy stocks : Companies that have been owned by the same family for generations ⌛ The Death Industry : Someone has to make money on coffins, right? 💀 Space Stocks : For when you want your portfolio to blast off into zero G. 🚀 Check them out and then let us know what your favorite Spark is by sharing a link in the comments below! Three lucky people will win some special prizes including 1 year of Premium, 1 year of Pro+, and 1 year of Pro. Bonus points (a chance to win a TradingView mug) if you add a quick summary of why that spark is your favorite. Drawing ends at Noon EST, this Wednesday. Good luck to all! 😎 -Team TradingView
NYSE:AIEducation
by TradingView
118
NYSE Comp: Broadening Top Potential Macro WarningThe NYSE composite has spent the last year building a classic broadening top pattern. The pattern develops as strong hands distribute to weak hands, and when it occurs, often marks a transition from bull to bear. 1. Broadening formations are relatively rare and because the pattern itself is difficult to trade systematically (as the boundaries are continually moving farther apart) aren't given a lot of attention in literature. a. Edwards and Magee in their seminal "Technical Analysis of Stock Trends" suggest that the broadening top, as a rule, only appears near the end or in the final phases of long bull markets. b. Shabacker in his classic "Technical Analysis and Stock Market Profits" also remarks that the pattern is rare, but extremely important, often marking an important transition from bull to bear. 2. In my experience both Shabacker and Edwards and Magee are correct. They are rare and generally very hard to trade (so I don't bother) but they do offer an important warning of a potential phase transition. 3. Note that the pattern isn't always well defined, with overthrows and underthrows of the pattern boundaries occuring regularly. This is what makes it hard to trade or design a trading strategy around. a. The pattern is extremely compelling when it appears in individual equity charts. As I see it, these are the important chart elements. 1. The composite broke the trendline from the March 2020 low. This changed the weekly trend from up to neutral. 2. After breaking the trendline, the Comp spent most of the next year moving laterally and tracing out a clear broadening formation, warning of a potential phase transition. 3. Over the last few weeks the Comp violated the rising trend line (marked on the chart) along the last three internal trend line lows, and accelerated to the lower boundary of the pattern. 4. I have included the 10 and 40 week moving averages. The two averages are roughly equivalent to the 50 and 200 day averages. Note that the 10 has rolled over and is moving to meet the flattened out 50. Often a narrowing between two moving averages marks an important market decision point. Its interesting that it is occuring at the very moment when the broadening formation appears to be nearing a conclusion. 5. If the market does begin to breakdown there are several initial move targets that can be constructed. I like to look for confluences of move targets and chart supports. The more the merrier. a. I like to overlay the .382, .500 and .618% retracement targets first. b. Next I locate chart supports. In this case, the area around the 14183 high from early 2020 can be expected to generate at least some buying interest. c. There is also a measured move target that can be generated using the width of the broadening top, it projects to roughly 14400. d. 14089 is the .382% Fibonacci retracement. 6. The support confluence provided by the pivot, the Fibo and the measured move suggest an initial support zone between 14089 and 14400. I would clearly watch this roughly 2% wide zone for reversal behaviors to either reduce shorts or perhaps, if the right behaviors develop, consider new longs. But again, the MAIN point is not so much generating trading targets as recognizing the pattern as potentially a harbinger of an important trend change. This is particularly important against the context presented in the macro overview posts of the last few weeks. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
TVC:NYAEducation
by CMT_Association
45
How To Succeed In Your TradingFocus on one single trading strategy One thing that many people try and do is switch between strategies constantly. This is setting you up for failure, and if the concept of probabilities is truly understood, you will comprehend the reasons why a single strategy will work. Any strategy is not going to have a 100% win rate, so first you should attempt at getting 50% of your trades right. After that mastering a 2:1 Reward to risk ratio is what will make you profitable. Trying to juggle many strategies will have you working tirelessly, but not moving forward in any particular one. Less trading, more education Many people have the conception that spending countless hours in front of the screen looking for potential set ups is how it should be, however that is completely wrong in my eyes. I spend minimal time now looking at charts and set ups, I highlight key levels I want to look at, along with alerts, and simply wait for the market to head there. Time spent looking at charts should be simply for education and mastering your strategy through back testing or simply understanding previous data. Approach the market from a neutral position Anyone that knows me knows how big I am on trading psychology and how I believe it is the most important aspect of trading. Emotions in trading can be one of your greatest enemies as it can lead you to failure even after your success. There are scenarios where you can take trades and be in positive which will lead you to feel over confident, happy, and those will ultimately will lead to irrational decisions if you let them. Those emotions will make you believe you are better than the markets, or that you can outsmart them, ultimately leading your successful trade to turn into a failure. The same can happen when you feel the opposite and lack confidence to enter another trade due to a loss, or think have feelings of doubt. This is why the market needs to be approached by a completely neutral position. Once you understand that for every person on one side of a trade, there is someone on the opposite side, you will begin to understand that the market itself is just a whole bunch of neutral information moving in nobody’s favour. Write your goals Affirmations are great and something that has helped me in every aspect of my life and not just trading. It is very important to write down your goals in order to manifest them into reality. All ideas first begin in the mind, and then come into the physical. Your goals need to be solidified, definite, and written down in order for your mind and yourself to know exactly what you are going after. Every single day, you need to read your goals aloud, envision them in your mind with every bit of detail possible in order to bring them into the physical. In order to achieve a goal you need to arrive at the destination first in your mind. Relax There is no need to rush a single thing in your trading journey, and believe me take it from my experience, every time I tried to, I failed. People attend university for years before going out into a career which then takes many years before mastering it, yet people want to master trading in a year. Patience is required in all aspects of trading, whether it’s on the charts themselves, or with your strategy, or with your learning curve. It all requires patience. If you are going after trading as a serious life career which you aim to remain in, then relaxing and taking your time is the first step. Nothing great comes from rushing it, especially the markets. Know how to handle your trades Based on your strategy and the concept of probability there are a number of things needed in order to appropriately handle your trades. Firstly, don’t touch your stop loss. I cant say this enough, but stop losses are determined as the final barrier before the trade is invalid, and they are determine before entering the trade. If you find yourself moving your stop, ask yourself why. You will find out mostly its out of fear of losing your money, which is one of the 4 fears of trading. Accept your loss and let the trade stop out, you had it there for a reason. Also, don’t leave trades behind out of fear. If you have a strategy that you have confidently developed, you should understand that the overall should be a greater number of winners than losers, and you should not leave trades behind out of fear, because they can be the ones that perform the best and make up for the losers. Another thing to have in place is an appropriate strategy for exiting your trades. Many people have trades that are in profit, however due to the lack of knowledge on how to exit their trades, they still end up not profitable. You need to have a system on how to exit your trades appropriately and at what levels. Always remember, the profit running on a trade is not yours until its closed. Risk management Yes, I know you have heard it and read it a thousand times already, but you have no idea how important risk management is until the day you master it and recognise it was the single greatest thing holding you back from success. People can have amazing strategies, the best reward to risk ratios, but with the inappropriate risk management trust me it means absolutely nothing. I have seen people overleverage on a trade simply because it “looked too good” compared to other trades, only for it to be the worst of the bunch. I have seen people lose tremendous amounts of money and one thing I can promise you is not a single one of these people lost 100 trades in a row at 1% a trade. Every single one of them lost their entire accounts due to ONE trade that they married. Risk management should be one of your main areas of focus, because believe me if you have mastered it, even with an average strategy you are doing much better than someone with an exceptional strategy with no adequate risk management. Keep track of your performance The only way to improve in any aspect of life is to first recognise what needs change and then work on it. It is very important to actually understand your positives and negatives and have them all tracked. A journal is one of the first steps in order to look in the mirror. Being completely honest is the only way a journal will work, and lying is only lying to yourself. If you are after serious improvement you need to appropriately identify all your flaws in order to better them. You should never feel down or behind, remember trading the markets is one of the biggest psychological challenges one can face, and that is exactly why not everyone is suited for them. Instead see it as a challenge to better yourself and achieve the perfection and discipline you have always desired on and off the charts. Trading the markets will teach you lessons that you will carry with you throughout your entire life and not just on the trading floor.
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