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👀 Three Black Crows. Bear Market Candlestick PatternThree Black Crows is a term used to describe a bearish candlestick pattern that can predict a reversal in an uptrend. Classic candlestick charts show "Open", "High", "Low" and "Close" prices of a bar for a particular security. For markets moving up, the candlestick is usually white, green or blue. When moving lower they are black or red. The Three Black Crows pattern consists of three consecutive long-body candles that opened with a gap above or inside the real body of the previous candle, but ultimately closed lower than the previous candle. Often traders use this indicator in combination with other technical indicators or chart patterns to confirm a reversal. Key points 👉 Three Black Crows is a Bearish candlestick pattern used to predict a reversal to a current uptrend, used along with other technical indicators such as the Relative Strength Index (RSI). 👉 The size of the Three black crow candles, timeframe they appeared on, the gaps when they opened, the downward progression sequence, as well as their shadows can be used to judge whether there is a risk of a pullback on a reversal. 👉 The “Three Black Crows” pattern should be considered finally formed after the sequential closure of all three elements included in it. 👉 The opposite pattern of three black crows is three white soldiers, which indicates a reversal of the downward trend. But maybe more about that another time. Explanation of the Three Black Crows pattern Three Black Crows is a visual pattern, which means there is no need to worry about any special calculations when identifying this indicator. The Three Black Crows pattern occurs when the bears outperform the bulls over three consecutive trading bars. The pattern appears on price charts as three bearish long candles with or without short shadows or wicks. In a typical Three Black Crows appearance, bulls start the time frame with the opening price or gap up, that is, even slightly higher than the previous close, but throughout the time frame the price declines to eventually close below the previous time frame's close. This trading action will result in a very short or no shadow. Traders often interpret this downward pressure, which lasted across three time frames, as the start of a bearish downtrend. Example of using Three black crows As a visual pattern, it is best to use the Three Black Crows as a sign to seek confirmation from other technical indicators. The Three Black Crows pattern and the confidence a trader can put into it depends largely on how well the pattern is formed. Three Black Crows should ideally be relatively long bearish candles that close at or near the lowest price for the period. In other words, candles should have long real bodies and short or non-existent shadows. If the shadows are stretching, it may simply indicate a slight change in momentum between bulls and bears before the uptrend reasserts itself. Using trading volume data can make the drawing of the Three Black Crows pattern more accurate. The volume of the last bar during an uptrend leading to the pattern is relatively lower in typical conditions, while the Three Black Crows pattern has relatively high volume in each element of the group. In this scenario, as in our case, the uptrend was established by a small group of bulls and then reversed by a larger group of bears. Of course, this could also mean that a large number of small bullish trades collide with an equal or smaller group of high volume bearish trades. However, the actual number of market participants and trades is less important than the final volume that was ultimately recorded during the time frame. Restrictions on the use of three black crows If the "Three Black Crows" pattern has already shown significant downward movement, it makes sense to be wary of oversold conditions that could lead to consolidation or a pullback before further downward movement. The best way to assess whether a stock or other asset is oversold is to look at other technical indicators, such as relative strength index (RSI), moving averages, trend lines, or horizontal support and resistance levels. Many traders typically look to other independent chart patterns or technical indicators to confirm a breakout rather than relying solely on the Three Black Crows pattern. Overall, it is open to some free interpretation by traders. For example, when assessing the prospects of building a pattern into a longer continuous series consisting of “black crows” or the prospects of a possible rollback. In addition, other indicators reflect the true pattern of the three black crows. For example, a Three Black Crows pattern may involve a breakout of key support levels, which can independently predict the start of a medium-term downtrend. Using additional patterns and indicators increases the likelihood of a successful trading or exit strategy. Real example of Three black crows Since there are a little more than one day left before the closing of the third candle in the combination, the candlestick combination (given in the idea) is a still forming pattern, where (i) each of the three black candles opened above the closing price of the previous one, that is, with a small upward gap, (ii ) further - by the end of the time frame the price decreases below the price at close of the previous time frame, (iii) volumes are increased relative to the last bullish time frame that preceded the appearance of the first of the “three crows”, (iv) the upper and lower wicks of all “black crows” are relatively short and comparable with the main body of the candle. Historical examples of the Three Black Crows pattern In unfavorable macroeconomic conditions, the Three Black Crows pattern is generally quite common. The weekly chart of the S&P500 Index (SPX) below, in particular, shows the occurrence of the pattern in the period starting in January 2022 and in the next 15 months until April 2023 (all crows combinations counted at least from 1-Month High). As it easy to notice, in each of these cases (marked on the graph below) after the candlestick pattern appeared, the price (after possible consolidations and rollbacks) tended to lower levels, or in any case, sellers sought to repeat the closing price of the last bar in series of the Three Black Crows candlestick pattern. Bottom Line 👉 As well as in usage of all other technical analysis indicators, it is important to confirm or refute its results using other indicators and analysis of general market conditions. 👉 Does History repeat itself? - Partially, yes.. it does. This is all because financial markets (as well as life) is not an Endless Rainbow, and after lovely sunny days, earlier or later, dark clouds may appear again, and again.
SP:SPXEducation
by Pandorra
Market Psychology: Why the Wall St. Cheat Sheet Still WorksI decided to apply the Wall Street Cheat Sheet to a chart of the S&P 500 during the Dotcom crash. It is impressive that it still works and holds so many lessons. The question you should ask yourself is, where are we now? Let me know your thoughts in the comments below. ------------------------------------------------------------- Understanding the implications of the Wall Street Cheat Sheet can be crucial for investors and traders looking to navigate the markets more effectively. It serves as a reminder of the recurring nature of market sentiment, highlighting that investor psychology tends to repeat itself in a cyclical pattern. Recognizing these patterns can help traders anticipate market movements and improve their decision-making processes. Although it's not a fail-proof guide to predicting market trends, the Wall Street Cheat Sheet is a tool that, when combined with other strategies and risk assessments, can provide insightful context to market indicators and behavior. The Wall Street Cheat Sheet encapsulates the variety of emotions investors go through during market cycles. Recognizing emotional cycles can inform risk assessment and trading strategies. The Wall Street Cheat Sheet serves as a roadmap for navigating the emotional highs and lows investors face during market cycles. Each phase reflects a collective sentiment that can influence financial markets and, subsequently, the price movement of stocks. Market cycles represent the recurrent fluctuations seen in the financial markets and can be identified through the price movements of stocks. These cycles are driven by a variety of factors such as economic indicators, corporate performance, and investor sentiment. The Wall Street Cheat Sheet encapsulates the typical emotional journey of investors through the different stages of a market cycle. The following phases are included: Hope: A period when optimism starts to grow, and investment decisions are made with the anticipation of future gains. Optimism: The phase where confidence continues to build, often leading to increased investments. Belief: This stage marks a commitment to the bullish trend, with many investors convinced of their strategy. Thrill: Investors experience a high, often accompanied by a sense of triumph. Euphoria: The peak of the cycle, where maximum financial risk is actually present but overlooked due to extreme optimism. Complacency: After reaching peaks, the sense of euphoria shifts to a state of denial once the market begins to turn. Anxiety: As market correction sets in, anxiety starts to replace complacency. Denial: Investors hold onto hope that the market will bounce back quickly, failing to acknowledge changing trends. Fear: Acknowledgment of losses sets in, and panic may ensue. Desperation: A feeling of helplessness might prevail, with investors looking for a way out. Panic: Rapid selling occurs, trying to exit positions to avoid further losses. Capitulation: Investors give up any previous optimism, often selling at a loss. Anger: The reality of financial impact hits, and investors question their decisions. Depression: Coming to terms with the financial hit and reflecting on the decisions made. Disbelief: Skepticism prevails even as the market may begin recovery, with many wary of another downturn.
CBOE:SPXEducation
by liberatedstocktrader
15
Quad Witching: Mark Your Calendar for 2024Quad-witching is a phenomenon unique to the stock and options markets, occurring four times a year. It captures a flurry of activity sparked by the simultaneous expiration of four types of derivatives contracts: stock index futures, stock index options, stock options, and single stock futures. The third Friday of March, June, September, and December marks these critical days in the trading calendar, bringing with them distinct opportunities and challenges for investors and traders alike. Quad Witching S&P 500 Index Price Drops 2023 March -1.1% June -0.37% September -1.22% December -0.1% Average Drop 0.7% The Basics of Quad Witching Quad Witching is a critical event for anyone engaged in the stock market due to its pronounced effects on market volatility. Understanding its mechanics, significance, and impact helps investors and traders navigate the complexities of financial markets. Definition of Quadruple Witching Quadruple Witching is a term used to describe the simultaneous expiration of four types of financial derivatives: stock index futures, stock index options, stock options, and single stock futures. This event happens every quarter, specifically on the third Friday of March, June, September, and December. It poses distinct considerations for market participants. Significance of Quadruple Witching Dates It is important for those who are involved in the financial markets to mark the calendar for Quadruple Witching Dates. These days witness increased trading activity as investors and traders adjust or close out their derivative positions. This period of adjustment is a display of strategic decision-making as market participants act to manage their investments before contracts expire. Impact on Market Volatility During Quad Witching, there is a simultaneous expiration of derivative contracts that can lead to higher trading volume and market volatility. Traders and investors need to be aware of the potential fluctuations in prices resulting from the amplified trading activity, which can significantly impact the short-term valuation of securities.
SP:SPXEducation
by liberatedstocktrader
1
HOW-TO Discover and Harness the Potential of the Dividend MarketDividend Market as well as Dividend futures trading shines bright, in accordance with CME Group @CME_Group Q3'23 Equity Insights Report. Dividend futures combined Q3 ADV reached 5.1K contracts, and OI averaged 284K contracts (+5% vs. Q2 2023). Over 77K contracts have traded since the launch of Annual Dividend Index futures on Nasdaq-100 NASDAQ:NDX and Russell 2000 TVC:RUT , which allow market participants increased options to manage U.S. dividend risk, especially as year end approaches. Understanding Dividends and Dividend Market 👉 A dividend is the distribution of corporate earnings to eligible shareholders. 👉 Dividend payments and amounts are determined by a company's board of directors. Dividends must be approved by the shareholders by voting rights. Although cash dividends are common, dividends can also be issued as shares of stock. 👉 The dividend yield is the dividend per share, and expressed as a percentage of a company's share price. 👉 Many companies - constituents of S&P500 Index DO NOT PAY dividends and instead retain earnings to be invested back into the company. 👉 The S&P500 Dividend Points Index (Annual) tracks the total dividends from the constituents of the S&P 500 Index. The index provides investors the opportunity to hedge or take a view on dividends for U.S. stocks, independent of price movement. The index resets to zero on an annual basis. 👉 Using the S&P500 Dividend Point Index (Annual) as the underlying in financial products, investors can hedge or gain exposure to the dividend performance of the S&P500 Index. Representation of S&P500 Dividend Points Index (Annual) over the past 5 years. Dividends points are to be collected through the calendar year, and reset to Zero on an annual basis Understanding S&P500 Annual Dividend Index Futures 👉 The S&P500 Annual Dividend Index futures CME:SDA1! calculates the accumulation of all ordinary gross dividends paid on the S&P500 index constituent stocks that have gone ex-dividend over a 12-month period. The amounts are expressed as dividend index points. 👉 The underlying index for S&P500 Annual Dividend Index futures is the S&P500 Dividend Index. The methodology for the index can be found here at S&P Global website. 👉 Dividend index points specifically refer to the level of index points that are directly attributable to the dividends of index constituents. They typically only capture regular dividends and calculate this on the ex-date of the respective constituents within each index. 👉 In general, “special” or “extraordinary” dividends are not included as dividend points in the respective annual dividend indices. 👉 Futures contract Unit is $ 250 x S&P 500 Annual Dividends Index. The Universe of S&P500 Annual Dividend Index futures with expirations dates over the next several years Understanding the Difference between 'Today' and 'Tomorrow' using S&P500 Annual Dividend Index Futures, or what is CME:SDA1! and CME:SDA2! Futures contracts 👉 CME:SDA1! is a Front S&P500 Annual Dividend Index futures contracts, that calculates expected dividend index points for current (in this time - 2023) calendar year. 👉 CME:SDA2! is a Next one S&P500 Annual Dividend Index futures contracts, that calculates expected dividend index points for the next one (in this time - 2024) calendar year. 👉 The difference (futures spread) between front and next one can give an expression to traders and investors. 👉 Macro conditions are good, and U.S. economy is doing well, so futures spread values are below Zero (expected dividend points for next year are bigger rather current). 👉 Macro conditions are bad and U.S. economy is getting worst, so futures spread values are above Zero (expected dividend points for next year are lower rather current). 🤝 Happy Dividend Market Trading to Everyone! Enjoy!
SEducation
by Pandorra
Top 10 books in tradingAs a trader now of over 23 years, I have read a few hundred trading books in that time. It is always really interesting to have other people's perspective, strategies, hint, tips and tools. However, the main issue is not knowing if you are likely to get value from the book you purchase as it is also very subjective. You either have issues such as the book is too basic, or the other end of the scale, it's too advanced. During the 20 plus years, I found a number of great books that helped me - but also ones I have shared with others over the years. Regardless of your level of knowledge how do you know what works or would work for you or your style of trading? I put this list together in no real order, but I'll try to summarise each with a little about what I liked or what you can take away. ============================================================== "The Wall Street Jungle" Written by Richard Ney, first published in 1970. In this book, Ney provides readers with an insider's perspective on the world of finance and investment. He delves into the complexities and pitfalls of Wall Street, offering a critical examination of the stock market and the investment industry. Ney, a former Wall Street insider himself, reveals the often deceptive practices and psychological games played by brokers and financial institutions. He discusses the dangers of following investment advice blindly and emphasizes the importance of informed decision-making when it comes to managing one's finances. Throughout the book, Ney uses real-life examples and anecdotes to illustrate the challenges and temptations that investors face. He also explores the psychological aspects of investing, discussing how emotions can influence financial decisions and lead to costly mistakes. What I like about this is the emphasis put on the market makers, as a trader who uses Wyckoff Techniques, it made more sense when identifying with Composite Man theory. "Trading in the Zone" By Mark Douglas that focuses on the psychology of trading and investing. Published in 2000, the book offers valuable insights into the mental aspects of successful trading. Douglas emphasizes the idea that trading is not just about mastering technical analysis or market fundamentals but also about mastering one's own emotions and mindset. This book was one of the best in terms of psychology, every trader has a different appetite for risk and even profits, this is a huge factor in trading especially early on. If you struggle with psychology of trading or the emotions, I would 100% recommend this one. "The Wealth of Nations" Written by the Scottish economist and philosopher Adam Smith, first published in 1776. This influential work is considered one of the foundational texts in the field of economics and is often regarded as the birth of modern economics. In the book Smith explores the principles of a free-market capitalist system and the mechanisms that drive economic prosperity. He famously introduces the concept of the "invisible hand," which suggests that individuals pursuing their self-interest in a competitive market inadvertently contribute to the greater good of society. For me, the rules of economics have not changed much since the creation of this book. appreciating moves such as DXY up = Gold down, is simple economics. The main take away is again around Wyckoff theory for me and the fact the "invisible hand" is exactly why and how some fail and some profit. "The Go-Giver" Although not technically a trading book, it's one of the best little business/life stories. self-help book co-authored by Bob Burg and John David Mann. Published in 2007, it presents a unique and compelling philosophy on success and achieving one's goals. The book revolves around the story of a young, ambitious professional named Joe who is seeking success in his career. Through a series of encounters with a mentor named Pindar, Joe learns the "Five Laws of Stratospheric Success." These laws, which are principles of giving, value, influence, authenticity, and receptivity, guide him on a transformative journey toward becoming a true "go-giver." The way I saw this from a trading perspective is pretty much, the value given by stocks or companies is something Warren Buffet and Benjamin Graham investment theory was all about. Although a different type of value - you can understand why instruments such as gold or oil have a place, a value and this can be deemed as expensive or fair at any given point. These waves are what really moves the market. "The Zurich Axioms" A book written by Max Gunther, originally published in 1985. This book offers a set of investment and risk management principles derived from the wisdom and practices of Swiss bankers in Zurich. The Zurich Axioms provide a unique and unconventional approach to investing and wealth management. The book presents a series of investment "axioms," or guidelines, that challenge conventional wisdom in the world of finance. These axioms emphasize risk management, flexibility, and the willingness to take calculated risks. They encourage investors to think independently and avoid the herd mentality often associated with financial markets. For me it's more about investing and less about trading. But the deep down message is all to do with ultimately wealth preservation, I have been in the wealth management and investment space and found it interesting that the more an investor has, the less about making money it becomes and more about safe guarding that capital it gets. "Mastering the Market Cycle: Getting the Odds on Your Side" Written by Howard Marks, a renowned investor and co-founder of Oaktree Capital Management. Published in 2018, the book delves into the critical concept of market cycles and provides insights on how investors can navigate them to enhance their investment strategies. In the book, Marks emphasizes the cyclical nature of financial markets and discusses the inevitability of market fluctuations. He explores the factors and indicators that drive market cycles, such as economic data, investor sentiment, and market psychology. Marks' central thesis is that investors can improve their chances of success by understanding where they are in the market cycle and adjusting their investment decisions accordingly. I had a spooky delve into market cycles, I have a good friend who told me he did not trade price, instead time. This was something I could not really figure out, but was so fascinating that the markets can work in cycles. It was interesting that Larry Williams also discussed a similar thing with the Orange Juice market's in one of his books. "How I Made One Million Dollars Last Year Trading Commodities" And here is Larry Williams' book. provides an insider's perspective on his successful journey as a commodities trader. In this book, Williams shares his personal experiences, strategies, and insights into the world of commodity trading. He outlines the specific techniques and tactics he used to achieve remarkable profits in a single year. While the book may not offer a guaranteed formula for success, it offers valuable lessons on risk management, market analysis, and the psychology of trading. It serves as both an inspiration for aspiring traders and a guide for those looking to improve their trading skills in the volatile world of commodities. For me, the COT intel is invaluable. When you learn what drives markets really, COT is such a useful tool to have at your disposal. "Nature's Law: The Secret of the Universe" A groundbreaking book by Ralph Nelson Elliott, the creator of the Elliott Wave Theory. Published in the early 20th century, this influential work introduced a novel perspective on market analysis and price prediction. Elliott's theory posits that financial markets and other natural phenomena follow a repetitive, fractal pattern that can be analyzed through wave patterns. He outlines the concept of impulsive and corrective waves and demonstrates how these waves form trends in various financial markets. The book delves into the idea that the market's movements are not entirely random but instead exhibit an underlying order, governed by these wave patterns. Elliott's ideas have had a profound impact on technical analysis and have been adopted by traders and analysts worldwide. "Nature's Law" serves as the foundation of the Elliott Wave Theory, offering valuable insights for anyone interested in understanding and predicting financial markets based on natural patterns and mathematical principles. If you want to learn about Elliott Waves - here it is from the horse's mouth as they say. "Master the art of Trading" By Lewis Daniels - Master the Art of Trading trader, offers a quick, easy, and comprehensive roadmap to trading. It explores the grand theories and behavioural economics underpinning the markets, from Elliot Wave Theory to Composite Man. It unpicks visual data, such as candlestick graphs and trend lines. It equips readers with the correct tools to make sense of the data and to make better trades. And it helps readers uncover their innate strengths, realise their propensity for risk, and discover what sort of trader they are - on order to optimise their behaviour to make them as effective as possible. This book puts together all of the core trading requirements from the basic trendline through to psychology and technical techniques. "The Intelligent Investor" a classic and highly influential book on the subject of value investing, written by Benjamin Graham and first published in 1949. Graham, a renowned economist and investor, is often considered the "father of value investing." The book offers a comprehensive guide to the principles and strategies of sound, long-term investing. Graham's central concept is the distinction between two types of investors: the defensive, "intelligent" investor and the speculative investor. He emphasizes the importance of conducting in-depth analysis and due diligence to make informed investment decisions, rather than engaging in market speculation. I don't think any list of trading books is complete without this one! It's the Warren Buffer Holy Grail. For me, it's about risk management, finding value - especially with investments like value stocks. Using compounding interest and the factor of time to your advantage. ===================================================================== I would be keen to get comments and other book recommendations from the trading community here on Tradingview.
FX:XAUUSDEducation
by Mayfair_Ventures
5
The VIX: A Measure of Market FearThe VIX, or Volatility Index, is a measure of the expected volatility of the S&P 500 index over the next 30 days. It is calculated using the prices of options on the S&P 500 index. A higher VIX indicates that market participants are expecting more volatility in the future, while a lower VIX indicates that they are expecting less volatility. The VIX is an important tool for investors because it can help them understand how risky the stock market is. A high VIX indicates that the market is expected to be volatile, which means that there is a greater chance of large price swings. This can make investing more risky, but it can also create opportunities for profit. The VIX is also correlated with the S&P 500 index. This means that the VIX tends to move in the opposite direction of the S&P 500. When the S&P 500 falls, the VIX tends to rise, and when the S&P 500 rises, the VIX tends to fall. This correlation is not perfect, but it is strong enough to be useful for investors. The VIX can be used in a variety of ways by investors. Some investors use the VIX to assess the risk of their portfolios. Others use the VIX to trade volatility, either by buying or selling VIX futures contracts. Still others use the VIX to hedge against risk in other assets. The VIX is a complex and volatile asset, but it can be a valuable tool for investors who understand how to use it. Here are some additional things to keep in mind about the VIX: The VIX is not a direct measure of the volatility of the stock market. It is a measure of the expected volatility, which means that it is based on the opinions of market participants. The VIX can be affected by a variety of factors, including economic news, political events, and natural disasters. The VIX is not always accurate. It can sometimes overshoot or undershoot the actual volatility of the stock market. Despite its limitations, the VIX is a valuable tool for investors. It can help investors understand the risk of the stock market and make informed investment decisions. I hope this post is helpful. This analysis represents my thoughts at the date it is posted. This analysis does not represent professional and/or financial advice. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content found on this profile before making any decisions based on such information.
VEducation
by YExplore
2
Stock HeatmapHave you ever heard of a stock heatmap? 📈 It's an innovative and visually appealing tool used in the world of finance to analyze and interpret market data. Let's explore what it is and how it can be useful in your trading journey. 🌡️ What is a Stock Heatmap? A stock heatmap is a graphical representation of a large set of stocks or securities, where each individual stock is color-coded based on its performance or specific metrics. It provides a visual snapshot of the entire market or a specific sector, helping traders quickly identify trends, strengths, and weaknesses. 🔍 Utilizing Heatmaps 1️⃣ Market Analysis: Heatmaps allow you to assess the overall market sentiment and identify which stocks are performing well and which ones are underperforming. 2️⃣ Sector Analysis: By using sector-specific heatmaps, you can easily spot strong sectors and weak sectors, helping you make informed decisions about sector rotation strategies. 3️⃣ Stock Selection: Heatmaps can assist in narrowing down potential trading opportunities by highlighting stocks with significant price movements, volume surges, or specific technical indicators. 4️⃣ Risk Management: Heatmaps help you assess the risk-reward profile of different stocks, enabling you to prioritize stocks that align with your risk tolerance and investment goals. Remember, a stock heatmap should be used as a complementary tool alongside other fundamental and technical analysis techniques. It provides a dynamic and intuitive way to visualize market data, aiding in decision-making and identifying potential trading opportunities.
SP:SPXEducation
by JRiquelmeTrading
1
The Story Behind Bulls and BearsHello @TradingView family , this is @Vestinda, and let's have some fun and enjoy the markets together. Vestinda is driven to offer our knowledge in developing winning strategies and make traders tasks easier. This is The Story About Bulls and Bears. Bulls can lift things up, Bears can eat you for lunch. Who Are The "Bulls" And The "Bears" In The Market The terms "bulls" and "bears" are included in the trader's slang as the main categories of players in the market. Understanding the technique of the game will help you to understand the intricacies of how the market works. "Bulls" are buying investors. Like their totem, they lift the enemy up on the horns. "Bulls" buy, wait for the rising rate and sell at a higher price. They dream of a prosperous economy: the lower the unemployment rate, the higher the GDP, the faster markets grow. Warren Buffett - the most famous representative of the bulls . The Bears play on the opposite side. They earn on the depreciation, in a fading economy. Their ideal world is high unemployment, low GDP and large-scale crises. It all starts long before the collapse of the market: the “bears” buy on credit and immediately resell, artificially creating a drop in prices. After the price becomes cheaper, they are purchased again, but at a lower price, and the debt is repaid. The difference between the first and second purchases is the profit of the bears. 💲 How Bulls Make Money On The Market 💲 "Bulls" buy, when they are sure that the market will go up. Examples of situations where this is possible: 🟣 the shareholder enterprise has published a financial report, and the figures exceeded forecasts; 🟣 the new reform allows to pay less taxes, thereby increasing profits; 🟣 the company has introduced a new product, which, according to analysts, will be in great demand; 🟣 the level of well-being, salary and solvency of the population are growing, which has a beneficial effect on the company's profit. Bullish trades take time – you have to wait to make money. "Bears" are distinguished by shorter trades and the prospect of quick earnings. A red flag for the bulls is an increase in prices by 20% from the lows and the presence of strong prerequisites for further growth. The most favorable moment comes when there are more buyers than sellers on the market. 📍 There Are 4 Key Phases Of A Bull Market:📍 1️⃣ "bearish" trends are gradually fading; 2️⃣ the backdrop of negative news has ended, but there is no confidence in future growth yet, the market is moving sideways, the growth of prices alternates with a fall; 3️⃣ the economy is going up, volatility is decreasing, investors are optimistic; 4️⃣ the peak of growth, traders make easy profits. The market trends are cyclical, a bull market becomes overbought over time and inevitably turns into a bear market. The move up can be uneven, with periods of pullbacks and corrections, that provide an opportunity to profit on counter-trend trades. As a rule, prices didn't rise as quickly and unpredictably as they fall. Therefore, transactions in the "bullish" market are characterized by a longer period, the so-called "long positions". Both own and borrowed money, shares and other assets, which are returned after closing, act as collateral. Long positions are considered more stable, predictable and calm. Therefore the majority of market participants are "bulls" (or consider themselves so). In an uptrend, it's easy to choose an investment because almost everything goes up. However, the "bulls" need to be careful and remember, that there is no eternal growth, the market can be oversaturated at any moment, turning in the opposite direction. It is important for conservative traders to exit the game on time. 💲 How Bears Make Money On The Market 💲 The bears enter the arena during a downturn in the economy and prices. Their tactic is to sell at the beginning of a downtrend and then buy at the end of a downtrend. If they guess the high and low points of the bear market, they will receive the maximum margin. Examples of situations, that will play into the hands of this category of traders: 🟣 there were large-scale economic crises, force majeure situations, natural disasters, epidemics, wars; 🟣 the shareholder enterprise found itself in the center of a scandal or changed its general director; 🟣 sales of the new product failed. A "bear" market comes into its own, when prices fall by 20% from the maximum. There are 4 main stages of the trend: 1️⃣ the bull market is oversaturated and goes into overbought phase; 2️⃣ against the backdrop of negative sentiment, prices fall sharply, and trading activity decreases, panic arises on the market; 3️⃣ prices fell quite strongly, but continue to gradually decline, at this time “bears” enter the market en masse; 4️⃣ seduced by cheaper prices, conservative investors become more active, due to which the market gradually turns in the opposite direction. Thus, the "bear" market is gradually replaced by a "bullish" one. Can a Bull become a Bear? In fact, these divisions are rather arbitrary, they were created by exchange slang. Officially, in the market, you do not need to indicate yourself in which category you belong, so no need to be a bull or a bear all your life. Traders' strategies are good because they can be adapted or completely changed to specific conditions on the exchange. It's not always possible to sell shares at the maximum or buy at the minimum price, so you have to adjust to the average attitude. Therefore, a “bull” can become a “bear”, just like a “bear” can become a “bull”. Conclusion: What are Bulls and Bears in Trading? Bulls and Bears are two sides of the stock market. Bulls are traders who believe that the stock prices will go up, while bears are traders who think that the stock prices will go down. In trading, these two forces are constantly at work, and understanding their roles can help you make better decisions when it comes to investing. Bulls and Bears play an important role in trading as they provide insight on the direction of a particular security or market trend. By understanding their roles in trading, investors can more accurately predict future price movements and make more profitable trades. Dear friends, this is our first post. 😊 If you liked it, press <> 👍, share it on your social networks, groups - it will allow more people get interesting information, and we'll be able to delight you with new posts even more!♥️
INDEX:BTCUSDEducation
by Vestinda
4
Does the yield curve inversion signal recession?The famous negative curve. This market concept is used when the US02Y or US03Y operate at higher levels than the US10Y, this behavior usually anticipates recessions, but why does this happen? The inversion of the yield curve distorts the expected functionality of the financial system. Under "normal" conditions, raising funds in the short term for investment in longer terms is used to provide positive arbitrage between interest rates on liabilities (paid) and assets (received), a strategy subject to the limits of the rollover capacity of the liabilities and raising new funds. The availability of assets with higher premiums and liquidity, US02Y and US03Y, makes it less attractive to offer funds for longer terms < US10Y, and more expensive to raise funds for those who demand funds for shorter terms. So the interest curve is considered a kind of thermometer of what lies ahead in an economy, and it is the graphic representation of how much investors are charging to lend money in different maturities, and once it is inverted, it means that it is more expensive to borrow in the short term than in the long term – an unusual thing, because more distant payment dates mean greater risks for the borrower. In the US economy, a widely documented fact is that yield curve inversion (i.e., when there is a negative differential between long-term versus short-term bond yields) is a good leading indicator of periods of economic contraction. four to six quarters ahead. According to data available on the Federal Reserve website, yield curve inversion has preceded every US recession since 1950, with the exception of a false signal in 1967. There is also evidence that indicators of this nature are important predictors of periods of economic contraction in other countries. But are there any silver linings to this unusual reversal scenario? Yes, in these moments of greater uncertainty we have an interesting opportunity to buy good companies at low prices. This is because after the monetary tightening cycle, the economy usually weakens, during this period risk assets suffer, considering that their future projections will suffer due to the scenario, so many of the market participants seek security in bonds, others seek to anticipate the recovery considering that as soon as this CORRECTIVE cycle ends, a new UPWARD CYCLE tends to maintain perennial companies and give birth to many new companies that arise in the face of challenging scenarios.
Editors' picks
TVC:US10YEducation
by leandrosander_
35
Using different deflactors on IndexesHere I put up a series of deflactors on the Nasdaq 100 Total Return... I like to use Total Return Indexes becuase they acurately reflect the actual growth of the invested money, rather than simple price indexes... I picked the Nasdaq because as you may have noticed from previous posts the Nasdaq is the absolute winner in terms of performance in the last 15 years... also (unfortunately) I did not find a Total Return option for the S&P500 on Tradingview... actually it's quite bad out there, even spglobal.com doesn't seem to publish those anymore, much less deflated with CPI... Anyway, moving to the chart here we present a series of deflactors applied to the $NDX Total Return since INCEPTION: 1. Gold 2. CPI 3. CPI+DXY 4. M2 (Fred money stock) 5. REAL M2 (Fred money stock with CPI) I found the Real M2 the most interesting idea, for in a high monetary inflation environment, Real M2, purges the nominal M2 (total monetary inflation) of its price inflation "component", and comes to a somehwat more balanced deflaction than the original metric (435% performance using M2 Real, vs 275% using the Pure M2 deflactor)
NASDAQ:NTTREducation
by LotusTrading20
3
The cycles of the S&P500 | PART 1The cycles of the S&P500 / PART 1 This post introduces a study I'm conducting with the main objective of understanding the cycles and sub-cycles that the S&P500 Index has. Why am I studying the S&P500? Because it is the most relevant index in the world. There is not any other economy in the world that gets close to the returns of the US stock market as a whole, and also, we have a massive amount of data back from more than 100 years ago. So with all that said, let's start. The fundamental view I have regarding the market is that the price has moved between periods of fear and optimism through history, on a cycle that never stops. There is either Fear or Optimism, in other way impulses and corrections. On this chart, we can go through periods of optimism and fear caused by multiple factors, different governments, different geopolitical situations, massive crises, changes in interest rate; you name it, all of them are on this chart, the dot com bubble, the subprime crisis, the missile crisis with Cuba, wars, oil crisis, 1929, etc. The first conclusion I can make at first glance is that despite what was causing it, fear and optimism tend to have characteristics that we may be able to understand. This is a strong base for technical analysis as a discipline. Fear looks the same through several situations, and the same applies to optimism. That's why understanding the price is a powerful element to conclude where we are on the cycle. So what is the price telling us? In this post, we will not only go through the big cycles, but also we want to understand the smaller ones. Now I will put my main conclusions regarding the information I have found. THE BIG CYCLE: -------------------- Impulse 1: 1877 - 1881 = 4 Years / 152% from bottom to top. Correction 1: 1881 - 1897 = 16 Years / -41% from top to bottom. -------------------- Impulse 2: 1897 - 1902 = 5 Years / 144% Fromb bottom to top. Correction 2: 1902 - 1921 = 19 Years / -40% from top to bottom. -------------------- Impulse 3: 1921 - 1929 = 8 Years / 400% from bottom to top. Correction 3: 1929 - 1933 = 4 years / -84% from top to bottom. -------------------- Here we can observe a clear change in behavior regarding impulses. Until 1933 we observe short impulsive periods and long corrective periods. From 1933 until now, this trend reversed, we have long impulsive periods and short corrective periods compared to the past. -------------------- Impulse 4: 1933 - 1969 = 36 years / 2106% from bottom to top. Correction 4: 1969 - 1974 = 5 years / -48% from top to bottom. -------------------- Impulse 5: 1974 - 2000 = 26 years / 2500% from bottom to top. Correction 5: 2000 - 2009 = 9 years / -58% from top to bottom. -------------------- Impulse 6: 2009 - present = 13 years / 600% from bottom to top. In PART 2 of this series of posts , I will go through the sub-cycles we observe from 1933 until now. My main objective is to understand the similarities between these impulsive situations (impulse 4,5 and 6) Here I give you a snapshot of what will be coming: Impulse 4 with sub impulses and corrections: Impulse 5 with sub impulses and corrections: Impulse 6 with sub impulses and corrections: Here you can see the Days and % decline of each correction inside the impulses. Thanks for reading! I will be updating this soon.
SP:SPXEducation
by ThinkingAntsOk
9
Market's MoneyHi! Most commonly used and popularized position sizing method is percent equity model i.e. trader should never risk more than certain percent of trading capital on a single trade. Quite often this number is 2%. This can be anything - within trading there is no right or wrong answers. It all depends from different factors: *Goals *Risk tolerance *Account size *Trading experience *Trading style and strategy One great position sizing technique is 'Market's Money'. Actually it is a way how trader can think (mindset) about his trading capital. Concept is simple: there is my money and there is market's money. My money is my starting capital and all earned profits are market's money. Market's money will become mine only if I convert it into my money. Until it has not been converted into my money, then I can risk more with it because it's not my money, it's market's money. As I mentioned before, it is mindset. Some traders are able to think about trading capital that way, others are not. And that's fine, trader's are different. For me this is a great position sizing technique. Trader can risk less with his "own" capital and more with "market's" capital. Generally speaking we can group position sizing strategies into 2 groups: aggressive and defensive. Market's money goes into aggressive group. It can be used when trader's one goal is to make high returns. I don't want to say exceptional because actually trader can also be conservative using market's money method. There are numerous ways (thousands I guess) how to use market's money. Eventually it all comes down to how trader determines when market's money is converted into his. Here are few examples: *Time (days, weeks, months, years) *Cash earned *Percentage gain *Trades (1, 2, 5, 10, 30 etc.) *Tax purposes *Mathematical formula *Girlfriend's birthday 😀 Usually examples with biggest compounding effect come from: 1) Systems that have very high winning percentage 2) Infrequent conversions from market's money to trader's money Here are few examples how to use market's money: Let's say that trader has starting capital X $. Risk per trade is 2% of that equity. After turning profitable he/she is willing to increase risk. In addition to initial risk (2%), trader is willing to add 5% from earned profit into every new trade. Trading period is 3 months. After that trader converts profits (market's money) into his. Then everything starts over. Chart 2 This example is suitable for day traders. Those traders know very well their system and that system wins on average 3 trades in a row until losing trade occurs. If this system is generating thousands of signals per year then market's money compounding effect would be exceptional. In case of losing streak trader must be willing to live through large drawdowns. When trader uses different system (let's say some trend-following method with low winning percentage) then this position sizing method would not work so well. Key is to know characteristics of your trading system/style and then figure out what kind of position sizing would be best fit. In real life it is very hard to find these kind of systems that have high certainty about when losing trade happens. Mostly trade distribution is more random. Therefore most traders should not use this example with real money. I just wanted to show some different variations about how it is possible to use market's money. Conclusion: If trader's trading system or style (here I mean also discretionary traders) is profitable, then using some creative position sizing methods allow to achieve better results without changing the system. Some traders are constantly trying to improve their systems and make them perfect. Instead that, maybe it would be better to spend some time in position sizing area. Simple trading system/style + well thought position sizing method = Good System! Lastly, it all depends what you find logical and what suits you. Trading with percent equity model is totally fine. Adding market's money to that model can give higher compounding ability to profitable traders. Thank you and have a nice day. Cheers
NASDAQ:AAPLEducation
by Laurentsius
4
Trading Idea - #SP500 #BoumidiBandsHello everybody, since I pay a lot of attention to statistical values in trading, I took a closer look at the #BoumidiBands (BB_SPX). The BBs are derived from the implied volatility of the futures markets. The upper and lower bands of the indicator give us the range with the highest probability in which the market can move. If the market breaks out of the BBs, it is expected to return into the bands. At least that is my interpretation. I applied the BBs to the SP500 index and took a closer look on Tradingview. I looked at the data from February 2021 to today. My backtesting criteria: on a breakout above the upper band I would open a SHORT trade and on a slide below the lower band, I would open a LONG trade. The result is fantastic, without defining SL and TP here. In total, my backtesting resulted in 19 winning trades against 7 losing trades. Check out my chart where I marked the market entries. green thumbs up = winning trade red thumb down = losing trade Have fun with it. I would be happy if you leave me some feedback. Regards Traderherz
SP:SPXEducation
by Traderherz-Analytics
1
H&S Pattern can be either horizontal or sloping up/down neckline ( """ The pattern consists of a head (the second and the highest peak) and 2 shoulders (lower peaks) and a neckline (the line which connects the lowest points of the two troughs and represents a support level). The neckline may be either horizontal or sloping up/down. The signal is more reliable when the slope is down rather than up. The pattern is confirmed when the prices broke below the neckline after forming the second shoulder. Once it happens, the currency pair should start a downtrend. So, a sell order is put below the neckline. To get the target measure the distance between the highest point of the head and the neckline. This distance is approximately how far the price will move after it breaks the neckline. source FBS
SP:SPXEducation
by samitrading
4
Is your money worth reading "maybe´s"Hello Trenders, Been thinking a lot to or to not publish this signal. Many of you expect a deep on global level, therefore I here show you some mathematic forecast. This may not be the end of the world, yet it is far worse than the most downbeat forecasts. The evidence to support this outlook is in plain sight. Some sixth-grade math is a good place to begin the analysis. Make 2019 economic output 100 (the actual figure is $22 trillion; “100” is 100 percent of that number; a convenient way to measure ups and downs). Assume output drops 20 percent over the second and third quarters of 2020 (many estimates project larger drops; 20 percent is a plausible if conservative estimate). A 20 percent drop for six months equals a 10 percent drop for the full year, assuming the first and fourth quarters are flat on net. A 10 percent drop from 100 = 90 (or $2.2 trillion of lost output). Since 1948, U.S. annual real growth in GDP has never exceeded 10 percent. Since 1984, real growth has never exceeded 5 percent. The highest-growth years since the end of World War II were 8.7 percent in 1950, 8 percent in 1951, and 7.2 percent in 1984. An assumption that real growth will occur in 2021 at a 6 percent annual rate is a generous if unrealistic assumption. Such growth would qualify as a Vshaped recovery. If our new base is 90 (compared with 100 in 2019) and we increase output by 6 percent in 2021, this brings total output to 95.4. If we enter 2022 with the new base of 95.4 and increase that base by 4 percent (so, 95.4 × 1.04), we come to 99.2 in total output by the end of 2022. Here’s the problem. Using 100 as a baseline for 2019 output, and assuming 6 percent real growth in 2021 and 4 percent in 2022 (rates of growth that have not happened on an annual basis since 1984), the economy does not get back to 2019 output levels. The hard truth is that 99.2 < 100. Source : The new great depression (2021). What about if we really have a second wave harder then the first with mutatied covid? I want to add, is not my intention to spread panic or "maybe´s" but the study got my attention. Even the legends will have trouble surviving if this happen. So how can a trader survive in this case condition by trading as only source of income??? Perhaps agricultural commodities will always perform....
SP:SPXEducation
by DeFontain
1
If you don't know what DXY is and you are a trader, then read..Let's talk about DXY. TLDR: DXY is important and you should keep your trading eye on it. For those that don't know, DXY is the US Dollar Index. It measures the performance of the USD compared with a basket of six other currencies that are major trading partners of the United States. By far the largest component is the EUR, followed by JPY, GBP, CAD, SEK and CHF. We use DXY to track the relative strength of the world's biggest currency. The health of the USD drives so many things. Yesterday's stream covered the probability of the FOMC (the body in the US that determines interest rates) changing their language regarding their Quantitative Easing (QE) program. You can watch the stream here (warning there is a slight echo at first): www.tradingview.com I wanted to add some explanation to some of the topics I covered. I predicted that their language in the statement would change, and that it would point more towards them ending QE faster than expected. What this means is that they are hinting at tightening interest rate policy. Higher US Interest rates = stronger USD, because you can get more interest depositing your cash in a US bank in USD than you could get yesterday. I also pointed out some Technical Analysis we had done here at Mayfair, showing the timing was perfect for a USD rally. So far so good, and the FOMC did more or less as I expected, and the DXY rallied strongly: Now here's the idea I posted on May 28th showing the same thing: THIS IS ALL WELL AND GOOD BUT........... DXY (USD) strength has ramifications across loads of other markets. This is the point some people may not realise, so i thought I would explain it. If you buy Gold, you pay (usually) in USD. If the USD is stronger, you need fewer USD's to buy the same amount of Gold. so the Gold price goes down: The same is true of US500 Index: While BTC is also priced against the USD, 1-2% moves in the USD aren't going to have too much of an effect on something that can move 5% a day for a long time! DXY's behaviour is something to keep your trading eye on.
TVC:DXYEducation
by Paul_Varcoe
7