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Crude Oil WTI

Unveiling the Impact of #FOMC Decisions on #WTI, #Gold, #USD Today was #FOMC! I'm Sure most of us had same experience on BLACKBULL:WTI and $OANDA:XAUUSD. I Just wanted to write about What is #FOMC and It's impact on #WTI, #Gold and #USD, Maybe somebody has lots of questions about that, so I try to do my best regarding captioned subject. The Federal Open Market Committee (#FOMC) plays a crucial role in shaping monetary policy in the United States. The decisions made by this committee have significant implications for various financial markets, including commodities like West Texas Intermediate (#WTI) crude oil, #gold, and the U.S. dollar (#USD). Understanding the impact of FOMC decisions on these assets is essential for traders, investors, and market participants. The FOMC's Role and Decision-Making Process: The FOMC is composed of members from the Federal Reserve System who are responsible for setting monetary policy. These members regularly convene to assess economic conditions, review data, and deliberate on the best course of action. One of the most critical outcomes of these meetings is the announcement of the federal funds rate, which influences borrowing costs and has a broad impact on the financial landscape. BLACKBULL:WTI : FOMC decisions have a notable impact on WTI crude oil prices. Changes in interest rates directly affect borrowing costs for businesses, which, in turn, influence their operations and investment decisions. When interest rates decrease, economic growth is often stimulated, leading to increased demand for oil and potentially driving up prices. Conversely, an increase in interest rates may have the opposite effect, dampening economic activity and reducing oil demand. Additionally, FOMC decisions indirectly impact WTI crude oil prices through their effects on the U.S. dollar. Since oil is globally priced in dollars, fluctuations in the dollar's value can influence the purchasing power of oil-importing countries. A weaker dollar can make oil relatively cheaper, increasing demand and potentially bolstering #WTI prices. OANDA:XAUUSD : The relationship between FOMC decisions and gold prices is complex and multi-faceted. Gold is often considered a safe-haven asset and a store of value during times of economic uncertainty. When the FOMC adopts a dovish or accommodative monetary policy stance, such as lowering interest rates or implementing quantitative easing measures, it diminishes the attractiveness of holding U.S. dollars. Consequently, investors may seek refuge in #gold, leading to an increase in gold prices. Conversely, a hawkish stance by the FOMC, signaled by raising interest rates or indicating tighter monetary policy, can strengthen the U.S. dollar and exert downward pressure on #gold prices. As interest rates rise, the opportunity cost of holding gold, which does not yield interest or dividends, increases. This can make alternative investments more appealing, potentially reducing demand for gold. PEPPERSTONE:USDX : FOMC decisions have a direct and significant impact on the value of the #USD. Changes in interest rates influence the relative attractiveness of U.S. dollar-denominated assets, which in turn affects currency exchange rates. A rise in interest rates can make the #USD more appealing to investors seeking higher yields, potentially strengthening the currency. Conversely, a reduction in interest rates may lead to a decline in the value of the U.S. dollar. Moreover, FOMC decisions and accompanying statements provide insights into the central bank's economic outlook. Favorable economic projections and indications of a tightening monetary policy can bolster confidence in the #USD. Conversely, cautious or pessimistic remarks may weaken the currency. Final Words: FOMC decisions have a substantial impact on #WTI crude oil, #gold, and the value of the #USD. Changes in interest rates directly influence borrowing costs, economic growth, and investment decisions, thereby impacting #WTI crude oil prices. Additionally, the effects of FOMC decisions on the U.S. dollar indirectly influence #WTI crude oil This article serves as a comprehensive guide, offering valuable insights that will enhance your understanding of the FOMC and its impact on financial markets AND May your journey through the intricacies of the FOMC empower you with a solid strategy and guide you towards successful trades, or encourage you to exercise caution and refrain from trading during these significant events. Wishing you the best of luck in your endeavors!
BLACKBULL:WTIEducation
by POUSHEINI
Special Report: Celebrating 40 Years of Crude Oil FuturesNYMEX: WTI Crude Oil ( NYMEX:CL1! ) On March 30, 1983, New York Mercantile Exchange (NYMEX) launched futures contract on WTI crude oil. This marked the beginning of an era of energy futures. WTI is now the most liquid commodity futures contract in the world. It’s 1.7 million daily volume is equivalent to 1.7 billion barrels of crude oil and $125 billion in notional value. For comparison, global oil production was 89.9 million barrels per day in 2021. Looking back at 1983, exactly 40 years ago: • NYMEX was primarily a marketplace for agricultural commodities, with Maine Potato Futures being its biggest contract; • NYMEX was a small Exchange with 816 members, mainly local traders and brokers; • Known as Black Gold, crude oil was a strategic commodity regulated by governments and monopolized by the Big Oil, the so-called “Seven Sisters”; • Pricing of crude oil was not a function of free market but controlled by the Organization of Petroleum Export Countries (OPEC), an oil cartel. The birth of crude oil futures contract was a remarkable story of financial innovation and great vision. Facing a “Mission Impossible”, NYMEX successfully pulled it off. At the helm of the century-old Exchange was Michel Marks, its 33-year-old Chairman, and John E. Treat, the 37-year-old NYMEX President. The “Accidental Chairman” Michel Marks came from a long-time NYMEX member family. His father, Francis Q. Marks, was a trading pit icon and influential member. Since high school, the younger Marks worked as a runner on the trading pit for his family business. After receiving an Economics degree from Princeton University, Michel Marks returned to NYMEX as a full-time member, trading platinum and potatoes. In 1977, the entire NYMEX board of directors resigned, taking responsibility for the Potato Futures default from the prior year. Michel Marks was elected Vice Chairman of the new Board. He was 27 years old. One year later, the Chairman at the time suffered a stroke. Michel Marks replaced him as the new NYMEX Chairman. At 28, he’s the youngest leader of any Exchange in the 175-year history of modern futures industry. White House Energy Advisor John E. Treat served in the US Navy in the Middle East and later worked as an international affairs consultant in the region. He received an Economics degree in Princeton and a master’s degree in international relations from John Hopkins. During the Carter Administration (1977-1981), Treat worked at the US Department of Energy. He served as Deputy Assistant Secretary for International Affairs and sat on the National Security Council and the Federal Energy Administration. In his capacity, Treat was at the center of the formation of US energy policy. After President Carter lost his reelection bid, Treat left Washington in 1981. At the time, NYMEX was exploring new contracts outside of agricultural commodities. One possible direction was the energy sector, where NYMEX previously listed a Heating Oil contract with little traction in the market. With his strong background, Treat was recruited by NYMEX as a senior vice president. A year later, after then President Richard Leone resigned, Treat was nominated by Chairman Marks to become NYMEX President. He was 36 years old. The Birth of WTI Crude Oil Futures In 1979, the Islamic Revolution in Iran overthrew the Pahlavi dynasty and established the Islamic Republic of Iran, led by Shiite spiritual leader Ayatollah Khomeini. Shortly after, the Iran-Iraq War broke out. Daily production of crude oil fell sharply, and the price of crude oil rose from $14 to $35 per barrel. This event was known as the second oil crisis. It triggered a global economic recession, with U.S. GDP falling by 3 percent. After President Reagan took office in 1981, he introduced a series of new policies, known as Reaganomics, to boost the U.S. economy. The four pillars that represent Reaganomics were reducing the growth of government spending, reducing federal income taxes and capital gains taxes, reducing government regulation, and tightening the money supply to reduce inflation. In terms of energy policy, the Reagan administration relaxed government regulations on domestic oil and gas exploration and relaxed the price of natural gas. NYMEX President John Treat sensed that the time was ripe for energy futures. He formed an Advisory Committee to conduct a feasibility study on the listing of crude oil futures. His strategic initiative received the backing of Chairman Michel Marks, who in turn gathered the support of the full NYMEX membership. Arnold Safir, an economist on the advisory board, led the contract design of WTI crude oil futures. The underlying commodity is West Texas Intermediate produced in Cushing, Oklahoma. The delivery location was chosen for the convenience of domestic oil refineries. WTI oil contains fewer impurities, which results in lower processing costs. US refineries prefer to use WTI over the heavier Gulf oil. WTI trading code is CL, the abbreviation of Crude Light. Contract size is 1,000 barrels of crude oil. At $73/barrel, each contract is worth $73,000. Due to the profound impact of crude oil on world economy, NYMEX lists contracts covering a nine-year period. On March 29, 1983, the CFTC approved NYMEX's application. The next day, WTI crude oil futures traded on the NYMEX floor for the first time. Competing for the Pricing Power Now that crude oil futures were listed. Initially, only NYMEX members and speculators were trading the contracts. All the oil industry giants sat on the sidelines. John Treat knew that without their participation, the futures market could not have meaningful impact on the oil market, not to mention a pricing power over crude oil. In early 1980s, the global oil market was monopolized by seven Western oil companies, known as the "Seven Sisters". Together, they control nearly one-third of global oil and gas production and more than one-third of oil and gas reserves. 1) Standard Oil of New Jersey, later became Exxon; 2) Standard Oil of New York, later became Mobil Oil Company; It merged with Exxon in 1998 to form ExxonMobil; 3) Standard Oil of California, later became Chevron; It took over Texaco in 2001, and the combined company is still named Chevron; 4) Texaco, collapsed in 2001 and was taken over by Chevron; 5) Gulf Oil, which was acquired by Chevron in 1984; 6) British Persian Oil Company, operating in Iran, withdrew after the Iranian Revolution and then fully operated the North Sea oil fields, later British Petroleum ("BP"); 7) Shell, an Anglo-Dutch joint venture. Treat's background as President Carter's energy adviser played a key role. After nearly a year of hard work, the first Big Oil entered the NYMEX crude oil trading floor. However, it was not until five years later that all Seven Sisters became NYMEX members. OPEC producers tried to boycott the crude oil futures market. However, as trading volume grew, they eventually gave in, first by Venezuela and then the oil producers in the Middle East. Interestingly, the Middle Eastern oil producers started out by trading COMEX gold futures, probably as a hedge against oil prices. Gold has been a significant part in the Middle Eastern culture for long. As the main buyers of gold, the Arabs buy more gold when their pockets are filled with rising oil prices, and conversely, they sell gold when oil revenues fall and their ability to buy gold decreases. With the participation of Big Oil and OPEC, coupled with an active crude oil options market, crude oil pricing power has shifted from the Middle East to NYMEX's trading floor by the end of the 1980s. WTI has also become a globally recognized benchmark for crude oil prices. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Editors' picks
NYMEX:CL1!Education
by JimHuangChicago
33
Leading Indicators To Improve Decision Making in Oil TradingHello Traders! As you know, trading is a game of probabilities and navigating the financial markets is not always easy. Different strategies that we use, such as Elliott wave analysis and pattern trading, can provide different scenarios for market movements. However, market conditions are often uncertain and can extend beyond what is predicted by these strategies. In such cases, it is useful to have access to scientifically proven tools that can help us better assess the probabilities of different scenarios. One such tool is the use of leading indicators. In this educational idea, we will explore the use of a leading indicator for Wti prices that embodies information from futures term spread and Relative Inventories. Correlation with Relative Inventories is due to the basic supply and demand dynamics of the market. When inventories are high, there is an oversupply of oil which puts downward pressure on prices. Conversely, when inventories are low, there is a shortage of oil which puts upward pressure on prices. Another useful metric for predicting oil prices is the term spread. The term spread refers to the difference between the prices of two oil contracts with different delivery dates. Researchers have found that changes in the term spread can be a leading indicator of future prices. The relationship between the term spread and oil prices comes from the fact that the term spread reflects changes in market expectations about future supply and demand for oil. Studies have confirmed the predictive power of both relative inventories and the term spread. Starting in a seminar paper by Hamilton (1983), it was demonstrated that changes in inventories had a significant impact on future oil prices. Similarly, other research has shown that changes in the term spread have a strong correlation with future oil price movements (e.g., Kilian and Murphy, 2009), and now there are a vastity of academic paper that explores that correlations and the predictive possibilities. Here another couple of references: www.sciencedirect.com gupea.ub.gu.se Now, I want to bring you an example of how these empirical result can be exploited and used in trading. In the main chart indeed I show an indicator constructed to reproduce the forecasting model proposed in the last article that I linked (Larsson, 2018). This Forecasting Model is a time series ARIMA model that uses both relative inventories and term spread between 3-months ahead contract and the 40-months ahead contract, together with squared relative inventories to capture non linearities in the relation between inventories and wti price. You can see the forecasted model in the red line, while the blue line is the weekly oil closing price. I will report again here the chart for clarity: After the uptrend ended, in which the forecasting model overshooted before crossing back, we can see that every time the red line (forecasting model) retested the blue line (actual price) the retest was followed by a strong decrease in price. This was use for us as confirmation for our bearish scenario on oil, that we are still trading. I hope you can find this post useful! If you have any comment, please share, we will be happy! Cheers, GMR
TVC:USOILEducation
by GMR-Capital
5
CPI & Inflation Rate USHello everyone! Let's take a look on what happened yesterday on the US financial market and understand the impact of CPI and inflation rate. The Consumer Price Index (CPI) and inflation news from the United States can have a significant impact on financial markets and the value of the U.S. dollar. The CPI measures the change in the price of a basket of goods and services consumed by households, and inflation is the rate at which the general level of prices for goods and services is rising. When the CPI and inflation numbers are higher than expected , it can indicate that the economy is growing, which can boost stock prices, lead to higher interest rates, and appreciate the dollar. This is because as the economy grows, companies will see increased demand for their products and services, which can lead to higher profits and stock prices. Higher interest rates can also attract more investors to bonds, which can lead to higher bond prices. Additionally, a strong economy can lead to increased demand for U.S. goods and services, and increased foreign investment in the U.S. economy. As a result, the demand for dollars increases, which can lead to an increase in the value of the dollar. On the other hand, if the CPI and inflation numbers are lower than expected , it can indicate that the economy is slowing down , which can lead to lower stock prices, lower interest rates and depreciation of the dollar. This is because as the economy slows down, companies will see decreased demand for their products and services, which can lead to lower profits and stock prices. Lower interest rates can also lead to less investors in bonds, which can lead to lower bond prices. Additionally, a weak economy can lead to decreased demand for U.S. goods and services, and decreased foreign investment in the U.S. economy. As a result, the demand for dollars decreases, which can lead to a decrease in the value of the dollar. It's important to note that the Federal Reserve uses inflation as an indicator to change the monetary policy, as they use interest rates as a tool to control inflation. Typically if inflation is too high, the Fed will increase interest rates to slow down the economy and curb inflation, and if inflation is too low, the Fed will decrease interest rates to stimulate the economy. These monetary policy decisions can also have an impact on the value of the dollar, as when the Fed raises interest rates, it can make the U.S. a more attractive place to invest, which can lead to an appreciation of the dollar. Conversely, when the Fed lowers interest rates, it can make the U.S. a less attractive place to invest, which can lead to a depreciation of the dollar.
ECONOMICS:USCPIEducation
by m_maia14
USOIL 3rd OCTOBER 2022 - COMBINATION STRATEGYUSOIL Combination strategy with a Trendline, Unfilled Order (UFO) and Psychological level. Trend is a movement that shows where the market is moving. The term "trend" in everyday life is often used to express a situation, where something is in vogue or is gaining public attention. As you know, a trendline is a tool that can be used to recognize the direction of a trend. Therefore, a trendline can serve as both Support (in an uptrend) and Resistance (in a downtrend). Trend line, Its function as a technical tool does not need to be doubted. Besides being able to help identify trends, this tool can also be used to find entry points. In looking for entry points, you can use bounce and breakout opportunities. remember "the trend is your friend". Believe it or not, in forex trading, the trendline is one of the friends that can help you to follow the direction where the market is moving. This trend movement forms a series of sequential waves with the following levels: Peak (High/H), Higher peak (Higher High / HH) Lower peak (Lower High / LH ) Valley (Low/L) higher valley (Higher Low / HL ) Lower valley (Lower Low / LL) By knowing the support and resistance levels, a trader can minimize risks and maximize profits. During a downtrend, a trendline can serve as resistance. But conversely, during an uptrend, the trendline can function as support. In finance market, a psychological level, is a price level in technical analysis that significantly influences the price of the underlying security, commodity or derivative. Usually, the number is something "easy to remember," like a number that is rounded up. Meanwhile, Unfilled order is a shipment of orders that have not been fulfilled and inventory reported by domestic manufacturing companies. historically it can be seen that the balance between buyers and sellers is broken due to high volatility. for example in the case of US30 23rd AUGUST 2022
TVC:USOILEducation
by DNP-FX
2
Why Crude Oil is Trending Higher Again, Breaking Above US$100In this tutorial, I will explain both its fundamental and technical reasons for crude oil likely to break above and stay above US$100. I am having two portfolios at all times, one for long-term investing and the other for short-term trading. For the long-term I am mindful the current global inflationary pressure is real and it may last many months or even years ahead. Therefore, my current investment mandate: • U.S. stock markets – To trade them • Commodities – To buy them Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. For your reference: NYMEX Crude Oil $0.01 = US$10 Example: From $94.00 to $100.00 (10000-9400) x US$10 = US$6,000
NYMEX:CL1!Education
by konhow
1
A good trendline should touch 3 timesJust wanted to highlight for you this morning the importance of trendlines. Good trendlines are like a good wine – the older they are the better they become! A 3-month trendline is more important than a 3-week trendline for example. They also help to enforce discipline; they can act as entry or exit zones and they can help with timing. This one on the Crude Oil continuation chart is an excellent one, it underpins the bull move so far this year and connects 3 points (very important) and is located circa 106.50. Success or failure at the trendline is likely to prove pretty directional for the market and given price action over the past week, to my practiced eye – it looks vulnerable. Failure we suspect would initiate a sell-off towards the 50% retracement (of the move seen this year) circa 96.50.
NYMEX:CL1!Education
by The_STA
Less Liquidity In Summer Months Could Lead To More VolatilityThe Memorial Day weekend is the start of the summer season. In many markets, seasonal factors can impact prices. The old saying, “sell in May and go away,” may not be applicable in the stock market as stocks have been on a rocky path lower in 2022. In commodities, gasoline, meats, grains, and other raw material prices often increase as demand peaks. Heating oil and other winter commodities often move to the downside. However, 2022 is anything but an ordinary year in markets. Thin markets are more volatile than liquid markets Market participants are tired and frustrated in 2022 Lockdowns over the past years could lead to extended summer vacations Lots of head-fake moves on the horizon Expect the unexpected- Volatility leads to opportunity Over the past two years, the global pandemic distorted prices. Stocks rose as artificially low interest rates made the stock market the only alternative with fixed income yields at historical lows. Rates are rising in 2022, with a hawkish Fed and falling bond market. Supply chain bottlenecks continue to plague commodities, and the war in Ukraine has only exacerbated pricing and availability issues. Mid-term elections in the US, and a Presidential contest in Brazil, a leading commodity-producing country, are on the horizon later this year. The geopolitical bifurcation between nuclear powers is another issue facing markets that reflect the economic and geopolitical landscapes. Market participants are exhausted as 2022 has brought a new set of concerns. We could see liquidity in markets dry up over the coming weeks and months as the summer has arrived, and vacations will limit participation in markets across all asset classes. Thin markets are more volatile than liquid markets Liquidity is a critical ingredient for smooth-running markets. Liquidity tends to reduce price variance as more market participants increase buying and selling interests at various levels. Commodities tend to be more volatile than other assets, sans cryptocurrencies, but some raw material markets experience far more volatility than others. Lumber and crude oil are two highly volatile commodities, but one has minimal liquidity while the other experiences far more participation. The daily chart of CME lumber futures shows that daily volume tends to be well below 500 contracts. Open interest at 2,293 contracts makes lumber an illiquid market. Daily historical volatility at over 62% is a function of the lack of volume and open interest, leading to price gaps and limit-up and limit-down price moves where buying disappears during bearish periods and selling evaporates when the price moves higher. Meanwhile, on a typical trading session, NYMEX crude oil futures trade well over 400,000 contracts, with open interest at above 1.81 million contracts on June 2. Daily historical volatility at below 20% reflects that the highly liquid oil market has buyers and sellers at all price levels. The bid-offer spreads in liquid markets are far tighter than in illiquid markets. As liquidity declines, markets tend to experience far more price variance. Market participants are tired and frustrated in 2022 In early 2022, market participants were breathing sighs of relief as the global pandemic was beginning to fade in the rearview mirror. Health concerns may have declined, but financial woes increased with prices. Monetary and fiscal policies planted inflationary seeds that have caused prices to explode higher, while supply chain bottlenecks continue to exacerbate inflationary pressures. Meanwhile, the Russian invasion of Ukraine is another crisis following on the heels of two years of pandemic panic. Sanctions and Russian retaliation exacerbate inflation. Moreover, Russia’s “no-limits” cooperation with China creates a geopolitical bifurcation of the world’s nuclear powers. We live in interesting and exhausting times, with people tired and frustrated with the events since 2020. Lockdowns over the past years could lead to extended summer vacations Lockdowns ended in the US as vaccines went into arms. People have returned to work and school. In China, the COVID-19 restrictions appear to be easing. In early June 2022, the coming summer months offer the opportunity to rest, relax and recharge internal batteries for the second half of 2022. The demand for travel, hotel rooms, and other vacation-related consumer products has soared. Inflation and supply chain bottlenecks have only increased prices, but the demand is robust. As market participants take a few weeks off over the coming months, they are likely to turn off their screens and ignore the market action that could interfere with good times with friends and family. Increased vacations may bolster earnings for travel-related businesses, but it will reduce market liquidity as a vacation for many includes a rest period from watching or participating in markets across all asset classes. Lots of head-fake moves on the horizon As liquidity declines because of a lack of participation, markets will likely become a lot bumpier over the coming weeks and months. Selling could lead to downdrafts and buying may create rip-your-face-off rallies. These events cause head-fake moves that can cause even the most experienced traders and investors more than a bit of indigestion. A decline in liquidity could dramatically increase price variance. The geopolitical and economic landscapes will not take any vacation during the summer of 2022. Expect the unexpected- Volatility leads to opportunity Expecting the unexpected will reduce the stress-related with sudden market volatility. Moreover, higher price variance increases opportunities for nimble traders and investors with their fingers on the pulse of markets. Approach markets with a sold risk-reward plan that avoids open-ended risks. Even though declining liquidity can cause markets to rise or fall to irrational price levels, always remember the current price is always the correct price because it is the level where buyers and sellers meet in a transparent environment, the marketplace. Do not be afraid to take small losses and remember to take those profits or adjust risk levels to protect them when markets reach targets. Trading or investing with a plan and sticking to it avoids the ego-related mistakes that cause us to believe we are always right, and the market is wrong. The market price is never wrong. Meanwhile, combinations of put and call options can protect the downside, hedging portfolios while allowing for upside participation that will enable you to enjoy your time off from the daily grind. Enjoy the summer but keep your eyes open for opportunities. Adjust your mindset to expect the unexpected and embrace the higher volatility that comes alongside lower liquidity. Price variance is a nightmare for the passive, but it creates a world of opportunity for the dynamic. -- Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
LEducation
by Andy_Hecht
1
Cup and Handle Trading Pattern 📉📉📉✅ A cup and handle is a technical chart pattern that resembles a cup and handle where the cup is in the shape of a "u" and the handle has a slight downward drift. A cup and handle is considered a bullish signal extending an uptrend, and it is used to spot opportunities to go long. 🎯 Cup Handle Pattern William O'Neil's Cup with Handle is a bullish continuation pattern that marks a consolidation period followed by a breakout. ... The cup forms after an advance and looks like a bowl or rounding bottom. As the cup is completed, a trading range develops on the right-hand side and the handle is formed 🎯 What happens after cup and handle pattern? If a cup and handle pattern is confirmed, it will be followed by a bullish price move upward. You can pick a price target based on the size of the cup, but it becomes much less clear what will happen after the initial breakout from the cup and handle pattern. 🎯 How reliable is cup and handle pattern? The accuracy rate for cup and handle pattern for forex and stock on Daily timeframe are 65% and 68% respectively.
OANDA:XAUUSDEducation
by AnonimFXRO
📊 What is Market Seasonality ? 🎯 Seasonality refers to particular time frames when stocks/sectors/indices are subjected to and influenced by recurring tendencies that produce patterns that are apparent in the investment valuation. 🎯 Seasonality is a characteristic of a time series in which the data experiences regular and predictable changes that recur every calendar year. Any predictable fluctuation or pattern that recurs or repeats over a one-year period is said to be seasonal. 📊 What is a Seasonality Forecast? In time series data, seasonality refers to the presence of variations which occur at certain regular intervals either on a weekly basis, monthly basis, or even quarterly (but never up to a year). Various factors may cause seasonality - like a vacation, weather, and holidays - ✅ You can use the Market Seasonality as an extra fundamental confluence for the price, we have 2 market seasonalities bullish and bearish. If a price has bullish seasonality it means the pariticular asset will tend to rise during that cycle and viceversa. Market Seasonality (MS) is a good tool to have in your arsenal but only if you are trading on a mid-long term perspective. You can't trade using the market seasonality on a scalping or a intra-day basis because it makes no sense. Was this a valuable information ?
Education
by AnonimFXRO
2
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.
Editors' picks
BITSTAMP:BTCUSDEducation
by ThinkingAntsOk
103
BOS - BREAK OF STRUCUTRE ✅✅✅🎯 WHAT IS BOS ? BOS - break of strucuture. I will use market strucutre bullish or bearish to understand if the institutions are buying or selling a financial asset. To spot a bullish/bearish market strucutre we should see a higher highs and higher lows and viceversa, to spot the continuation of the bullish market strucuture we should see bullish price action above the last old high in the strucutre this is the BOS. 🎯 BOS for me is a confirmation that price will go higher after the retracement and we are still in a bullish move Kindly see attached photos
BINANCE:BTCUSDEducation
by AnonimFXRO
HTF intention with LTF execution 📉📉📉🎯 I will try to explain how do i use HTF in order with LTF. ✅ HTF - higher time frame usually those are timeframes that are higher then H4 like D1,MN1. ✅ LTF - lower time frame usually those are timeframes that are lower then H1 like M30,MAT,M5 When i take trades i wait for price to approach a HTF POI and then zoom out on LTF to find a better risk-reward entry like the photo says HTF intent LTF execution helps you to get a better risk-reward ratio and a higher probability trade, this is working on every financial asset from crypto to forex to commodities and stock market ✅ POI - POINT OF INTERES an area in the market where price have a higher probability to go bullish then bearish lets say 70/30 % probability. Example price come into a ,,support,, area this means we have a BULLISH POI we have a better probability to go higher then lowe
BINANCE:BTCUSDEducation
by AnonimFXRO
Commodities - What are they and how do they work?This article is continuation to the series of educational articles on basic fundamentals in regards to particular asset classes. If you have not read our previous article on stocks, feel welcome to do so: In order to read the article click on the chart above. Commodities are basic goods used in commerce that are interchangeable with other goods of the same type. They are usually refined or used for production of other goods. Commodities can be traded privately or on public market exchange where they must meet specified minimum standards like quality, weight, type, etc. They are great speculative investments which tend to be ruled by cycles and interaction between supply and demand. Classification of commodities In order to distinguish between particular characteristics of each group, commodities can be categorized according to their type and origin. Commodities that are mined or extracted are called hard commodities (oil, gold, silver, etc.) while commodities that are grown are called soft commodities (wheat, rice, livestock, etc.). Though, commodities can be sorted even further into smaller sub-categories. For example, metals can be divided into industrial metals (copper, nickel, iron, etc.) and precious metals (silver, gold and platinum). Additionally, the agricultural sector can be divided into livestock and grains; and the energy sector can be divided into oil, coal and natural gas. Other commodity sectors can be subcategorized in the similar fashion. Raw materials Primary commodities which are unprocessed and serve as input for production of other goods are also called raw materials. Raw materials involve, for example, crude oil, copper, iron, wheat and corn. Commodities exchanges include: Asia Pacific Exchange (APEX) - Singapore Chicago Board of Trade (CBOT) - United States Chicago Mercantile Exchange (CME) - United States Dalian Commodity Exchange (DCE) - China London Metal Exchange (LME) - United Kingdom National Commodity Exchange Limited (NCEL) - United States New York Mercantile Exchange (NYMEX) - United States Shanghai Gold Exchange (SGEX) - China Correlation Some commodities tend to show correlation with other assets. Such correlation can be positive or negative. Positive correlation means that two assets behave in a similar way. For example, when gold rises then mining stocks rise as well. Contrary to that, negative correlation describes such behavior in which assets move in the opposite direction to each other. For example, when USD/EUR rises then gold in USD tends to decline. Illustration 1.01 Illustration above shows the monthly chart of USOIL. It also shows USDEUR (orange line). Negative correlation between these two assets is observable. When USDEUR falls then USOIL tends to rise. Participants, spot market and derivatives market Commodities are great anti-inflationary assets which are often sought by producers and speculators alike. Producers tend to use commodities with purpose to hedge their risk; furthermore, they often demand delivery of physical goods. Speculators, instead, try to exploit volatile price movements in commodities with the goal to profit from it. Commodities can be bought and sold through the spot market or derivatives market. Spot market simply means buying or selling cash positions while derivatives market involves investing in futures, options, ETFs, etc. Seasonality Some commodities are prone to seasonal cycles which means that they tend to show the same or very similar behavior based on a particular calendar season. For example, in some countries, production of a certain crop may vary during the wet season and drought season. Similarly, heating prices tend to increase during the harsh winter as opposed to during the hot summer. Concept of seasonality is also applicable to commercial and industrial trends. DISCLAIMER: This content serves solely educational purposes.
OANDA:XAUUSDEducation
by Tradersweekly
7
What you trade is just as important as how you trade!Hey Traders! WOW! What a Monday! Excellent moves in the markets today at the US open, I don't want to sound like I am bragging, but we kinda prepared ourselves very well for today by working our asses off on creating our watchlist, we knew what could be moving and we made sure that they focused on the best setups, setups that had the highest rewards and the lowest risks! Aside from a big miss on WTI, we aced EURUSD, NASDAQ, DAX and EURJPY. Preparation of a watchlist is vital for us day traders and we make sure to invest time into creating our day trading watchlists! This video explains a little better what we did to make today a BIG SUCCESS for ourselves and our members!
OANDA:WTICOUSDEducation
by PrimedGroup
2
My rules for Reversal Watch CriteriaA couple of weeks ago I noticed the front page of the Economist publication, which had a front-page title – ‘The energy shock’ and it reminded me that market psychology plays a huge part as one of my reversal watch criteria. After all once a market starts moving a lot and grabbing more headlines, more and more people jump on that trend and once it gets to the front page of newspapers or publications, like The Economist, it is generally a good indication that a move is either at or very near the end of its move. I have for many years worked on the trading floor of several large banks and have always found this to be a good indication of market in general. A few years ago I had a strong view on the fixed income markets as I had noted that the US 10Y yield had reached my long term downside target. I duly went off to tell the traders that the market had got to its target and they might like to think about covering their long positions on Fixed Income futures and not only was NO-ONE interested in hearing my view they simply told me to get lost – they had made money all year being long fixed income futures. So, I went and sat back down and thought hang on if all these guys are already long, who is left to buy? Within a couple of days the market had turned lower very quickly with absolutely no new news or any fundamental reason that I could determine. This is something I have observed over the many years in the business. But it does kind of makes sense as well, for a market to go up aggressively it takes a lot of buying and if most people have already bought who is there left to buy? For a market to go down, it does not have to be a change in fundamentals, it can just be a lack of buying…. So, if one of my reversal watch criteria is market psychology what are the other criteria? 1. The market is approaching a significant target area 2. The market is over-stretched or runaway ahead of target 3. We have heightened intraday volatility 4. We have Newspaper articles 5. All dealers/articles/people you speak to have the same view We saw these conditions met recently on the Oil market. It is always extremely hard to cut a position that you are making money in and it helps when you have a list of criteria that you can watch. Once these criteria start to be met, it is a good idea to tighten up stops and think about lightening a position. 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.
NYMEX:CL1!Education
by The_STA