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M6E1! trade ideas

EURUSD Short IdeaPrice has rejected multiple times on the daily chart from the 50% level of the bearish orderblock @ 1.08635 . Price also failed to displace and close above Mondays high. My Draw on Liquidity (DOL) is Tuesday's low, and am hunting a short setup. I want to see H1 candles closing with rejection wicks in the H1 bearish FVG areas ( 1.08565 to 1.08580) as well as 50% of the H1 bearish orderblock (1.08605). H1 candle closing rejecting this area, and I'd look for entry on M5. Let me know your thoughts on this trade idea, and what you are looking for on EUR.
CME:6EH2024Short
by Tradius_Trades
EURZAR SELLING OPPORTUNITY (short EUR) (long ZAR) BRICS powerEURZAR SELLING OPPORTUNITY short EUR long ZAR BRICS power. The EURZAR pair has been volatile in recent months, with the EUR weakening against the ZAR. This is due to a number of factors, including: The ongoing war in Ukraine, which has put upward pressure on energy prices and boosted the South African rand as a commodity-linked currency. The prospect of rising interest rates in South Africa, which could make the ZAR more attractive to investors. Concerns about the strength of the European economy, which could put downward pressure on the EUR. BRICKS economies: The BRICS economies are generally considered to be emerging markets with high growth potential. However, they also face a number of challenges, such as political instability and high levels of debt. The performance of the BRICS economies can have a significant impact on the value of their currencies. Before making any investment decisions, it is important to do your own research and consider your own risk tolerance. You should also consult with a qualified financial advisor. Here are some resources that you may find helpful: South African Reserve Bank: www.reservebank.co.za Bloomberg: www.bloomberg.com Reuters: www.reuters.com
CME:6E1!Short
by wicked925
Options Blueprint Series: The Covered Call Strategy DecodedIntroduction In the ever-evolving world of financial markets, savvy investors and traders continuously seek strategies to optimize returns while managing risk. Among the plethora of strategies available, the covered call stands out for its simplicity and efficacy, especially when applied to a dynamic asset like Euro Futures. This article delves deep into the intricacies of the covered call strategy, using Euro Futures as the underlying asset. Through this exploration, we aim to equip you with the knowledge and tools necessary to navigate the complexities of the futures and options markets. By the end of this journey, you'll gain a comprehensive understanding of how to implement covered calls with Euro Futures, enhancing your trading arsenal with a strategy that balances potential returns against the inherent risks of the forex futures market. Understanding Euro Futures: The Beacon of Currency Markets Euro Futures on the Chicago Mercantile Exchange (CME) represent a contract for the future delivery of the Euro against the US dollar. These futures are pivotal for traders and investors looking to hedge against currency risk or to speculate on the fluctuations of the Euro's value relative to the dollar. Each Euro Futures contract is standardized, with each contract representing a specific amount of Euros. Trading Euro Futures offers a transparent, regulated market environment with deep liquidity, making it an attractive instrument for a broad spectrum of market participants. The futures are marked-to-market daily, and gains or losses are credited or debited from the trader's account, providing a clear view of financial exposure. Key Features of Euro Futures: Contract Size: Each contract represents 125,000 Euros. Tick Size: The minimum price fluctuation is $ 0.000050 per Euro, equating to $6.25 per contract. Trading Hours: Euro Futures markets are accessible nearly 24 hours a day, allowing traders from around the globe to react to market-moving news and events in real-time. Leverage: Futures trading involves leverage, allowing traders to control a large contract value with a relatively small amount of capital. However, while leverage can amplify gains, it also increases the potential for losses. Market Participants: Hedgers: Corporations and financial institutions may use Euro Futures to protect against adverse movements in the Euro's exchange rate, securing pricing or costs for future transactions. Speculators: Individual and institutional traders may speculate on the future direction of the Euro's value against the dollar, aiming to profit from price movements. Importance in the Financial Landscape: The Euro is the second most traded currency in the world, making Euro Futures a critical tool for managing currency exposure in the international financial markets. The contracts provide a gauge of market sentiment towards the Eurozone's economic outlook, influenced by factors such as interest rate differentials, political stability, and economic performance. The Basics of Covered Calls: Charting a Course The covered call is a conservative strategy where the trader owns the underlying asset — in this case, Euro Futures — and sells call options on that same asset to generate income from the option premiums. This strategy is particularly appealing in flat to moderately bullish market conditions because it allows the trader to earn an income from the premium, which can provide a cushion against a downturn in the market and potentially enhance returns in a stagnant or slightly bullish market. Key Concepts of Covered Calls: Ownership: The trader must own the Euro Futures contracts or be long on a futures position to write (sell) a covered call. Option Premium: The income received from selling the call option. This premium is the trader's to keep, regardless of the option's outcome. Strike Price: The price at which the underlying futures can be bought (call) by the option buyer. The trader selects a strike price that reflects their expectation of the market direction and their willingness to part with the futures if the option is exercised. Expiration Date: All options have an expiration date. The covered call strategy involves choosing an expiration date that balances the desire for premium income with the market outlook. Implementing the Strategy: Selection of Euro Futures Contracts: The first step is to have a long position in Euro Futures. This position is the "cover" in the covered call strategy. Selling the Call Option: The trader then sells a call option on the Euro Futures they own, receiving the option premium upfront. This option is sold with a specific strike price and expiration date in mind. Outcome Scenarios: If the Euro Futures price stays below the strike price at expiration, the call option will likely expire worthless, allowing the trader to keep the premium as income while still holding the futures position. If the Euro Futures price rises above the strike price, the call option may be exercised by the buyer, requiring the trader to sell the futures at the agreed strike price. This caps the trader's upside potential but secures the premium as profit. Risk Profile Graphic for the Covered Call Strategy on Euro Futures: This graph illustrates the profit and loss potential of a covered call strategy applied to Euro Futures. The strategy involves holding a long position in Euro Futures while selling a call option at a specific strike price. If the Euro Futures price at expiration is below the strike price, the trader's loss is offset by the premium received from selling the call option. However, the profit potential is capped if Euro Futures rise above the strike price, as the trader may have to deliver the futures at the strike price, missing out on further gains. Implied Volatility and CVOL: A Navigator's Tool In the strategy of covered calls, understanding Implied Volatility (IV) is essential. IV reflects the market's expectation of a security's price fluctuation and significantly influences option premiums. For traders employing covered calls, especially with Euro Futures, high IV can mean higher premiums, offering better income potential or protection against the underlying asset's price movements. Since the Euro Futures is a CME product, examining CVOL could provide an advantage to the trader as CVOL is a comprehensive measure of 30-day expected volatility from tradable options on futures which can help to: Determining Premiums: By gauging current IV, traders can identify optimal premium levels for their call options. Deciding which Strategy to use: High IV periods might indicate advantageous times to implement covered calls, leveraging CVOL's insights for timing entry and exit points. Benefits and Risks of Covered Calls: Income Generation: The most apparent benefit of the covered call strategy is the ability to generate income through the premiums received from selling call options. Downside Protection: The premium received can offer some “protection” against a decline in the futures price, effectively lowering the break-even point. Profit Limitation: A significant risk of this strategy is that the trader's profit potential on the futures is capped. If the market rallies strongly beyond the strike price, the trader misses out on those additional gains, as they are obligated to sell the futures at the strike price. Initiating a Covered Call with Euro Futures: Setting Sail Implementing the covered call strategy with Euro Futures involves a blend of strategic foresight and meticulous planning. The objective is to enhance potential returns or protect against downside risk through the calculated sale of call options against a long Euro Futures position. Here's a step-by-step guide to navigate through the process: Step 1: Selection of Euro Futures Contracts Long Position Establishment: Begin by establishing a long position in Euro Futures. This position acts as your safety net, providing the necessary coverage for the call options you're about to sell. Margin: When going long Euro Futures, the Margin Requirement (suggested by CME on Feb-21 2024 is USD 2,100 per contract) Market Analysis: Conduct a thorough analysis of the Euro Futures market. Consider factors like historical volatility, economic indicators affecting the Eurozone, and any impending events that might influence the Euro's value against the dollar. The chart shows how careful key Support and Resistances have been selected in order to decide when to buy long Euro Futures as well as deciding the Call Strike Price to use. Other techniques can be employed depending on the trader’s plan and methods. Step 2: Selling the Call Option Strike Price Decision: Choose a strike price that aligns with your market outlook. A strike price above the current market price can offer potential for capital appreciation, plus the income from the premium. Since the Resistance is located around 1.10, selling the 1.10 Call could be an appropriate decision. Expiration Date Selection: The expiration date should reflect your market perspective and risk tolerance. Shorter-term options can provide more frequent income opportunities but require closer management. We will be using December 2024 in this educational idea. Premium: When selling a 1.10 Call using DEC24 expiration on Feb-21 2024, the premium collected would be between 0.02180 and 0.02280. The midpoint being 0.0223 and the contract size being USD 125,000, this means we would collect USD 2787.5 in premium, which would either add to the profit or subtract from risk. Step 3: Managing the Trade Monitoring Market Movements: Keep a vigilant eye on market trends and Euro Futures price movements. Be prepared to adjust your strategy in response to significant changes. Adjustment Strategies: If the market moves unfavorably, consider rolling out the option to a further expiration date or adjusting the strike price to manage risk effectively. Case Study: A Voyage on Euro Seas Let's illustrate this strategy with a hypothetical trader, Elena. Elena holds a long position in Euro Futures, expecting slight bullish momentum in the upcoming months. To capitalize on this and earn additional income, she sells call options with a strike price slightly above the current futures price, receiving an upfront premium. As the market progresses, two scenarios unfold: Bullish Outcome: The Euro strengthens, but not enough to reach the strike price. Elena retains her futures position, benefits from its appreciation, and keeps the premium from the call options. Bearish Downturn: The Euro weakens. The premium received provides a cushion against the loss in her futures position's value, mitigating her overall risk. Risk Management: Navigating Through Storms Implementing covered calls doesn't eliminate risk but redistributes it. Effective risk management is crucial: Use of Stop-Loss Orders: These can limit potential losses on the futures position if the market moves against your expectations. Position Sizing: Ensure your position size in Euro Futures aligns with your overall risk management strategy, avoiding overexposure to a single trade. Diversification: Consider diversifying your strategies and holdings beyond just Euro Futures and covered calls to mitigate systemic risks. Conclusion: Docking at Safe Harbors The covered call strategy, when applied to Euro Futures, offers traders an efficient way to navigate the forex futures market. By generating income through premiums and potentially benefiting from futures price movements, traders can strategically position themselves in varying market conditions. However, the journey doesn't end here. Continuous learning, market analysis, and strategy adjustments are paramount to sailing successfully in the dynamic waters of futures trading. As with all trading strategies, the covered call approach requires a balance of knowledge, risk management, and practical experience to master. Embarking on this voyage with Euro Futures and covered calls can lead to rewarding destinations, provided you navigate with caution, preparation, and an eye towards the horizon of market opportunities and challenges. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CME:6E1!Education
by traddictiv
2
a weekly priceaction market recap and outlook - eur/usdGood evening and i hope you are well. Starting today i will do weekly fx recaps/outlooks for the 3 following currencies: EUR/USD, USD/JPY, GPB/USD (will only post 1 of the 3 here on tradingview). eur/usd Let’s start off with a monthly time frame. Market is in a multi decade bear trend and struggling to find a bottom. Was the 202209 low below 1 the true bottom? No idea and nor has someone else. What we do know is, market pulled back more than 50% of it and is ranging right around that level for many months now. Since markets continue to do what they have been doing, the high probability trades are betting on a continuation of the range between 1.058 and 1.105 on a daily/weekly. On the monthly the range is 1.06 to 1.22 (orange dotted lines). bull case: Bulls see the market oscillating around the monthly 20ema for a year now and since market are trading below, they want back above and first target is to retest the 50% pullback price around 1.097 and then the small bear trend line around 1.1 to 1.105. They bought at the 2023-12 lows and their first target now is trading above 1.1084 and making higher highs again. bear case: Bears see 3 clear pushes on the weekly tf for the bulls from the 2023-10 low to the 2023-12 high. They want their 3 pushes down to retest the 2023-10 lows now and one could argue, that they already had 2. We are probably working on a pullback currently and then market decides if bears get a third one below 1.06 or not. outlook last week: “sideways to up. i can’t see bears strong enough for a breakout of the triangle. odds favor the bulls to form a lower high (to around 1.1) inside the triangle which would form a good looking head & shoulders pattern.“ → Last Monday we traded 1.0785 and now we are at 1.0793. Does not get better than that. Hope you faded moves. short term: sideways to up (very small up) - bulls probably get a bounce and then market decides for a third bear leg or up again to 1. target 1.097 medium-long term: sideways inside 1.058 and 1.105
CME_MINI:M6E1!Long
by priceactiontds
Euro FX Futures Breach Support A rallying USD is putting ample pressure on Euro futures. Now that we’ve broken trendline support, it appears that we’re in the midst of a steeper correction. How low can the contract go? Technical Outlook : Euro futures trended higher for the duration of Q4 last year, with trendline support dating back to November first. Weakness in the USD, and favorable economic data through that period helped propel the contract higher. However, now that the USD has turned higher, we saw Euro futures breach that support line. Looking at RSI, we are still firmly entrenched in no-man's land, with RSI reading approximately 41. In other words, it would appear that we have ample selling pressure yet to materialize. If we see a continuation in strength in the USD, the concurrent weakness in the Euro could see the lows from early November tested over the course of the next 6-8 weeks. Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: 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 *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. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CME:6E1!Short
by Blue_Line_Futures
6E 5 Minute Trade Review & Second Entry Opportunity Preview On the 15-minute, I identified a range and a HWB (Half Way Back) that had the potential to hit both the bottom of the range and the profit target. There is also a wedge that has formed. The daily is also at the bottom of a channel and triggered HWB 8 days ago. The only issue on the daily is that there is a lot of choppiness since reaching that HWB. Entered a H2 after profit takers and buyers came in strong on the 5 minute. Second entry will be at the HWB
CME:6E1!Long
by JoeRodTrades
EURO Futures (EURUSD) Weekly Outlook... BULLISH1. Daily Swing structure is bearish, after this clear break of market structure. 2. The internal structure is bullish, as price pulls back into premium. The reaction to supply is significant. It potentially indicates the end of the retracement, and price now seeking external LQ at the swing low. 3. I am monitoring the FVG above closely. Should price trade through it, it would indicate price has bearish momentum, and strengthening the idea that the pullback is over. Should this bullish PD Array hold, price could potentially make a HH, and head to the premium old high.
CME_MINI:M6E1!Long
by RT_Money
Will dollar strength affect market correction?If you would like to be notified whenever I post a new article, just click "FOLLOW" at the top. Also, if you would like to elaborate on a particular topic or need some advice, please comment below the article and I will be happy to help. Will dollar strength affect market correction? On Tuesday, the dollar index rose to 102 after a period of growth. Investors are in a wait-and-see mood in anticipation of the U.S. inflation data to be released this week, as it could influence Federal Reserve policy. According to the New York Fed's latest survey, consumer expectations for short-term inflation in the United States fell in December to the lowest level in three years. However, last week's economic data showed that the U.S. economy created an impressive 216,000 jobs in December, exceeding forecasts of 170,000. This shows the resilience of the labor market despite tighter financial conditions. In our analysis today we will examine the forecast for the dollar and how markets might react to its possible strength in the coming months. While many expect a weak dollar, I have a different view. The focus this week is on inflation data, which are closely monitored by the Fed. Based on the December employment and unemployment rate data, we saw an increase in jobs and wages. This makes the inflation data announced on Thursday even more relevant. I am confident that we will see a surprise in Thursday's data, and I think inflation will be down less than expected. Meanwhile, markets have lowered expectations for an interest rate cut by the Fed in March to 64 percent. Given that the probability was 90% just last week, we can conclude that the market has reduced its risk appetite. This trend has also led to an increase in demand for dollars. In the first quarter of this year, I expect the dollar to remain strong. Recent macroeconomic data are positive, and even in the event of a decline in inflation, this outcome has already been taken into account. With the dollar rising strongly, it would be unwise to invest in natural gas and opt instead for a medium-term trade in EUR/USD. Also, it is best to avoid investing in Bitcoin as the news of ETF approval has already been included in prices and seasonality during halving years is not favorable. As for the NASDAQ, which is greatly influenced by the dollar, I expect a healthy correction in the first quarter. To take full advantage of the dollar's strength, the best instrument is EUR/USD. Inflation in Europe is falling rapidly, and macroeconomic data are extremely negative. In December, inflation in the euro area reached 2.9 percent, slightly below expectations of 3 percent. The increase was mainly influenced by energy-related factors. At the same time, we saw an expected cooling of the core rate to 3.4 percent, the lowest since March last year. My bearish thesis goes against the thinking of other analysts. In my opinion, the ECB will be the first to cut interest rates rather than the Fed, which will lead to the EUR/USD exchange rate falling to 1.07 in the coming quarters. Although the technical analysis shows a positive trend, violation of the key level of 1.09 (corresponding to the EMA 100) could lead to a new bearish trend.
CME:6E1!Short
by Antonio_Ferlito
Euro to propel on relapsing EU inflation & US jobs dataFighting inflation is hard. Hence, central banks are data dependent while calibrating rates. Continuing geopolitical conflicts puts Europe at risk of inflation relapse. Headline numbers can be misleading. Central bankers will dig deep. Deeper analysis will compel investors and policy makers to rethink and recalibrate interest rate calculus. This paper unpacks US jobs & Euro area inflation report, and market expectations of rates ahead. UNPACKING US NON-FARM PAYROLL DATA The US labour market added 216k jobs in December 2023 surpassing expectations. It was up 25% month-on-month. Headline numbers look healthy. Details spell trouble. Payroll data was revised lower by 71k for October and November. Average work week contracted, and participation rate declined. Jobs growth is concentrated in three sectors, namely, Government, Education/healthcare, and Leisure/Hospitality. Eighty percent of the jobs added are from sectors that are not considered growth engines. Three key takeaways from jobs report: 1. Employment growth remains robust: Month-on-Month employment trends point to jobs growth in government, leisure and hospitality, health care, social assistance, and construction, while transportation and warehousing lost jobs. On a 12-month seasonally adjusted basis, apart from (a) Transportation & Warehousing and (b) Information, rest of the sectors added jobs. Source: BLS 2. Hourly Wage Earnings growth is strong: In December, average hourly earnings on private payrolls jumped by fifteen cents, or 0.4%, to USD 34.27/hour. Average hourly earnings have increased by 4.1% over the last year. Source: BLS 3. Unemployment Remains Unchanged: Unemployment rate was unchanged at 3.7% (3.5% last year this time) with number of unemployed persons unchanged at 6.3 million (5.7 million last year this time). COMPREHENDING EUROZONE INFLATION NUMBERS Euro area inflation rose 2.9% YoY in December 2023, reversing a two-year low (2.4%) observed in November. Eurostat inflation estimates was marginally below the market consensus of 3%. Inflation uptick since April 2023 was primarily due to energy-related base effects. Energy prices declined 6.7% while services inflation was flat. Core inflation, excluding food and energy prices, softened to 3.4%. Core inflation is at its lowest point since March 2022. MARKET EXPECTATIONS OF RATE CUTS Investors are betting that the US Fed and the ECB will cut rates six times this year. First rate cut is expected in March or April. Market expectations are in sharp contrast to policymakers. The US Fed expects to make three quarter-point cuts this year. The ECB has stood its ground arguing that the inflation fight is not over yet. Amid strong economic data, probability of Fed rate cuts in March has fallen from 100% to 70%. Source: CME Fedwatch Tool EUR-USD WITNESSED WILD MOVES ON INFLATION, JOBS, AND SERVICES DATA BUT SETTLED WHERE IT OPENED Last Friday news flow impacting FX rates were strong. Front month EUR-USD futures traded wildly opening at 1.0977 reaching a high of 1.1030 and then plunging to a low of 1.0908 before closing at 1.0977. December US ISM Services PMI unexpectedly fell to 50.6, the lowest reading in seven months, compared to 52.7 in November. Services industry is critical accounting for more than two-thirds of the US economy. Euro fell 0.5% last week, marking its largest weekly drop since early December breaking three consecutive weeks of strengthening. The EUR-USD is hovering at its support levels with the 50d DMA likely to print a golden cross with the 200d DMA. Near term technical signals point to strengthening of the Euro versus the US dollar. Momentum favours Euro while price reversion risk remains neutral. Diverging macroeconomic conditions leaves Eurozone exposed to higher risk of inflation relapse. The ECB is expected to be slower with rate cuts relative to the Fed. In anticipation, leveraged funds are starting to sharply reduce their net short positions in the CME EUR/USD futures. Source: CME QuikStrike HYPOTHETICAL TRADE SETUP Europe is at greater risk of inflation relapse on continuing geopolitical risks in Russia-Ukraine and the middle east. Energy and goods inflation relapse will force the ECB to defer its rate cuts. Size of the rate cuts, if any, is also likely to be smaller at the ECB relative to the Fed. This will strengthen the Euro against the USD in the near term. To harvest gains from a strengthening Euro, this paper posits a hypothetical long position in CME Micro EUR/USD Futures expiring in March 2024 (M6EH2024) with an entry at 1.0979 combined with a target at 1.1123 and hedged by a stop at 1.0871, delivering an expected reward-to-risk ratio of 1.33x. Each lot of CME Micro Euro Futures contract provides exposure to 12,500 Euros. It is quoted in USD per Euro increment. Each pip i.e., 0.0001 per Euro delivers a P&L of USD 1.25. • Entry: 1.0979 • Target: 1.1123 • Stop: 1.0871 • Profit at Target (hypothetical): USD 180 (= 0.0144; 144 pips; 144 x 1.25 = 180) • Loss at Stop (hypothetical): USD 135 (= -0.0108; -108 pips; -108 x 1.25 = -135) • Reward-to-Risk (hypothetical): 1.33x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CME_MINI:M6E1!Long
by mintdotfinance