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The ultimate guide on Elliott waves in crypto tradingMost of you have probably heard about Elliott waves and we are sure that you don’t use it in cryptocurrency trading strategy because it’s very complicated and subjective approach. Crypto trading for beginners is very challenging and stressful even without Elliott waves. To be honest when we first time tried to implement it to my crypto trading strategies it was a complete disappointment. We were sure that it does not suit for both trading bot and manual trades. Elliott waves were thrown into a garbage bin for almost two years and we developed our crypto trading algorithm using only linear programming approaches. While we have been trying to invent the best automated trading bot using only indicators and support and resistance levels, best crypto traders have been successfully using Elliott waves in their analysis. Finally we make a decision to have a deep dive in this popular crypto trading tool and studied in details all available literature. As a result we found that Elliott waves will ruin your trading if you use it without special indicators for confirmation. Now we have 2 years of experience in trading with waves and almost one year ago we implemented them into our algorithmic trading bot. Today we prepared the best ultimate guide ever on Elliott waves using best practices and our unique experience how to use them in developing your own profitable crypto trading strategies. Let’s go! Why it’s vital to use Elliott waves? Before answer this question, let me ask another one! Why is important to use map to reach the final destination? I think here is the obvious answer! Talking about Elliott waves it’s almost the same reason. This is the only one approach which gives you a map for a price chart. I think you agree that technical indicators or support and resistance levels will not give you the answer which direction the price will choose. When you have, for example Stochastic Oscillator crossover or RSI oversold area hit you just open long because this is the most common strategy. You buy asset like a blind kitten. We are not criticize this approach, because using proper risk and money management you will earn with almost every strategy, but understanding the Elliott waves concept will dramatically increase your profit even if you combine them with your ordinary strategy. Why it’s happening? The answer is easy, because Elliott waves in the underlying structure of the market. You will be aware when you shall use your signals and when it’s better to skip trade. Now let’s dive into the Elliott waves to understand how to find them on the price chart. In the first part we will give you all needed theory and after that we will show in the real charts how it works. Elliott waves In general, Elliott waves concept is pretty easy. All markets are globally moving up with the five waves formations and then show the pullback with at the reactive waves. On the Bitcoin price chart above you can see the most common picture for Elliott waves. We had the bull run which consists of five waves and then was the bear market represented with the ABC correction. Waves can be divided into two groups: impulsive and reactive. On the bullish phase waves 1, 3 and 5 are impulsive, 2 and 4 reactive. Impulsive waves consists also with five sub waves, while reactive have usually three waves (exception the triangle correction, will be covered later). On the bearish phase we have the opposite situation: waves A and C are impulsive, while wave B is reactive. Now let’s discuss each wave in details. What will stop every wave in 90% of cases? Before we will observe the wave it’s very important to understand what are the early signs that current wave is about to be finished. This is really crucial concept because without it almost impossible to use Elliott waves for profitable trading. We need four tools to make sure that our counting is correct. In this article we will not spend to much time for these indicators, we just show you in practice how to use them. These tools are: Awesome Oscillator, Market Facilitation Index (MFI), Fibonacci retracement and extension and Fractals. These four indicators produce five wave’s end conditions. Divergence with Awesome Oscillator. If you found five sub waves inside any wave and you can see that price set the higher high (or lower low for bearish case), while AO set lower high (or higher low) it’s divergence between wave 3 and 5. This is the most powerful signal that trend is over. Fractal at the top or bottom. When you see the divergence it’s just the first sign of trend weakness, we need confirmation with the fractal forming at the top or bottom. You can easily find this indicator in TradingView, it will show you all fractals. MFI squat bar. We will cover MFI in one of the next educational articles, now you just need to know that it has squat state - the last battle between bulls and bears. One of the three top bars will be the squat in 80% of waves end. You can also find this indicator in TradingView. AO momentum change. Another one confirmation that trend is over is when AO histogram changes color. It’s better to wait three consecutive columns of the other color or when AO will cross back the signal line, 5 period MA of the AO. Target area. Using Fibonacci extension and retracement we can find the area where the reversal is the most likely. We will show you this targets when talking about waves. Now you know the five basic rules and we are ready to discuss every wave using this concept. Wave 1 When the previous trend is over the impulsive wave 1 begins. We can define the wave 1 start only establishing the previous wave end. It could be wave 5, C or E. It does not matter. You just need to apply our five rules: divergence, momentum change, target area, squat bar and fractal. On the chart you can see how in theory wave 1 can be looks like. Wave 1 always consists of five waves. That’s why we can wait for the same five rules to complete between wave 3 and 5 inside the wave 1. When you anticipate the wave 1 finish you have two options: close trade and re-enter at the wave 2 bottom or hold for the entire cycle. Wave 2 When wave 1 ends, you will see pull back in wave 2. It’s important to catch wave 2 bottom because wave 3 will bring you a lot of profit. Wave 2 can be classical ABC zigzag, flat or irregular correction. 70% probability it will be ended inside 0.38 and 0.62 Fibonacci retracement range of wave 1, in rare cases it can ends higher or lower. That’s why it’s better t count waves inside wave 2 and do not miss when all five trend killing conditions are met in wave C inside 2. Wave 3 The most impulsive wave in the entire cycle is obligatory for trading. Here you can have the less risky and the most easy trading. Wave 3 has the great fundamental factors as a price drivers. For example, Bitcoin spot ETF triggered a huge pump recently. Let’s imagine you correctly entered at the wave 2 end. Now we have to define wave 3 targets. The target area using fibonacci extension can be found between 1 and 1.61. This is the most likely case. In crypto it’s very often when waves 3 are extended. To have the most precise target it’s highly recommended to count waves inside wave 3. Found five waves? Check our favorite trend killing rules to exit a trade at the top. We know it sounds fantastic, but we managed to buy the exact bottom and sell at the top many times, but to be honest, we have never caught the top of the extended wave 3. Need more experience for that. Wave 4 Wave 4 can be the most complicated because it has a lot of different variants: zigzag, flat, irregular or even triangle. But at the same time in wave 4 we can have the easiest setup. When you predicted wave 3 top, it’s time to setup the target for the wave 4. The most reliable one is between 0.38 and 0.5. This wave is not so rapid as wave 2 and takes much more time (up to 70% of all cycle). The very important tip here is to look at the price where wave 4 inside wave 3 has been ended. If this level coincides with the 0.38-0.5 zone it can give you much more confidence. We have never made a mistake using this technique. As usual you have to look for the five trend killing rules in wave C inside wave 4 as well. Another one thing we want to point out. You know the axiom, that wave 4 has not overlap wave 1 top. This rule can be slightly violated and we will show you the case. Don’t pay attention that much to this rule. Wave 5 Finally we are in wave 5. This is really vital to define it’s top because bear market will follow this wave and can destroy your deposits. The target area for the wave 5 is defined as the distance between wave 1 bottom and wave 3 top, measured from wave 4 bottom. Area between 0.61 of this distance and 1 Fibonacci level is our target. There you have to find trend killing rules as usual but this time for all cycle, not subwaves. Corrections The most dangerous place for trading is the correction. From our experience only wave C in zigzag is tradable. You would better to skip corrections and try to catch it’s end. We have four types of corrections, but the most important knowledges is that wave C and E are always consists of five waves. It means you can use the rules how to catch wave 5 end inside these waves. Zigzag ABC. If wave A consists of 5 waves the most like we will see zigzag. Wait when wave B reach 0.5-0.61 Fibonacci of wave A and be ready to trade in wave C. Flat. Wave A has 5 waves inside. Waves A, B and C are almost equal to each other. Irregular. Wave B top is higher that the previous impulsive wave. Wave A consists of 3 waves. Triangle. Consists of A, B, C, D and E waves. Wave E consists of five waves. Usually occurs inside waves 4 and B of higher degree. Now you have a theoretical description. It’s time to trade!
Education
by Skyrexio
19
Trading Diverging Chart PatternsContinuing our discussion on trading chart patterns, this is our next tutorial after Trading Converging Chart Patterns This tutorial is based on our earlier articles on pattern identification and classification. Algorithmic Identification of Chart Patterns Flag and Pennant Chart Patterns In this tutorial, we concentrate on diverging patterns and how to define rules to trade them systematically. The diverging patterns discussed in this tutorial are: Rising Wedge (Diverging Type) Falling Wedge (Diverging Type) Diverging Triangle Rising Triangle (Diverging Type) Falling Triangle (Diverging Type) 🎲 Historical Bias and General Perception Before we look into our method of systematic trading of patterns, let's have a glance at the general bias of trading diverging patterns. 🟡 The Dynamics of Diverging Wedge Patterns Diverging Wedge patterns are typically indicative of the Elliott Wave Structure's diagonal waves, potentially marking the ending diagonal waves. That means that the patterns may signal the ending of a long term trend. Hence, the diverging rising wedge is considered as bearish, whereas the diverging falling wedge is considered as bullish when it falls under Wave 5 of an impulse or Wave C of a zigzag or flat. For an in-depth exploration, refer to our detailed analysis in Decoding Wedge Patterns Both rising wedge and falling wedge of expanding type offers lower risk reward (High risk and low reward) in short term as the expanding nature of the pattern will lead to wider stop loss. 🎯 Rising Wedge (Expanding Type) Expanding Rising Wedge pattern is historically viewed with bearish bias. 🎯 Falling Wedge (Expanding Type) Expanding Falling Wedge pattern is historically viewed with bullish bias. 🟡 The Dynamics of Diverging Triangle Patterns Diverging pattern in general means increased volatility. Increased volatility during the strong trends also mean reducing confidence that may signal reversal. 🎲 Alternate Approach towards trading diverging patterns Lack of back testing data combined with subjectivity in Elliott wave interpretation and pattern interpretation makes it difficult to rely on the traditional approach. The alternative method involves treating all expanding patterns equally and define a systematic trading approach. This involves. When the pattern is formed, define a breakout zone. One side of the breakout zone will act as breakout point and the other side will act as reversal point. Depending on the breakout or reversal, trade direction is identified. Define the rules for entry, stop, target and invalidation range for both directions. This can be based on specific fib ratio based on pattern size. Backtest and Forward test the strategy and collect data with respect to win ratio, risk reward and profit factor to understand the profitability of patterns and the methodology. Breaking it down further. 🟡 Defining The Pattern Trade Conditions Base can be calculated in the following ways. Distance between max and min points of the pattern. (Vertical size of the pattern) Last zigzag swing of the pattern (This is generally the largest zigzag swing of the pattern due to its expanding nature) This Base is used for calculation of other criteria. 🎯 Breakout Zone - Entry Points Breakout zone can be calculated based on the following. Long Entry (top) = Last Pivot + Base * (Entry Ratio) Short Entry (bottom) = Last Pivot - Base * (Entry Ratio) If the direction of the last zigzag swing is downwards, then top will form the reversal confirmation and bottom will form the breakout confirmation. Similarly, if the direction of the last zigzag swing is upwards, then top will become the breakout confirmation point and bottom will act as reversal confirmation point. 🎯 Stops Long entry can act as stop for short and vice versa. However, we can also apply different rule for calculation of stop - this includes using different fib ratio for stop calculation in the reverse direction. Example. Long Stop = Last Pivot - Base * (Stop Ratio) Short Stop = Last Pivot + Base * (Entry Ratio) 🎯 Invalidation Invalidation price is a level where the trade direction for a particular pattern needs to be ignored or invalidated. Invalidation price can be calculated based on specific fib ratios. It is recommended to use wider invalidation range. This is to protect ignoring the potential trades due to volatility. Long Invalidation Price = Last Pivot - Base * (Invalidation Ratio) Short Invalidation Price = Last Pivot + Base * (Invalidation Ratio) 🎯 Targets Targets can either be set based on fib ratios, as explained for other parameters. However, the better way to set targets is based on expected risk reward. Target Price = Entry + (Entry-Stop) X Risk Reward 🟡 Back Test and Forward Test and Measure the Profit Factor It is important to perform sufficient testing to understand the profitability of the strategy before using them on the live trades. Use multiple timeframes and symbols to perform a series of back tests and forward tests, and collect as much data as possible on the historical outcomes of the strategy. Profit Factor of the strategy can be calculated by using a simple formula Profit Factor = (Wins/Losses) X Risk Reward 🟡 Use Filters and Different Combinations Filters will help us in filtering out noise and trade only the selective patterns. The filters can include a simple logic such as trade long only if price is above 200 SMA and trade short only if price is below 200 SMA. Or it can be as complex as looking into the divergence signals or other complex variables.
NASDAQ:TSLAEducation
by Trendoscope
7
How Does Recession Affect Financial Markets?How Does Recession Affect Financial Markets? Recessions, marked by widespread economic decline, profoundly impact financial markets. Understanding how different markets – stock, forex, commodity, and bond – respond to these downturns is crucial for traders and investors. This article delves into the varied effects of recessions, highlighting strategies for navigating these challenging times and identifying potential opportunities for resilience and growth in the face of economic adversity. Understanding Recessions A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale retail sales. Economic experts often cite two consecutive quarters of GDP contraction as a technical indicator of a recession. However, it's more than just numbers; it reflects a noticeable slump in economic activities and consumer confidence. Historically, recessions have been triggered by various factors, such as sudden economic shocks, financial crises, or bursting asset bubbles. For instance, the Global Financial Crisis of 2007-2008 stemmed from the collapse of the housing market bubble in the United States, leading to a worldwide economic downturn. Recession impacts nearly every corner of the economy, leading to increased unemployment, reduced consumer spending, and overall economic stagnation. Effects of Recession on Different Financial Markets A recession's impact on financial markets is multifaceted, influencing everything from stocks and bonds to forex and commodities. However, each market reacts differently. To see how these various asset classes have reacted in past recessions, head over to FXOpen’s free TickTrader platform to access real-time market charts. General Impact on Markets During a recession, the financial landscape typically undergoes significant changes. Investors, wary of uncertainty, often reassess their risk tolerance, leading to shifts in asset allocation. Market volatility usually spikes as news and economic indicators sway investor sentiment. This period is often marked by cautious trading and a search for safer investment havens. Impact on Stock Markets Stock market performance in a recession can be quite varied. Generally, stock markets are among the first to react to signs of a recession. Prices may fall as investors anticipate lower earnings and weaker economic growth. This decline is not uniform across all sectors, however. Some industries, like technology or luxury goods, might experience steeper drops due to reduced consumer spending. Conversely, sectors like utilities or consumer staples often include stocks that do well during a recession, as they provide essential services that remain in demand. Impact on Forex Markets In forex, recessions often lead to significant currency fluctuations. Investors might flock to so-called safe currencies like the US dollar or Swiss franc, while currencies from countries heavily affected by the recession weaken. Central bank policies, such as interest rate cuts or quantitative easing, play a crucial role in currency valuation during these times. Impact on Commodities Commodities can react differently in a recession. While demand for industrial commodities like oil or steel may decline due to reduced industrial activity, precious metals like gold often see increased interest as so-called safe-haven assets. Impact on Bonds Bond markets usually experience a surge in demand during recessions, particularly government bonds, seen as low-risk investments. As investors seek stability, bond prices typically rise, and yields fall, reflecting the increased demand and decreased risk appetite. Types of Stocks That Perform Well During a Recession During economic downturns, certain stock categories have historically outperformed others. The stocks that go up in a recession generally belong to sectors that provide essential services or goods that remain in demand regardless of the economic climate. Consumer Staples: Companies in this sector, offering essential products like food, beverages, and household items, may appreciate during a recession. As these are necessities, demand usually remains stable even when discretionary spending declines. Healthcare: Healthcare stocks often hold steady or grow during recessions. The demand for medical services and products is less sensitive to economic fluctuations, making this sector a potential safe haven for investors. Utilities: Utility companies typically offer stable dividends and consistent demand. Regardless of economic conditions, consumers need water, gas, and electricity, providing these stocks with a buffer against recessionary pressures. Discount Retailers: Retailers that offer essential goods at lower prices can see an uptick in business as consumers become more budget-conscious during tough economic times. Types of Stocks to Hold in a Recession While there are some stocks that perform well in a recession due to sustained demand for their products, there are other types of stocks that are valued for their financial resilience and potential to provide long-term stability. Blue-Chip Stocks: These are shares of large, well-established companies known for their financial stability and strong track records. During recessions, their history of enduring tough economic times and providing dividends makes them attractive. Value Stocks: Stocks that are undervalued compared to their intrinsic worth can be good picks. They often have strong fundamentals and are priced below their perceived true value, with the potential to rebound strongly as the economy recovers. Non-Cyclical Stocks: These stocks are in industries whose services or products are always needed, like waste management or funeral services. Their demand doesn’t fluctuate significantly with the economy, which may offer stability. The Role of Government and Central Banks During Recessions During recessions, governments and central banks play a crucial role in stabilising financial markets. Government interventions often include fiscal policies like increased spending and tax cuts to stimulate the economy. Central banks may reduce interest rates or implement quantitative easing to increase liquidity in the financial system. These actions can bolster investor confidence, stabilise markets, and encourage lending and spending. However, their effectiveness can vary based on the recession's severity and the timeliness of the response. The Bottom Line Navigating recessions requires understanding their multifaceted impact on financial markets. From stocks and bonds to forex and commodities, each sector reacts uniquely, offering both challenges and opportunities. To take advantage of the various opportunities a recession presents, opening an FXOpen account can be a strategic step. We provide access to a broad range of markets and trading tools designed to help traders adapt to a shifting economic landscape. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:XAUUSDEducation
by FXOpen
6
How To Grow A Forex or Crypto Acc Scalping A 5m Time FrameIn this video, we delve into a high-probability scalping strategy, building upon the concepts introduced in our previous videos on developing a trading plan and risk management. This third installment in the series focuses on refining entry points for high-probability trades. We explore a basic trend continuation strategy on the 4-hour time frame, then zoom in on the 5-minute time frame to identify specific price action that provides a precise entry point. Our approach involves identifying when price action begins to trade sideways, forming a range on the 5m time frame, and waiting for signs of volatility, where price takes out stop losses above or below the range. Once this occurs, the trend typically sets up on the lower time frame, allowing us to enter our trade on the 5-minute chart. We always place stops above or below the previous high, targeting the previous price swing. Please note that this video is for educational purposes only and should not be construed as financial advice.
Education
by fxtraderanthony
10
Meta Shares Decline 15% Despite Strong Earnings reportTech Giants Experience Significant Decline, Erasing $300 Billion Amid Meta's Weak Guidance and Q1 Stagflation Concerns During a volatile trading session, the combined market capitalization of the top seven tech companies experienced a sharp decline exceeding $300 billion within the first hour of trading on Thursday. This downturn was primarily triggered by Meta Platforms Inc.'s ( NASDAQ:META ) announcement of a revenue outlook for the upcoming quarter that fell short of market expectations, alongside apprehensions stemming from the release of first-quarter gross domestic product data. Key Developments: Meta Platforms NASDAQ:META exceeded analyst forecasts by reporting first-quarter revenue of $36.45 billion, marking a notable 27% increase year-over-year. Additionally, earnings per share reached $4.71, surpassing the anticipated figure of $4.32. However, investor sentiment soured following Meta's issuance of a cautious guidance for the next quarter, leading to a retreat in the company's stock price. The Roundhill Magnificent Seven ETF NASDAQ:MAGS fell 3%. Treasury yields, especially for the two-year note, have risen above 5%, indicating increasing investor concern about inflation and its possible impact on future Federal Reserve decisions. This concern led to a widespread sell-off in the bond market, with notable declines in long-term treasury ETFs, including the iShares 20+ Year Treasury Bond ETF ( NASDAQ:TLT ), which fell by 0.8%. Meta Shares Decline 15% Despite Strong Earnings Report Meta reported robust earnings that surpassed both consensus and whisper estimates. Despite these strong results, Meta's stock experienced a 15% decline. This downturn is commonly attributed to substantial investments in AI technology and remarks by CEO Mark Zuckerberg regarding the non-immediate profitability of these expenditures. While momentum-driven analysts might overlook this, seasoned analysts are aware that returns on AI investments will not be immediate. Key Reasons for Meta's Stock Decline Ahead of Meta's earnings announcement, Wall Street's positioning was overwhelmingly positive. This positioning often leads to contrary market movements. Understanding this Wall Street dynamic is crucial for maximizing returns from the market. Due to their significant implications, these mechanics are often closely guarded by financial professionals. Impact of Other Notable Earnings on Market Sentiment: IBM Common Stock: NYSE:IBM Prior to its earnings report, there was significant anticipation around IBM due to its AI initiatives. However, the earnings fell short of whisper numbers, leading to a roughly 10% drop in its stock price. It is worth noting that The Arora Report capitalized on this by taking a short position, securing profits shortly thereafter. Caterpillar Inc. : NYSE:CAT Reported earnings that were below expectations. Merck & Co Inc: NYSE:MRK Surpassed whisper numbers with its earnings report. Market Reactions to Recent Economic Indicators: The latest auction of $70 billion in five-year Treasuries saw weaker demand, though it is not indicative of a larger economic issue: High yield: 4.659% (When-Issued: 4.655%) Bid-to-cover ratio: 2.39 Indirect bids: 65.7% Direct bids: 19.2% Momo Crowd And Smart Money In Stocks The momo crowd is buying stocks in the early trade. Smart money is selling stocks in the early trade. In gold trading, the momentum crowd exhibited volatile behavior, while the smart money remained inactive. The SPDR Gold Trust ( AMEX:GLD ) remains the most popular gold ETF, and the iShares Silver Trust ( AMEX:SLV ) for silver. Similar patterns were observed in the oil market, with volatile trading by the momentum crowd and inactivity from the smart money. The primary ETF for oil is the United States Oil ETF. For further details on long-term ratings, please refer to our comprehensive reports on gold, silver, and oil markets.
NASDAQ:META
by SroshMayi
18
The profitability of TA trading rules in the Bitcoin market█  The profitability of technical trading rules in the Bitcoin market The Bitcoin market, known for its wild fluctuations, poses a unique challenge for traders: Is it possible to consistently profit using technical trading rules? Recent research analyzing Bitcoin's price data from July 2010 to January 2019 has shed light on this question, focusing on the effectiveness of seven trend-following indicators. The research was conducted by Gerritsen et al. Notably, the trading range breakout rule emerged as a promising strategy, often outperforming the traditional buy-and-hold approach. █  Some Background into the Bitcoin Market Bitcoin's price path suggests market inefficiency, likely due to its short history and the erratic behaviors of market participants. Previous studies on Bitcoin's efficiency mainly focused on its predictability from a random walk perspective, leaving the performance of technical trading rules on Bitcoin prices largely unexplored. The core aim of this study is to examine the profitability of technical trading rules, specifically to determine if these rules can surpass a basic buy-and-hold strategy. By applying seven well-documented trading rules and analyzing their performance through the Sharpe ratio, the study seeks to provide practical insights for Bitcoin traders. █  Methodology The study uses daily price data from July 17, 2010, to December 31, 2018, totaling 3,084 daily observations. Gerritsen and team removed a brief period in 2011 due to a Mt. Gox hack and integrated data from Coinmarketcap starting April 28, 2013. The research also considers the risk-free rate, using 3-month US Treasury bill returns for its analysis. █  Trading Rules Analyzed 1. Moving Averages (MA): This strategy issues buy signals when the recent price or its short-term average exceeds a longer-term average and sell signals in the opposite scenario. It tested combinations like 1-day vs. 50-day, 2-day vs 150-day, and 5-day vs 200-day averages. 2. Trading Range Breakout (TRB): It looks for price breakouts beyond the highest and lowest prices of a predefined period (50, 150, 200 days), signaling buys for breakouts above the high and sells below the low. 3. Moving Average Convergence Divergence (MACD): The MACD rule uses two exponential moving averages (EMAs), and triggers buy signals when the MACD line (the difference between a 12-day and a 26-day EMA) is above zero, and sell signals when it is below zero. It also examines the MACD signal line and MACD histogram as additional signals. 4. Rate of Change (ROC): This rule compares the current price with the price n days ago (commonly 10 days) to determine market momentum and issue buy/sell signals. The rule suggests buying when the ROC is positive, indicating upward momentum, and selling when it is negative, indicating downward momentum. 5. On-Balance-Volume (OBV): This volume-based indicator predicts price movements based on volume flow, asserting that volume changes precede price changes. The study applied MA rules to the OBV to generate signals, buying when the short-term MA of OBV crosses the long-term MA from below, and selling when it crosses from above. 6. Relative Strength Index (RSI): A momentum oscillator that identifies overbought or oversold conditions, suggesting buy signals when below 30 and sell signals above 70. 7. Bollinger Bands (BB): This strategy uses a moving average with upper and lower bands based on standard deviations from the MA, issuing buy signals when the price touches the lower band and sell signals at the upper band. █  Strategies and Evaluation The study applied each trading rule in three distinct strategies: Literal Interpretation: Buying or selling Bitcoin directly based on the signal, including short positions. Long Positions Only: Considering only buy signals due to the practical challenges of shorting Bitcoin on many exchanges. Default Long Position with Adjustment on Signals: Maintaining a default long position, doubling investment on buy signals, and moving to risk-free assets on sell signals. The performance of these strategies was evaluated using the Sharpe ratio, comparing the excess returns of the trading strategies over the risk-free rate to their volatility. A higher Sharpe ratio indicates a more efficient risk-adjusted return. The study used bootstrapping to assess the statistical significance of the Sharpe ratio differences between each trading rule strategy and a benchmark buy-and-hold strategy. █  Key Findings The study finds mixed results across different technical trading strategies when applied to Bitcoin. Notably, the trading range breakout (TRB) rule consistently offers higher Sharpe ratios than a buy-and-hold strategy, signifying its superior performance. On average, TRB strategies yield a Sharpe ratio of around 0.08, marking them as statistically significant against the buy-and-hold benchmark. This rule's success is further highlighted in specific periods, such as 2011–2012, 2013–2014, and 2017–2018, where its Sharpe ratios were notably higher than those of the buy-and-hold approach. The significant outperformance in these periods underscores the TRB rule's adaptability to market dynamics. While most other technical trading rules did not consistently outperform the buy-and-hold strategy, certain strategies like MACD showed significant outperformance in specific applications (Strategy 2), illustrating the nuanced effectiveness of technical trading rules in the Bitcoin market. Counter-trend indicators, such as the Relative Strength Index and Bollinger Bands, generally underperformed compared to the buy-and-hold benchmark, sometimes yielding negative Sharpe ratios. █  Sensitivity to Market Conditions The effectiveness of the TRB strategy, in particular, seems to be highly dependent on the prevailing market conditions. During periods of strong trends (either bull or bear markets), the TRB rule demonstrated notable outperformance. However, during more stable periods, like 2015–2016, the TRB rule and most other trading rules did not show a significant advantage over the buy-and-hold strategy, aligning with the adaptive market hypothesis suggesting that the performance of trading strategies is contingent upon environmental factors. █  Limitations and Future Research One notable limitation is the focus solely on Bitcoin, leaving the question of whether these findings can be generalized to other cryptocurrencies. Additionally, the analysis does not account for transaction costs, potentially affecting the trading strategies' profitability. Future research is encouraged to extend the investigation to other leading cryptocurrencies and to consider the impact of transaction costs on the profitability of the trading range breakout rule and other technical trading strategies. █  Reference Gerritsen, D.F., et al. (xxxx). The profitability of technical trading rules in the Bitcoin market. Finance Research Letters, xxx(x), xxx-xxx. ----------------- Disclaimer This is an educational study for entertainment purposes only. The information in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell securities. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on evaluating their financial circumstances, investment objectives, risk tolerance, and liquidity needs. My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
COINBASE:BTCUSDEducation
by Zeiierman
6
Assessing Market sentiment using the Vix and Dxy 📑Hello Traders and welcome back to another Video analysis. We break down the relationship amongst different asset classes when gauging market sentiment. In particular, how to analyze market direction on the Nasdaq 100 by looking at the Volatility and Dollar Indexes. We combine this sentiment analysis with candlesticks, and how they leave clues for us when anticipating market direction. If you aren't familar, the Dollar Index represents the strength or weakness of the USD against a basket of 4 currencies. The Euro, Yen, Aud, and the Gbp. The US dollar is the safe haven of the world and when it increases in value, this represents risk off sentiment as investors and market particpants look to preserve the value of thier monies. On the other hand, the Nasdaq is a stock index, and therefore represents an asset class where investors are looking to grow their capital. In theory, they should be inversely correlated and generally are, thereby giving us clues when anticipating market movements in one another. In this example, we look at how we can use the (DXY) dollar index when anticipating market movements in the Nasdaq 100 stock index. The Vix or Volatility Index represents the options market for the S&P500 stocks. When the Vix goes up this equates to investors and market participants buying puts and anticipating future downside for the S&P 500 stock index. When the Vix goes down, this represents anticipated upside in the U.S. stock indexes by investors and market particpants buying calls in the options market. Please a Rocket or comment in support of similar analysis in the future
BLACKBULL:NAS100Education
by ShrewdCatfx
8
Portfolio Beta Hedging Ahead of Super Seven EarningsYou cannot predict the future. But you can prepare for it. Mega cap tech stocks have collectively lost USD 930 billion in value since Nasdaq 100 peaked on 21st March 2024. Will Super Sevens earnings turn the tide? Starting this week, the Super Sevens will start announcing first quarter results. NASDAQ:TSLA is up first on 23/Apr (Tue) followed by NASDAQ:META on 24/Apr (Wed) with NASDAQ:GOOGL and NASDAQ:MSFT on 25/Apr (Thu). NASDAQ:AAPL reports on 2/May followed by NASDAQ:NVDA on 22/May. Broad US equity markets are facing multiple headwinds. Rate cut hopes are fading. Geopolitics are turning for the worse with tensions escalating in the middle east. Investor sentiments are gloomy. Consequently, both S&P 500 and Nasdaq 100 have endured their worst week in a long time. Investors are pinning hopes on AI-infused tech earnings to stem the downdraft and to turn the tide. Bloomberg reports that Super Seven earnings are forecast to rise 38% during Q1 2024 compared to a year ago. If true, those earnings would dwarf the overall S&P 500’s meagre +2.4% forecasted YoY earnings growth. This paper is set in two parts. Part 1 summarises idiosyncratic factors affecting each of the Super Sevens. Second part of the paper illustrates beta hedging using index options to help portfolio managers defend against downside risk while retaining upside potential. ARTIFICIAL INTELLIGENCE. EXCITEMENT TO EXHAUSTION? AI hype remains palpable. But monetising AI is hard. That is becoming increasingly clear. Even among the Super Sevens, not everyone has cracked the AI monetisation formula. Investors are starting to moderate AI linked expectations. They need a clear path to profits from AI initiatives. Investor scepticism is showing up even among Super Sevens. NASDAQ:NVDA has been selling shovels to AI gold miners. Expectedly, their earnings and consequently their stock prices are up sharply. Its share prices are up 54% YTD leaving the rest in dust. NASDAQ:META is up 36%, compared +10% for NASDAQ:GOOGL and +6% for $NASDAQ:MSFT. NASDAQ:AAPL and NASDAQ:TSLA are increasingly losing shine. NASDAQ:TSLA (down a colossal 41%) risks being booted out of the Super Seven grouping. “Investors are expecting not just strong results — but strong guidance,” said Quincy Krosby, chief global strategist at LPL Financial. “Any disappointment from the mega-tech names reporting could push this week’s oversold market deeper into oversold territory” as reported by Bloomberg. NASDAQ:AMZN is expected to deliver modest EPS growth. Analysts remain strongly bullish with 60 of 63 analysts giving a Strong Buy or Buy rating. Source: TradingView NASDAQ:GOOGL is facing justified scepticism by investors about its AI capabilities after multiple missteps. AI powered search engines potentially threatens Google’s dominance. Despite the headwinds, analysts remain bullish on NASDAQ:GOOGL with average 12-month price target offering an 8% upside. Source: TradingView Falling smartphone market share, slowdown in innovations, nothing to show for in AI, lacklustre demand for Vision Pro, closure of Apple Car project, Anti-trust fines and more. Adverse news is hammering NASDAQ:AAPL share prices non-stop. While overall analyst rating remains bullish, the number of hold and sell calls are rising fast for NASDAQ:AAPL . Source: TradingView Bloomberg reports that NASDAQ:META is expected to show revenue growth of 26% this quarter and almost double the net earnings from a year ago. Analysts remain very bullish on NASDAQ:META with an average 12-month price target of USD 540.90 a share. Source: TradingView NASDAQ:MSFT is expected to benefit from AI. It has cleverly implemented Copilot AI into its product suite. Last quarter, demand for AI fuelled growth in its Azure cloud-services business. Analysts remain constructively bullish on NASDAQ:MSFT with 54 out of 57 analysts holding a Strong Buy or Buy rating on the stock. Source: TradingView NASDAQ:NVDA will be the most watched quarterly earnings yet again. Its stock is priced to perfection. Feeble earnings or guidance could send its share prices into a free fall. Fifty-three of Sixty analysts have either a Strong Buy or a Buy rating on NASDAQ:NVDA with average 30% upside over next 12-months. Source: TradingView EV market contraction. Price wars from Chinese EV makers. Deep discounts. All these are heavily weighing down on NASDAQ:TSLA shares. Not unexpectedly, analysts remain neutral on NASDAQ:TSLA . Source: TradingView ILLUSTRATING BETA HEDGING USING INDEX OPTIONS Super Seven earnings are critical to US equities given their outsized impact due to substantial index weightings. Valuations remain lofty. Despite the recent selloff, these mega caps trade at an aggregate thirty-one times forward earnings. Earnings can and does have enormous impact on share prices. When valuations are priced to perfection, even a hint of negative news will plummet stock prices down. Astute portfolio managers defend their portfolio using beta hedging. Beta hedge requires that notional of the hedging trade is equivalent to the beta-adjusted notional value of single stocks. Illustration of the beta hedge below assumes that a portfolio manager holds thirty shares in each of the Super Sevens. TradingView publishes trailing twelve month beta values for each firm which is the stock’s sensitivity to the S&P 500 index. In the lead up to results, implied volatility on shares expands rapidly. While hedging using equity put options is an alternative, but it is an expensive one. A portfolio manager can cleverly deploy short-dated equity index options to minimise hedging costs. CME offers Micro E-Mini S&P 500 Options (“Micro S&P500 Options”) with each contract providing a notional coverage of USD 5 times the S&P 500 index which translates to USD 25,000 per lot based on current S&P 500 levels of 4,967.23. Using Micro S&P500 put options expiring on 25th April 2024 at a strike of 4950, a portfolio manager incurs a premium of USD 105 per lot based on close of market prices on 19th April 2024. It requires approximately 4 lots (USD 25,000 per lot times 4 lots = USD 100,000) notional of put options to hedge the above beta adjusted portfolio of USD 107,153. Source: CME Table below illustrates hedging pay-off under different price action scenarios during quarterly earnings: Long Options delivers financial convexity. Options allow portfolio managers to harvest asymmetric gains. It provides protection when markets plunge and allows portfolio managers to capture gains from rising markets. 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.
SP:SPXEducation
by mintdotfinance
6
Why Would Countries Devalue Their Currency?Why Would Countries Devalue Their Currency? Currency devaluation is a nuanced aspect of fiscal policy with profound implications globally. This article demystifies the strategic reasons and consequential effects when nations choose to devalue their currency. From influencing trade balances to adjusting economic strategies, understanding these dynamics is crucial for traders and investors alike. Dive into the complex world of currency devaluation and its far-reaching impact on global economics. Devalued Currency Definition So, what is currency devaluation, and how does a country devalue its currency? Currency devaluation is a deliberate downward adjustment of a country's currency value relative to another currency, group of currencies, or standard. This monetary policy decision is typically made by a national government or its central bank. Devaluation is distinct from depreciation, which is a market-driven decrease in currency value. In a practical sense, devaluation reduces the cost of a country's exports and increases the cost of imports. For countries with fixed or semi-fixed exchange rates, this involves officially lowering the exchange rate by the revaluation of the peg or a change in the pegged currency. Countries with a free-floating currency system can influence devaluation through monetary policies like lowering interest rates, which can decrease investor demand for the currency, thereby reducing its value. Also, central banks can intervene by buying foreign currency and selling domestic. These fluctuations are visible across many currency pairs in FXOpen’s free TickTrader platform. Additionally, governments might engage in expansive fiscal policies or public statements to sway market perceptions, indirectly impacting the currency's market value. Devaluation of Currency Example In 1994, Mexico experienced a notable devaluation of its currency, the peso. This event is often referred to as the Mexican Peso Crisis. Prior to the devaluation, Mexico maintained a fixed exchange rate regime, pegging the peso to the US dollar. However, due to a combination of political uncertainty, economic pressures, and dwindling foreign exchange reserves, the Mexican government found it increasingly challenging to maintain the peso's value. In December 1994, the government decided to devalue the peso by around 15%. The immediate effect was a dramatic fall in the peso's value, plunging nearly 50% against the dollar within months. This devaluation led to significant economic turmoil, including high inflation and capital flight, but it also eventually helped to make Mexican exports more competitive in the international market. Why Might a Country Choose to Devalue Its Currency? 3 Reasons Why would a country devalue its currency? While this move can have widespread implications, there are strategic reasons behind such a decision. Understanding these reasons is crucial in comprehending global economic dynamics. Reason 1: Boosting Exports One of the primary reasons for a country to devalue its currency is to make its exports more competitive in the global market. A weaker currency lowers the price of a country's goods and services in foreign markets, making them more attractive to international buyers. This increase in demand for exports can stimulate the country's manufacturing sector and, in turn, boost economic growth. For instance, a country heavily reliant on exports might use devaluation to gain a competitive edge, especially if its major trading partners have stronger currencies. Reason 2: Reducing Trade Deficits Devaluation can be a tool to address trade imbalances. A country with a significant trade deficit – where imports exceed exports – might devalue its currency to make imports more expensive and exports cheaper. By doing so, it can reduce the volume of imports as they become costlier for domestic consumers and businesses, while simultaneously increasing exports due to their lower prices on the international market. This adjustment can help in narrowing the trade deficit, bringing more balance to the country's external trade. Reason 3: Managing National Debt Countries with high levels of debt denominated in foreign currencies may resort to devaluation as a strategy to reduce the real value of their debt. When a currency is devalued, the amount owed in the local currency increases, but the actual value in terms of foreign currency decreases. This may ease the burden of debt repayment for the government, particularly if the country is facing fiscal challenges. However, this approach can be risky, as it might lead to loss of investor confidence and increased cost of borrowing in the future. Devalued Currency Effects The effects of devaluing a currency ripple through various sectors of an economy. In the short term, it often leads to increased inflation. As the cost of imports rises, domestic prices generally increase, affecting the purchasing power of consumers. This inflationary pressure can be particularly challenging for economies that heavily rely on imported goods. On the business front, while export-oriented industries may thrive due to increased competitiveness abroad, import-dependent businesses face higher costs, which can lead to reduced profit margins or increased prices for consumers. Additionally, the immediate aftermath of devaluation often includes volatility in financial markets, as investors may react to perceived risks by pulling capital out of the country. In the long term, if managed well, devaluation can lead to a more competitive export sector, potentially resulting in economic growth and job creation. However, the benefits depend on the elasticity of demand for exports and the country's ability to capitalise on the weakened currency. Finally, devaluation can impact a country's global reputation. Frequent or large-scale devaluations might lead to a loss of investor confidence, affecting foreign investment and the country's ability to borrow money on international markets. Such decisions, therefore, must balance immediate economic needs with long-term fiscal stability and credibility. The Bottom Line Understanding currency devaluation's complex dynamics is vital in today's interconnected world. Whether to boost exports, manage debt, or address trade imbalances, nations employ this strategy with varied outcomes. For those looking to take advantage of forex trading, consider opening an FXOpen account to access comprehensive resources and trading opportunities in this dynamic field. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
11
How to use Williams Alligator Indicator in crypto trading?You have probably heard about Alligator, indicator which is used by top crypto traders. This powerful tool can increase performance of every cryptocurrency trading strategy and help you to make money on the market. Alligator gives us the precise answer if now price is in impulsive or reactive wave. This knowledge is very useful in building your own crypto trading strategies or even in automated trading bot strategies. Even if you use grid bot strategy Alligator can increase your return on investment because it’s vital to set up grid bot in reactive wave and sideways movements. What is the beast Alligator, let’s have a deep dive into this topic today! What is Alligator? Alligator is the best indicator for trend detection. It consist of three moving averages which are called jaw, teeth and lips. Moving averages are frequently used in algorithmic trading bots. They can be exponential, smoothed or weighted depending on particular crypto trading algorithm, but we will use smoothed moving averages (SMA). Jaw (blue line) - 13 period SMA shifted 8 bars is the future. This is the balance lie of the current time frame, for example 1D Teeth (red line) - 8 period SMA shifted 5 bars in the future. This is balance line of lower degree time frame, for example 4h Lips (green line) - 5 period SMA shifted 3 bars in the future. This is balance line of two times lower degree time frame, for example 1h Please, be careful when you use Alligator on different cryptocurrency trading platforms. Check the correct settings and moving average type. On TradingView it’s correct, don’t worry! Trend detection with Alligator. 
The main Alligator’s feature is the detection the trending markets and markets which are about to explode in any side. This powerful tool can enhance your crypto trading algorithm if you use it in the correct way. On the ATOM price chart you can see the example of an Alligator. As you can see it has two conditions: sleeping and hungry. Sleeping Alligator is when all lines are crossing each other and the price. This period of time can takes up to 80% of time. This is the market cycle stage where you shall avoid any trading and be prepared for the trending market Hungry Alligator is when after a long period of consolidation price chose the trend direction. It’s an impulsive move. Alligator’s mouth is widely opened and do not crosses the price. It’s very important to distinguish the trending market because only this type of a market gives you opportunity for the fast and huge profit. Otherwise, in the range bounded market you don’t have enough space for price to make profit for you. Most of stop losses occur while Alligator is sleeping. Another one very useful hint for you. If you use Elliott waves analysis. You don’t need to understand in which wave market is now. You just jump into the impulses and avoid corrections. How to trade with Alligator Here is the most interesting part. How to start crypto trading using Alligator? Our basic strategy is to wait when the price will create the first fractal above the Alligator’s mouth and place conditional order to buy one tick above the fractal’s top. We will discuss fractals in details next time. Now you have to understand how to use Alligator. Another one hint from our experience is to use fractals only when Alligator has been sleeping for a long time, like you see on the BTC chart. After long sleep and fractal breakout Bitcoin showed the greatest bull run in the history. Let’s notice where we should close trade. Almost at the top! When price started showing weakness we don’t need to be in the market anymore. Using this strategy on 1W time frame you can hold assets during entire bull run and sell then before bear market. Fantastic! Isn’t it? Conclusion In this article we discussed how you can implement Alligator indicator in your trading routine. This indicator will help you to avoid boring market when you can only lose money and catch every big move. Moreover you can use even sideways market detection if you use cryptocurrency trading bot which earns money in range bounded market. For sure this in not the only one strategy using Alligator. Next time we enhance our approach with other tools and see in details how Alligator improve their profitability. Moreover, soon we will live stream where practice trading with Alligator. See you next time!

 Best regards, Skyrex Team
Education
by Skyrexio
17
EURNZD - Seize Profitable Opportunity with Anti-Shark PatternEURNZD is currently exhibiting the formation of an Anti-Shark Harmonic Pattern (XABCD) coupled with the presence of a significant Trendline, indicating potential bearish momentum on the horizon. This analysis delves into the technical factors influencing the currency pair's movement and proposes strategic entry and exit points for traders to consider. Pattern Identification: Anti-Shark Harmonic (XABCD) with Trendline Confluence The observed Anti-Shark Harmonic Pattern (XABCD) on the 1-hour time frame suggests a potential reversal in the prevailing trend. This pattern comprises distinct points: X, A, B, C, and D, with Point D marking a crucial juncture for market participants. Additionally, the convergence of a Trendline further emphasizes the significance of Point D as a potential turning point. Key Levels: Resistance Identified Point D aligns strategically with a key resistance level, reinforcing the likelihood of bearish pressure manifesting from this point. Traders should remain vigilant as price action nears this critical area, as it often serves as a catalyst for significant market movements. Entry Strategy: Entry: 1.80900 Stop Loss: 1.81370 A prudent entry point at 1.80900 aligns with the anticipated bearish momentum following the completion of the Anti-Shark Harmonic Pattern. To mitigate risk, a stop loss set at 1.81370 provides a buffer against adverse price fluctuations, safeguarding capital in the event of unexpected market developments. Take Profit Targets: TP-1: 1.80400 TP-2: 1.79900 TP-3: 1.79436 Strategically positioned take profit targets offer traders opportunities to capitalize on potential downward movements. These targets, set at 1.80400, 1.79900, and 1.79436 respectively, correspond with key support levels where price action may encounter barriers or exhibit signs of reversal. Conclusion: In conclusion, the technical analysis of EURNZD on the 1-hour time frame indicates a favorable setup for bearish trading opportunities. With the formation of an Anti-Shark Harmonic Pattern and confluence with a Trendline, coupled with the proximity to a key resistance level, traders are advised to consider short positions with careful risk management. By adhering to the outlined entry, stop loss, and take profit levels, traders can navigate the market dynamics with greater confidence and precision.
Short
by trading_jupiter
17
Bitcoin vs. Ethereum: Deciphering the DistinctionsCryptocurrencies have revolutionized the financial landscape, with Bitcoin and Ethereum emerging as two prominent players shaping the digital economy. Despite sharing the common ground of blockchain technology, each offers distinct features and functionalities, underscoring the need to understand their differences. Introduction to Bitcoin Bitcoin, introduced in 2009 by the mysterious Satoshi Nakamoto, heralded the dawn of decentralized digital currencies. Its primary objective was to provide an alternative to traditional fiat currencies through a peer-to-peer electronic cash system. Transactions on the Bitcoin network are verified and recorded on an immutable public ledger, known as the blockchain. Introduction to Ethereum In 2015, Vitalik Buterin introduced Ethereum, presenting a paradigm shift beyond mere digital currency. Ethereum serves as an open-source platform for executing smart contracts and decentralized applications (DApps) without intermediaries. At its core is Ether (ETH), the native cryptocurrency powering transactions and fueling the ecosystem. Core Differences Purpose: Bitcoin functions primarily as a digital currency, aiming to revolutionize financial transactions. Ethereum, on the other hand, is a versatile platform enabling the execution of smart contracts and DApps, with broader implications for decentralization beyond monetary exchange. Technology: Bitcoin operates on a Proof-of-Work (PoW) consensus mechanism, requiring significant computational power for transaction validation. Ethereum initially adopted PoW but is transitioning to Proof-of-Stake (PoS) with Ethereum 2.0, offering improved scalability and energy efficiency. Scalability: Bitcoin processes approximately 7 transactions per second, while Ethereum can handle up to 30. Both face scalability challenges, with Ethereum exploring solutions like sharding to enhance throughput and efficiency. Supply: Bitcoin has a fixed maximum supply of 21 million coins, creating scarcity akin to digital gold. In contrast, Ethereum does not have a predefined supply limit, potentially allowing for continuous production, albeit with economic implications. Use Cases: Bitcoin is synonymous with a store of value, often likened to digital gold due to its limited supply and scarcity. Ethereum's versatility enables the creation of innovative applications such as decentralized finance (DeFi), non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), and more, expanding its utility beyond monetary transactions. Price Dynamics Bitcoin's market movements often dictate the broader cryptocurrency landscape, impacting the prices of assets like Ethereum. Influencing factors include market sentiment, regulatory developments, and macroeconomic conditions. Ethereum's price dynamics are further influenced by platform upgrades, developer activity, and the burgeoning demand for decentralized applications. Monthly Bitcoin Chart Monthly Ethereum Chart Conclusion While Bitcoin and Ethereum share the foundation of blockchain technology, their purposes, technologies, and applications diverge significantly. Bitcoin seeks to redefine monetary exchange, while Ethereum aims to revolutionize contractual agreements and decentralized applications. Understanding these distinctions is paramount in navigating the evolving landscape of digital assets and harnessing their transformative potential in the global economy.
BINANCE:BTCUSDEducation
by FOREXN1
6
what currencies to buy in times of geopolitical tensions. In times of geopolitical turmoil or war, investors often seek refuge in currencies perceived as safe havens. several currencies are considered safe harbors due to their stability, liquidity, and low risk of depreciation. Some of the notable safe-haven currencies include: 1-US Dollar (USD): The US dollar is often regarded as the ultimate safe-haven currency due to the size and stability of the US economy, as well as the liquidity of USD-denominated assets. During times of uncertainty, investors tend to flock to the USD, driving up its value. 2-Swiss Franc (CHF): Switzerland's reputation for political neutrality and its strong banking system make the Swiss Franc a popular safe-haven currency. Investors view the CHF as a stable and reliable asset during periods of geopolitical tension. 3-Japanese Yen (JPY): The Japanese Yen is considered a safe-haven currency due to Japan's status as a net creditor nation and its large current account surplus. During times of crisis, investors often repatriate funds into the JPY, driving up its value. 4-Euro (EUR): Despite occasional uncertainties surrounding the Eurozone, the Euro is still considered a safe-haven currency by many investors. The Euro's status as the second most traded currency in the world and the stability of major Eurozone economies contribute to its safe-haven appeal. 5-Gold-Backed Currencies: Some countries, particularly those with significant gold reserves, may issue currencies backed by gold or pegged to the price of gold. These currencies offer stability and are perceived as safe havens during times of crisis.
OANDA:XAUUSDEducation
by JoeChampion
12
Mind the Gap: How to Trade Price GapsThe Power and Beauty of Price Gaps Price gaps represent a clear imbalance in supply and demand, making them one of the purest representations of momentum in financial markets. These gaps occur when there is a significant disparity between the closing price of one period and the opening price of the next, indicating a sudden surge in buying or selling pressure. How to Trade Price Gaps: 3 Different Strategies 1. Gap & Go: Description: This strategy involves trading in the direction of the gap, anticipating that the momentum will continue. Execution: Enter trades as soon as the market opens, aiming to capture the initial momentum surge. Timeframe: Typically applied on shorter timeframes, such as intraday charts. Risk Management: The gap can be used for stop less shelter, hence stops can be placed above (below) the gap. Example: Tesla (TSLA) 5min Candle Chart In this example, Tesla gaps lower at the open – breaking below a key level of support and signalling the breakdown of a sideways range. The gap follows through to the downside during the remainder of the trading session. Past performance is not a reliable indicator of future results 2. Gap Fill: Description: In contrast to the Gap and Go strategy, this approach involves fading the initial price movement and trading in the opposite direction of the gap. Execution: Wait for price to retrace back to pre-gap levels before entering trades, anticipating that the gap will eventually be filled. Timeframe: Can be applied on various timeframes, depending on the magnitude of the gap and market conditions. Risk Management: Implement stop-loss orders to manage risk, as price may continue to move against the trade. Example: Barclays (BARC) Hourly Candle Chart Barclays gap above key resistance on the hourly candle chart. The gap is filled and broken resistance turns to support prior to the uptrend resuming. Past performance is not a reliable indicator of future results 3. First Pullback: Description: This strategy combines elements of both Gap and Go and Gap Fill, focusing on entering trades after the initial momentum surge but waiting for a pullback or consolidation before entry. Execution: Wait for the first pullback or consolidation after the gap before entering trades in the direction of the prevailing momentum. Timeframe: Suitable for both shorter and longer timeframes, depending on the magnitude of the gap and market dynamics. Risk Management: Utilise stop-loss orders to protect against adverse price movements and adjust position sizing based on volatility. Example: Arm Holdings (ARM) Hourly Candle Chart Arm’s share price puts in a large price gap which breaks decisively above a key level of resistance on the hourly candle chart. Given the size of the gap, optimal entry requires waiting for the market pullback. Past performance is not a reliable indicator of future results Additional Factors to Consider Catalyst Behind the Gap: Look for stock-specific news events that recalibrate market expectations, such as earnings surprises or changes in outlook. Mechanical events like dividends or corporate actions are less likely to sustain momentum. Size of the Gap: Larger gaps indicate stronger momentum but also carry a higher risk of mean reversion. Assess the magnitude of the gap relative to historical price action and volatility. Levels Broken: Consider the significance of key support and resistance levels broken by the gap, as they may influence the strength and direction of the price movement. Prevailing Trend: Analyse the prevailing trend before the gap and assess whether the gap aligns with the overall market direction. By incorporating these factors into your analysis and selecting the most suitable strategy based on market conditions, you can effectively trade price gaps and capitalise on momentum opportunities in the financial markets. Remember to exercise proper risk management and adapt your approach as market conditions evolve. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
NASDAQ:TSLAEducation
by Capitalcom
1
1-Indicator Strategy For Beginners...The Stochastic Hey Rich Friends, Happy Wednesday! I wanted to share one of my top 3 favorite indicators with you.... The Stochastic (STOCH). As a leading (vs lagging) indicator, it is perfect for beginners because you can find entry and exit signals with only a few key details. Adding the STOCH to your chart: 1. Search the indicators for "STOCHASTIC" and click once to add to your chart. The only thing that I modify is the thickness of the lines but feel free to make further changes to your liking. 2. Make sure that the "indicators and financial values" option is ON. Right-click your scales, select labels, and make sure "indicators and financial values" is checkmarked. Entry signals for a buy: - The STOCH is facing up - The fast line (blue) is above the slow line (orange) - The STOCH has crossed above the 20% level, from oversold, back into the blue-shaded area Exit the trade or take profit once the STOCH has crossed back below the 80% level, from overbought, into the blue-shaded area. Entry Signals for a sell: - The STOCH is facing down - The slow line (orange) is above the fast line (blue) - The STOCH has crossed below the 80% level, from overbought, back into the blue shaded area Exit the trade or take profit once the STOCH has crossed back above the 20% level, from oversold, into the blue-shaded area. I hope that this video helps someone become a more independent and profitable trader. Let me know in the comments if you try this strategy! Peace and Profits, Cha
Education
0
by MoneyMantraCha
33
Keltner Bands Pullback StrategyHere we take a look at trading pullbacks using the Keltner Channels. I cover the initial setup, the types of entries, and trades to avoid. This setup contains 3 parts: The channel touch The Pullback The Entry The Channel Touch Here is an example of the beginning signal in our setup, a band touch. The top and bottom bands represent the ATR (Average True Range) of a loopback period. So a touch of the band indicates volatility in the underlying stock or commodity. This also presents us with a chance for a nice pullback with continuation. The Pullback The pullback is simple, it is a reversion to the mean. So, the price pulls back to the mean (the ema) that the Keltners are based on. From this point, you can start to determine the entry. The Entry Depending on your style, a stop order, or limit order trader, you get to create your style to enter the trade. The following are some ideas: zero line MACD cross, second entry (price action) long or short, a trigger zone (for limit order traders), and an ema touch (limit order traders). Zero Line Entry Price pulled back and crossed the zero line on the modified MACD indicator. Second Entry Long (High2) The entry is the second attempt to break the previous bars high in a pullback. The Trigger Zone I created these based on an internal Keltner channel. You can set your limit orders anywhere inside of them. EMA Touch Whenever the price touches an offset ema you can enter. So you can place and move your limit order as the ema moves. I like to offset by one because you are guaranteed a price touch (ema doesn't move). Backtesting is also my accurate with an offset ema. Conclusion The Keltner channels offer an extremely powerful way to determine a potential pullback within a trend. They also help define trends (on the first touch) and help objectively identify climatic behavior. This strategy as a whole allows for high-quality setups and the flexibility of entering and exiting trades based on trading style. I like to shoot for a 1:1 based on stop placement.
AMEX:IYREducation
by JoeRodTrades
3
HERE ARE 10 COMMON TRADING INDICATORS MADE SIMPLE Chart has all 10. Hope this helps. Hope it's simple to understand if you still struggle with indicators. Remember, no one indicator is good on its own. Think of an indicator as a sign that you should pay attention to a possibility. For example, if I go to the ocean, maybe I have an indicator that says you're closer to sharks than in the great lakes, will I be eaten? Probably not, but also, there are more sharks and my indicator confirms that. I can't use this one indicator to say, I'm probably about to be eaten. BUT.. Let's say I have multiple indicators that I use to give me a better idea if I'll be eaten. Maybe an indicator tells me there is an oddly higher than avg number of a sharks number 1 food source within the area. Can I say I'll be eaten? No, but I could say, maybe due to the increased food supply, there may be more sharks. What if I have a few more indicators, one of which says there are 30 great whites within 10 miles, and another that says, usually at this time of the year, there are only ever between 2 to 7 great whites. Can I say, Yes, I'll be eaten? NOPE, not yet. What if I have another indicator that says, across the globe, shark attacks are increasing by a certain percentage, and another that says, there is blood detected within the water you're swimming in, which is lower than the threshold for human's to detect, but higher than the threshold needed for sharks to smell. What if I combine that with an indicator that says, on avg there are 1000 swimmers here, but now, there are under 30. Can I say I'll be eaten? Nope, BUT, I can say, hmm. Something is up and if one of us were to get eaten, I'm more likely to be picked out of 30 people than 1000. When can I say I'll be eaten? Probably if you build an indicator that can detect bite force and compare to known bit forces of sharks that could sense you're actively being eaten, but at that point, the stock moved already... err I mean, the shark ate already, and you're late to the show.. My point being, use them, but don't always assume when it comes to indicators. Take in all the data and then make a decision. Some indicators fit your style, some won't. Do I need 30 stacked indicators for sharks if I'm swimming in Lake Michigan? Probably not, it would make everything a mess. So, here there are. Relative Strength Index (RSI): Ah, the RSI, the “I’ve had too much” indicator of the stock market. When it hits above 70, it’s like your stock had too much to drink at the party and is likely to come crashing down. Below 30? It’s been left out in the cold and might be due for a warm-up (a.k.a. price increase). Remember, it’s not foolproof, but then again, neither is your weather app. On-Balance Volume (OBV): This one’s all about following the crowd. If the volume is increasing, it’s like everyone’s rushing to get the latest iPhone. But remember, even if everyone jumps off a bridge, it doesn’t mean you should too. Always double-check before you follow the herd. Simple Moving Average (SMA): The SMA is like that reliable friend who’s always a bit behind on the latest trends. It gives you the average closing price over a certain period. It’s simple, it’s moving, it’s average. It’s the SMA. Exponential Moving Average (EMA): The EMA is the SMA’s hip younger sibling. It cares more about what happened recently than what happened way back when. It’s great for short-term trading, but remember, even the coolest kids can get things wrong. Moving Average Convergence Divergence (MACD): This one sounds complicated, but it’s not. It’s like watching two rabbits on a race track. If the fast rabbit (the 12-day EMA) overtakes the slow rabbit (the 26-day EMA), it’s a bullish signal. If the slow rabbit overtakes the fast one, it’s a bearish signal. Just remember, rabbits are unpredictable! Fibonacci retracements: Ah, Fibonacci, the Da Vinci of math. These horizontal lines indicate where support and resistance levels might be. It’s like trying to predict where you’ll meet your ex at a party. It could be useful, but don’t rely on it too much. Stochastic oscillator: This one’s a bit like a pendulum. When it swings one way, it’s likely to swing back the other way soon. It’s great for spotting potential reversals, but remember, even a broken clock is right twice a day. Bollinger bands: These are like the elastic waistband of your favorite sweatpants. If the price hits the upper band, it might be time to sell (or stop eating pizza). If it hits the lower band, it might be time to buy (or hit the gym). Average Directional Index (ADX): This one tells you whether the price is trending strongly or just wandering around like a lost puppy. Above 25 is a strong trend, below 20 is weak. But remember, even lost puppies find their way home eventually. Accumulation/Distribution (A/D) line: This one’s all about supply and demand. If the line is going up, the stock is being accumulated. If it’s going down, it’s being distributed. It’s like tracking whether more people are buying or selling fidget spinners. Remember, these indicators are like tools in a toolbox. Don’t try to build a house with just a hammer. Use them in combination, understand their limitations, and always do your own research. Happy trading! 📈
NASDAQ:TSLAEducation
by nicktussing77
18
Tesla's upcoming Robotaxi launch: stock trading idea 8/04/24Tesla Inc. is gearing up for a significant reveal on 8 August this year, as it plans to introduce its much-anticipated robotaxi. This move comes at a time when the company is navigating sluggish sales and increasing competition from more affordable Chinese electric vehicles. Elon Musk, the CEO of Tesla, announced on his social media platform, X, the upcoming unveiling of the robotaxi. Tesla has long been ambitious about its vision of a fully autonomous vehicle, first presented to investors in 2019. Recently, Tesla has rolled out the latest iteration of its driver assistance software, marketed as Full Self-Driving (FSD), to its consumer base. Given this backdrop, let's delve into Tesla Inc.'s stock (TSLA) to scout for potential trading opportunities: Analysing the Daily (D1) chart, a support level is identified at 160.51 USD, with resistance at 182.87 USD. A breakout above this resistance level could signify the start of an uptrend. On the Hourly (H1) chart, initiating long positions becomes attractive upon breaching the 182.87 USD mark, targeting a short-term objective of 205.06 USD. For those looking at a medium-term investment, maintaining a long position until reaching 233.87 USD could be viable. — Ideas and other content presented on this page should not be considered as guidance for trading or an investment advice. RoboMarkets bears no responsibility for trading results based on trading opinions described in these analytical reviews. The material presented and the information contained herein is for information purposes only and in no way should be considered as the provision of investment advice for the purposes of Investment Firms Law L. 87(I)/2017 of the Republic of Cyprus or any other form of personal advice or recommendation, which relates to certain types of transactions with certain types of financial instruments. Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
NASDAQ:TSLA
by RoboMarkets
20