Live stream - Weekly Close Livestream 11-3-2023Stock market has a huge bounce this week. I bought a lot of TSLA earlier because it hit my level. Let's catch up and see where the next opportunity may be!
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Revisiting Automatic Access Management API for VendorsThis video explains how to automate access management for vendors who build and sell invite only scripts based on subscription or one time fee. I have made videos about this earlier as well. But, due to high demand, I have been asked to make this video again.
🎲 Tools Required
Replit - Used for hosting the service that automates access management
Postman - To test the services hosted
🎲 Prerequisites
User should have premium tradingview account and be able to publish invite only scripts by following the house rules.
User should disable 2FA on their account in order to allow programs to login remotely and manage access.
🎲 Steps
All the steps are also mentioned in the githup repository: github.com
🎯 Run the access management service
Fork the replit repository: replit.com
Update Environment Variables tvusername and tvpassword
Run the repl
🎯 Use postman to test the service methods
Detailed explanation of the API calls are present in the github link provided above. The service is capable of doing following things.
Check if the given tradingview username is valid or not
Get the access details of given user to list of scripts identified by pub id.
Delete the access to given user to list of scripts identified by pub id.
Provide/Extend access to given user to list of scripts identified by pub id for specific duration.
🎲 Notes
Please follow house rules while publishing and selling subscriptions to invite only scripts.
Do not commercialize these API calls or do not turn it into product. The mechanism is built on backend calls that are not officially supported by tradingview. While tradingview is tolerant on individual use, any malicious activity may force them to shut this down for everyone.
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MSFT: Double-Top, or Bull Flag Breakout?NASDAQ:MSFT is showing a mixture of bullish and bearish signals; however, the most concerning of which is an active rug pull event which kicked off on March 16, 2023 at $265.20 via the 2D timeframe:
This coincides with a large RSI divergence event occurring on the larger timeframes; highlighting the potential for a double-top:
That being said, there appears to also be a major bull flag forming on the larger timeframes:
If we dive a bit deeper into the smaller timeframes and analyze the bull flag, we see another active rug pull at $345. This signals a high likelihood NASDAQ:MSFT will hit $345 in the near future:
With a high degree of both bullish and bearish signals, it can be hard to discern where NASDAQ:MSFT might be headed next.
We are keeping a very close eye on the AVWAP derived from the March 16 event as a guiding factor. Should the price significantly break below this level, we expect further drawdown to $265 will occur.
The road higher will be bumpyWhile bullish in the long term, we are still awaiting further pullback in the price of gold after its impressive run above $2,000. Right now, we are paying close attention to support and resistance levels near $2,009, $1,985, and $1,959. If the price of gold manages to hold above $1,985, it will be positive; the same applies to the breakout above $2,000 and resistance near $2,009. However, if the price fails to stay above the mentioned level, and we see more decline in RSI and Stochastic on the daily chart, it will alert us to more downside; in such a case, we would expect gold to drop below $1,960 (and maybe even to as low as $1,925). Yet, regardless of our opinions, it is important to note that there is a FOMC meeting scheduled for today, which can have a volatile impact (to either side) on the price depending on the FED’s decision and the chairman's tone during the press conference.
Illustration 1.01
Illustration 1.01 portrays the daily chart of XAUUSD and simple support/resistance levels derived from particular peaks and troughs.
Illustration 1.02
The image above shows the daily chart of RSI. The yellow arrow indicates a bearish crossover below 70 points, which raises our suspicion (though it still could be just a fakeout).
Technical analysis
Daily = Bullish
Weekly = Neutral
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Trading strategyA trading strategy encompasses a set of guidelines for initiating a position.
A trading system encompasses a set of rules for consistently profitable trading. This involves a clear comprehension of your strategy, specifying the assets you trade, the setups you utilize, the risk involved, preferred timeframes, and other pertinent details.
Consistency: A meticulously crafted action plan serves as a tool to maintain a steady trading strategy while minimizing the sway of emotions on your decision-making. Such consistency often yields more predictable results and enhances overall performance over time.
Confidence: Equipped with a playbook, you can trade with increased self-assurance, knowing that you are following a tried-and-tested strategy. This confidence alleviates stress and anxiety, enabling you to maintain focus and make sound decisions.
Adaptability: In the face of shifting market conditions, having a playbook at your disposal empowers you to adjust and fine-tune your strategies as needed. This adaptability is a critical factor in staying ahead and sustaining success in the constantly evolving realm of trading.
4 distinct components that constitute a trading strategy:
Context: Context encompasses the surroundings and circumstances related to a trading idea or event. It is crucial for a comprehensive understanding of the situation and is vital for maximizing the potential of your trading strategy. Many traders erroneously believe that a trading strategy is simply about identifying patterns or triggers along with basic risk management. For instance, some may focus on trading Order Blocks. However, the key to making Order Blocks a profitable tool lies in applying the correct context.
Patterns: The second component involves identifying the triggers or patterns that dictate when to enter a position. Context is applied to these triggers for in-depth analysis, aligning them with the risk-to-reward parameters defined in your trading system. Triggers can vary widely and should be chosen according to your individual trading style and strategy.
Position Management: Inexperienced traders often find themselves overwhelmed when they enter a position, leading to irrational decisions. Defining a repeatable process for managing your trades is essential. This process should align with the goals set out in your trading strategy. For instance, if your strategy aims for a risk-to-reward ratio of 3R or higher, your approach will differ from someone targeting a minimum of 1.5R. To ensure consistency, it's crucial to avoid excessive discretion when managing positions, such as attempting to achieve a 1:5 risk-to-reward ratio, placing short stops, or averaging down. Instead, aim for strict consistency, gradually honing your skills.
Risk Management: The final facet of any trading system is risk management. Poor risk management is a leading cause of trader failures. It often results from excessive leverage and a lack of understanding. Your risk management plan doesn't need to be overly complex, but it must be clear and diligently adhered to. By following a robust risk management strategy, you can avoid the pitfalls that ensnare many inexperienced traders who destroy their accounts due to reckless trading practices.
It may vary depending on your trading style, but for day trading I recommend the following:
* 1% maximum risk per trade
* 2% maximum per day
* 6% maximum per week
* 10% maximum per month
6 essential steps to build and refine your trading strategy:
Determine Your Trading Style: Start by defining your trading style, whether you are a day trader, swing trader, or long-term investor. This choice guides your selection of appropriate strategies, time frames, and risk management techniques. For instance, specify your preferred win rate (e.g., 50%+), risk-to-reward ratio (e.g., 2R minimum), and trading style (e.g., scalping, position trading, or swing trading).
Research and Select Strategies: Explore various trading strategies and choose the ones that align with your trading style, risk tolerance, and financial objectives. You may want to consider strategies like Smart Money trading, which could be particularly beneficial.
Define Entry and Exit Criteria: For each selected strategy, outline precise entry and exit criteria. Determine your stop loss and profit targets to ensure you execute trades accurately and limit potential losses. It's crucial to establish a well-defined trade management plan that guides step-by-step position management. For example, decide to move your position to break-even when a 1:1 risk-to-reward ratio is reached, open trades exclusively with a 1:2 ratio, or close 50% of your position at 1:1 and the remaining 50% at 1:3.
Establish Risk Management Rules: Implement robust risk management rules to safeguard your capital. These rules might include setting a maximum percentage of your account balance to risk per trade or using Expert Advisors to automatically determine position sizing for risk control.
Test Your Strategies: Prior to committing real capital, test your strategies using historical market data or a demo account. This testing phase allows you to refine your strategy and build confidence in your approach. If you cannot achieve positive results on a demo account, it's advisable to avoid risking real money until you've honed your skills.
Analyze Your Trades: Maintain a comprehensive trade journal recording the strategy used, entry and exit points, and relevant market conditions for each trade. Regularly review your trade results to pinpoint areas for improvement and adapt your trading plan accordingly. Analyzing your trades is crucial for continuous growth as a trader.
Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch!
✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes.
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How to Trade Crude OilLearning how to trade crude oil requires a nuanced understanding of its fundamental aspects, instruments, and trading strategies. This comprehensive article offers insights into the critical elements that affect crude oil prices, the range of instruments available for trading, and specific strategies traders use in this market.
The Basics of Crude Oil
Crude oil, often referred to as "black gold," is a fossil fuel derived from the remains of ancient organic matter. It serves as a crucial raw material for various industries, including transportation, chemicals, and manufacturing.
Two primary types of crude oil traded on global markets are West Texas Intermediate (WTI) and Brent Crude. WTI is primarily sourced from the United States and is known for its high quality and low sulphur content. On the other hand, Brent Crude originates mainly from the North Sea and serves as an international pricing benchmark.
The Organization of the Petroleum Exporting Countries (OPEC), which includes members like Saudi Arabia, Iran, and Venezuela, plays a pivotal role in determining global oil supply. By adjusting production levels, OPEC influences crude oil prices significantly. Additionally, other regions like Russia and the United States contribute to the world's oil supply, further affecting market dynamics.
Factors Affecting Crude Oil Prices
In oil trading, economics is a fundamental aspect that traders need to grasp to make educated decisions. Several factors drive the price of crude oil, and here are some of the most significant:
Supply and Demand: At its core, the price of crude oil is determined by how much of it is available (supply) versus how much is wanted (demand). An oversupply can depress prices, while high demand can cause prices to spike.
Geopolitical Events: Conflicts, wars, and diplomatic tensions in oil-producing regions can disrupt supply chains, affecting prices. For instance, sanctions on Iran or instability in Venezuela can push prices higher.
Currency Fluctuations: Oil prices are generally quoted in US dollars. A strong dollar can make oil more expensive for countries using other currencies, thereby affecting demand.
Seasonal Changes: During winter, demand for heating oil can rise, pushing crude oil prices up. Conversely, a mild winter might result in lower demand and prices.
Technological Advances: Innovations in extraction methods, such as fracking, can alter the supply landscape, making it easier to extract oil and thereby affecting prices.
OPEC Decisions: As previously mentioned, OPEC has a significant influence on oil prices. Their production quotas can tighten or flood the market, causing price swings.
Economic Indicators: Data like unemployment rates, manufacturing output, and interest rates can indicate the health of an economy, which in turn can affect oil consumption and prices.
How Is Crude Oil Traded?
When learning how to trade crude oil, traders have a variety of instruments to choose from. However, it’s also important to be aware of its trading hours and how leverage is used.
Crude Oil Instruments
Futures Contracts: A futures contract is an agreement to buy or sell a specific quantity of crude oil at a predetermined price on a specified future date. Both WTI and Brent Crude have their own futures contracts traded on exchanges like the New York Mercantile Exchange (NYMEX).
Contracts for Difference (CFDs): This financial derivative allows traders to speculate on oil price movements without owning the actual commodity. Essentially, you're entering into a contract with a broker to exchange the difference between the opening and closing prices of the crude oil position.
Exchange-Traded Funds (ETFs): These are investment funds traded on stock exchanges. ETFs such as the United States Oil Fund (USO) or the SPDR S&P Oil & Gas ETF (XOP) provide exposure to oil prices by either tracking the commodity's price or investing in oil-related equities.
Options: These financial instruments give traders the right but not the obligation to buy or sell crude oil at a fixed price before a certain date. They offer more flexibility but are generally considered riskier due to their complex nature.
Spot Market: In the spot market, physical crude oil is bought and sold for immediate delivery. However, this is less common for retail traders due to the logistical challenges involved.
At FXOpen, we offer both WTI and Brent Crude CFDs. To get started with oil trading, software such as our free TickTrader platform can provide the technical analysis tools necessary to analyse crude markets.
Trading Hours
Crude oil markets are open almost around the clock, offering high liquidity and the potential for trading opportunities at various times. The New York Mercantile Exchange (NYMEX), for example, is open for trading from Sunday evening until Friday afternoon, with a daily trading break. The most active trading hours are generally during the US (9:00 AM to 2:30 PM EST) and European sessions (6:00 AM to 11:00 AM EST).
Leverage
Leverage allows traders to use small amounts of capital to control a larger position. While this can amplify profits, it also increases risk. Most retail traders opt for trading crude oil through CFDs, which often come with higher leverage options, making it essential to manage risk carefully.
Crude Oil Trading Strategies
Given the volatile nature of crude oil prices, traders employ specific strategies to capitalise on price fluctuations. Here are some strategies particularly useful for crude oil trading:
Trend Following with Moving Averages
The trend is your friend, especially in commodities like crude oil. One effective way to follow the trend is by using moving averages, such as the 50-day (blue) and 200-day (orange). When the 50-day crosses above the 200-day, it's generally a bullish signal, and vice versa for a bearish trend. However, as with all technical analysis tools, moving averages can sometimes trigger false signals.
Range Trading
Due to supply-demand dynamics and geopolitical factors, crude oil prices often fluctuate within a specific range. Identifying these ranges can be useful for short-term trading. Traders buy at the lower end of the range and sell at the higher end, applying technical indicators like RSI or Stochastic Oscillator for entry and exit signals.
News-Based Trading
In crude oil markets, news about OPEC decisions, US oil inventory data, geopolitical tensions, and technological advancements can dramatically impact prices. Traders keeping an eye on oil news can take advantage of sudden announcements or an economic release likely to push prices in a particular direction. Given the high leverage commonly available in CFD trading, this strategy can be profitable but also comes with significant risk.
The Bottom Line
In crude oil trading, having the right strategies and tools is essential for success. By understanding the fundamentals, market dynamics, and utilising specific trading techniques, you are now equipped with the knowledge you need to get started. To access these markets with competitive spreads and rapid execution speeds, consider opening an FXOpen account and step confidently into the world of crude oil trading.
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.
Day Trader's Toolbox Part 3: Average True Range (ATR)
Welcome to the final instalment of our Day Trader's Toolbox series, in which we highlight some essential tools and indicators which have the potential to transform your day trading.
Today we lift the lid on the Average True Range or ATR – a simple yet highly effective tool when analysing the price movement of any market. We’ll explain how ATR helps you to view the market through the eyes of a professional trader and we’ll outline the three core uses for ATR in day trading.
I. Understanding ATR:
What is ATR?
Okay, let’s start with the basics: ATR is designed to measure market volatility by calculating the average range between the high and low prices over a specific period.
Without delving into the ATR formula, it's important to understand that this indicator takes price gaps into account. This factor provides traders with an authentic representation of market volatility.
On TradingView, the ATR indicator appears as a line underneath your chart. And whilst it can be calculated on any timeframe, we typically talk about ATR in terms of the daily timeframe – hence ATR will tell us how much we can expect a stock to move up or down in typical trading day.
Daily ATR on Daily Candle Chart
Past performance is not a reliable indicator of future results
Start Seeing Price Movement Like a Seasoned Trader
Have you ever found yourself drawn to the lists of top gainers and losers on stock trading platforms? It's a common fascination for novice traders, as these lists provide quick summaries of what's "hot" on any given day.
However, seasoned traders know that evaluating stock prices solely based on percentage movements is about as practical as a paper umbrella in a rainstorm.
To illustrate this point, consider two stocks, Stock A and Stock B, both opening with a 3% increase. Yet, Stock A typically fluctuates by 3% on an average day, while Stock B usually moves by 1.5%. In this context, Stock B's price movement is far more significant.
This is where ATR comes into play. ATR normalises market price movements, making it a valuable tool for comparing a stock's price changes against its historical performance and its peer group.
So, it's time to shift your perspective. Leave behind the world of percentage-based analysis and adopt ATR to see price movement through the eyes of a professional trader.
II. 3 Ways to Use ATR When Day Trading
1. Profit Targets
Consider this day trading scenario: The market has broken above its previous day's high (PDH), and the price is showing signs of consolidation while staying above VWAP. With these clear signals of strength and insights from your higher timeframe analysis, you decide to go long. Now, the question is, where do you place your profit target?
Answer:
As a day trader, your goal is to capitalise on intraday price movements and avoid holding positions overnight, thereby mitigating overnight risks. This means that setting a structural target, such as the next resistance level, may not be practical.
However, if you incorporate the daily ATR with the current day's low, it provides you with an exceptionally realistic profit target. This target is entirely objective and calibrated to the specific market's current level of volatility.
It's important to note that ATR is an average, so it should be used as a guide rather than an absolute rule. Nevertheless, having a tool to adjust your profit expectations is invaluable, especially in the emotionally charged environment of day trading.
Example:
ATR based profit target
Past performance is not a reliable indicator of future results
2. Stop Placement
In swing trading, where positions are held over several trading sessions to capture price swings, using multiples of the ATR for stop placement is a smart strategy. It helps keep your stops outside of market noise and enhances risk management.
However, when it comes to day trading, it's understandable that stops need to be considerably smaller. But that doesn't mean we can't use ATR to fine-tune our stop loss levels according to market volatility.
Day traders can benefit from using a multiple of a lower timeframe ATR to establish a volatility-adjusted stop loss. This approach is often more effective than simply placing a stop below the nearest level of support. For day traders using a 5-minute candle chart, a stop set at 10 times the ATR on this timeframe is a reasonable starting point.
Keep in mind that ATR serves as a normaliser of price movement across different markets. Using ATR for stop placement allows for consistency in risk management across the various markets you trade.
For day traders who prefer locking in profits as a trade moves in their favour, an ATR trailing stop can be an invaluable tool. It trails the stop a certain number of ATRs below the close of a specified number of bars, dynamically adjusting to the market's volatility. TradingView offers numerous ATR trailing stop indicators just search for “ATR Trailing Stop” in the indicators tab.
Example:
ATR Trailing Stop Loss
Past performance is not a reliable indicator of future results
3. Measuring Overextension
Just as ATR proves invaluable in setting realistic profit targets calibrated to market volatility, it also serves as an objective measure to define when a market is overextended.
There are various methods to use ATR for this purpose, but one of the most straightforward approaches involves Keltner Channels, which envelop an ATR band on either side of an exponential moving average.
When the price moves beyond the boundaries of the Keltner Channels, it is considered overextended. Day traders can experiment with Keltner Channel settings. The standard setup involves using 2.5 times the ATR wrapped around a 20-period exponential moving average. Wider bands (a higher ATR multiplier) across a longer period of the moving average generate fewer signals, while narrower bands across a shorter period produce more signals.
Incorporating Keltner Channels, in conjunction with support and resistance levels, provides an additional layer of confirmation for day traders, enhancing their ability to assess overextension in the market.
Example:
Keltner Channels: S&P 500 5min Candle Chart
Past performance is not a reliable indicator of future results
In summary, ATR is a versatile tool for day traders, helping them navigate volatile markets with precision. It aids in setting realistic profit targets, fine-tuning stop placement, and identifying market overextension. By incorporating ATR into your trading strategy, you can make informed decisions and manage risk more effectively.
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.
NEAR Q3 OverviewExecutive Summary
NEAR Protocol stands as a Layer-1 (L1) smart contract blockchain that couples a state-of-the-art sharded architecture with an emphasis on offering a user experience reminiscent of Web 2 platforms. While maintaining the security and decentralization integral to blockchains, NEAR aims to surpass the capabilities of prior chains, such as Ethereum, in terms of usability, efficiency, and scalability. Recognizing and aiming to overcome Ethereum's limitations, NEAR incorporates sharding. This key distinction allows the blockchain to significantly enhance its throughput, accommodating a more substantial transaction volume by dividing the blockchain into smaller, concurrent shards.
A pivotal differentiator for the NEAR Protocol, sharding was introduced in November 2021 as Nightshade. This technique allows validators to process only transactions specific to their assigned shards, enabling potentially infinite scalability. For end users and investors, Nightshade ensures quicker transaction speeds at reduced fees. Diverging from traditional sharding methods that split the blockchain into multiple states, NEAR's design maintains the blockchain as a singularly sharded entity. Additionally, a synchronized state mechanism ensures that a change in one block's state prompts adjustments in other shards correspondingly.
In March 2023, NEAR unveiled the Blockchain Operating System (BOS), a groundbreaking open-source platform that allows developers to craft applications across various blockchain environments using well-known programming languages. Moreover, it provides crypto users with an experience reminiscent of Web 2. Designed to be inclusive, BOS appeals to Web3 veterans and those new to the decentralized web. By ensuring easy onboarding, robust security, and seamless cross-chain interactions, BOS is setting a new paradigm for Web 3 application development.
The NEAR Foundation, with the inception of the NEAR Digital Collective (NDC) and a pivot to community DAOs, is pioneering a transition to a more democratized and decentralized framework compared to the conventional Board-based system. Launched in Q3 2022, the NDC represents a concerted effort to decentralize decision-making within the NEAR network, emphasizing transparency through defined treasury management and embracing decentralized governance with on-chain voting. Furthermore, the NDC aspires to advance validator decentralization and stimulate the development of the core protocol and infrastructure.
Looking forward into 2024, the Near protocol will introduce several pivotal milestones, including the next step in Nightshade sharding, meta transactions, zero-balance accounts, a Global Storage proposal, and more.
Introduction to Near
NEAR Protocol is a Layer-1 (L1) smart contract blockchain with a bleeding-edge sharded design and an emphasis on an intuitive Web 2-like customer experience, all while preserving the security and decentralization users expect with a blockchain. Established in 2018, it sets out to achieve improved usability, efficiency, and scalability over preceding chains like Ethereum. Founded by Illia Polosukhin and Alexander Skidanov and spearheaded by the Near Collective, the NEAR Protocol was envisioned to serve as a community-driven cloud computing PoS blockchain and a decentralized hub tailored explicitly for hosting innovative decentralized applications.
The central motivation behind NEAR's technology is to prevent network congestion and furnish a conducive environment for developers, thereby promoting on-chain protocol development. Early on, NEAR identified certain operational challenges in Ethereum, particularly related to network congestion and high/volatile gas fees, that it looked to solve. To do so, Near turned towards sharding.
A key differentiator for NEAR, sharding, in essence, provides the ability for a blockchain to increase its throughput and handle a larger number of transactions by partitioning the blockchain into smaller parallel shards. In its pursuits, Near introduced an original approach to sharding in November 2021 known as Nightshade, initially unveiled as Simple Nightshade. The underlying principle of Nightshade is that validators are not burdened with the task of processing every incoming transaction. Instead, they only handle transactions that are within specific shards. By doing so, Nightshade paves the way for theoretically limitless scalability. But what does this mean for the end user or investor? Primarily, this approach, which is entirely abstracted from the end-user experience, allows for reduced transaction fees while ensuring rapid transaction speeds.
Additionally, Near recently launched a new initiative in early 2023 known as the Blockchain Operating System (BOS). This development represents a significant shift in how we perceive blockchain platforms. The BOS is designed to integrate seamlessly with various blockchain systems while facilitating decentralization and discoverability, which have historically been impossible to achieve together.
Essentially, the BOS is grounded in blockchain technology but broadens its application by acting as a universal layer, making it adaptable to different blockchain frameworks. One of its primary features is the provision of a decentralized platform for front-end development. This platform aims to simplify the creation of blockchain applications by emphasizing clarity and flexibility.
One of the core advantages of BOS is its potential to decentralize user interactions, improve security protocols, and enhance the modularity of components. Additionally, it prioritizes compatibility across diverse blockchains, presenting developers with a more intuitive and straightforward development environment.
NEAR Technologies
Blockchain Operating System (BOS)
In March 2023, the NEAR protocol introduced the Blockchain Operating System (BOS), an open-source platform empowering developers with the flexibility to build across diverse blockchain environments using familiar programming languages and equipping crypto users with a familiar Web 2 UX. The BOS is designed to be inclusive and democratize the open, catering not only to seasoned web3 enthusiasts but also to the broader audience who might be newer to the decentralized web. A significant breakthrough in the system is eliminating the immediate need for a new user to own any cryptocurrency, substantially reducing the friction of user onboarding.
Additionally, the BOS interface streamlines access and navigation, making it more user-friendly for both developers and the general populace. Moreover, it enables users to search through a portal to diverse communities and applications, all the while prioritizing data privacy. Further, the BOS's user-centric design, coupled with its focus on accessibility, does not just simplify the onboarding experience but also bolsters the discovery of new applications.
Remarkably, the BOS functions both as a development platform and a social network. It’s an environment where users can both deploy and unearth new applications. In delivering straightforward onboarding procedures, unmatched security, and fluid interactions across all chains, the BOS is reshaping the framework for constructing Web 3 applications.
Source
BOS Under the Hood
The Blockchain Operating System (BOS) by NEAR seeks to redefine the landscape of Web3 applications through its unique architecture based on three pivotal elements: components, blockchains, and gateways. Here, we will delve into the significance of each element and examine how they collectively shape the BOS framework.
Components: The Building Blocks of BOS
Components exist at the decentralized application (dApp) layer and can be equated with notable platforms such as Lido, Uniswap, Compound, and others. They stand out for their on-chain storage, high degree of transparency, and their ability for developers to fork these applications, harnessing their functionalities and composability to craft comprehensive web applications. Storing the entirety of a component's code on-chain not only ensures auditability but also bolsters security. With the code readily available for scrutiny in blockchain explorers, users can operate these applications locally, enjoying resilience against potential censorship and a streamlined user experience. This ability to natively audit and locally run the applications represents a paradigm shift in the user-app relationship.
Blockchains: The Underlying Infrastructure
The versatility of components and the BOS becomes apparent in their ability to interact with numerous blockchains and smart contracts instead of just one chain. Currently, BOS offers compatibility with all EVM chains, such as Ethereum, Polygon, Arbitrum, and Optimism, as well as, the native NEAR platform. As EVM chains dominate the TVL in the DeFi space, the BOS’ ability to work across nearly all enables users to tap into nearly all the liquidity and top dApps in the crypto economy. NEAR's capability to efficiently and cost-effectively store HTML/CSS/JS makes it the preferred choice for hosting app source codes.
Gateways: Bridging the Gap to Decentralization
Gateways, the third pillar of the BOS, facilitate the delivery of decentralized front-ends to a broader audience. Each gateway is underpinned by a bespoke virtual machine (VM) equipped to load and run frontends for protocols, be they Ethereum-based, Layer 2 solutions, or alt-L1 platforms like NEAR. All code pertaining to these frontends finds its home on the NEAR blockchain. The gateways are diverse, ranging from wallets and portfolio tools to distinct applications like SWEAT. They cater to tasks as rudimentary as adding swap functionality or as intricate as erecting decentralized app stores. Integrating this expansive functionality requires just the addition of a JavaScript library, followed by a selection of desired app front-ends. Prominent gateway exemplars include near.org, bos.gg, near.social, Cantopia, and nearpad.dev.
The decentralization of composable front ends enabled by the BOS is unique to Near, filling a conspicuous and much-needed void in the crypto arena. Instead of relying on centralized data servers, these front ends are blockchain-stored, promoting both composability and resistance to potential censorship. Historical instances, such as Uniswap's token delisting and the sanctions imposed on Tornado Cash, underscore the vulnerabilities of front ends. BOS’s decentralized approach allows developers the flexibility to fork these front ends and build in the truly OSINT environment that the cryptocurrency movement was built upon.
BOS Advantages
The BOS aims to integrate decentralization with discoverability and developer flexibility. Central to the BOS framework is its array of Web3 development tools that are crafted with the intent of pushing Web3 mainstream. From the onset, the system is designed to enhance user onboarding, improve cross-chain development and app discoverability, and create a seamless UX for Web3 users.
This last point on abstracting away different blockchains for a seamless Web3 experience has benefits beyond simply improving UX. It can potentially also reduce the liquidity fragmentation and tribalism associated with a fragmented crypto economy built around disparate, siloed blockchains. The BOS proposes a solution to this by striving for a consistent user experience across multiple blockchains and allowing developers globally to access and implement various Web3 components. With users and developers now (potentially) unable to discern which blockchain they are using, there is no longer a need to promote one over the other.
None of this is possible without the composability offered by the BOS. The system aims to be chain and language-agnostic, allowing developers to reuse and adjust different components while utilizing the language of their choice. The BOS supports a variety of languages for smart contract development, including JavaScript, Rust, AssemblyScript, and Solidity. Complementing this are their collaborations with established cloud providers, namely Google, Seracle, and Alibaba Cloud, to make transitioning from Web2 to Web3 as comfortable as possible.
In addition, NEAR has initiated the NEAR Dev Hub, a platform envisioned as a resource hub for developers. Preliminary outputs from this initiative include sponsored hackathons and the establishment of community groups.
Thresholded Proof of Stake
The NEAR Protocol operates on a distinct consensus mechanism known as "Thresholded Proof of Stake" (TPoS). Similar to other PoS implementations, TPoS still uses validators, who must stake NEAR tokens to participate, to validate transactions and ensure the integrity/security of the network. However, within the TPoS environment, validators can assume one of four pivotal roles:
Chunk Producers: Their primary responsibility is to authenticate transactions on individual shards, subsequently crafting a chunk, often referred to as a "shard block", from their designated shard.
Block Producers: These validators gather chunks from their chunk-producing counterparts associated with discrete shards. Their function culminates in the production of a block, which is then added to the primary chain.
Hidden Validators: Operating under a veil of confidentiality, these validators authenticate random shards — shards whose identity remains a secret to them and is undisclosed to the public. This veil serves a dual purpose. Firstly, it considerably complicates the task for any malevolent entities attempting to compromise them. Secondly, it robustly augments the chain's overall security measures.
Fishermen: Actively overseeing certain chain segments, these validators act as the guardians against fraudulent activities. They constantly monitor, ready to flag any nefarious activities. Interestingly, their operational requirements are modest — a minimal stake. However, this role, though critical, doesn't confer any rewards.
Central to TPoS is its innovative auction system employed to select validators. This methodology, in essence, discourages the practice of pooling. When validators amass resources, they not only amplify their individual rewards but also consolidate control over the chain. Such centralization runs counter to the foundational principles of blockchain, which emphasize distributed control. The TPoS design confronts this challenge head-on by placing natural barriers against pooling.
Additionally, TPoS tackles the issue of consensus forking — a scenario in which multiple validators simultaneously contribute blocks to the chain. Such events can elongate the time required for transaction finality. By minimizing the possibility of these forking instances, TPoS ensures swifter transaction finality.
Validator Requirements
Validators bear the critical responsibility of validating and executing transactions across the entirety of NEAR's sharded blockchain. Additionally, they monitor their peers (other validators), ensuring no invalid blocks are produced or alternate chains are formed. Validators found compromising network stability undergo "slashing," where part or all of their staked assets are confiscated. To compensate for their services and inherent risks, NEAR validators receive a inflationary protocol rewards, amounting to 4.5% of the total supply annually.
Given the complexity of the validator role, there are stringent hardware requirements (e.g. costs) for anyone looking to run one. To effectively run a validator, a robust system configuration, consisting of an 8-Core CPU, 16GB of RAM, and 1 TB SSD storage, is necessary. Current estimates indicate that the monthly expenditure for hosting a block-producing validator node stands at $330+.
This excerpt just scratches the surface, for the full report, click here .
The very Fat tail of the Market!The trading value of the 5078 stock tickers traded in the 6088 billion USD.
Hence, the trading value of the top 10 tickers with the highest dollar value of trading was 1811 billion USD, almost 29.75% of all circulated dollars in the market.
The fact that the top 10 tickers account for almost 29.75% of all trading value is a sign of market inefficiency. This suggests that the market is skewed towards a few large tickers. This can lead to increased risk for investors who are trying to exploit market inefficiencies.
The top 10 tickers were:
TSLA: Accounts for more than 7.2% of all trades, 10.3% of S&P500 trades, and 18.98% of NASDAQ100
NVDA: Accounts for more than 6.8% of all trades, 10.3% of S&P500 trades, and 15.27% of NASDAQ100
AAPL
MSFT
AMZN
META
AMD
BRK.A
NFLX
GOOG
The top 10 tickers account for 70.55% of all trading value of tickers on the NASDAQ 100..!
The top 10 tickers account for 38.54% of all trading value of tickers on the S&P500..!
The S&P 500 and NASDAQ 100 are both broad market indices that track the performance of the 500 largest publicly traded companies in the United States and the 100 largest non-financial companies listed on the Nasdaq stock exchange, respectively. These indices are widely used by investors as benchmarks for their portfolios.
However, the fact that the top 10 tickers account for such a large share of trading value suggests that these indices may not be as representative of the overall market as they once were. This is because the performance of the top 10 tickers can have a disproportionate impact on the performance of the S&P 500 and NASDAQ 100.
The high kurtosis in the distribution of trading values also suggests that the S&P 500 and NASDAQ 100 may not be as good at capturing the full range of risk and return potential in the market. This is because the distribution of trading values is skewed towards a few large tickers. This means that there is a greater potential for large losses in the S&P 500 and NASDAQ 100 than would be suggested by their average returns.
As a result of these factors, the S&P 500 and NASDAQ 100 may be less useful for investors who are looking for a diversified portfolio that is representative of the overall market and that has a low risk of large losses.
Implications
The fact that the top 10 tickers had such a significant impact on the overall trading dollar value has a few implications.
1st: it means that investors who focus on investing in the top 10 tickers are more likely to generate higher returns than investors who invest in a wider range of tickers.
2nd: it means that regulators need to be aware of the potential for market manipulation by investors who have large holdings in the top 10 tickers.
3rd: it means that investors need to be careful not to over-concentrate their portfolios in the top 10 tickers, as this could make them more vulnerable to losses if the performance of these tickers deteriorates.
4th: The correlation between the tickers and indexes may be overstated. This is because the performance of the top 10 tickers has a disproportionate impact on the performance of the indexes. As a result, the correlation between the tickers and indexes may not be representative of the correlation between the individual tickers.
5th: The correlation between the tickers and indexes may be less informative. This is because the correlation between the tickers and indexes does not provide any information about the specific relationships between the individual tickers. For example, the correlation between the tickers and indexes does not tell us whether the individual tickers are moving in the same direction or in opposite directions.
Conclusion:
Even among the top 10 tickers, TSLA and NVDA have dragged too much attention from most market participants, and the Future of the market is very dependent on the future movements of these 2 tickers!
Education:
A fat tail in statistics is a feature of a distribution where the tails of the distribution are thicker than those of a normal distribution. This means that there are more extreme values in the distribution than would be expected under a normal distribution.
Swiss Franc Rides High on Investor Flight to Safety?Investor flight to safety might provide a favorable outlook for the Swiss franc this week.
Swiss franc against the USD and GBP might be the most interesting considering the Fed and the Bank of England (BoE) hold their policy meetings this week, where they are both expected to keep rates exactly where they are. These pauses by the Fed and BoE might contrast too sharply with the Swiss National Bank (SNB), whose Vice-Chairman made some hawkish comments over the weekend, pushing back against expectations that the SNB is done with its rate hikes, and cause some rumblings in the USDCHF and GBPCHF.
Investor risk-aversion has already caused the Swiss franc to hit a high not seen since 2015 against the Euro. Euro Area inflation is also due this week, so this pair might also be appropriate to watch this week.
Regarding the Middle East conflict, latest developments have seen Israeli Prime Minister Benjamin Netanyahu deny they would agree to ceasefire, drawing parallels to US retaliation to the terrorist attacks of 9/11. In this way, we might expect drawn out conflict, and the desirability of the Swiss franc rising.
Unlocking Trend Reversals: Mastering Bollinger Bands and VWAPsIn this comprehensive video tutorial, we will delve into the powerful techniques of utilizing Bollinger Bands and VWAPs (Volume Weighted Average Prices) to identify and master trend reversals in the futures market. ES1!
You will learn how to leverage these volatility-based indicators to detect potential turning points in price trends. By understanding Bollinger Bands' ability to highlight periods of market consolidation and expansion, you will gain an edge in predicting trend shifts and take advantage of profitable opportunities.
Additionally, we will explore the significance of VWAPs, an essential tool for analyzing price and volume dynamics. By combining volume-weighted prices with Bollinger Bands, you will be equipped with a comprehensive approach to assess market liquidity, support, and resistance levels.
Throughout this tutorial, I provide step-by-step guidance to effectively interpret the signals generated by Bollinger Bands and VWAPs, empowering you to make informed trading decisions. We will also address common misconceptions that can often lead to misinterpretations and false signals.
Whether you are a seasoned trader seeking to refine your strategy or a beginner eager to grasp these technical indicators, this video is designed to provide valuable insights and practical knowledge that can elevate your trading outcomes.
Bitcoin Bull Run Precedes Ethereum RallyDays of triple digit volatility and rampant amateur speculation are gone. Unlike the overblown enthusiasm which defined the peak of 2021, investors now are more measured and discerning.
2023 has been defined by (a) discrete and information fuelled rallies followed by unprecedented low volatility, and (b) rise of traditional finance entrants in digital assets.
Bitcoin (BTC) has rallied sharply relative to Ethereum (“ETH”), pushing BTC-ETH ratio to its highest level since 2021. Several factors point to a potential reversal in the ratio. Investors can deploy CME Micro BTC and Micro ETH Futures to harness gains from eventual reversion.
BTC surged 20% during the past week driven by excitement over the anticipated approval of a BTC Spot ETF. Large liquidations triggered as BTC prices rose on its re-emergence as a haven asset as discussed in a previous paper .
BITCOIN IS A HAVEN (AGAIN)
In October, BTC’s correlation with gold rose while correlation with Nasdaq-100 has inverted suggesting that investors consider BTC as a haven rather than a risk-on asset.
The case for BTC as a haven derives from its limited supply. Every four years, the number of BTCs minted as a mining reward, halves and will eventually halt, leading to a fixed supply.
BTC has played its role as a haven previously. In March this year, during the US regional banking crisis, BTC surged 40%. BTC also rallied 20% at the start of Russia-Ukraine conflict but soon pared those gains. Given the repeated pullback in its prices, question around BTC’s ability to deliver as a safe haven remains.
Assigning BTC a haven status could be a tad bit too early. It is a new asset. It faces regulatory ambiguity. It remains under-invested relative to traditional safe havens like gold and treasuries.
Notwithstanding that BTC is new, it is the most popular and widely tested cryptocurrency. Flow of assets from riskier crypto to the safety of BTC during rising uncertainty partly contributes to haven flows into BTC.
SHORT SQUEEZE ACCENTUATED BITCOIN’S RALLY
Recent rally was punctuated by heavy deleveraging in BTC derivatives. During the long squeeze in August, 64,000 BTCs were liquidated. In the following period, only half of these long positions returned.
These positions were not spared either as large liquidations occurred on October 17th and 23rd leading to unwinding of more than 60,000 BTC.
Source: Glassnode
The size of liquidation was like those in Jan 2023 when prices definitively broke above the $20k range, suggesting that this washout may be adequate to cement a major psychological price level.
AWAITING A BTC SPOT ETF
The latest development in the BTC spot ETF saga comes as an appeals court upheld the ruling against SEC’s rejection of Grayscale’s spot ETF application based on concerns that market manipulation is not addressed sufficiently.
The court held that SEC’s decision was arbitrary, capricious, and unenforceable. This time around, the SEC stated it will not be appealing any further.
The SEC’s easing stance is also echoed in the modest feedback response to other spot ETF applications. Many now believe that all spot BTC ETFs will be approved together and probably before the deadline of January 10th.
Approval of spot BTC ETFs is expected to make the asset available to a wider audience in a familiar Tradfi product structure making BTC go “mainstream.”
Spot ETFs will spur greater demand for spot BTC from ETF manufacturers. When gold ETF was first listed, incremental fund flows translated into higher demand for physical gold.
ETF listing and BTC price run is not a given as regulatory concerns remain. Prices have struggled to sustain ETF excitement driven rallies not once but thrice in 2023 due to slow developments compounded by a harsh macro backdrop.
The risk that the current rally will pullback persists. Earlier this week, price action was significantly influenced by investors speculating on the approval of Blackrock spot ETF (IBTC). The rumours have been spurred by the listing, delisting, and relisting of the ticker on Depository Trust and Clearing Corporation (DTCC) website.
BITCOIN BULL RUN PRECEDE ALTCOIN RALLIES
In stark contrast to BTC’s rally, other major cryptocurrencies have lagged pushing BTC dominance to its highest since 2021.
ETH has rallied 15% over the past week. ETH underperformance relative to BTC has pushed the ratio between them to levels unseen since 2021.
Altcoin underperformance is unusual. During past BTC rallies, ETH price tops lagged BTC tops by a month. This is a consequence of capital rotation within crypto.
In past rallies, asset rotation can be seen in three distinct waves starting with (1) increase in BTC capital, (2) ETH rotation, followed by (3) increasing stablecoin flows.
MARKET METRICS AND ON-CHAIN SIGNALS
A raft of market metrics points to bullish sentiment in crypto markets due to resilient Long-Term Holders (LTH), limited profits at current levels, and strained supply which is expected to be exacerbated by demand from spot ETFs.
More importantly, market metrics indicate a higher bullish sentiment for ETH.
FUTURES AND OPTIONS POSITIONING
Leveraged funds have built up net short positioning over the last few weeks in BTC futures. Contrastingly asset managers have setup net long positioning. In options, BTC full size options have a bullish P/C ratio of 0.51 and Micro BTC options have a P/C ratio of 0.76.
In contrast, leveraged funds bullish on ETH have switched from net short to net long positioning last week. Full size ETH options have bullish P/C ratio of 0.38 and Micro ETH options have P/C ratio of 0.38.
Overall, leveraged funds and option markets are more bullish on ETH compared to BTC.
TRADE SETUP
BTC prices may pullback relative to ETH in the short term given price divergence. CME’s suite of crypto futures can be deployed to harness gains from this trend reversal.
The hypothetical spread posited in this paper consists of two legs: (1) long position in Micro ETH futures expiring on November 24th ( METX3 ) and, (2) short position in Micro BTC futures expiring on the same date ( MBTX3 ).
Each lot of Micro ETH futures provide exposure to 0.1 ETH while each lot of Micro BTC futures provides exposure to 0.1 BTC. To balance notional values, nineteen lots of METX3 are required for each lot of MBTX3 at current prices
● Entry: 19.090
● Target: 17.58
● Stop Loss: 20.000
● Profit at Target: USD 276
● Loss at Stop: USD 169
● Reward to Risk: 1.6x
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
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A Traders’ Playbook – Defence remains the best form of attack Equity continues to trade heavily, and while we are getting to a point of extreme fear, the price action, and the bearish momentum in EU, AUS200 and US equity indices, suggest this is still a sellers’ market. While we have some big catalysts due this week, I still think we must navigate a passage of darkness before we see light in this tunnel.
The geopolitical backdrop in the Middle East remains a dominant market consideration and the market still sees an increasing risk the conflict will not be contained with other players stepping into the conflict.
A near 3% rally in Brent crude on Friday testament to those worries, with the move above $90 seeing traders bid up gold to $2006, with gold's role as the preeminent portfolio hedge once again confirmed. A move into the April/May supply area of $2050 seems perfectly feasible, and the bullish momentum in the price, and the ease by which we’ve seen gold push through well-watched resistance levels, suggests the path of least resistance remains higher and pullbacks should be well supported.
The BoJ meeting could be a real curveball and while the odds are we see it proving to be a low-volatility event, if the BoJ does tweak the YCC cap to 1.5% it could trigger a wave of selling through global long-end bonds (yields higher). This would likely see sizeable gyrations play through all markets, with the JPY – which has stolen the crown from the CHF as the no.1 geopolitical FX hedge – likely to rally hard. Gov Ueda has aimed to be more predictable than former gov Kuroda, so with recent press suggesting a tweak to YCC could be on the cards, the prospect of change to policy is 50:50.
We also get the US Treasury Quarterly Refunding activity throughout the week. To those who aren’t fixed-income traders, this can be an event that isn’t too well-known. As we saw in August, when the Treasury Department detailed increased auction size in its financing plans, it proved to be a key driver behind US Treasury yields rising sharply from 4%. Once again, this event does have the potential to create some big vol in bonds, which could spill over into FX and equity markets. This time around, could we see lower increases in supply, which in turn supports USTs?
Staying in the US, while the FOMC meeting can never be ignored, traders get a thorough read on the US labour market and wages/earnings. On the docket, we get ADP payrolls, the Employment Cost Index, JOLTS job openings, Unit Labour Costs, jobless claims, and nonfarm payrolls. US swap pricing has a 25bp hike in December priced at a 20% chance, so big numbers in this report could see that probability rise, which would likely see the USD break out of the current sideways consolidation.
Corporate earnings get another run past traders, with 24% of the S&P500 market cap reporting. Apple is the marquee name to report, with the options market pricing a move on the day at 3.7% - the market focused on iPhone demand and consumer trends in China. Rallies have been sold of late, with price now below the 200-day MA for the first time since 2 March 2022.
It promises to be another lively week – good luck to all.
The marquee event risks for the week ahead:
Month-end flows – talk is pension funds and other asset managers rebalancing in favour of selling of USDs.
China manufacturing and services PMI (31 Oct 12:30 AEDT) – the market sees the manufacturing index at 50.2 (unchanged) and services index at 51.8.
EU CPI (31 Oct 21:00 AEDT) – while EU growth data seems the more important factor, we could see some volatility in the EUR on this data point. The market consensus is for headline CPI to come in at 3.1% and core CPI at 4.2%. EURCAD is trending higher, and I like it into 1.4750.
BoJ meeting (31 Oct – no set time) – the BoJ should increase their inflation estimates, but the focus will fall on whether there is an adjustment or even full removal of Yield Curve Control (YCC). This is where the BoJ currently cap 10-yr JGB yields (Japan Govt bonds) at 1%. The consensus sees no change to YCC at this meeting, but there is a 50:50 chance we see the cap lifted to 1.5% - an action which could see JGBs sell off (higher yields) and see global bond yields higher in symphony. It could also see the JPY rally strongly.
US consumer confidence (1 Nov 01:00 AEDT) – The market expects the index to pull back to 100.0 (from 103.0) – unlikely to cause to much of a reaction across markets unless it’s a big miss.
US Treasury November Refunding (30 Nov at 06:00 & 1 Nov 12:30 AEDT) – the US Treasury Department (UST) will offer its gross financing estimates for Q42023 (currently $850b) and end-of-quarter targets for its cash balances. It is likely that the gross borrowing estimate will be lowered to $800b, perhaps even lower. The lower the outcome the more USTs should rally and vice versa.
On 1 Nov we will see the UST announce the size of upcoming bond auctions across the 2-, 3-, 5-, 7-, 10- and 30-year bond maturities. The market expects auction sizes to increase across ‘the curve’ by around $1-2b for each maturity. As we saw in August, the higher we see these taken the greater the likely reaction in US Treasuries and subsequently the USD.
FOMC meeting (2 Nov 05:00 AEDT) – The market ascribes no chance of a hike, so guidance from the statement and Powell’s press conference is key. One can never overlook a Fed meeting, but in theory, we shouldn’t learn too much new information and this should be a low-drama event.
BoE meeting (2 Nov 23:00 AEDT) – UK swaps price a 4% chance of a 25bp hike at this meeting, and around a 1 in 3 chance of a 25bp hike by Feb 24. The split in the voting could also be important, with most economists leaning on a 6:3 split. The market feels like the BoE are done hiking, with cuts starting to be priced by June.
US ISM manufacturing (2 Nov 01:00) – The consensus is for the index to come in at 49.0 (unchanged). Consider that the diffusion index has been below 50 since October 2022, so a reading above 50.0 could be modestly USD positive.
US JOLTS job openings (2 Nov 01:00) – Last month we saw a big increase in job openings and further evidence the US labour market is tight. The consensus this time around is for 9.265m job openings (from 9.61m) – risky assets will want to see this turn lower again with reduced job openings.
US nonfarm payrolls (3 Nov 23:30 AEDT) – With so many labour market and wage/earnings data point due out this week, the US NFP report is the highlight. After last month’s blowout 336k jobs print, the current consensus is for 190k jobs, the U/E rate at 3.8% and average hourly earnings at 4%.
Brazil Central Bank meeting (2 Nov 08:30 AEDT) – The BCB should cut by 50bp.
Earnings – This week we see earnings from UK, EU and US listed names coming in thick and fast - 24% of the S&P500 market cap report this week. Numbers from HSBC (Monday), Caterpillar (Tuesday) AMD (Tuesday), Qualcomm (Wednesday), Apple (Thursday) should get the attention.
Can You Explain Your Trading Strategy in 3 Sentences?Can you explain your trading strategy in 3 sentences or less?
Go ahead and give it a try in the comments below.
This is an important exercise for any trader of investor as it demonstrates mastery of an existing strategy. Meaning, if a trader knows their strategy inside and out, and has practiced it or modified it over a period of time, they also can explain it quickly and succinctly.
• Are you a swing trader? What criteria determines a trade?
• Are you a value investor? What metrics do you use?
• Are you an algorithmic trader? What code powers your trading?
All of these questions and more go into explaining your trading strategy, which is ultimately the process you're using to trade markets. However, it's often observed that new traders don't have a strategy. Instead, their trades are impulsive and random. As a community, we can use the comments section below to showcase our individual levels of expertise, helping new traders along the way and watching pro traders innovate.
We look forward to seeing what everyone writes in the comments below.
In addition, the more people who share, the more we can learn.
Be sure to like, follow, and comment on the traders who have the most interesting answers. You may find a great follow and improve your social feed here.
- TradingView Team
Decoding Market Patterns:10 Essential Price Patterns Every TradeIn the intricate world of trading, price patterns are the footprints left by market sentiment. Understanding these patterns is like deciphering a complex code, revealing insights into potential market movements. Today we will explore 10 essential price patterns every trader should recognize. Each pattern is a chapter in the dynamic story of market behavior, offering opportunities to identify trends, reversals, and strategic entry or exit points.
1. Bull Flag: The Flagbearer of Continuation
A Bull Flag is a continuation pattern, often seen in strong uptrends. It resembles a flagpole (the initial price spike) followed by a rectangular flag (consolidation phase). When the price breaks above the upper boundary of the flag, it signals a potential continuation of the uptrend.
2. Bear Flag: The Bearish Counterpart
The Bear Flag is the opposite of the Bull Flag. It appears in downtrends, with a flagpole representing the initial price drop followed by a consolidation period. When the price breaches the lower boundary of the flag, it indicates a potential continuation of the downtrend.
3. Head and Shoulders: The Classic Trend Reversal
The Head and Shoulders pattern is a powerful reversal indicator. It consists of three peaks – the central peak (head) is higher than the surrounding peaks (shoulders). When the price drops below the neckline (a line drawn through the lowest points of the shoulders), it suggests a potential trend reversal from bullish to bearish.
4. Inverse Head and Shoulders: The Bullish Resurgence
The Inverse Head and Shoulders pattern is the bullish counterpart of the Head and Shoulders. It occurs after a downtrend and indicates a potential reversal to an uptrend. The pattern consists of three troughs – the central trough (head) is lower than the surrounding troughs (shoulders). When the price rises above the neckline, it signals a potential shift from bearish to bullish.
The cool thing about chat patterns is that they are everywhere. You often see many different chart patterns on a singular chart, or smaller patterns that are a part of a larger pattern. The tricky part is finding them and appropriately identifying them.
5. Double Top: The Bearish Reversal Duo
A Double Top pattern occurs after an uptrend and signals a potential reversal. It consists of two peaks at nearly the same price level, indicating a struggle to push the price higher. When the price falls below the trough between the peaks, it suggests a possible shift from bullish to bearish.
6. Double Bottom: The Bullish Reversal Duo
The Double Bottom is the bullish counterpart of the Double Top. It occurs after a downtrend and signals a potential reversal to an uptrend. It consists of two troughs at nearly the same price level, indicating a struggle to push the price lower. When the price rises above the peak between the troughs, it suggests a potential shift from bearish to bullish.
7. Rising Wedge: The Rising Price Constrictor
A Rising Wedge is a bearish continuation or reversal pattern. It can form during a downtrend or in an uptrend where buying pressure becomes exhausted. The wedge is characterized by converging trend lines that slope upward. While the price may make higher highs and higher lows, the pattern tightens, indicating weakening momentum. When the price breaks below the lower trendline, it suggests a potential continuation of the downtrend or reversal of an uptrend.
Rising Wedge Reversal Example:
Rising Wedge Continuation Example:
8. Falling Wedge: The Falling Price Constrictor
The Falling Wedge is the bullish counterpart of the Rising Wedge. It forms during an uptrend or a downtrend, characterized by converging trend lines that slope downward. While the price may make lower highs and lower lows, the pattern tightens, indicating weakening selling pressure. When the price breaks above the upper trendline, it suggests a potential continuation of the uptrend.
Falling Wedge Continuation Example:
Falling Wedge Reversal Example:
9. Symmetrical Triangle: The Balance of Bulls and Bears
A Symmetrical Triangle is a neutral pattern that forms during a trend, indicating a period of consolidation. It is characterized by converging trend lines that slope in opposite directions. When the price breaks above the upper trendline, it signals a potential bullish move, and when it breaks below the lower trendline, it signals a potential bearish move.
10. Pennant: The Brief Consolidation Pause
A Pennant is a continuation pattern that forms after a strong price movement. It resembles a small symmetrical triangle, indicating a brief consolidation before the previous trend resumes. When the price breaks above the upper boundary, it suggests a potential bullish continuation, and when it breaks below the lower boundary, it suggests a potential bearish continuation.
Important Thing To Consider:
Price patterns are a tool that if practiced and executed properly can be a great asset for any trader. There are a few things that all traders should keep in mind when using price patterns to make trading decisions.
Context is critical: Price patterns don't exist in isolation; they occur within the context of larger market trends. It's essential to consider the prevailing market conditions, including the overall trend (bullish, bearish, or sideways), volume trends, and recent price action.
Confirmation is Key: While recognizing a price pattern is an important skill, relying solely on its formation might lead to premature or false trades. Traders should always wait for confirmation signals before taking action. Confirmation can come in the form of a price breakout above a pattern's resistance level, a significant increase in trading volume confirming the pattern's direction, or additional technical indicators aligning with the pattern's signal. Waiting for confirmation helps traders filter out false signals, reducing the risk of entering trades based solely on pattern
Risk management is paramount: No pattern, regardless of its historical accuracy, guarantees a profitable trade. Traders must always implement proper risk management strategies, including setting stop-loss orders and defining acceptable levels of risk per trade as a percentage of their trading capital. Risk management ensures that even if a trade based on a price pattern fails to materialize as expected, the impact on the trader's overall portfolio remains manageable.
Practice, practice, practice: Identifying price patterns is a skill that improves with practice and experience. Traders should dedicate time to studying historical charts, both in live markets and during backtesting. Regularly practicing pattern charting enhances the ability to spot patterns quickly and accurately. TradingView offers a great set of tools to help anyone get started by offering a full line of automated pattern recognition indicators for educational and research use. Utilizing these automated pattern recognition indicators is a great way to visualize patterns in the real world as patterns are often less clean than textbook examples.
Recognizing these price patterns equips traders with a valuable skill set for navigating a dynamic market. However, it's vital to remember that patterns, like pieces of a puzzle, offer meaningful insights when combined with other indicators and thorough analysis. No single pattern guarantees profits, and each should be evaluated within the context of the broader market conditions. By integrating pattern recognition into a holistic trading strategy, traders can unlock the door to more informed, confident, and strategic trading decisions. Happy trading!
Ben with LeafAlgo
Five of the Best Volatility IndicatorsVolatility can seem like a scary concept at first glance: wild price swings, stop-outs, and general unpredictability. However, there are volatility technical indicators that can help. This article covers five essential volatility indicators, discussing how they work and how they’re used to gauge market conditions.
What Is Volatility?
Volatility represents the range and rate at which the price of a financial asset moves over a specific timeframe. In other words, it gauges the degree of variation in a trading price. High volatility often correlates with higher risks and potential rewards, while low volatility suggests a less turbulent market with lower risks and potential rewards.
Volatility Technical Indicators
Volatility indicators are specialised tools that help traders quantify these price swings, making it easier to forecast future movements. They can help traders identify potential breakouts or market reversals by revealing periods of accumulation or distribution. By providing a clearer understanding of market temperament, these indicators equip traders to make more calculated decisions – be it in forex, commodities, or stock markets.
These indicators can be overlaid on price charts to offer visual cues, thereby simplifying complex data. They are commonly used alongside other technical indicators like moving averages and momentum oscillators to reinforce their signals.
Best Volatility Indicators List
Now, let’s take a closer look at five of the best volatility indicators. To see how they work for yourself, head over to FXOpen’s free TickTrader platform. There, you’ll find each indicator ready to use.
Bollinger Bands
Bollinger Bands are a volatility indicator invented by technical analyst John Bollinger in the 1980s. The indicator consists of three bands: a middle band, which is a simple moving average (SMA) of the asset's price, and two outer bands that are placed two standard deviations away from the middle band. These bands adjust dynamically with volatility, widening during periods of high volatility and contracting when volatility is low.
In trading, Bollinger Bands serve multiple purposes. They can identify overbought or oversold conditions when the asset's price reaches the upper or lower bands. The width of the bands also helps in recognising periods of increasing or decreasing volatility, often signalling potential market transitions. Traders frequently use Bollinger Bands to confirm trend reversals or to validate other technical signals.
Average True Range (ATR)
The Average True Range (ATR) is a volatility indicator introduced by J. Welles Wilder in 1978. Unlike Bollinger Bands, which envelop price action, ATR is a single line that typically appears below a price chart.
The indicator calculates the average of true ranges – essentially the greatest value among the current high minus the current low, the absolute value of the current high minus the previous close, and the absolute value of the current low minus the previous close – over a set number of periods.
ATR is primarily used for setting stop-loss levels and gauging the volatility of an asset. It doesn't offer any clues about price direction, making it a "pure" volatility measure. Higher ATR values indicate increased volatility and may suggest that price jumps or drops are more probable, warranting caution. Lower ATR values signify lower volatility, often seen during sideways market movements.
Keltner Channels
Keltner Channels are another volatility-based indicator, created by Chester Keltner in 1960 but later modified by Linda Raschke. This indicator consists of three lines: a central line, which is an Exponential Moving Average (EMA) of the asset's price, and two outer bands calculated based on the ATR. Typically, the outer bands are set two ATR values away from the central EMA.
Much like Bollinger Bands, the width of the Keltner Channels expands and contracts based on market volatility. These channels are particularly useful for identifying trend continuations and reversals. For instance, a price that moves toward the upper band often indicates bullish activity, whereas a movement toward the lower band suggests bearish behaviour.
Chaikin Volatility Indicator
The Chaikin Volatility Indicator, developed by Marc Chaikin, focuses on the expansion and contraction of price movement, differentiating it from other volatility indicators. Instead of using trading volume or calculating the average range, this indicator measures the difference between two EMAs of an asset's price, typically over 10 days.
When the Chaikin Volatility Indicator shows an upward movement, it indicates an increase in price volatility, potentially signalling a market breakout or a strong trend. Conversely, a downward trend in the indicator often suggests a decrease in volatility, possibly pointing to a market consolidation phase. Because this indicator focuses solely on price behaviour, traders often pair it with volume-based indicators for more comprehensive analysis and confirmation of trading signals.
Volatility Index (VIX)
The Volatility Index, commonly known as the VIX, operates somewhat differently from typical volatility trading indicators. Developed by the Chicago Board Options Exchange (CBOE), the VIX quantifies market sentiment and volatility expectations for the next 30 days. It is often referred to as the "fear gauge," as it tends to spike during periods of market unrest or uncertainty.
Calculated from the implied volatilities of S&P 500 index options, a high VIX value suggests that traders expect significant price swings, usually accompanying bearish market phases. On the other hand, a low VIX often indicates periods of complacency or confidence, generally correlating with bullish markets.
While not directly applicable to an asset's price chart, the VIX serves as one of the leading stock volatility indicators, offering traders context for broader market conditions.
The Bottom Line
In essence, volatility indicators are invaluable tools in a trader's arsenal, helping to demystify often unpredictable price movements. Mastering and combining these indicators, especially with momentum and trend tools, can significantly enhance your decision-making process.
To put these five tools into practice, consider opening an FXOpen account. We offer hundreds of tradable instruments and sophisticated charting tools, allowing you to navigate the markets with confidence.
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Mastering the Art of Investing: Common Mistakes & solutionsLet's keep it straight to the point, Shall We?
1. Emotional Investing:
One of the most prevalent mistakes is allowing emotions to drive investment decisions. Fear and greed can lead to impulsive actions, such as panic selling during market downturns or chasing speculative investments during bullish phases.
Solution: Develop a well-thought-out investment plan based on your financial goals, risk tolerance, and time horizon. Stick to this plan, regardless of short-term market fluctuations. Regularly review and adjust your portfolio, but do so based on rational analysis, not emotional reactions.
2. Lack of Diversification:
Concentrating all investments in a single asset or industry exposes investors to significant risks. If that particular investment performs poorly, it can have a devastating impact on the overall portfolio.
Solution: Diversify your portfolio across different asset classes, industries, and geographic regions. This strategy helps reduce risk and improves the potential for more stable returns over the long term.
3. Market Timing:
Attempting to time the market, i.e., buying and selling based on predictions of short-term price movements, is a common mistake. Even seasoned professionals struggle to consistently time the market correctly.
Solution: Adopt a long-term investment approach. Time in the market is generally more important than timing the market. Stay invested and focus on your financial goals rather than trying to predict short-term market movements.
4. Overlooking Fees and Expenses:
High investment fees and expenses can significantly erode returns over time. Many investors underestimate the impact of these costs.
Solution: Be mindful of the fees associated with your investments, including expense ratios, broker commissions, and advisory fees. Consider low-cost index funds or exchange-traded funds (ETFs) as cost-efficient alternatives.
5. Ignoring Asset Allocation:
Some investors focus solely on individual investments without considering how they fit into their overall portfolio. Neglecting proper asset allocation can expose portfolios to unnecessary risk.
Solution: Determine an appropriate asset allocation based on your risk tolerance and investment goals. Rebalance your portfolio periodically to maintain the desired allocation.
6. Chasing Hot Tips and Fads:
Acting on unsolicited stock tips or investing in the latest fads and trends can lead to poor decision-making and losses.
Solution: Rely on thorough research and due diligence before making any investment. Avoid making impulsive decisions based on hearsay or the fear of missing out (FOMO).
7. Lack of Patience and Discipline:
Investing is a long-term endeavor, and expecting quick riches can lead to disappointment and rash decisions.
Solution: Cultivate patience and discipline in your investment approach. Stay committed to your long-term strategy and avoid making knee-jerk reactions to short-term market movements. Also, another good way of increasing discipline is giving us a boost for our efforts :)
In conclusion, successful investing requires a well-structured plan, emotional resilience, and a commitment to disciplined decision-making. By avoiding these common mistakes and implementing the provided solutions, investors can increase their chances of achieving their financial goals and building a more secure financial future. Remember, investing is a journey, and learning from mistakes can ultimately lead to greater financial wisdom and success.
Have Insights or Questions? Let us know in the comments below.👇
While you do that, how about a boost for some motivation🚀
⚠️Disclaimer: We are not registered advisors. The views expressed here are merely personal opinions. Irrespective of the language used, Nothing mentioned here should be considered as advice or recommendation. Please consult with your financial advisors before making any investment decisions. Like everybody else, we too can be wrong at times ✌🏻
Five year view on LinkLink was one of the darlings of the last bull run. It’s story includes crazy volatility, stories of “Link Marines” blowing out Zues Capital out after its short and distort narrative fell apart. I suspect Link will once again be a darling of this new bull cycle.
cointelegraph.com
Analysis
The meat of the idea is from the main chart. We have hidden bullish divergence on the log MACD as well as the RSI. Hidden bullish divergence suggest a uptrend will continue. There is a higher low on the price but a lower low on the indicator. The green arrows show that very clearly.
The RSI getting to above 70 can signal overbought on a time frame but it can also signal that the bulls are in control of the price action. The log MACD is above zero once again. Both are very bullish indications that momentum is shifting fully bullish.
I favor using two Keltner channels, one set with the ATR at 1 and one set at 2. It helps be visualize when price is in between and make some conclusions. In order to “break” a weekly Keltner channel we need months if not years of price action creating a formation we can play.
I am just going to keep it as simple as possible. Link had a Elliot wave impulse and has completed its ABC correction. That is the structure we need to break the Keltner channel and push it upward. The chart below shows that twice link lost over 60% of its value when it corrected. So there are going to be discounts on the way back up. These relative bear markets lasted several hundred days and that can really weaken people’s hands.
Since we are using elliot wave the primary targeting technique I am using is major fib extension levels. I have only shown a couple on the main chart for simplicity but I expect action at almost all major fib lines. Stalls, retraces, all the normal drama.
Looking to buy the lower half of the Keltner channels seemed to have worked out for long term investors between 2018 and 2021. It was only when we put in the lower high at point B that strategy meant you were out of the money for a long time.
My plan
I plan on having Link be a major holding going forward. I plan on watching some tokens against Link (sol, xmr, ftm, etc) and trying to do some rotations or buying the alts when they have bullishness against link. In the long run I hope to pull close to 200x out of link with no margin.
The Euro May Have BottomedThe Euro has faced steady selling pressure since July, but now there may be signs of the currency bottoming against the greenback.
The first pattern on today’s chart is the falling trendline along the weekly highs. EURUSD has been pushing above that resistance this week. Notice how it started rallying a year ago after breaking a similar trendline.
Second is the January low around 1.048. The currency pair fell under that level in early October but recovered. The results were a false breakdown and a hammer candlestick. Chart watchers may view both as bullish reversal patterns.
This setup could keep traders on alert for a potential rally given upcoming events like gross domestic product (GDP) Thursday morning, the Federal Reserve meeting on November 1 and non-farm payrolls on November 3.
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ETH ecosystem to fund initial stage of crypto bullrunWhen markets rotate the money has to come from somewhere. Money can move in and out of one sector of the economy into the other, like money moving from industrials into technology or from fiat into precious metals. Money can also move around within a macro system from its constituent sub-systems. In the case of crypto, think we will see the Ethereum ecosystem beggared while money flows out of it into other ecosystems.
In order to try and stay ahead of the rotations into and out of crypto and into and out of the various layer one projects within crypto I turn to the best tool I have, which is the charts. Once we have the layer one blockchain we care about we can look at other layer projects that ride on top of the layer one to move up the risk curve for more volatility as we see fit.
ETH/Bitcoin
Bitcoin is the biggest single slice of the crypto by fame and market cap. The double top threat is pretty clear at this point. The black double top appears to be an eve and eve with the difference between the first and second peak about 3.12% That is about as textbook as we could want to see. We just have to start breaking the neckline of the formation and we should start to see more volatility in the pair.
Eth Dominance
ETH.D is likewise in a double top but this one is a bit further away from the neckline. The targeting is much the same. Due to the structures of the uptrend I think that 40% draw down is very reasonable and realistic.
XRPETH
XRP appears to be in a ascending triangle against ETH with a target close to 2x if full performance is reached.
Solana/ETH
Solana is suppose to be an Ethereum killer and in the long run I think it will live up to its name. I think it has a couple of years for the ecosystem to mature before It does. A major sign of strength will be if this W pattern performs to target. That would have Sol putting up over twice the gains than eth does in the initial stages of this move.
Polkadot ETH
Dot has been moving sideway for the last 4 months and has created some bullish divergence on the weekly chart. I think we will see it slowly erode share out of eth.
Kadena Eth
One of my favorite layer ones to watch and maybe trade before I see my long term set up is Kadena. It is poised ot have a W pattern that pops it over 100% against eth.
Cronos Eth
Cro seems to be another coin in a wedge against eth. The target this cycle is over 300% away from the current level.
ADA ETH
Oh, look, it is another coin in a bullish falling wedge against ETH. Sure reaching the previous ATH might take a decade or so, but that is a decade to favor ADA over eth.
Doge Meme Coin Versus Eth
Want to consider something that at first glance seem moronic or hilarious? Doge has the structure to 70x eth over the next couple of years.
Final thoughts
The Eth team has done a lot to make their system more affordable to use. As price goes down the ease of use goes up and the adoption goes up. Ethereum is in the process of turning itself into a volume trade and not a profit margin trade. That might be a good thing for cryptocurrency as a whole but I am chasing alpha. Crypto gives me more potential alpha than equities so I play here. If the alpha is leaving eth then I am going to leave as well, no matter how good it could be for the world or the ecosystem. Daddy can't pay for his girls food and clothes if he doesn't get that alpha.
Technology to Energy RatioEverything is cyclical. Every asset has its own cycle eventually in its own time. From Crypto to Real estate and Technology.
I crossed compared the Energy sector to the Technology Sector. XLE/QQQ
Then overlaid the Technology Sector to the Energy Sector QQQ/XLE
As you can see there is many clues where one will always outperform the other.
You just have to hold these assets where one is gaining vs the other.
One asset will suck the liquidity of the other and visa versa until one completes the cycle then it repeats
Hard assets are primed for outperformance.
Happy Investing
Long Term Investment Thesis for LYVLooking for long term investments is always a challenge. Thing is you need to know what you are looking for. It makes a difference to find a company that is oversold and is sitting on the 200 moving average. I have an idea that we have a gap to close between the yellow lines. I think but, time will tell, that this stock possibly could break through to those yellow lines in order to fill the gap and fill the orders that are out there within that gap.
This stock is a company that has high director ownership at 32% which tells me they believe in their company. As I dive deeper, this company is constantly increasing their employees yearly to where they are now at 28,000 employees.
As far as the Market Value 18.40B and Enterprise Value 19.68B this company has two numbers that are close. However, they do have more debt than cash but it is close.
This stock is in the niche that has plenty of growth room and they are kicking it within the entertainment business and selling tickets online.
This is a company that is in the entertainment niche. They have cornered a market and many in the USA have used this company if they have attended college sports and events or any other venues that need and use a web based ticket collection agency. This company owns and operates TicketMaster which has taken the whole process of paper tickets to be replaced, bought, sold, exchanged via web based. This stock has been trading in the same range over the past 5 years for the most part. It has been going higher over time but, the markets have been off due to the corrections with in the market. This particular stock is set to go higher over time with many analysts putting $107 and higher price tags.
The insider ownership of the directors is nearly 32% ownership and their Market Cap is 18.40B whereas the Enterprise Value is 19.68 B, which are very closely aligned. The earnings per shares is $1.07. They have continuously been hiring new employees due to their growth over the years.
This stock is:
Live Nation Entertainment, Inc. operates as a live entertainment company. NYSE:LYV
It operates through Concerts, Ticketing, and Sponsorship & Advertising segments. The Concerts segment promotes live music events in its owned or operated venues, and in rented third-party venues; operates and manages music venues; produces music festivals; creates and streams associated content; and offers management and other services to artists.
The Ticketing segment manages the ticketing operations, including the provision of ticketing software and services to clients for tickets and event information through its primary websites livenation.com and ticketmaster.com, as well as through other websites, mobile apps, retail outlets, and call centers; and provides ticket resale services.
This segment sells tickets for its events and third-party clients in various live event categories; offers ticketing services for arenas, stadiums, amphitheaters, music clubs, concert promoters, professional sports franchises and leagues, college sports teams, performing arts venues, museums, and theaters.
The Sponsorship & Advertising segment sells international, national, and local sponsorships and placement of advertising, including signage and promotional programs; rich media offering that comprise advertising related with live streaming and music-related content; and ads across its distribution network of venues, events, and websites.
This segment also manages the development of strategic sponsorship programs, as well as develops, books, and produces custom events or programs for specific brands.
It owns, operates, or leases entertainment venues in North America and internationally. The company was formerly known as Live Nation, Inc. and changed its name to Live Nation Entertainment, Inc. in January 2010.
Live Nation Entertainment, Inc. was incorporated in 2005 and is headquartered in Beverly Hills, California.
I personally buy stocks when I see setups in charting that I like which is just my style of investing. I have attached a detailed daily chart with RSI (37.44) that is showing this stock is oversold meaning that it is unloved at the moment but, most of the market is too but, it is not as cooled off as I would like to see it. I’m personally looking for it to go closer to RSI of about 30. It is also beginning to reach a critical point of touching the 200 moving average line in which I will watch to see if it continues to hold there or proceeds to break through to the downside. If it continues to hold and stay within that price range for the next week. That indicates to me that a buying trend is beginning to form. The Volume and MACD is also showing a huge sell off so, I want to see that level off some as well. I do not plan to buy into this stock until I see the MACD cross upward and at minimum 5 days of similar stock price range with stronger buying volume than the current selling off volume. I personally am also looking at a gap that I know has orders still waiting to be filled where buyer and/or sellers are waiting to get this stock at $73.73 to $67.60 price range. Generally, not always, gaps have to be filled at some point in time. I’m looking for the stock to drop into this range before I enter it. I might be late and disappointed if the markets take off and this one continues higher but, that is where I’m looking to enter. I just wanted to share this company with the group because I see much here and personally have used this company to buy all my sporting event and concert event tickets over the past 5+ years.
I know we can’t pin point “the bottom” but, I like to buy all the bottoms now that I understand how to read charts in order to have a better dollar cost average for long term stock investing. The reason I dollar cost average the bottoms, is because my personal psychology drives me crazy to see huge losses in my portfolio. Happy stock hunting and investing, y’all!
