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SEVEN GUILTS IN TRADING PSYCHOLOGY 1. Confirmation Bias: People pay close attention to information that confirms their beliefs and ignores information that contradicts it. How to avoid: While preparing to execute the order, we try to find support reasons for the opposite direction. The second consideration can not be too careful. 2. The illusion of Control: The illusion of control is the tendency for people to overestimate their ability to control events. It occurs when someone uses a lot of market indicators/TA's method and places the truth on as many as possible. How to avoid: Remember that "Simple is the best". The good-enough trading system on a simple level with a good-enough winning probability will help to exist in the full lying market. 3. Mental-Accounting Bias: The investor has 1000 USD initial capital and 200 USD profit. The psychology of investors usually tries to keep the capital of 1000 USD, while 200 USD will take away more risky investments with the thought that if they lose, they will only lose profits. However, in essence, 200 USD or 1000 USD are all our assets. How to avoid: - Convert the profit to hard assets, if the profit is enough big. - Withdraw the profit periodically, only trade with the initial capital. We can review and reinvest into the capital every month/year. 4. Recency Bias: People analyze a stock that has good fundamentals, and now has a low valuation, but the market trend over the last few weeks is down. Most of them will be more inclined to the negative side and think that this is no longer an attractive investment. However, with experienced analysts, they will see the other long-term factors and see the decline as a temporary correction, even an opportunity to buy shares cheaply. How to avoid: Let's see things from a wider perspective. 5. Herd Mentality: - FOMO: Fear of missing out when seeing nearby someone get a lot of money. - Be panicked when the market sharply decreases. How to avoid: - For short-term trading, be patient, do not chase the price. There are a lot of chances for the next trading. - For long-term trading, make out some major support areas, and early enter orders with sufficient volume in order to avoid FOMO. - For the problem of strongly competing for sales in the plunging market, stay away from illiquid assets. 6. Loss Aversion: Loss aversion refers to people’s tendency to prefer suffering huge losses with the expectation that the price will come back. How to avoid: Make a plan for managing the capital. Everything is just probability, don't hesitate to cut your losses when guessing wrong. Leave room for mistakes. 7. Overconfidence: The psychological problem occurs when an investor wins continuously, they will be more subjective and less disciplined. How to avoid: Always keep a balanced mind! For example, a good psychological investor usually set minimum and maximum profit targets by period (week, month, year). If the lowest goal hasn't been reached, confidence is superfluous. If the highest goal has been reached, the rest should be taken into account. Of course, goal setting must be consistent with the strategy and not overwhelming, it is impossible to set a 100% profit in a week.

Education

by vumaikhanh1991

The Four Quadrants of the Economic Cycle Use this as tailwinds for your trading and investments to spot the capital inflows when the time comes. I would say we are likely in the inflationary bust stage (1) coming out of the disinflationary boom stage (4) for the last decade and beyond. I would dare say the Inflationary bust stage is next (2) as the central banks try to kill inflation by raising rates and destroying asset prices. To fix the economic damage they would have to eventually change their monetary policy which would then bring us into an inflationary boom (3) The cycle repeats over and over but I'm positioning for the Inflationary boom stage (3) as I believe this stage will last many years.

Education

Updated

Using MACD To Identify Long Term Trends How can we tell whether a downturn is just a normal part of a solid bull market, or the beginning of a major downdraft? We need to have a way to identify when long-term trends are changing. One way to guard against being caught on the opposite side of a trend is to apply technical indicators that can isolate major trend shifts and reduce psychological biases. Specifically, technical indicators based on moving averages reduce the noise that characterizes the stock market. We can argue about the fundamental valuation of a company, but we cannot argue whether a stock’s price is above or below historical moving averages. In analysis based on moving averages, the focus is less on why the market should move up or down, and more on what the current market dynamics are from a supply-and-demand perspective. Today there are more opportunities than ever for a decoupling of price from fundamentals. This is fueled in part by retail investors, who have access to information and tools that previously were available only to institutional investors, and social media in which market players can talk up stocks. This is where MACD, or “moving average convergence-divergence” indicator, comes in. It was developed in the 1970s and is widely accepted by technical analysts as one of the best ways to identify prevailing trends. It is available on just about every charting platform, most of which allow for revision of the indicator’s standard parameters. The standard MACD consists of a spread between the 12-period and 26-period exponential moving averages of a stock’s closing prices, which is then smoothed by a signal-generating line derived from the 9-period exponential moving average of the spread. A long-term trend-following overlay is afforded by the MACD applied to the monthly bar chart of the S&P 500 Index (SPX). It provides a visual gauge of the primary trend, and it identifies major turning points when the two lines that comprise the MACD cross over. The crossovers provide “buy” signals and “sell” signals that may more clearly indicate when the long-term trend has shifted. To illustrate this, the chart goes back 1999. The price bars are colored green to reflect positive or improving MACD readings, and red to reflect negative or deteriorating MACD readings. Bullish and bearish crossovers are denoted by up and down arrows. Generally, it has been good to be long equities when the bars are colored green, which has typically been associated with uptrends. It tends to be a more difficult environment for investors when the bars are colored red, which is typically associated with a sideways or lower trend. It was 2008 that technical analysis really became noticed on Wall Street. The SPX had seen its monthly MACD flash a “sell” signal in November 2007, a month before it broke down, and it did not flash a “buy” signal until a few months after the March 2009 low. The bearish reversal caught many off guard, but those who used the MACD were quicker to minimize exposure, bringing attention to the field of technical analysis as a viable discipline for risk management. MACD “buy” and “sell” signals do not capture pivots until after-the-fact, but the signals are not too late to take advantage of long-term turnarounds. Sometimes they even precede bear markets, as in 2000 and 2007. Note that the MACD flashed a “sell” signal in January 2000, before the tech bubble burst, and did not flip to a “buy” signal until May 2003, before a sustained bull market move began. Whipsaws are not uncommon, but they are short-lived, and often associated with shifting trends like in 1999 and 2015, so even false signals can have value. The bulk of uptrends and downtrends were captured by the MACD despite its inherent lag. The MACD is not a trading system, so a “sell” signal need not be interpreted as a reason to move to 100% cash in a portfolio, but rather an indication to position more defensively. Traders often refine long-term MACDs with shorter-term MACDs, evaluating them alongside other momentum and overbought/oversold indicators for a holistic view. Since technical analysis is based on concrete data, there is broad agreement on the merits of MACD, although different preferences and parameters can be applied. So, what does MACD tell us about the current environment? As it stands, the SPX is currently in a bear market cycle and has been since the MACD flashed a “sell” signal at the end of March 2022. Since the “sell” signal, the SPX is down roughly 16% and continues to trend lower. In a down-trending environment, breakouts are more likely to fail, and breakdowns more likely to see downside follow-through. Overbought readings instill fear, whereas oversold readings instill healthy skepticism. Psychological biases, notably fear and greed, are what makes a market a market, and they can be managed with unbiased input from the MACD. Clear-eyed analysis of the underlying momentum of the market can help us stay on the right side of the prevailing long-term trend. Adapted from “The New Market Momentum: Reading the Technical Indicators” by Katie Stockton, published on Future.com (June 15, 2021). Katie Stockton, CMT Founder and Managing Partner Fairlead Strategies Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.

Education

by CMT_Association

Are You Ready to Trade Full Time? 4 Essential Signs ⭐ Hey traders, Once you mature in trading and become a consistently profitable trader, the question arises: are you ready to trade full time? Becoming a full time trade is a very significant step and my things must be taken into consideration before you make it. ✨Becoming a full time trader implies that you quit your current job, that you give up a stable income - your salary. In contrast to classic job, trading does not give guarantees. Please, realize that such a thing as stable income does not exist in trading. Trading is a series of winning and losing trades, positive and negative periods. For that reasons, remember that in order to become a full time trader, your average monthly trading income must be at least twice as your monthly expenses. ✨Moreover, even if your trading income is sufficient to cover two months of your life, that is still not enough. You must have savings. Trading for more than 8 years, I faced with quite prolonged negative periods. One time I was below zero for the entire quarter. For that reason, supporting a family and living a decent life will require savings that will help you not to sink during the losing periods. ✨Another very important sign is your correct and objective view on your trading. Please, realize that if you bought Bitcoin one time and made a couple of thousands of dollars, it does not make you a consistently profitable trader. Please, do not confuse luck with the skill. Your trading must be proven by many years of trading. ✨You must be emotionally prepared for the living conditions that full time trading will bring you. Being a full time trader implies that you are constantly at home, you work from home from Monday to Friday. You do not see your colleagues, your social life will change dramatically. I know a lot of people who started to trade full time and then realized that they can not work from home for different reasons. ⭐So what are the necessary conditions for becoming a full time traders: you should have savings that will cover the negative trading periods, your average monthly trading income should be at least twice as your monthly expenses, your trading efficiency must be proven by objective, consistent results, and you must be psychologically prepared for working from home. When these conditions are met, you can make a significant step and become a full-time trader. Are you ready to become a full time trader? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️

Education

by VasilyTrader

Updated

Managing Your trades using TIME of DAY Phrases such as: Technical analysis, Price action break, Trendline, etc., turn us on, but it's not that often we discuss POSITION MANAGEMENT and TIME of DAY. MOST movement occurs during the 1st two hours of the European Session and the 1st two hours of the US session. Price tends to STALL OUT, or PULL BACK right before the lunch hour, (European and US) and USUALLY continues SIDEWAYS through the rest of the session. Around 30min./hour before the session starts is a good time to observe price action to determine if the movement is going to continue (which is rarely does) or is going to stall out or pullback. Example: I live in the U.S. and am waking up around the end of the lunch hour of the European session. Let's say I'm in a trade and overnight the asset goes as expected and I'm up 30 -60 pips. When I check the chart, I see the asset has hit a level and reacted (stalled or pulled back). At this TIME, I will most likely REDUCE my POSITION (LOCKING IN SOME PROFIT). I will not worry about FOMO (fear of missing out). If the asset passes the level and starts to move again with the U.S. session I can always add back to my position. If it reverses, (usually due to a news release) I have already taken some profit. If the asset pulls back to a level and the trade is still valid, I can add to my position. Right before the U.S. lunch hour I will repeat this TIME ASSESEMENT. There is plenty of discussion about technical analysis, fundamentals, and strategies, etc. but it's not that often we talk about MANAGING A POSITION, and how it relates to TIME OF DAY. I warrant that the information created and published by is not prohibited, doesn't constitute investment advice, and isn't created solely for qualified investors. Bruce Baines

Education

How to create a real-time US real rate on TradingView US real rates drive everything in markets right now, and if they are going up then so is the USD, while equity will head lower – for context, the 1-month rolling correlation (assessed by value, not percentage) between US 10-yr real rates and the USDX sits at +0.94 – so there is an incredibly strong relationship. This is also true of equities, where the US real rate (we deflate the 10yr Treasury for expected inflation) holds a rolling 1-month correlation with the US500 of -0.92 and NAS100 -0.89. It sounds pedantic that one day makes a difference, but the default setting for 5 and 10yr US TIPS/real rates on TradingView, which the source a feed directly from the St Louis Fed (FRED) website – comes under the code DFII10 – as per the FRED website this, however, has a two-day lag, so the benefit to traders is reduced. We can see the breakeven component of real rates on TradingView (10-year breakeven, or the expected US inflation rate to average over the coming 10yrs – code = T10YIE) actually holds no lag, so we can now use this to create a more up-to-date US 5 & 10-year ‘real’ Treasury rate. So there work around - In the search function simply subtract T10YIE from the US 10yr Treasury (US10Y) and you can get a real-time real rate – type TVC:US10Y-FRED:T10YIE – this is the 10yr real rate, but you can change it to TVC:US05Y-FRED:T5YIE for the 5-year. Higher real rates act as the true cost of capital – they are the handbrake on economic activity that the Fed need to be more cognisant of than anything. If 10yr real rates are going to 1%, and if this relationship holds, then I think the DXY re-tests the 15 June highs, although we are seeing real support for EURUSD, and the US500 likely heads to 3400 – 3200. It's here where most see a trough in the market and where we bake in a true recession – not just a technical one, but one where we see broad-based layoffs. As it is, a recession is certainly probable, but will the economy talk itself into something far more pronounced that really impacts consumption?

Education

Mid Year Update: Part 1: 10 Year Rates:Mid-Year Update: Part 1: Bonds/Rates: I begin each year looking at monthly perspective charts of Equity, Rates, Commodities and DXY. Those posts can be found in their entirety, with extensive fundamental support, in the links below. I will update views on the four markets over the next few weeks. The early 2022 the conclusions were: - Bonds: A bull market defined by a broad declining channel, but rising inflation could easily change the trend. The most likely catalyst to end keep rates below 3.25% would be a financial accident created by higher rates. -Equities: SPX remains in a technical bull market and there are no overtly bearish behaviors evident in the longest perspectives. However short term weakness could easily morph into a bear market. -Commodities: Goldman Sachs Commodities index is in the center of a broad 14 year range, bounded essentially by the low set during the financial crisis and the resultant 2011 high. The most notable/useful current chart feature is the clear uptrend from the 2020 pandemic low. Until that uptrend is broken, the most immediate trend is to higher price. -US Dollar: The wide macro range, 70.70 - 121.02 has contained price action over most of my trading career but volatility is more cyclical than price. These periods of low vol. set up conditions that often lead to explosive moves. Reminder: Bond bull and bear markets are defined by the PRICE trend. In other words, a bull market in bonds = rising bond prices and falling yields. 10 Year: Monthly: - In January bonds broke above the 40 year downtrend that had defined the bull market. The break of the downtrend moves the structural long term trend from bullish to neutral. -A monthly close above the 3.25% pivot would begin to define a long term structural bear. - Initial targets above the pivot are found at 5.29% (the 2007 pivot high) and 6.27%, (.382 retracement of the entire bull market). -The monthly MACD oscillator generated a long term sell signal (in December of 2020 at roughly 90 bps). Until this sell signal resolves, place less weight on buy signals generated in lower perspective (daily and weekly) time frames. Weekly: The combination of very strong resistance, overbought MACD and bad seasonals suggest that a counter trend weekly perspective rally or consolidation is becoming likely. -Testing very strong resistance while overbought both in terms of price and momentum. It wouldn't be surprising to see a testing probe of 3.50% but its clear that buyers (expecting lower yields) are becoming more active. -The Mid-June spike above 3.25% left a thrust rejection that suggested strong handed sellers entering. -Weekly MACD is threatening to roll over. -Bond prices have very strong seasonal tendencies, weak into the May - June time frame, stronger into the middle of September, and weak into the end of the year. We are into the period where bonds transition from weakness to strength. -While it’s clear that the trend lower in inflation has inflected higher, potential weekly perspective inflection points in commodities and energy should relieve some of the short term inflation angst and by extrapolation the pressure on bond prices. -Major yield highs are almost always the result of a financial accident with systemic ramifications. I don't think crypto is a big enough market to qualify and other than the widening high yield spreads I don't sense much going on in this regard. -Ten Year TIPS breakeven rates are on the verge of generating a MACD month perspective sell signal (suggesting lower expectations for future inflation). This is a direct reflection of the recent declines in energy and commodities. A TIPS sell signal would be very supportive of lower nominal 10 year rates. Bottom Line: The long term structural bull market is dead, but the market has yet to establish a new structural bear. Unless there is a systemic catalyst, Weekly perspective rallies, particularly into the fourth quarter, should be viewed as selling opportunities.

Education

by CMT_Association

ETH 2 phases and why we need it?Hi friends today i want to explain ETH 2.0 phases in short. like you see in picture above it explain our need to ETH 2.0 so i will summarize phases below: Phase 0 : Beacon Chain Phase 0 is the name given to the launch of the Beacon Chain. The Beacon Chain will manage the Proof of Stake protocol for itself and all of the shard chains. Once Phase 0 is complete, there will be two active Ethereum chains. For the sake of clarity let’s call them the Eth1 chain (current, PoW main chain) and the Eth2 chain (new Beacon Chain) During this phase, users will be able to send their ETH from the Eth1 chain to the Eth2 chain and become validators. (They will NOT be able to migrate this ETH back to Eth1) Phase 1 : Shard Chains Shard chains are the key to future scalability as they allow parallel transaction throughput and there will be 64 of them deployed in Phase 1 (with the possibility of adding more over time as hardware scales). Shard validators, who are randomly selected by the Beacon Chain for each shard at each slot, merely come to agreement on each block’s content. Phase 2 : State Execution Phase 2 is where the functionality of the entire system will start to come together. Shard chains transition from simple data containers to a structured chain state and Smart Contracts will be reintroduced. Phase 2 also introduces the concept of 'Execution Environments (EEs). Every shard has access to all execution environments and has the ability to make transactions within them as well as run and interact with smart contracts hope this article is useful for you. thank you all for your supports.

Education

by TraderAmin-KZ

2 Steps in Drawing a Downtrend Channel A buying strategy in a downtrend. How to identify buying opportunity in a downtrend? Not my preference to buy in a downtrend, but that does not mean we should avoid it when buying opportunity arises. Recognizing it is a downtrend, we keep our buy position short-term; as we are going against the trend. Discussion: Rules in constructing a downtrend parallel trendline Rule 1 – First the downtrend line Rule 2 – Then, its parallel Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.

Education

08:59

Poor Result of Effort: A Sign Of Supply, Nat Gas Natural Gas: The essence of techncial analysis (at least in my opinion) is ascertaining the ebb and flow of supply and demand. Natural Gas futures offers a great example of a market which, despite ultra-bullish headlines, displayed clear signs of strengthening supply/falling demand prior to breaking hard. The reduction of thrust or the declining net result of effort displayed in this chart as an important warning of impending change and is a pattern I always pay attention to. In this example: · Each successive thrust covers less new ground than the prior thrust: 76 points, 42 points, and finally 14 points. There is a clear reduction in the net result of the effort expended. This often appears as an arching over. · Each successive thrust is often at a reduced angle: 43, 30 and finally 20 degrees. · Each successive thrust often takes less time to accomplish. 14, 14, and finally 9 bars. But time is the least important of three measures. Since each thrust has less momentum. It’s not surprising that this would register as an ongoing divergence on a momentum oscillator like RSI. This particular pattern built over almost 2 months of trading (37 daily bars), allowing plenty of time to build a trading plan, either exiting if long or perhaps building a plan to build a short position around the decline. More reason to take the development of the pattern more seriously is found in the weekly chart (see the triple screen post linked below). In the example there are three successively steeper trend lines that roughly define the markets trend state. · I tend to be particularly attentive to these patterns after a third steeply pitched uptrend develops in the charts of higher degree. · The parabolic acceleration in the third leg often offers warning that the trend is moving into its late stages. · But, parabolic moves often last for extended periods and cover lots of ground. · I like to look for this pattern on standard scale as opposed to log scale charts. Log scale tends to hide the parabolic nature of the third leg. While others will argue over the efficacy of standard scale charts over long time periods and large moves, I clearly prefer non log scaling for this pattern. There was also an intermediate perspective warning in the RSI momentum divergence. Both patterns of are fractal, occurring across all markets and all time frames. The reduction of thrust pattern tends to display at tops rather than bottoms. Often, they show up well in the hourly charts. Note: I inadvertently used the MCX instead of the NYMEX futures. But there are no material differences in the patterns between the two Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.

Education

by CMT_Association

Consistent Profitability, how long does it take?How long does it take to become consistently profitable as a trader? This is one of the most searched questions in the Internet when it comes to trading and the beauty is there's no right answer. When you do receive an answer, it's miss leading to beginners and everyone gets confused. There's a solid chance that you've looked at this before, or perhaps you just seen the title of this post and clicked on it. How long this is going to take you to master the arts of the market. There's a good chance you sat there and questioned, "what am I doing? how long are we going for? What should I be goal setting in terms of time with trading?" if you see yourself in this position or you've seen it previously, I finally have the answer you need to hear. How long does it take you to become consistent and profitable trading? As long as it takes. There's so many different sources which claim so many different time limits that it takes to master Forex trading or crypto trading or industry, trade, whatever it might be your embarking on. All of them say the same around two to three years to become a consistent and experienced professional. Yet, where are they getting this data from? I know traders that master trading within six months. I also know other traders that traded for six years and couldn't get the look of it. There's no time frame to put on trading in terms of success and consistency. It isn't a university course, we don't sit down and do all the course procedures and even if we do, the bare minimum, still graduate in three years. That's not how trading works. The question you should be asking isn't how long is this going to take me to master, but rather how many hours are you going to put into it. Day in, day out, how much work are you going to do? That is what will determine how long it takes you to become successful in this industry. There's so many people that will see 2 and a half years to become successful trader, then they trade half heartedly as if it is a hobby. They don't concentrate too much. They just trade here in there. Two and a half years pass and they'll call themselves seasoned professionals because they have been in the market for 2 1/2 years. Yet they couldn't show a single piece of consistency within their trading. Then there's other traders that put in hard work. I'm talking 8 hours a day of pure grueling backtesting, trade management, risk management, analyzing everything, and they put an exponential amount of work in and in six months they can outperform anyone else who's ever step foot in the market. Time is not an important factor. The amount of work you are putting in is the important factor. Yes, time will tell whether or not you can be successful in this industry, but if you're measuring time based off of when you've been interested or when you've been trading a little bit and rather than the actual hard, grueling hours that you're putting into trading. Then you will never get to that level you want to get too. You have to put in the hard yards. This industry is very advertised as easy, simple and the money making machine. There's a number of different factors in which we can blame for that, but we're not going to dive into that today. What I want to share with you is this is not easy. This is actually one of the hardest professions you could ever do, because work doesn't just stop, we don't just clock off and get paid the same amount every week. It's all dependent on the amount of time and effort you put into the market. Do you want to be profitable and consistent in trading? Then put in the hard work. Stop Googling how long it's going to take. Stop having a look at other people's success stories. Knuckle down and put in the hard work. Then in two years, three years, six years, 10 years, whatever it's going to take. Look back and be proud. When someone asks you how long did it take you? Don't answer about six years or two years, be honest. How many hours did you have to invest? How hard was the work?

Education

by the5erstrading

Jamie Dimon’s Hurricane and the Bond Market in Early June In 2021, as the US central bank and the Secretary of the Treasury continued to call rising inflation a “transitory” and pandemic-inspired event, the bond market declined. Bonds watched prices rise while the economists were pouring over stale data. Meanwhile, the Fed and government planted inflationary seeds that sprouted during the second half of 2020, bloomed in 2021, and grew into wild weeds in 2022. The consumer and producer price data began to flash a warning sign in 2021, with the economic condition rising to the highest level in over four decades. The Fed and the Treasury finally woke up. While the Biden administration was already “woke,” the data awakened them to a point where late last month, Treasury Secretary Janet Yellen admitted “transitory” was a mistake. However, there was no admission and self-realization that monetary and fiscal policies created the inflation, and ignoring the warning signs only made it worse. A storm forecast from JP Morgan Chase’s leader Bonds are sitting near the lows The Fed’s FOMC meets on June 14 and 15 Higher rates are on the horizon Expect lots of volatility in markets The bond market was far ahead of the Fed and the Treasury, which should have been another warning sign. Consumer and producer prices have skyrocketed, and the central bank is using demand-side tools to address the economic fallout. Meanwhile, the war in Ukraine, sanctions on Russia, and Russian retaliation have only exacerbated the inflationary pressures, as they create supply-side issues making demand-side solutions impotent. The Biden administration blames the rise in energy prices on Russia, but they were already rising before the invasion and sanctions. The shift in US energy policy to a greener path is equally responsible for record-high gasoline and other fuel prices. At the end of 2021, a conventional 30-Year fixed-rate mortgage was just below the 3% level, and in less than six months, it rose to 5.5%. On a $300,000 loan, the move increases the monthly payment by $625, a significant rise. We are in the early days of an economic storm that began with the pandemic, continued with a lethargic Fed and government officials, and was exacerbated by the first major war in Europe since WW II. We have not seen the peak of the storm clouds gathering for more than two years. A storm forecast from JP Morgan Chase’s leader Jamie Dimon, the Chairman and CEO of JP Morgan Chase, called Bitcoin a “fraud.” A few short years ago, he said he would fire any trader “stupid” enough to trade cryptocurrencies on the bank’s behalf. As recently as late 2021, he said he believes Bitcoin is “worthless.” So far, he has been dead wrong on the asset class. The financial institution he heads replaced real estate with cryptocurrencies in late May, calling them a “preferred alternative asset.” In his latest comments on markets across all asset classes, Mr. Dimon issued a warning. Quantitative tightening that will ramp up to $95 billion in reduced Fed bond holdings and the Ukraine war led him to tell market participants, “You’d better brace yourself. JP Morgan is bracing ourselves, and we’re going to be very conservative with our balance sheet.” He began by saying, “You know, I said there’s storm clouds, but I’m going to change it…it’s a hurricane.” Mr. Dimon believes QT and the war create substantial changes in the global flow of funds, with an uncertain impact. The leading US bank’s CEO is prepared for “at a minimum, huge volatility.” His forecast on cryptos aside, the warning is a call to action. There is still time to hedge portfolios and establish a plan for the coming storm. Volatility is a nightmare for passive inventors, but it creates a paradise of opportunities for nimble disciplined traders with their fingers on the pulse of markets. Bonds are sitting near the lows Quantitative tightening not only removes the put under the bond market that had supported government-issued fixed income instruments since early 2020, but it also puts downward pressure on bonds and upward pressure on interest rates further out along the yield curve. The long-term chart of the US 30-Year Treasury bond futures highlights the decline to the most recent low of 134-30, declining below the October 2018 136-16 low, and falling to the lowest level since July 2014. At the 135-20 level on June 10, the bonds are sitting close to an eight-year low, with the next technical support level at the December 2013 127-23 low. The Fed’s FOMC meets on June 14 and 15 The market expects the US Federal Reserve to increase the Fed Funds Rate by 50 basis points this week at the June meeting. The move will put the short-term rate at the 1.25% to 1.50% level. The Fed remains far behind the inflationary curve, with CPI and PPI data at an over four-decade high and coming in hotter each past month. While the central bank determines the short-term rate, the bond market has been screaming for the Fed to catch up, warning that inflationary pressures were mounting. The bottom fell out of the long bond futures in 2022 as the Fed began to tighten credit. However, the Fed’s economists will only put the short-term rate at 1.50%, with inflation running at many times that level. A 75 basis move to 1.75% would shock the market, which is not a path the Central Bank wants to follow. Higher rates are on the horizon The Fed may have awakened, realizing it must use monetary policy tools to address inflation, but the central bank remains groggy and slow to adjust rates to levels that would choke off rising prices. The economists do not have an easy job as they face supply-side economic problems created by the war in Ukraine. Had they been more agile in 2021 and nipped the rising inflation in the bud with a series of rate hikes, the US Fed would be better positioned to address what has become a no-win situation. The war has caused energy and food prices to soar with no central bank tools to manage the situation. Last week, gasoline rose to a new high, crude oil was over $120 per barrel, natural gas was over $9.65 per MMBtu, and grain prices remained at elevated levels. Rate hikes and lower bond prices are not likely to cause prices to fall as US energy policy, sanctions on Russia, and Russian retaliation are supply-side issues that leave the central bank with few answers. Higher food and energy prices will keep the inflationary spiral going and will continue to push bond prices lower. Expect lots of volatility in markets The US and the world face an unprecedented period that began with the 2020 global pandemic. Artificially low interest rates and the government stimulus that addressed the pandemic were inflationary seeds. The pandemic-inspired supply chain bottlenecks exacerbated the inflationary pressures. A shift in US energy policy increased OPEC and Russia’s pricing power in traditional energy markets. Meanwhile, the war in Ukraine has turbocharged the economic condition, making a solution challenging for the central bank. The current US Treasury Secretary, and former Fed Chair, Janet Yellen, once said that monetary policy works together with the government’s fiscal policies. In the current environment, fiscal policy and the geopolitical landscape have become the most significant factors for rising inflation. Jamie Dimon is worried, and the head of the leading US financial institution is battening down the hatches on his balance sheet for a storm. Even though he was mistaken about cryptos, we should heed his warning and hope he is wrong. Markets reflect the economic and geopolitical landscapes, which are highly uncertain in June 2022. Hedge those portfolios, and make sure you develop a plan for any risk positions. Expect the unexpected because 2022 is anything but a typical year in markets across all asset classes. Fasten your seatbelts for what could be a wild and turbulent ride over the coming months. -- Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility , inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.

Education

FrogAlgo: 5 Simple Ways to Control Your Emotions in Trading The markets are emotional and so are the people who trade them. But that doesn’t mean you have to let it affect you. Instead, learn how to control your emotions and make more money. Here are five simple ways you can control your emotions in trading and make more money. Don’t let your emotions dictate your trading It’s important to remember that your emotions are a part of who you are as a person. But they’re not part of who you are as a trader. Nothing in trading requires you to let your emotions dictate your trades. The best traders are in a state of flow — a state of complete absorption where nothing else exists except the task at hand. In a state of flow, the only thing that matters is what you’re doing. It doesn’t matter if you’re in a down market or a strong bull market — if you’re in flow, you can’t be affected by the outside world. You can’t let your emotions get the best of you and make bad decisions because you’re on autopilot. Set a threshold for when you’ll trade When you get started in trading, you’re going to have a period of time where you’re emotionally charged and feel like you have to trade every day. You might have a specific time period where you’ll only feel like trading when the sun is out and the markets are up. If that’s the case, then trade when you’re in that “charged” time period — but set a threshold for just how “charged” you’ll get. Let’s say you only feel “charged” from 9 am to 12 pm — set that as your trading time window. You’ll still feel “charged” enough to trade, but not so “charged” that you make mistakes. Train yourself to be aware of your emotions The best traders are in a state of flow — a state of complete absorption where nothing else exists except the task at hand. In a state of flow, the only thing that matters is what you’re doing. It doesn’t matter if you’re in a down market or a strong bull market — if you’re in flow, you can’t be affected by the outside world. You can’t let your emotions get the best of you and make bad decisions because you’re on autopilot. The best traders are aware of their emotions. If you don’t know what you’re feeling, you can’t let your emotions get the best of you and make bad decisions. The more you know about your emotions, the more in control you’ll be and the more money you’ll make in the markets. Know the difference between a trade and a position In trading, every position is a trade. It’s just a matter of how much money you’re putting at risk. The most important distinction is between a position and a trade. If a trade occurs when you risk a set amount, a position just happens when you risk an amount that’s less than what you’re long or short. What’s important is that you keep track of both your position and your trade. You might think a trade is only 1 or 2 shares. But if you end up adding to that position, then you actually have a position that’s thousands of shares. Your position is what you have, but your trade is how much you risked. Find a good trading mentor The best way to learn new skills is to have an expert show you how to do them. Trading is a lot like golf — you’re better off with an experienced teacher than trying to learn from reading books. A good mentor is someone who will help you build your skills as a trader. They won’t just tell you what to do — they’ll show you how to do it. They’ll help you develop the skills of patience, discipline, and the ability to be in the market even when the market is not in your favour. A good mentor will also be someone who shares your same passions and interests. A good mentor is someone who shares the same passions as you — someone who likes the same things you like. Being in the same place in life helps — but don’t let it stop you because it’s the best way to learn. Conclusion Emotions play a big part in trading, but they don’t need to dictate your trading. The best traders are aware of their emotions and know the difference between a trade and a position. They also find a good mentor and use them as an expert to help them build their skills. When you control your emotions, you’ll make better decisions in the markets and increase your profits. And the best part is that once you have the skills, you can trade anywhere in the world.

Education

by A1TradingHub

JPY/USD Breaking Down the Macro Range: Observations JPY/USD: It’s not often that a macro breakdown of this magnitude presents itself, but Dollar/Yen is providing the opportunity to monitor and learn from just such a breakdown in real time. One of the more interesting mysteries of the last two decades has been the durability of the JPY. · Years of extremely accommodative monetary policy, Negative Interest Rate Policy (NIRP), Yield Curve Control (YCC) and Quantitative Easing (QE) have thoroughly disrupted fair value across JPY asset classes. · Government Debt at 266% of GDP is more than double the threshold above which countries are vulnerable to sovereign default. For more on sovereign debt levels see Reinhart and Rogoff “This Time is Different, Eight Centuries of Financial Folly.” A must read in my opinion. · They are an island nation devoid of energy assets. Higher energy prices increase the need for to swap Yen for Dollars in order to transact. While monetary policy has created the greatest macro danger, growing yield differentials and rising oil prices represent more immediate concerns. In particular, the YCC policy that pins Japanese 10 year rates at 25 bps even as rates are rising sharply across the rest of the developed markets is creating massive capital outflows. The YCC policy creates an arbitrage between Japanese and other DM rates. · A Japanese citizen can swap JPY for DX and buy a 10 year US Treasury at +300 bps carry advantage. · While collecting 300 bps in positive carry they own a currency (DX) far less likely to depreciate. Particularly as the Fed is tightening policy relative to the BOJ. · If DX appreciates, they can add the appreciation to the carry. This same dynamic can also be seen in institutional flows. With the yield differential so wide, the Yen Carry trade popular prior to the financial crisis is being implemented again. Investors can borrow Yen at very low rates, swap for higher yielding currencies and earn the carry. Many of us old guys remember the extreme pain generated by the unwind of this trade. This arbitrage results in significant outward bound capital flows but in spite of the Yen weakness the BOJ continues to reiterate its support of the YCC program. It should also be remembered that the BOJ and other official Japanese institutions have acquired so much of Japan’s sovereign float, that even if they lose their resolve and end YCC, rates probably won't rise enough to totally offset the rate differential. I suspect that a rally with this as a fundamental catalyst, while violent, would likely fail long before reversing the recent damage. Importantly the fundamental pressures add weight to the technical breakdown occurring on longer time frame charts. · JPY/USD is breaking out of a wide, upwardly slanting channel that has acted as support for over 30 years. · After testing the bottom of the channel, the market was unable to attract buyers and moved mostly laterally along the channel bottom. This lethargic behavior suggested a near complete lack of buying pressure/interest. · The six years spent moving laterally stored tremendous energy. Remember that the more time spent in a range, the more potential for movement exists. In essence, six years of buyers are now trapped. I would expect that these trapped buyers will now be sellers into strength and drive declines. · Wyckoff called this stored energy “cause” or count. The size of the count directly relates to the size of subsequent move as it reflects years of positioning, much of which must be adjusted for a new price regime. · While I haven’t done so for this piece, Point and Figure counts can be used to derive targets based on the width of the count. You can see an example of how this is done on the IWM post linked below. · The width of the channel (MM1 - MM2) can be projected lower (MM3) to arrive at an initial estimate of the potential move. This could create a measured move target as low as .003. · There is a monthly perspective MACD sell signal. The solid sell signal comes after multiple years of what I think of as flutter (I think George Lane first used the term to describe the behavior in his stochastic oscillator). · Following periods of oscillator flutter, a clear oscillator buy/sell signal coupled with a clear violation of price support/resistance can be extremely reliable. In shorter term perspectives the market would normally be considered oversold (both price and momentum). But breakouts from large macro ranges attract strong handed sellers and often oscillators and price both behave differently than they do in normal markets. This is particularly true in the early in the move. Specifically, oscillator readings become meaningless and short term price targets are regularly exceeded. This makes them extremely difficult and risky to trade in. At this point, to turn bullish on JYPD will require the development of overtly bullish price and volume behaviors or clear bottoming behaviors. Until then I will treat this as a bear market and use strategies and tactics appropriate for that environment. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.

Education

by CMT_Association

Trading Performance Psychology: Part 1 The greater the difficulty, the more glory in surmounting it. Skillful pilots gain their reputation from storms and tempests. - Epictetus. Hey everyone! 👋 This week, we thought it would be interesting to dive into a less-commonly discussed topic: performance psychology - and discuss how it relates to Trading. Specifically, we're going to look at the following question: What actually drives outperformance from one trader to the next? From a process standpoint, there are lots of things that aspiring traders can take from other performance disciplines (like sports) in order to better understand the necessary steps to get where they would like to be. Let's jump in! Time is the common element to expertise ⏰ Mastery is built over time. First through exploration, then knowledge building, then well-structured practice. To invest the great amounts of time and effort required for mastery, an individual typically bonds emotionally with the field, creating a long-term relationship. Present in almost all extremely high performing traders is an inherent, intrinsic love of trading itself. This means a love for analyzing charts, working on strategies, looking at markets, and trying to fit the pieces together in one's head. In this frame - Trading isn't a job, it's a CRAFT . If you just love the status, the lifestyle, or the income, then it's likely that you won't reach the true heights of the profession. The highest performing traders spend hours and hours working on their trading; not because they WANT to, but because they LOVE to. Finding a niche ❤️ The greats do not become great by working hard; they work hard because they find a great niche: a field that captures their talents, interests, and imagination. The best pitcher in the world might make a terrible hitter. If you're early on in your journey (or lost), something to consider is trying to find a niche that you truly resonate with. A great deal of importance is placed on niches in other professions and institutionally within finance, as hospitals and banks have rotational programs to expose newcomers to different types of experiences. Why then, don't individual traders do this? A great way to center your thinking is by constructing a rotational program for yourself. Here's a list of the most popular asset classes & trading styles. Give each a google, or look for ideas here on TradingView, and see what you resonate with most strongly. Set yourself up for long term mastery by actually finding something you love doing day in and day out. Liquid Asset Classes: -Stocks -Currencies -Cryptocurrencies -Futures -Fixed Income -Volatility Styles (Timeframe): -Intraday - holding time is seconds to hours -Swing - holding time is days to weeks -Position - holding time is weeks to months Which holding style fits with your temperament? What topics do you like learning about? The Learning Process ✅ In trading and in life, we often hear that "Practice makes perfect". A better saying may be "Perfect practice makes perfect". How practice time is structured makes the difference between a performer who has five years of experience and someone who has one year of experience repeated five times over. So; how should you structure your practice? In performance psychology, there's a concept known as a "learning loop". It has three parts. Performance -> Feedback -> Learning (repeated). This is crucial, because feedback is the key to improvement. Trading is a solo sport, which means that figuring out how to incorporate a feedback process that allows for reflection is absolutely critical. P/L is feedback, but there can be some problems with it singularly as your feedback mechanism. Even the best traders who execute the best looking trades can be on the opposite side of variance on given days. Process is king. Get feedback from your performance that doesn't have to do with P/L so you can track the inputs to your decision making. Some traders take copious notes, some record their screens, and some record data points that aren't P/L related (hours slept, hydration, mood, etc). (we have a notes feature built into the charts you can use for this purpose.) If you gather up all of these items together to create a long term blueprint for building mastery, it should look something like this: 1.) Find out what you truly love about trading 2.) Explore it more deeply 3.) Stick with it through time and allow your intrinsic enjoyment motivate you through the ups and downs 4.) Structure your performance through that time in such a way that you can generate feedback for yourself 5.) Incorporate that feedback to continually improve your process. Allow learning loops to be your engine of long term performance. - Hope you enjoyed reading, and stay safe out there! - Team TradingView

Education

Methods to improve your trading Any professional trader should monitor his daily routine. Traders make a schedule, follow it and remove from life what is unproductive. Beginners don't spend enough time making plans. A typical trading day for beginners can consist of constant monitoring of price movement, even during lunch. Today we will talk about how to make your trading day calm and productive. 1. Sleep Sleep is still an important part of any person. Do not neglect sleep, because sooner or later the body will require rest, without which it is simply impossible to trade calmly and in a disciplined manner. Needless to say, your attempts to trade, analyze the market and stick to your trading plan with a lack of sleep simply will not succeed. Perhaps the first and most important way to ensure a proper trading regime is to provide yourself with a good, full night's sleep for at least 7 hours a day. • Do not drink coffee or other caffeinated beverages during the day. Try drinking herbal tea instead; • Do not go to bed late thinking that you can sleep off the next day. Research proves that our body functions as productively as possible when we go to bed at sunset and wake up at dawn. This means that you need to go to bed early and wake up early; • Create a proper sleeping environment. As a rule, this means that your bedroom should be cool (i.e. not too hot), dark and quiet. 2. Healthy breakfast It has long been known that breakfast is the most important meal of the day. After sleep, the body needs a boost of energy. Find time for a healthy breakfast every morning: take the necessary amount of protein, whole grains and some fruits. As soon as you wake up, drink a huge glass of water. Most people don't do that. Drinking water saturates your body and also helps to control appetite between meals, and since your body mainly consists of water, it is necessary, first of all, to drink water rather than any other drink. 3. Physical exercises Regular exercise is the main key to your motivation, attention and focus on everything in your life, including trading. Physical exercise gives us a good feeling physically and mentally, and this is very important for the development of proper trading habits and productivity. Regular physical training will keep you focused at the highest level, it will also help you sleep soundly at night, which, as noted above, is an extremely important factor for the proper functioning of cognitive activity, which is obviously crucial for success in trading. 4. Hobbies and entertainment You definitely don't want to turn into a trading hermit. You don't want to turn into a guy who sits in his underwear in front of the charts in the hope that his positions are moving in his favor, and allowing every victory or defeat to affect his happiness. Trading is a way to potentially improve your life, but it doesn't have to be your life. To succeed in trading, you need to have outside interests so that you are distracted from excessive market analysis and so that you feel happy and confident. If you still don't have any hobby, then find some. Even if your hobby is just spending time with your family, that's fine, just don't be the "guy" who sits in front of charts all day long, because, I assure you, it's not good for you and your trading. 5. Plan your day Make sure that you plan the key levels of the chart during or at the beginning of the week. Take some notes about the trend, your trading advantage, potential trading signals that you see. The easiest way to do the analysis is when the market is closed, so you will avoid the pressure caused by the price movement. Make a plan for the week and every day and follow it without paying attention to the noise. The famous French microbiologist Louis Pasteur once said: "Chance favors a pre-prepared thought." 6. Practice your trading strategy This may seem obvious, but if you haven't mastered your trading strategy yet, or if you don't have a trading strategy at all, you won't be able to develop a trading regime. Many traders start in the wrong direction because they don't really have a clear trading method yet, but, instead, they have a vinaigrette of different methods and trading "tips" that they read here and there, mixed everything into one pile, "thinking" that they got, thus, your trading strategy. You need a trading strategy that you can learn and master and that makes sense and is simple. 7. Discipline and consistency Discipline, routine and patience are things that people usually consider "boring" or uninteresting, but they should not be perceived in this way at all, especially with regard to trade. You have to understand and accept these things as the ones with which you make money in the market. After you review them in the light that "discipline and everyday life are beneficial and useful," they will take on a different meaning for you. Remember - trading should not be some random event without a structure or a firm approach and without an underlying regime, and if that is the case, you will end up wasting all your money by giving it to the market. You need to develop your own trading program that would fit your schedule and your personality, and then stick to your trading regime, maintaining cold discipline so that you can see how it works in your favor over a long period of trading and that it brings you income.

Education

How I Use Treasury Futures To Better Execute The E-mini S&P 500 Interest Rate Futures are the market leaders this year. Our technical indicators have less of an impact when the Bond & Treasury Markets are on the move and as Traders we have to be aware of when that is and how it impacts the price action in the E-mini S&P 500, E-mini Nasdaq 100 and Russell 2000 Futures. In this video I go over a simple, but effective way I use the 10 YR Futures ZN1! & the Micro 10 YR Treasury Futures 10Y1! to better execute the Indexes. To learn more about the Futures Products discussed in the video please check out CME Group's Website. I also mention that I trade futures on TradingView using TradeStation so please go to TradingView's website or TradeStation's website to learn more. Past Performance is not indicative of Future Results. This is for Educational purposes only. Derivatives Trading is not suitable for all Investors.

Education

10:59

by anthonycrudele

Negative Divergences Often Warn of Declines: Bitcoin & Gold Negative Divergences Often Warn of Impending Declines: Bitcoin Highlighted…. Is Gold Next? OTC:GBTC COMEX:GC1! INDEX:BTCUSD The CMT Association is proud to publish this guest post from Louise Yamada CMT. Louise was a Managing Director and Head of Technical Research for Smith Barney (Citigroup), and while there, was a perennial leader in the Institutional Investor poll and the top-ranked market technician in 2001, 2002, 2003 and 2004. Louise was the 2016 recipient of the CMT Association’s Lifetime Achievement Award. In these examples we use the moving average convergence divergence (MACD) indicator to illustrate the concept of divergence, to forensically evaluate Bitcoin and to make some forward looking observations on the gold market. Divergences: • Negative momentum divergences often warn of impending price consolidations or declines. • Divergence forms as price moves to a new high while the oscillator fails at a lower high, creating a negative divergence between the oscillator and price. • Divergences of this type suggest that the underlying momentum may be waning. Divergences carry different implications depending upon their time frame. • Daily perspective divergences suggest either a consolidation, or a pullback in an ongoing uptrend. • Weekly perspective divergences suggest a more sustained consolidation or even a reversal of trend, particularly if important support is violated. • Monthly divergences have the potential to result in a more sustained decline or even to reverse an uptrend. MACD sell signals give validity to divergences. • Monthly signals have much more weight than weekly and daily. • Monthly divergences don’t always occur prior to monthly MACD sell signals • But when a sell signal does occur it offers a structural warning. Graystone Bitcoin Trust (GBTC) Weekly: • The March 2021 high (A) was followed by a roughly equal price high (B). However, the MACD momentum peaked at a significantly lower high (Line A1-B1), forming a classic divergence that suggested that upward momentum was fading. • At point C, the weekly MACD moved onto a sell signal (the fast moving average crossed below the slower moving average) strongly suggesting that positions should be either lightened or sold. • After the sell signal was generated, price declined from 50 to 24. • A weekly MACD buy signal was then generated at point D. The subsequent rally carried price near the prior high. • The failure of the MACD to match its prior high warned of potential weakness. • The MACD generated another sell signal at point E, suggesting lightening or selling positions. Price offered another decline from 50 to 24. • After a multi-week consolidation in March-April 2022, price broke below the support @24 (S1-S2). • MACD continues to decline, suggesting that the price decline may not be over, notwithstanding interim rallies. • Before considering a new long, evidence of stabilization at a low and the gradual reversal of the daily, weekly and eventually, monthly MACDs would be required. Grayscale Bitcoin Trust (GBTC) Daily • On the daily perspective chart that there is a divergence from price (A-B) and the MACD (C-D) • The divergence warned of the possibility of bearish developments spreading to the weekly and monthly. Graystone Bitcoin Trust (GBTC) Monthly: • The monthly chart also shows a divergence at points MD1 and MD2 and on the histogram at MD3 and MD4. • At the second price high (B), MACD hadn’t yet generated a sell signal, but it was beginning to flatten and roll over. • One can also see the falling histogram, as the MACD narrows (blue arrow), and the divergence progressed, until it finally generated a clear sell. • Price lingered above the support at 24 (S2) for several months providing ample time to adjust positions before the May 2022 price breakdown. Momentum is still declining, suggesting that it’s too soon to consider re-entry, notwithstanding interim rallies, which can carry into resistance, formerly support. Graystone Bitcoin Trust (GBTC) relative to SPX Weekly: • One can also note a similar warning in the weekly Relative Strength (RS) negative divergence. • In this case the RS for BITCOIN/SPX was also suggesting a change from a period of relative overperformance to one of relative underperformance. Is Gold Next? Gold is displaying many of the same long term MACD warning behaviors evident in the GBTC chart. COMEX Gold Daily: • Despite the May 2020 (R1) and 2022 (R2) price peaks being roughly equal, the MACD (R3 & R4) peaked at a much lower level. • A MACD Sell signal occurred after the 2020 peak (R3), alerting to the possible price decline, which eventually carried to the March 2021 low near 1,700 (S1). • The lower March 2022 MACD peak (R4) also registered a sell signal, suggesting one might lighten positions. COMEX Gold Monthly: • There is a monthly multi-year MACD negative divergence between the 2012 (R1) and 2022 (R2) price peaks. • In 2012, the monthly MACD structural sell signal (R3) was very effective as price collapsed toward 1,100 on the sell signal. • In March 2022, the MACD, registered another major monthly sell (R4), and then subsequently rallied to test the high (R2) without generating a new buy signal (A), a sign of weakness. • The MACD has remained negative and appears poised to perhaps continue down. • This suggests that Gold may be in danger of a potentially large decline, especially if support at 1,700 is broken. • Such a breach could easily find support at the breakout level from the 2013 to 2019 basing pattern at 1400. • It is possible, however, that although GOLD has broken out in many other currencies, the extraordinary current strength in the US dollar may be contributing to the Gold disappointment. Louise Yamada CMT LYAdvisors LLC

GEducation

by CMT_Association

How much leverage should I be using?Understanding how to trade forex requires detailed knowledge about economies, political situations, all the individual countries, global macroeconomics, the impact of volatility, it goes on and on. But the reality of the situation is this isn't what makes most new traders fail. What makes most traders fail isn't the lack of knowledge or understanding of what it is they're actually trading. It's the lack of knowledge and understanding on leverage. As most of us would have heard, there is very obvious statistic out there that majority of retail traders fail. Now, most people will see this as a lack of competence and just purely not willing to put in the effort to be successful. But a lot of the time it is people not understanding the risk their undertaking and what it is they're actually doing with their money when they enter the market. It really highlights this when traders come to a firm like ours, and question leverage or they have so many questions about leverage that even though they've been trading for three to four years, they still don't fully understand the actual risks that are at hand when they are opening certain positions that they really can't afford to open. Today I wanted to jump into leverage. Let's really dive into depth what it is, why we have it, how we can use it. Then, finally touch on what is the right amount of leverage for you as a trader. So you can be exponential in maximizing your profits, but also ensuring that you're not damaging yourself long term. LEVERAGE RISK Firstly, I think it's important for us to have a look into leverage. Leverage is the process in which an investor or trader borrows capital in order to invest or purchase something. Typically we borrow capital from a broker and we buy into positions with money that we didn't have in order to be able to gain more profit from those positions. Most traders are blindsided and constantly think the more money I have, the more profit I can make, which is true, but they fail to recognize that the more risk it carries. Carrying higher leverage is an exponential increase in risk. Most brokers out there will probably offer you something like 50:1, 100:1 or even 500:1 leverage. This giving you a buying power of 50, 100 or even 500 times whatever the amount of money you have in your account. Which means a trader with just $100 in a brokerage account could open a position with $50,000 in the market. Now, while that may sound advertising, believe me, that's a trap and we're going to chat about that today. HIGH LEVERAGE EXAMPLE So let's dive into an example. Let's imagine we have a trader who has a $10,000 account. They decide to use 100:1 leverage, which now means with that $10,000 cash, they can trade up to $1,000,000 in the forex market. Let's assume that the trader opened a position with the full available capital which would relate to 10 lots, and they opened the position on a currency with the USD being the quote currency. That means that each PIP movement is equal to $100. So for a simple equation, if they were to enter a trade and that trade went against them by 50 pips, they would have lost 50% of their account because that 50 pips would have been equal to $5000. So in one wrong trade they lost 50% of their account. So many people in this industry is so quick to look at what the realized gains could be, but they rather tend to ignore the actual risks that come with that. If you don't have sufficient evidence that your investment strategy is going to provide consistent and stable gains long term, do not look to trade with higher leverage, as you will be gambling and it is extremely risky. LOW LEVERAGE EXAMPLE Now let's use the same example, but in a lower leverage situation. The trader has $10,000 cash only this time he is trading on an account with 5:1 leverage, resulting in a buying power of $50,000. This means on a pair with the US dollar as the base currency that you can open a maximum size of 0.5 lots. Let's go ahead and take the exact same trade, only this time with a 0.5 lots, each pip is equal to $5. Should the investment or trade fall the same 50 pips this time the trader will only lose $250, which is a mere 2.5%. Same trade, different leverage, one lost 50% the other lost 2.5%. It is a common trick out there that traders feel they require more leverage to really make money in the market. It's not true. Yes, it can help you get more profits from those smaller moves. Yes, it is really beneficial if you have a proven strategy. If you are still coming to grips with trading or you're fairly new and you haven't achieved consistency and profitability yet, focus on lower leverage. What it will actually do is make you focus on long term goals. Focus on the process this giving you more sustainability in the market and therefore more maturity. CHOOSE THE RIGHT LEVERAGE Choosing the right leverage is a very important step in Forex trading. You can be tapered in by fancy numbers and big brokers trying to get you in, Or, you can realistically dive into what it is you actually need and what's going to benefit you more in the future. There's no right answer to how much leverage you need each strategy in each individual require different things, but what I will do is share some tips and some knowledge on how to choose the right one that benefits you. 1. Always try and maintain the lowest leverage you possibly can for your strategy. If you manage to pull it right the way into where you can only just open the positions on the risk you have allowed yourself, and you can't open more than, lets say three positions, what you actually do is limit yourself to focus on only the good positions. You've prevented over trading from occurring and you can really focus on your risk management. 2. When you open positions or you talk about opening positions instead of going to people saying, "yes, I opened 0.35 lots." Use the actual dollar value when you open a 0.35 lot position. Instead, say "I opened a $35,000 position." Talking in that language that you have placed your bets with $100,000 or $1,000,000 will make you realize how much risk you're actually exposing yourself to and the capacity of what it is you are trading. 3. Limit your overall risk, at absolute Max, I risk 0.25%. This allows me to go into large drawdowns and it not be an issue. I can still manage it accordingly in it actually keeps me nice and calm and focused on the analysis rather than the running profit and loss. The bottom line is selecting the right Forex leverage depends on the traders experienced risk tolerance and comfort when operating in the market. You want to ensure that it's not out there to harm you, but rather it's there to help. You do not want be trying to get really high leverage so you can make large profits, when you know realistically, there is no evidence to prove that you will make those high profits. Start small, gain consistency, gain exposure and gain experience, and then you can start looking to expand your equity and buying power.

Education

by the5erstrading

What makes a good trader?Hey everyone! 👋 What makes a good trader? The eternal question. Is it character? Intelligence? EQ? Dumb luck? Something nobody's yet mentioned? Newbies and pros alike have long argued about this topic, and today, we want to hear from the TradingView community. Using just one word, in the comments below, tell us your opinion. What separates a good trader from a bad trader? Besides profit ;) If your comment contains more than one word, you're disqualified! To get the ball rolling, we'll give the users behind top two comments a pack of our new, 2nd edition TradingView Tarot cards. The contest ends tomorrow, Monday June 6th, at the New York open at 9:30 am. Have fun, and enjoy the rest of your weekend! - Team TradingView

Education

Updated

Triple Screen Method: Trading With The Trend: Commodities Note that this is not a trade recommendation but simply illustration of a particular approach. There are multiple reasons that I wouldn't execute this particular idea at this time, but those considerations are for another post. Those of you who have followed my work for the last few months know that I prefer simple. The triple screen chart perspective is precisely that. A quick, down and dirty trade filtering system that can help traders with their decision process. Even after decades of active trading, it's not often that I take a meaningful trade without taking at least a quick glance, if not at the triple screen, then at least at the trend of higher degree. Happily, it only takes a moment in TradeView to set up a work space. Importantly the setup is fractal (robust across time frames), robust across markets, and it works with simple momentum oscillators and moving averages. Since my personal preference is to derive the trend through the tape, I only use the oscillators as a quick confirmation to the trend. Less experienced traders can default to the trend as defined by the oscillators. · Trades are filtered by the trend of one higher degree. The monthly trend filters weekly perspective trades. Weekly trend filters daily, daily filters hourly, hourly filters 15 minute, and 15 minute filters 5 minute. Time periods are not sacrosanct. You should modify them to reflect your trading style. · A daily perspective buy signal would generally be rejected if the weekly trend was bearish, but could be executed if the weekly trend was rising, flat or ranging. You may extend the same logic up and down the time scale. · If the trend in the higher degree isn't in harmony, find a different market to trade. The beauty of being a multi asset trader is that you can always find a candidate somewhere. · The very best trades often occur when all three perspectives are in harmony. For instance, a daily long trade setup has a much better potential when the weekly and monthly trends are in harmony. · Finally, like everything else in trading, except for risk management, there is a time and a place to ignore the filters. If you have extreme conviction in a trade and you have a solid risk management plan, take the trade. Part of the journey is learning to recognize those nexus points when conditions and sentiment are right to enter counter trend trades. Goldman Sachs Commodity Index: After identifying a potential trade, load the symbol into the triple screen template. If the potential trade is in the daily perspective (as in this example) load daily, weekly and monthly charts. Begin with the longest time perspective and work your way lower to the perspective in which you are considering the trade. In this template I use a simple 14 period RSI and a 21 period exponentially smoothed moving average, but almost any momentum oscillator and moving average combination will work. The daily chart appears to be under re-accumulation and may be setting up a bullish breakout. Each decline has been met with strong buying at consecutively higher levels, price volume behaviors are consistent with accumulation, price is attempting to clear the top of the consolidation pattern and there is reasonable upside potential before the next resistance. Assuming the market met the rest of my buying tests, including liquidity considerations (which I doubt this one does), and the risk reward potential fit my risk management framework, I would consider tactics that would allow me to build a long position. However, before taking a deeper dive I would take a step back and load the symbol into the triple screen. Monthly: The trend is undeniably higher and there are few signs that it is in immediate danger of ending. · In a sign of strength, price moved above the top of the trend channel and stayed that way for the better part of four months. · Dips to test the top of the channel have repeatedly uncovered demand. · The oscillator, in this case a simple RSI, became overbought in September 2021, dipped slightly and then pushed to a new high. · There are no momentum divergences. · The moving average is also trending higher. · While the trend appears somewhat overextended there are no overtly bearish behaviors evident. Weekly: Another strong uptrend that appears to be on the verge of reestablishing momentum. · The overbought condition that had accrued in late February has been relieved via lateral movement. · The initial dip found support at a very high level. · The higher supports and flat top across the consolidation suggests accumulation. · This chart in in harmony with the chart of one higher degree. With the monthly, weekly and charts in harmony I would begin working my way through the rest of my analytic and risk management tests and screens. Remember though, for a daily perspective trade the most important level of conformation is at the weekly level. The strength in the monthly chart is simply a bonus. I also generally ask myself if the trade generally makes sense given my world view? But while having a fundamental underpinning for a trade is nice, it’s not a requirement. Sometimes it’s all about the pattern and momentum, particularly in the shorter time frames. Notes: In the Trading View setup it’s easy to synchronize the symbol and the crosshair. My preference is to synchronize the symbol but not the drawings or time period. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.

Education

by CMT_Association

Non-Fungible Token (NFT)Hi traders – I hope you all are doing well despite bear 🐻 It’s been a while since my last post but as NFT topic is largely uncovered in TradingView I thought that I will put something together. I have been learning about this area in past months and here are my findings. I divided my writing into three chapters: 1) Research 2) Gaming and NFTs 3) CryptoWalkers This way it’s more structured and easier to read. 1. Research For last 6 months I have been researching NFT space and some of my conclusions are following: NFTs can have basically unlimited use cases from music to land ownership NFTs are here to stay and will become an asset class with very high market capitalization Many well-known companies have shown their interest for NFTs Can expect a lot of innovation in this sector There are opportunities for investors/traders Coinbase CEO Brian Armstrong said to Bloomberg: „The market for non-fungible tokens could rival or even be larger than the company’s cryptocurrency business.“ (10.11.2021) I don’t know if that’s the case but there are definitely big potential in NFTs. According to CoinMarketCap, total Crypto market capitalization is $1.27 Trillion and NFTs total market capitalization is $11,4 Billion (30.05.2022). This makes NFT market capitalization 0.9% of total Crypto industry. These numbers show that we are still very early. During my research I have: Deep dived into discord servers (every NFT project has their own server). I have been active there – asking questions and made suggestions. Fun thing about that is you generally don’t know if you are speaking with 15 year old youngster or 60 year old elder. Minted NFTs Bought and sold NFTs on secondary markets Invested into failed projects To me investing into NFT projects is very similar to investing into startups – you invest mainly into founders & team. Idea is also important – as well ability to make changes when something is not working. Also keep in mind that many startups fail, I guess that this number will be even higher in NFTs. Before bear market there was extreme hype around NFT sector and you could basically draw a cow in Microsoft paint and sell it for 3 ETH if you were a good marketer. This is not the case anymore. Currently sometimes even good projects are struggling to sell out. Generally I believe that bear market is good for the NFT ecosystem. It will clear up some air and weak projects will fail. As famous investor Warren Buffett said: „Only when the tide goes out do you find out who’s been swimming naked.“ Strong projects will make it because they keep building and this gives better foundation to new market cycle. This will also educate investors because at some point when investor had a whitelist spot for minting event, it meant basically guaranteed profit. Markets can’t run like this forever. I mean you can still make money trading NFTs but it’s much harder with these market conditions and more work needs to be done. Here is little overview about different NFT categories (although sometimes it is difficult to classify them): For example sometimes NFT belongs into multiple categories, like PFP (Profile Picture) project with P2E (Play-to-Earn) mechanics. I believe in time these categories will be more precise as whole NFT market evolves. One of the most interesting area is blockchain gaming. This topic is nicely explained in Gemini's article and I copied it here (full link below). 2. Gaming and NFTs While the global gaming industry continues to grow across all markets, it remains structured in a way that primarily benefits game developers and perpetuates a one-directional flow of value where players spend money to unlock access to in-game assets and gameplay configurations. In contrast, blockchain-built games and decentralized applications (dApps) enable players to capture the utility and value of in-game purchases and asset acquisitions more effectively. Blockchain technology in gaming is driven by non-fungible tokens (NFTs), digital assets that represent in-game content. These tokens are unique, rare, and indivisible, while the blockchain networks that underpin NFTs facilitate player ownership, provable scarcity, interoperability, and immutability. Together, these advantages have the potential to drive mainstream adoption and a far more equitable value model. Although the adoption of NFTs in the gaming world comes with benefits, it also presents significant obstacles to overcome. Most notably, NFTs need to be made more appealing and intuitive to mainstream consumers who might not be technically oriented. And because NFTs possess intrinsic value, there's a risk that some will be used predominantly as speculative assets. This potentiality could motivate players to purchase in-game assets with the hope of selling them for future profit instead of using the assets within the gaming ecosystem as intended. Despite these challenges, the potential for profit within the gaming industry will motivate more non-blockchain-focused brands to experiment with NFTs, likely by forming partnerships with third-party blockchain projects that have the technical expertise needed to bring their vision to life. Simultaneously, the broader success of gaming dApps will likely play a role in further catalyzing NFT infrastructure improvements and drive the development of innovative solutions that unlock mainstream adoption. Read full article here: www.gemini.com 3. CryptoWalkers Cryptowalkers is unique collection of fully rigged 3D walking characters aimed to live in the Metaverse. All characters come with full bodies (and custom 3D backgrounds) to be used by it’s owners in various Metaverse environments. One of the main goals of this project is to develop P2E shooter game and it should be launching at February 2023 (dates can change, especially in Crypto but this is rough estimate). Development is well underway and team has released some video clips from the game - this is one of the most advanced blockchain based P2E game I have seen so far. I think that NFTs, P2E and Metaverse will become big things in Crypto. Despite being still early there are signs that this one will become one of the top players in the near future. I have been part of their community since their minting event (December 2021) and feel very bullish on this project. I'm mostly impressed how professionally this one is managed. Capable team is key to success and here we have one of those teams. They started with zero (0!) marketing budget but this little thing did not disturbed them. They managed to build a strong community within short time-frame. When team is able to do things with limited resources then you could imagine what will start to happen when there is some money backing their vision. In February Outlier Ventures joined as an investor and strategic partner. After that there are basically no closed doors for them. As I mentioned before, it is wise to invest into strong teams. This is especially true in bear market. Secondly, I believe that these CryptoWalkers have some X-factor that I can't describe. It's the same factor that separates great songs from good ones. To be honest, when I first saw them then they seemed little weird to me 😀 Now I really like those Walkers... X-factor is working. Here is chart of CryptoWalkers price movement (nftgo.io) Current floor price is 0.18 ETH. Highest floor price was 0.5 ETH (02.02.2022). Current entry is more than 50% below that. Due to market conditions there is possibility to enter cheaply. I think that this could be very good holding if trader wants some exposure in NFT sector. CryptoWalkers website is: cryptowalkers.io As always, DYOR! Thank you and have a nice day. Cheers.

Education

Moving Average | Two Profitable Ways to Use 📊 Hey traders, In this post, we will discuss two efficient ways to apply the moving average(s) indicator in your trading. Please, note that the settings for a moving average depend on many factors and can not be universal. Time frame, your style of trading and many other factors should be taken into consideration when you define the settings. 1️⃣The first very efficient way to apply moving average is to consider that to be a strong support/resistance. Such a method is appropriate for trend-following traders. A very important condition to note applying MA as the structure is that the market should be trending: it should trade in a bullish or bearish trend, not in sideways. 📍In a bullish trend, a moving average will provide you a relatively safe point for buying the market after a pullback. Quite often after a test of MA, the price tends to bounce all the way up to a current high and even go higher to the next highs. 📍In a bearish trend, a moving average will serve as a strong resistance and quite often will indicate a completion point of a retracement leg after a strong bearish impulse. 2️⃣The second way to apply moving average is to apply a combination of 2 MAs with different settings (one with a bigger and one with a smaller length). Such a method is usually applied by counter-trend traders. And again, a very important condition to note, is that if you want to apply this method efficiently, remember that the market must be trending, it should be bullish or bearish. Your task will be to track an intersection of two MAs. 📍In a bullish trend, a crossing of two moving averages with a high probability will indicate a trend violation and initiation of a new bearish trend. Such a signal usually serves as a trigger to open a short position. 📍In a bearish trend, a crossing of two moving averages will signify a violation of a bearish trend and the start of a new bullish trend. The intersection by itself will be a signal to open a long position. Your task as a trader is to find the most accurate inputs for MAs. With backtesting and experience, you will find the settings applicable to your trading style. What indicator do you want to learn in the next post? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️

Education

by VasilyTrader

Updated

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