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The TradingView Digest - February 20thHey everyone! Welcome back to the TradingView Weekly Digest. In today’s edition, we’re highlighting the top posts from our community, which includes an informative post about Apple’s valuation, a strategy for trading opening range breakout, a hot script on Ichimoku Oscillator, and all the latest headlines, earnings, and economic events. 💡 Apple’s Valuation When we look at Apple historically, the valuation is higher than average, with lower than average sales growth. Compare today's prices to the low prices of 2013, 2016, and 2018/2019, and you can see that you could buy Apple at 2.13, 2.20, and 2.68 times sales, with sales growing at sharply higher rates compared to now, where sales are growing at the slowest rate and reaching a peak valuation at 8.02 times sales. By timwest 💡 Timely Opening Range Breakout Strategy Open Range Breakout (ORB) is a simple strategy that day traders use in relatively low-volatility markets. The Opening Range usually refers to the highest and lowest prices within the first 15 to 60 minutes of the market opening. These levels then serve as your resistance and support, guiding your trading plan for the day. By Zeiierman 📰 Top Stories Coinbase Stock Pops 14% on First Quarterly Profit Since 2021 as Trading Picks Up Blackrock’s Bitcoin ETF Holdings Near 110K BTC Why high-yield bond ETFs may deliver 'surprise' outperformance in fixed income in 2024 Microsoft's $3.44B German AI Investment UK Records Biggest Monthly Retail Sales Rise Since April 2021 💵 Earnings highlights from the previous week: Eni Earnings Fall on Lower Energy Prices Alliant Energy's Q4 Earnings Rise, Revenue Falls; 2024 Outlook Maintained Airbus Posts Lower FY23 Net Income; Revenue Grows IAMGOLD Corp reports results for the quarter ended in December Schneider Electric Reports Growth in FY23 Net Income, Revenue 💡🎥 Thoughts and Analysis on US30 What a solid run we have seen until the CPI data! After the US CPI came in hotter than expected, it shocked the market, leading to heavy selling on stock indexes and risk currencies with a flight to safety (USD). Is this merely a buying opportunity, or could it signal a potential momentum change? Watch the video to find out. By Eightcap 🆕 TradingView and Coin Metrics: New Era in Crypto Asset Analysis Coin Metrics, renowned in crypto financial intelligence, has now integrated its dataset into the TradingView platform. Coin Metrics brings robust data on crypto networks, enriching the decisions of traders and investors with accurate information. Through this partnership, over 50 million TradingView users now have access to even more detailed and comprehensive information to analyze crypto assets. By TradingView 🌟 Script of the Week 📜 Ichimoku Oscillator This script utilizes various Ichimoku Cloud features to identify trend and potential entry/exit levels. By LonesomeTheBlue 💭 Our Weekly Thought: “There is never a rush to buy or sell.” We hope you found this helpful. Please share your feedback, comments, or suggestions with us in the comments below. TradingView Team 📣 Want to be among the first to know all the news? Give us a follow!
BITSTAMP:BTCUSD
by TradingView
8
GBP/JPY’s Break & Retest PatternGBP/JPY’s recent price action has formed a bullish Break & Retest pattern – an underrated pattern which represents a structured way to navigate breakouts. Here’s the three key components of GBP/JPY’s Break & Retest pattern: 1. The Breakout: On Tuesday, GBP/JPY made a decisive move higher, breaking above a significant resistance level. 2. The Retest: Following the breakout, prices retraced back to the level of the previously breached resistance. This pullback is a crucial component of the Break & Retest pattern, providing traders with a chance to confirm the legitimacy of the breakout. 3. The Reversal: The confirmation of the Break & Retest pattern came on Thursday when a bullish hammer candle formed. This reversal candle is indicative of the broken resistance now acting as support, aligning perfectly with the principles of the Break & Retest pattern. The market then pushed higher on Friday. GBP/JPY Daily Candle Chart Past performance is not a reliable indicator of future results Trading the GBP/JPY Break & Retest: Identifying and Anticipating: Traders who had identified the key resistance level in GBP/JPY prior to the breakout were well-positioned to anticipate the development of the Break & Retest pattern. Utilising price alerts would have been particularly beneficial to notify traders of both the breakout and the subsequent retest. Entry Points: The entry point for a bullish scenario involves strategically placing an entry order just above the high of the reversal candle. This ensures that traders enter the market with confirmation of the newfound support. Stop-loss Placement: Proper risk management is crucial. In a bullish scenario like this, a stop loss could be positioned below both the low of the reversal pattern and the broken resistance level, protecting against unexpected downturns. Price Targets: Traders have the flexibility to set a price target based on market structure or risk. With the GBP/JPY Break & Retest, targeting the next key level or support based on market structure, or opting for a price target twice the size of the risk, could be considered. Risk Management: As with any trading strategy, risk management is paramount. Traders engaging with the GBP/JPY Break & Retest pattern should implement proper risk management techniques, including position sizing, staying informed with the economic calendar, and diversifying their trading portfolio. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
by Capitalcom
2
Nvidia Q424 preview – this needs to be on everyone risk radar Whether trading equity, equity indices or even FX, Nvidia’s Q424 earnings (due after-market on 21 Feb) should be firmly on the risk radar. Markets could come alive with movement and traders may need to dynamically react. How the Nvidia share price reacts immediately after its earnings results and CEO Jensen Huang’s guidance could have far-reaching implications - not just for those holding exposures in Nvidia equity CFDs - but for those with open positions in NAS100 and US500, and even risk FX, such as AUD, NZD, and NOK. Nvidia is a true market darling – it hits the sweet spot in A.I revolution, which may not be a completely new theme, but given the sheer rate of change in the evolution market participants still have very low conviction when it comes to forecasting future cash flows. This inability to price certainty only increases the volatility. Looking at consensus expectations on sales, margins, and earnings may not prove to be overly worthwhile, given fundamentals mean little for what is essentially a pure momentum vehicle like Nvidia. It’s the commentary and guidance and the tone of the outlook that inspires investors, notably around its long-term data centre sales. We can explicate how the business is likely tracking from recent earnings numbers from the likes of AMD, SMCI and TSMC, and given the strong trends we’ve seen of late can assume sales are growing at a solid clip. Options structures price big moves on earnings If we look at the options market, the implied or expected move for the day of reporting sits at an impressive -/+11%. That level of implied volatility could indeed be mispriced, but an -/+11% move for a company with a $1.83t market cap would be staggering. When we consider that Nvidia has the fourth largest weight on both the S&P500 and NAS100, commanding a 4% and 5% weighting on each index respectively, an -/+11% move could have significant implications – especially if the move in Nvidia’s share price spreads into other A.I and mega-cap tech names, which it most probably would. Should we see a move in US equity futures it would likely impact the USD and risk FX, such as the AUD, NZD, or NOK. Staying in the options space, we see that Nvidia’s 1-week call options (10% out-of-the-money) currently commands an implied volatility of 100.8%, a clear premium over 1-week put options (with strikes 10% out of the money) at 85%. This is rare, as put option implied vol is typically higher than calls, given the increased relative demand to use put options to hedge against equity drawdown. We also see that 9 of the top 10 most traded options strikes recently (expiring on 23 Feb) are traders buying call options, which just adds to the view that equity traders are positioning portfolios for higher levels and remain incredibly bullish on their near-term prospects. The bottom line – Nvidia’s share price is not being driven by fundamentals – valuation matters little – it is all order flows and momentum. What matters to traders here is that the market expects a huge move on the day of earnings, and this could send ripples through broader markets. This creates opportunity but it also is a risk for traders that needs to be managed – put Nvidia on the risk radar.
NASDAQ:NVDALong
by Pepperstone
8
Mastering the 70/30 RSI Trading Strategy - Plus Divergences!Mastering the 70/30 RSI Trading Strategy: A Comprehensive Guide The 70/30 RSI technique stands out as a popular and effective method for making informed decisions in the financial markets. Leveraging the Relative Strength Index (RSI) indicator, this strategy empowers traders to navigate the complexities of buying and selling various financial instruments, from stocks to currencies. In this article, we delve into the intricacies of the 70/30 RSI trading strategy, exploring its fundamentals and practical application in forex trading. Understanding the 70/30 RSI Trading Strategy: Developed by renowned technical analyst J. Welles Wilder, the RSI indicator serves as a powerful tool for evaluating market strength and identifying overbought and oversold conditions. With a range from 0 to 100, the RSI provides traders with crucial insights into market dynamics, enabling them to make timely trading decisions. At the heart of the 70/30 RSI strategy lies the establishment of two key threshold levels on the RSI indicator: 70 for overbought conditions and 30 for oversold conditions. These thresholds serve as crucial markers for generating buy or sell signals, offering traders valuable guidance in navigating market trends. ⭐️ Adding and Setting Up the RSI Indicator on Your Chart: The RSI (Relative Strength Index) Indicator is a freely available tool accessible within your TradingView Platform, irrespective of your subscription plan. Whether you're using a Free membership or one of the Premium plans, you can easily find and add this indicator to your charts. Below, I'll guide you through the process of adding and customizing the RSI indicator on your platform with the help of the following images. To begin adding the RSI indicator to your chart:👇 You can also customize the colors to your preference, just like I did by selecting your favorite ones.👇 Now, let's delve into what the RSI indicator is and how to interpret it. Interpreting RSI Signals: In essence, an RSI reading of 30 or lower signals an oversold market, suggesting that the prevailing downtrend may be ripe for reversal, presenting an opportunity to buy. Conversely, a reading of 70 or higher indicates overbought conditions, implying that the ongoing uptrend may be nearing exhaustion, presenting an opportunity to sell. The Relative Strength Index (RSI) Explained: As a momentum indicator, the RSI measures the speed and magnitude of recent price changes, providing traders with insights into whether a security is overvalued or undervalued. Displayed as an oscillator on a scale of zero to 100, the RSI not only identifies overbought and oversold conditions but also highlights potential trend reversals or corrective pullbacks in a security's price. Practical Application of the RSI Strategy: Traders employing the 70/30 RSI strategy must exercise caution, as sudden and sharp price movements can lead to false signals. While RSI readings of 70 or above indicate overbought conditions and readings of 30 or less indicate oversold conditions, traders must consider additional factors and use other technical indicators to validate signals and avoid premature trades. Let's examine a few examples. Example No. 1: EUR/USD Daily Timeframe On the EUR/USD daily timeframe, we observed an overbought condition indicated by the RSI rising above the 70 level. This signaled a potential reversal in price direction. Subsequently, the price indeed reversed, confirming the overbought scenario. It's crucial to emphasize that while scenarios above the 70 RSI level or below the 30 RSI level suggest potential reversals in price, it's essential to complement your analysis with additional filters. These may include consideration of the economic environment, effective risk management strategies, and identification of triggers or patterns before initiating a trade. Below, I'll illustrate a potential trigger that aligns with the RSI 70/30 strategy: the crossover of the RSI line with the RSI-based moving average (MA). Example No. 2: In this example, the RSI strategy proved effective as we observed the price falling below the 30 level, indicating potential oversold conditions and a forthcoming reversal from the market's potential bottom. Additionally, in the image below, you'll notice the introduction of white lines, known as "divergences." I'll provide a clearer explanation of divergences in the next example. Example No. 3: In this example, denoted as circle N.3, we encounter another instance of the RSI reaching the 70 level, indicating an overbought condition. Once again, the strategy proves effective, but this time, we notice a shallower reversal compared to the previous two examples. Following this reversal, the price experiences growth, presenting a new opportunity for traders with a subsequent higher high. However, unlike before, this high does not breach the 70 RSI level, resulting in a deeper reversal. This scenario exemplifies a "divergence." But what exactly is divergence trading? Divergence trading revolves around the concept of higher highs and lower lows. When the price achieves higher highs, you would expect the oscillator (in this case, the RSI) to also record higher highs. Conversely, if the price makes lower lows, you anticipate the oscillator to follow suit, registering lower lows as well. When they fail to synchronize, with the price and the oscillator moving in opposite directions, divergence occurs, hence the term "divergence trading." I'm confident that the previous three examples were well explained to help you understand the 70/30 RSI strategy, along with the MA moving average trigger and the relative divergence strategy. Please share your thoughts in the comment section below. Key Considerations and Limitations: While the 70/30 RSI strategy offers valuable insights into market dynamics, traders must remain mindful of its limitations. True reversal signals can be rare and challenging to identify, necessitating a comprehensive approach that incorporates other technical indicators and aligns with the long-term trend. In Conclusion: The 70/30 RSI trading strategy represents a powerful framework for navigating the complexities of the financial markets. By leveraging the insights provided by the RSI indicator, traders can make well-informed decisions, identify lucrative trading opportunities, and optimize their trading strategies for success in various market conditions.
Education
by FOREXN1
15
GBP/JPY: Price Corrects from 8.5 Year HighGBP/JPY: Price Corrects from 8.5 Year High According to CNN, the economies of the UK and Japan entered a technical recession last week as data showed a second consecutive quarterly decline in gross domestic product. And if in the UK the economic downturn can be associated with high inflation and the strict policies of the Bank of England, then in Japan the reason may be the population decline (which has been going on for 14 years in a row). At the same time, the GBP/JPY chart shows that last week the rate exceeded 190 yen per pound for the first time since August 2015. However: → the price is at the upper border of the ascending channel (shown in blue); → at the beginning of this week, the price of GBP/JPY is below the 190 yen level – and a false bullish breakout of the psychological level should be regarded as a bearish sign; → the MACD indicator indicates that demand forces are fading. Perhaps market participants are inclined to take profits from longs. Since it is possible that the Japanese authorities are able to announce some decisions aimed at supporting the yen. In this case, one of the immediate targets for the bears may be the level of 186 yen per pound – where the support level (formerly the resistance level) is located, reinforced by the median line of the long-term channel. 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.
by FXOpen
10
How-To: Use the TradingView Paper Trading featureTradingView's Paper Trading isn't just for practice; it's a detailed educational platform that closely simulates the real trading environment, all without the risk of losing money. This feature is carefully crafted to mimic actual market scenarios, offering users a realistic preview of how their trading plans might fare.📖🧾 The video is packed with valuable tips 💡 on making the most of the Paper Trading feature. From initiating your paper trading account to executing trades, tracking your positions, and evaluating your trading approach, this guide is essential for anyone looking to refine their trading skills on TradingView. Engaging in paper trading means more than just trial runs; it integrates you into a community of well-informed traders. It encourages the prudent, yet proactive mindset advocated by TradingView. Such a strategy distinguishes the most successful traders. 📈 In summary, the Paper Trading feature reflects TradingView's dedication to providing its users with the necessary knowledge 📚 and tools ⚒️ for trading success. It champions the "look first, then leap" approach, ensuring that your venture into trading is informed, confident, and well-prepared. Immerse yourself in the video 🎥, delve into the Paper Trading feature, and start your path to becoming a knowledgeable and prosperous trader. 💹 ❓Have you tried our Paper Trading feature yet? How did you find it? Love it 🥰, hate it 👎🏽, we want to know especially with our upcoming competition where you could win up to $10,000 paper trading right here on TradingView. More on that later ⏰ ;) Happy trading, and always remember – look first, then leap! 👀🦘 ℹ️ More info on the TradingView Paper Trading feature can be found here: www.tradingview.com Don't want to miss out on more tips and tricks? Give us a follow!
Education
by TradingView
8
US30: Thoughts and Analysis Post-CPIToday's focus: US30 Pattern – Diagonal Support – 38,135, 37,135 Resistance – 38,810 Hi, traders; thanks for tuning in for today's update. Today, we are looking at the US30 on the daily chart. What a solid run we have seen till yesterday's CPI data. After US CPI came in hotter than expected, this shocked the market and led to heavy selling on stock indexes and risk currencies with a flight to safety (USD). We have broken down price action, price patterns and levels we are watching. Is this nothing more than a buying opportunity, or is this a potential momentum change? Good trading.
EIGHTCAP:US30
by Eightcap
5
Apple Valuation Graphed to 2009The valuation of NASDAQ:AAPL shares is always an interesting challenge and historically you can view the range of valuation that Apple shares have traded at using the powerful tools that TradingView has for you. Here is a template you can easily make a copy of using the "share" button at the bottom of the graph. Once you click "share" you will see a "make it mine" button to click on an make yourself a copy to use as a template for your other stocks. This is a powerful way to view your companies you invest in and see how they are valued. 1. Free cash flow 2. PS Ratio (How many times the annual revenues of the company is the market capitalization of the equity) 3. Shares Outstanding (Very important to know if a company is giving shares away to employees each year creating a drag on the earnings or are they buying back stock with borrowed money. Better yet, are they retiring stock with free cash flow.) 4. Long term debt (See above) Is the company borrowing more and more to grow and putting itself at risk 5. Total Revenue (Not inflation adjusted) 6. Market Capitalization (Value of stock only, not enterprise value which includes debt) When we look at Apple shares here historically, the valuation is higher than average with lower than average sales growth. Compare today's prices to the low prices of 2013-2016-2018/2019 you can see you could buy Apple at 2.13, 2.20, 2.68 times sales with sales growing at sharply higher rates versus now with sales growing at the slowest rate with a peak in valuation at 8.02 times sales. So, in effect, NASDAQ:AAPL is significantly more expensive relative to low valuation levels. Valuation isn't a timing mechanism for entering and exiting stocks but you can use it to understand the relative valuation of stocks in your portfolio and the investible universe of stocks. Knowledge is power and this data at least helps you to point out the downside risk to previous low valuation cycles. Cheers, Tim Friday, February 9, 2024 11:54AM EST $189.67 last NASDAQ:AAPL
NASDAQ:AAPLShort
by timwest
14
The TradingView Digest - February 13thHello, readers! We're delighted to announce the relaunch of our Weekly Digest, now optimized for an improved reading experience. Join us for a knowledge-enriched learning journey. Without delay, let's dive in! 🙂 In today’s edition, we’re highlighting the top posts from our community. This includes an informative post about Stan Weinstein's stage analysis, a video tutorial on market liquidity, a hot script on volume footprint, and all the latest headlines, earnings, and economic events. 🔥 ⦿ Stan Weinstein’s method of Stage Analysis Stage analysis is a powerful technique in trading that segments market trends into distinct phases, each offering unique opportunities and challenges. Developed by Stan Weinstein, this method helps traders understand and anticipate market movements. By FXOpen ⦿ Understanding Liquidity Liquidity is essentially composed of orders in the marketplace. Since trading operates as a zero-sum game, without liquidity, trading becomes impossible. To put it simply, if you want to buy, you need someone to sell to you, and vice versa. By TradinG_Grace ⦿ Top Stories SoftBank Swings to Surprise $6.4B Profit After Four Down Quarters, Arm Stake Nets $16B Intel Chip Sales Halted by German Court Bitcoin Halving Preparations Prompt Surge in Miner Outflows: Bitfinex Insights Pharmacy Chains Are in a World of Hurt. Blame Shrinking Drug Reimbursements Cloudflare's stock catapults 24% higher as earnings bring 'a lot to like' ⦿ Earnings Earnings highlights from the previous week: Alibaba's Q3 Earnings Fall, Approves $25B Buyback Ford's Q4 Revenue Up 4% Costco's Net Sales Rise in 2024 Adobe's Earnings to Rise 15.3% ⦿ How to Create a Solid Portfolio Building a strong portfolio can be challenging for most investors. Knowing easy ways to start that journey can greatly improve your performance as an investor. In this post, we'll show you how to better pick stocks, using the NAS100 as an example. By thesharkke ⦿ Bullion Ballet: Trading the Gold Platinum Ratio Gold is a preferred precious metal driven by consumer jewelry demand, investment, and monetary policies. Platinum, also precious, is used for jewelry and somewhat as an investment. Unlike gold (6% industrial demand), platinum relies heavily on industry (73%). By mintdotfinance ⦿ Script of the Week Volume Footprint Voids This script aims to plot single candle profiles and their own footprints. It uses lower timeframe calculations to plot different styles of single candle POC and can be used for scalping, finding precise entries and exits, and spotting potential trapped traders, etc. By StratifyTrade ⦿ Our Weekly Thought Always look first. Never rush into a trade or investment blindly. We hope you found this helpful. Please share your feedback, comments, or suggestions with us in the comments below. - TradingView Team ❤️
BITSTAMP:BTCUSD
by TradingView
5
Timely Opening Range Breakout Strategy (TORB)Today, I’ll tell you about an amazing research study back from 2019 by a team of Taiwanese researchers, “Assessing the Profitability of Timely Opening Range Breakout on Index Futures Markets.” Takeaway: The study's results are compelling. Implementing the TORB strategy yielded over 8% annual returns across the tested markets. Remarkably, the TAIEX index showcased a staggering 20.28% annual return. These numbers underline the potential of TORB in maximizing trading gains. █ What is Open Range Breakout? Open Range Breakout (ORB) is one of the simplest and safest strategies day traders use in a relatively low-volatility market. Opening Range means exactly just that. You check an asset's highest and lowest price in a certain time frame (usually 15 to 60 minutes) from the market's opening time. These levels become your resistance and support that guide your trading plan for that day. Say if your chosen stock price goes higher than the highest level after the opening range; it indicates a bullish run for the day. Conversely, it indicates a bearish run if the price loses support in a downward trend. █ Timely Opening Range Breakout Strategy ORB has a certain set of challenges, especially for volatile markets. The Timely Open Range Breakout (TORB) strategy has been proposed in response to these challenges. TORB leverages high-frequency intraday data and aligns trading strategies with the active hours of the underlying stock markets. By analyzing one-minute intraday data from 2003 to 2013 across various markets, including DJIA, S&P 500, NASDAQ, HSI, and TAIEX, the study by Yi-Cheng Tsai et al. demonstrates the effectiveness of this strategy. The key lies in identifying the 'active hours' of the market, aligning with the opening range of the underlying index. █ 1. PMMV and PMVR: The research paper introduces two critical variables for the TORB strategy: Per-Minute Mean Volume (PMMV) and Per-Minute Variance of Return (PMVR). These metrics are essential in identifying the most active hours for futures market trading. PMMV provides a snapshot of the market's activity level at each minute of the trading day. PMVR is crucial for understanding the volatility or the degree of fluctuation in the market at each minute. PMMV (Per-Minute Mean Volume) is calculated by averaging the trading volume in a one-minute interval over a specified number of trading days. The graph shows that the German 40 is most active during the London opening and 30 minutes into the New York opening. PMVR (Per-Minute Variance of Return) measures the variance of the one-minute returns, calculated as the logarithmic difference between the closing prices of one-minute intervals. Using PMVR, the German 40 is most active during the London opening session and approximately one hour into the New York session. █ 2. TORB Trading Rules: Basic ORB trading rules are applied here. Buying pressure dominates if the price moves above the resistance level, suggesting potential upward price movement. Conversely, selling pressure prevails if the price falls below the support level, indicating a possible downward trend. These rules are applied within the active trading hours, defined by the PMMV and PMVR metrics. Buy Signal Sell Signal The strategy also defines three key time points: the beginning of the observed period, the end of the observed period (probe time), and the time of closing the position. The prices at these specific times determine the conditions for buying and selling​​. █ 3. Data Sets: The study utilized two main datasets for its experiments: Intraday Data of Five Futures Markets: This dataset includes one-minute intraday data of the E-mini futures of the DJIA, S&P 500, NASDAQ 100, HSI (Hong Kong), and TAIEX (Taiwan). The period covered ranges from 2001/2003 to 2013, providing a comprehensive overview of these markets over a decade. Transaction Data for TAIEX Index Futures: This dataset contains detailed transaction data for the TAIEX index futures, covering the period from 2006 to 2013. It analyzes the relationship between TORB signals and trader behavior in the Taiwanese market. Interestingly, the research even considers the global financial crisis of 2007-2008, presenting test results for two sub-periods: before and after 2007. This approach ensures a thorough understanding of the strategy's performance across different market conditions​​. █ Results and Analysis 1. TORB Profitability Test: The TORB profitability test involved back-testing the strategy for the five futures markets. DJIA, S&P, and NASDAQ results revealed that strategies with probe times in the early stages yielded significantly higher annual returns. DJIA: The results showed that TORB transactions decreased as the probe time moved away from the beginning of active hours. This implies that the strategy was most effective when applied close to market opening times. S&P and NASDAQ: Similar to the DJIA, these markets also showed that strategies with early-stage probe times earned higher annual returns. Additionally, the TAIEX results demonstrated that TORB strategies earned significantly higher returns with probe times of less than 200 minutes. 2. Impressive Returns: The study's results are compelling. Implementing the TORB strategy yielded over 8% annual returns across the tested markets. Remarkably, the TAIEX index showcased a staggering 20.28% annual return. These numbers underline the potential of TORB in maximizing trading gains. It also found that the best probing times were shorter in the U.S. markets and longer in Asian markets​​. The research demonstrated that TORB strategies yielded consistently higher returns than traditional TRB (Trading Range Breakout) strategies, with no significant results in profitability tests for all TRB strategies across the five futures markets​​. To provide a clear picture, here's a summary of the daily returns for each market analyzed: E-mini DJIA: See Table 1 from the research paper E-mini S&P: See Table 2 from the research paper E-mini NASDAQ and HSI: See Tables 3 and 4 from the research paper TAIEX: See Table 5 from the research paper The active hours, identified by peaks in PMMV and PMVR, played a crucial role in the strategy's success. For instance, the E-mini DJIA showed peaks around 8:30 AM and 3:15 PM, coinciding with the opening and closing times of the underlying market. Similarly, peaks were observed for HSI around the opening, closing, and lunch break times. █ Relationship Between TORB Signals and Trader Behavior The study also examined the relationship between TORB signals and trader behavior, particularly in the TAIEX futures market. It was observed that the daily volume for individual traders was about twice that for institutional traders. The returns of the TORB strategies were positively related to the net buy positions of institutional traders both before and after the breakout. This suggests that by following the TORB signals, one could trade in the same direction as institutional traders and obtain positive returns. Specifically, the returns of the TORB strategies were significantly and positively related to foreign investment institutions, both before and after the breakout, indicating that TORB signals align with the trading direction of the most informed traders in the Taiwan market​​. █ Reference Y.-C. Tsai, M.-E. Wu, J.-H. Syu, C.-L. Lei, C.-S. Wu, J.-M. Ho, and C.-J. Wang, "Assessing the Profitability of Timely Opening Range Breakout on Index Futures Markets," IEEE Access, vol. 7, pp. 32061- 32071 Mar. 2019. ----------------- Disclaimer *Our results are approximate. We encourage you to test the assumption yourself. We do not guarantee that you will get the same results. This is an educational study for entertainment purposes only. The information in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell securities. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on evaluating their financial circumstances, investment objectives, risk tolerance, and liquidity needs. My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
OANDA:DE30EUREducation
by Zeiierman
22
Navigating Sympathy Plays: A Guide to Trading BITCOIN & COINBASE** Introduction ** Sympathy trading, a strategic approach rooted in both technical and fundamental analysis, capitalizes on correlated movements between assets to uncover profitable opportunities. In this article, we delve into the nuanced realm of sympathy trading using Bitcoin (BTCUSD) and Coinbase Global Inc. (COIN) as case studies, exploring how a blend of technical and fundamental analysis can enhance trading strategies. ** Understanding Sympathy Trading ** Sympathy trading hinges on discerning and exploiting the symbiotic relationship between correlated assets. It involves analyzing both technical indicators and fundamental factors to identify potential entry and exit points, as well as underlying drivers influencing price movements. ** BTCUSD and COIN: A Sympathetic Relationship ** BTCUSD and COIN exemplify a compelling case study in sympathy trading within the cryptocurrency domain. Bitcoin's price dynamics often exert a significant influence on Coinbase's stock value, reflecting the exchange's dependency on Bitcoin's performance and trading volumes. Technical Analysis Insights: Technical analysis provides crucial insights into price trends, momentum, and support/resistance levels. Key technical indicators for trading BTCUSD and COIN include: 1.Moving Averages: Analyzing moving average crossovers and trends helps identify potential entry or exit points. Golden crosses (short-term moving average crossing above long-term moving average) or death crosses (opposite) can signal trend reversals. 2.Volume Analysis:  Monitoring trading volumes in both BTCUSD and COIN can confirm price movements and signal changes in market sentiment. An increase in volume accompanying price movements suggests stronger market conviction. 3.Chart Patterns:  Identifying chart patterns such as triangles, flags, and head and shoulders formations can provide insights into potential price reversals or continuation patterns, guiding trading decisions. Fundamental Analysis Insights: Fundamental analysis delves into underlying factors driving asset valuations and market sentiment. Key fundamental factors influencing BTCUSD and COIN include: 1.Regulatory Developments:  Changes in regulatory frameworks governing cryptocurrencies can impact investor sentiment and trading activity. Positive regulatory developments may boost confidence in BTCUSD and COIN, while regulatory uncertainties could lead to volatility. 2.User Adoption and Trading Volumes:  Monitoring user adoption rates and trading volumes on Coinbase's platform can provide insights into the exchange's revenue prospects and growth trajectory. Increased user activity often correlates with higher revenues for the exchange. 3.Market Sentiment and News Catalysts:  Market sentiment surrounding Bitcoin, such as institutional adoption, macroeconomic factors, or geopolitical events, can influence both BTCUSD and COIN prices. News catalysts, such as product launches, partnerships, or earnings reports from Coinbase, can drive short-term price movements. ** Crafting Sympathy Strategies: ** Sympathy trading strategies integrating technical and fundamental analysis may involve: 1.Confirmation of Technical Signals:  Confirming technical signals with fundamental catalysts can strengthen trading convictions. For example, if a bullish technical pattern emerges in BTCUSD, traders may look for positive fundamental catalysts supporting the uptrend in COIN. 2.Event-Based Trading: Leveraging fundamental analysis to anticipate market-moving events, traders may position themselves ahead of key announcements or developments. For instance, if positive regulatory news is expected for cryptocurrencies, traders may preemptively buy COIN in anticipation of increased trading activity. ** Risk Management Considerations: ** Effective risk management is paramount in sympathy trading to mitigate potential losses: 1.Position Sizing:  Determine appropriate position sizes based on risk tolerance, account capital, and trade conviction. Avoid overexposure to a single trade and diversify across multiple assets to spread risk. 2.Stop-Loss Orders:  Implement stop-loss orders to limit potential losses and protect capital. Place stop-loss levels based on technical levels, volatility considerations, or predetermined risk-reward ratios. ** Case study in action ** Let's look at the charts, both on the 1W time-frame in order to catch and get an understanding of the bigger trends and see if the theory is applied on the price action. Bitcoin has provided 5 excellent Sympathy Play signals for Coinbase in the last 2 years. Starting with a Bear Flag that was rejected on its 1W MA50 (blue trend-line), Bitcoin initiated a huge decline on Coinbase (red shape), proportionally much stronger that its own. Then as its was attempting to find a market bottom, it provided 2 recovery signals that gave a proportionally bigger rise on Coinbase. Then a BTC Bull Flag again turned into a proportionally bigger rise on Coinbase with the last signal coming on October 2023. As you can see during this significantly sample, Bitcoin tends to provide strong early buy/ sell signals on Coinbase. It is worth noting that even though Coinbase is a stock, it follows Bitcoin's price movements more closely than the S&P500 stock index, which we have illustrated on the right chart by the grey trend-line. As you can see there have been numerous occasions where Coinbase failed to follow a big stock market rally and instead was tied to BTC with the most notable examples being recently in January 2024, March 2023 and October 2022. ** A few things to consider that distinguish Bitcoin from Coinbase: ** Market Factors:  Bitcoin's price is influenced by various market factors such as supply and demand dynamics, investor sentiment, macroeconomic trends, regulatory developments, and technological advancements. Coinbase's stock price, on the other hand, is influenced by factors specific to the company, including financial performance, earnings reports, regulatory compliance, competition, and market sentiment towards the cryptocurrency industry. Liquidity and Trading Volume:  Bitcoin, being the largest and most well-known cryptocurrency, typically exhibits higher liquidity and trading volume compared to Coinbase's stock. As a result, Bitcoin may experience more significant price movements and volatility compared to COIN, which could impact their respective charts differently. Correlation vs. Causation:  While Bitcoin's price movements may influence sentiment towards Coinbase and vice versa, correlation does not necessarily imply causation. While there may be periods where BTC and COIN prices move in tandem due to shared market sentiment or external factors, they are ultimately distinct assets with their own fundamental drivers. Market Participants:  Bitcoin is traded on cryptocurrency exchanges by a diverse range of market participants, including retail investors, institutional investors, miners, and traders. Coinbase's stock, on the other hand, is traded on traditional stock exchanges and may attract a different set of investors, including institutional investors, hedge funds, and retail traders. ** Conclusion: ** Sympathy trading using BTCUSD and COIN as case studies demonstrates the synergy between technical and fundamental analysis in identifying trading opportunities and managing risk. By integrating insights from both disciplines, traders can enhance their trading strategies, navigate market dynamics with confidence, and strive for consistent profitability in the dynamic cryptocurrency market. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
CRYPTO:BTCUSDEducation
by TradingShot
5
TradingView and Coin Metrics: New Era in Crypto Asset AnalysisHello investors and trading enthusiasts! Today, we bring you a great news that'll take your crypto analysis up another notch. Coin Metrics, renowned in crypto financial intelligence, has now integrated its dataset into the TradingView platform. Coin Metrics brings robust data on crypto networks, enriching the decisions of traders and investors with accurate information. Through this partnership, over 50 million TradingView users now have access to even more detailed and comprehensive information to analyze crypto assets. How to access Coin Metrics data? Type "COINMETRICS:" into the asset search field: 📈 Examples Bitcoin - Sum of unique addresses that were active on a given day Ethereum - Newly created addresses with a non-zero starting balance This integration is more than just data; it is a strategic collaboration to explore new markets and create innovative use cases in the world of digital assets . For more details, visit the official Coin Metrics website . We hope you found this as amazing as we did. We'd love to know in the comments what you think of this new integration. Additionally, if you have any suggestions for future improvements or implementations on Tradingview, just drop us a message. Congratulations on being part of the world's largest community of Traders and Investors! - TradingView Team ❤️❤️❤️
BITSTAMP:BTCUSD
by TradingView
8
What Is Stage Analysis in Trading?Stage analysis is a powerful technique in trading that segments market trends into distinct phases, each offering unique opportunities and challenges. Developed by Stan Weinstein, this method helps traders understand and anticipate market movements. This article delves into the four stages of this analysis, offering insights into how traders apply these concepts, particularly in the context of stock trading. Understanding Stage Analysis Stan Weinstein’s stage analysis, a concept introduced in his seminal work "Secrets for Profiting in Bull and Bear Markets," offers a structured approach to evaluating market phases. Stage analysis in stocks divides the market cycle into four distinct phases. Each represents a specific phase in a stock's lifecycle, characterised by unique price movements and investor behaviour. Weinstein's methodology is rooted in the identification of these stages through technical analysis, focusing on price action and volume. By discerning the current phase of a stock, traders gain insights into its probable future trajectory. This analytical framework assists traders in making more informed decisions about entry and exit points, aligning their strategies with the market's natural rhythm. Notably, it can be used in both intraday trading and long-term investing. Below, we’ll walk through the four stages of Weinstein’s methodology. To better understand the topic, consider following along in FXOpen’s free TickTrader platform. Stage 1: The Basing Area In Weinstein stage analysis, the basing stage, or stage 1, marks the beginning of a stock's life cycle. This period is characterised by a period of consolidation after a previous downtrend. Prices typically fluctuate within a narrow range, indicating a lack of clear direction as the market sentiment shifts from negative to neutral. This transition is often overlooked in stage analysis trading, as it doesn't present immediate opportunities for significant gains. During the basing stage, trading volumes generally diminish, reflecting a reduction in selling pressure. As buying volume increases, accumulation-distribution tools like on-balance volume (OBV) tend to bottom out and move higher, typically in tandem with price. OBV helps in tracking volume flow, offering insights into whether the volume is flowing in or out of an asset. Additionally, investors watch for a gradual flattening of the price’s moving averages, a sign that the downward momentum is waning. It's a period of accumulation for savvy investors who recognise the potential for future upside. However, traders are cautious as stocks can linger in this phase for an extended period, and premature entry can lead to capital being tied up in inactive investments. Traders employing Weinstein's method use this phase to prepare for potential entry points, keeping a close watch on stocks that show signs of breaking out of their base. The successful identification of a market transitioning from Stage 1 to Stage 2 – the Advancing Stage – may position traders to capitalise on the early beginnings of a new uptrend. Stage 2: Advancing In stock stage analysis, stage 2, known as the advancing stage, is where investors may see the potential gains. This phase begins when a stock breaks out from the basing stage (stage 1) with notable volume. It signifies a transition from a neutral to bullish market sentiment as more investors start acknowledging the market’s potential. A key characteristic of Stage 2 is the sustained upward movement in the stock's price, often accompanied by increasing trading volumes. This rise in interest confirms the growing interest and commitment from investors, reinforcing the trend's strength. During this phase, the price typically moves above its key moving averages, such as the 30-period moving average, which acts as a dynamic support. OBV is also useful in this period. An increasing OBV alongside rising prices is a positive sign, indicating that the upward price movements are supported by strong volume, thus validating the trend. Traders focus on stocks that maintain their price above key moving averages and show a consistent increase in OBV in this phase. Such alignment of price and volume dynamics provides a more robust confirmation for continuing the trade in the advancing direction. Stage 3: Top Area Stage 3, known as the top area, marks a significant shift in the stock's cycle. This phase signifies the transition from an uptrend to a potential downtrend, characterised by a levelling off of the stock’s price movement after its advance in Stage 2. It's a period of distribution where early investors start to take potential returns, and new investors may enter based on the stock's past performance, not its future potential. During this phase, price movements become less definitive, often moving sideways and creating a resistance level that the stock struggles to exceed. Price begins to hover around its key moving averages, such as the 30-period moving average, without a clear direction. This indecisiveness in price action is a crucial indicator of the weakening momentum. Volume analysis during Stage 3 is vital. A divergence between price and volume starts to emerge; while prices might still be high, interest often shows a noticeable decrease. This reduced volume hints at a lack of conviction among investors, assuming that the stock may not sustain its previous upward trajectory. Traders monitoring stocks in Stage 3 should be cautious. It’s a time to closely watch for signs of a breakdown or a continuation of the trend, as the stock may either revert to Stage 1 or unexpectedly surge into a renewed Stage 2. Stage 4: The Declining Phase Stage 4 marks the declining phase, where a stock transitions from a period of distribution to a clear downtrend. This period is characterised by a sustained drop in the stock’s price, often initiated by a decisive break below key support levels and moving averages, like the 30-period moving average. The declining phase is typically accompanied by increasing trading volumes, reflecting a growing consensus among investors that the stock’s peak performance is behind it. This phase can be accelerated by negative news or poor earnings reports, further driving down the price. The on-balance volume (OBV) is again a critical tool in this phase. A declining OBV indicates that selling pressure is increasing, reinforcing the downtrend. This downtrend is marked by lower highs and lower lows in both price and volume, signalling weakening investor confidence and diminishing interest in the stock. For traders, stage 4 is a period of high caution. It's often considered a signal to exit positions to avoid further losses. Short-selling strategies may be employed by more experienced traders who seek to capitalise on the market’s downward trajectory. However, it's essential to approach this phase with a clear risk management strategy, as the volatility can lead to rapid changes in price. The Bottom Line Mastering stage analysis may equip traders with a structured approach to navigate the stock market's ebb and flow. By understanding and applying the principles of each stage, traders can potentially make more informed decisions, aligning their strategies with market trends. For those ready to apply these insights in real-world trading, opening an FXOpen account offers a platform to implement stage analysis techniques effectively in a dynamic trading environment. 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.
NASDAQ:MSFTEducation
by FXOpen
4
Understanding LIQUIDITYIn this video I try to explain liquidity as it pertains to training in a simple manner. Liquidity are basically orders in the marketplace. Since trading is a zero-sum game, without liquidity, there is no trading. Simply put, If you wanted to BUY, then you would need someone to SELL to you, and vice versa. Smart Money has deep pockets and needs a large amount of liquidity to facilitate their positions. They want to be able to get in and our of their trades, as well as to be able to trade with capital that would be worth the reward. The largest pools of liquidity usually reside above swing highs and lows, and equal highs and lows (double/triple tops and bottoms). Support and Resistance ideologies dominate the market, and besides that, psychologically it makes sense to put stoplosses at such areas rather than at some random area within a range. There are also breakout traders who see price breaking out of an area as a sign of strength (or weakness if bearish) and they set their entries above/below these levels. This is how liquidity is "engineered" in the market and sentiment manipulated. These pools of liquidity can be seen as a magnet, drawing price to these levels, either to grab liquidity before reversing or continuing in its current direction. - R2F
OANDA:XAUUSDEducation
by Road_2_Funded
14
Mastering Trendlines: Navigating Bitcoin's VolatilityMastering Trendlines: Navigating Bitcoin's Volatility In the ever-evolving world of cryptocurrency, Bitcoin stands as the pioneer, leading the charge in digital finance. However, its notorious price volatility can be a double-edged sword for traders and investors alike. To navigate these turbulent waters, one of the most effective tools at your disposal is the trendline. This simple, yet powerful technique in technical analysis can be your compass in the vast ocean of digital currency trading. Let's dive into the essence of trendlines and how you can use them to your advantage with Bitcoin. Understanding Trendlines At their core, trendlines are straight lines drawn on price charts to connect a series of prices. By identifying the direction and slope of these lines, traders can discern potential market trends, be they upward, downward, or sideways. The magic of trendlines lies in their simplicity and the profound insights they offer into market psychology and momentum. Types of Trendlines Uptrend Line : This bullish line connects a series of higher lows, indicating a growing demand for Bitcoin as traders are willing to buy at increasingly higher prices. Downtrend Line : In contrast, this bearish line connects a series of lower highs, signaling a selling pressure on Bitcoin as traders are inclined to sell off their holdings at progressively lower prices. Example of Uptrend The Power of Support and Resistance Trendlines can also highlight critical levels of support and resistance: Support Trendlines suggest areas where prices find a floor, bouncing off these levels rather than breaking through them. For Bitcoin, a strong support trendline can indicate a good buying opportunity. Resistance Trendlines point to ceilings where prices tend to peak and reverse. For traders, a resistance trendline nearing breach could signal a potential sell or a strategic point to go short. Applying Trendlines to Bitcoin Trading Bitcoin's price movements, marked by sharp rallies and corrections, make it a prime candidate for trendline analysis. Here's how to effectively apply this technique to Bitcoin trading: Drawing Trendlines Identify the Trend: Begin by observing Bitcoin's chart to determine the overall trend direction. Is it moving upwards, downwards, or sideways? Select Key Points: For an uptrend, select the lowest lows; for a downtrend, pick the highest highs. These points will be the anchors of your trendline. Draw the Line: Connect at least two key points with a straight line. The more points a trendline touches without breaking, the stronger it is considered. Trading Strategies Buying on Support: When Bitcoin's price approaches an uptrend line without breaking below it, consider this a potential buying opportunity. It suggests that the price is likely to bounce off the support and continue its ascent. Example of buying at support Selling on Resistance: Conversely, if Bitcoin's price nears a downtrend line but fails to break above, it might be time to sell or short, anticipating a price reversal. Breakouts and Breakdowns: A price break through a trendline can signal a significant shift in market sentiment. A breakout above a downtrend line might indicate a bullish reversal, while a breakdown below an uptrend line could hint at bearish developments. Advanced Tips Volume Confirmation: Always look for volume confirmation when a trendline is broken. A breakout with high volume is more likely to signify a genuine shift in trend. Combine with Other Indicators: For more robust analysis, use trendlines in conjunction with other technical indicators, such as moving averages or the Relative Strength Index (RSI). Conclusion Trendlines are a testament to the principle that simplicity often prevails in the complex world of trading. For Bitcoin enthusiasts, mastering this tool can enhance your ability to predict price movements and make informed decisions in the face of volatility. Remember, while trendlines provide valuable insights, they're most effective when used as part of a comprehensive trading strategy, combining technical analysis, fundamental analysis, and sound risk management practices. Embrace the power of trendlines, and let them guide you through the dynamic landscape of Bitcoin trading.
Education
by FikratTrades
3
Bullion Ballet: Trading the Gold Platinum RatioGold is the favoured precious metal. Its demand reflects consumer consumption of jewellery, investment demand, and monetary policy conditions. In a previous paper , Mint Finance highlighted these factors in detail. Platinum is also a precious metal, used to create jewellery and to a small extent as a form of investment. Crucially, unlike gold (6% industrial demand), platinum (73% industrial demand) is used more extensively for industrial applications. As gold and platinum share the source of jewellery demand, their performance is generally positively correlated. However, due to the distinct sources of demand as well as the extent to which each precious metal is used for each application, the correlation can break. These periods can offer tactical trading opportunities to benefit from the relative performance of CME Group’s precious metals suite. Particularly in a key ratio called the Gold to Platinum Ratio (“GPR”) which measures the price of gold relative to platinum. WHAT DRIVES THE GOLD-PLATINUM-RATIO The GPR is affected by monetary policy. Though the ratio does not show a distinct impact upon the first-rate cuts by Fed, rapid rate cuts in response to economic crises such as recessions can cause it to rally. The GPR increases during recessions due to investor preference for gold during times of crisis. Interestingly, the ratio has been rising since 2008 as gold price reaches new record highs, while platinum currently faces a cyclical downturn. RECESSION MAY BE UNLIKELY While the GPR faces the potential to increase during a potential recession, there are signs that a recession may be unlikely in the US. US spending remains resilient and has contributed to faster than expected GDP growth in 2023. While growth slowed heading into Q4 2023, it is still expected to expand at a strong 2% in the quarter. Moreover, the January BLS nonfarm payrolls report showed a massive 353k new jobs added. Wage growth was strong at 0.6% MoM, double the analyst estimate. Strong labour market and consumer spending in the US point to a healthier than expected economy. INDUSTRIAL SLOWDOWN WILL STILL HAMPER PLATINUM DEMAND In 2023, 33% of platinum’s demand came from industrial sources according to data from the World Platinum Investment Council . Platinum is used as a catalyst for several crucial industrial chemical processes. In addition, automotive demand represents a further 40% of total platinum demand. In the automotive industry, platinum is used in catalytic converters to reduce emissions. This has been a recent driver of platinum demand due to rising emissions standards and the so-called platinum-for-palladium substitution. In short, palladium is a Platinum Group Metal (PGM) which can be used interchangeably in automotive applications. The surge in palladium prices prompted many automakers to replace it with platinum. These changes will be in place for the lifetime of a car’s production so this trend will benefit platinum for an extended period. While platinum is a standout among the so-called Platinum Group Metals (PGM), the industry has been facing a downturn over the past 2 years with prices sharply lower. Ample above-ground inventories as well as low investment demand has hampered platinum performance. This downturn may not be permanent. Higher automotive demand and growth in hydrogen vehicles are expected to be long-term growth drivers for platinum. For 2024, the World Platinum Investment Council forecasts a smaller supply deficit than 2023. This is largely due to lower industrial and investment demand as well as improved supply. Anglo American, one of the largest producers of refined platinum stated that it expects PGM production to improve, which means ample supply. During 2023, production was hampered in South Africa. Going forward, PGM’s are meant to be a major driver for the mining giant, so efforts to improve production are under way and management also expects prices to recover. However, continued cost pressures may force miners to scale back production. Overall, the slowdown in chemical and petroleum demand as well as ample supply will limit Platinum’s performance in 2024, though price does face upside potential in the medium-to-long term. BENEFITS OF TRADING THE RATIO Platinum faces a mixed outlook in 2024, while there are several long-term demand growth drivers pushing price up, it faces uncertain but bearish production and demand outlooks for 2024. Similarly, gold is benefiting from heightened geo-political risk and strong central bank demand but faces resistance as prices reaches new record highs and a recession looks unlikely. Mint Finance covered some of these factors in detail in a previous post . While the outlook for both precious metals alone is uncertain, a trade on the back of the GPR favours gold. Not only has the ratio been on an uptrend for the past decade, it has outperformed both gold and platinum prices. Moreover, the ratio is not prone to overly large corrections. The largest drawdown in the ratio was smaller than the largest drawdown in gold and platinum prices. HYPOTHETICAL TRADE SETUP To express a position on GPR, investors can opt to use CME Group’s suite of precious metals future. Margin offset of 50% is available for a trade consisting of 1 gold (GC) contract and 2 platinum (PL) contracts. Executing a trade on the May futures contracts (GCK2024 and PLK2024), requires margin of: (Margin for Gold Leg + 2 x Margin for Platinum Leg) = (USD 8,300 + 2 x USD 2,800) = USD 13,900 – margin offset of 50% = USD 6,950. CME options on gold and platinum point to a bullish outlook for both but gold positioning is more bullish than platinum. As of 5/Feb, Gold options have a put/call ratio of 0.48 while platinum options have a put/call ratio of 0.75. Consider the following hypothetical trade setup: Entry: 2.275 Target: 2.530 Stop Loss: 2.100 Profit at Target: USD 23,013 Loss at Stop: USD 15,803 Reward to Risk: 1.46x This position benefits when: • Gold price rises faster than platinum. • Gold price falls slower than platinum. The position loses when: • Gold price rises slower than platinum. • Gold price falls faster than platinum. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
COMEX:GC1!Long
by mintdotfinance
15
Chainlink - Did We Just Witness Wykoff Accumulation?To all my fellow traders, speculators and gamblers, its been some time since my last post. I hope you've all been well, and most importantly, bathing in huge profits :) It seems like Chainlink followed textbook Wykoff Accumulation Schematics. Not the most perfect schematics, notably PS ( Prelim Support) falling a little short of the soon to be Resistance Lines. In addition, BU only touched the resistance turned support once before rocketing up. However the first PS does line up with the BU and subsequent SOS (Show Of Strength) Phase A includes a number of additional ST ( Secondary Test) which is common after the SC (Selling Climax) stage. The selling Climax should've marked the lowest point, but price action made a lower low after the AR (Auto Rally) But it was merely a 19c difference. Price still stayed within the TR(Trading Range) and bounced from the support lines. The AR also marked the highest point within the trading range. These are all minor discrepancies as price action continued to follow Wykoff theory. We had multiple touches of the Support / Resistance lines, along with a perfect Spring (Final Shakeout/Bear Trap), Test and LPS, followed by a BU + SOS. It took approximately 533 days from the SC (Selling Climax) to the TR (Trading Range) breakout, The longer the accumulation period, the stronger the "Spring". Does this mean price will continue north? Not necessarily, we've all seen these schematics fail. After all, Chainlink is up over 305% since the $4.65 Spring/Shakeout/Bear Trap lows. That would've made an awesome long entry. However, price is still way below its $53 ATH, so anything is possible. Having a quick look we could see that price is currently at resistance levels. A break from the 19$ range could initiate further upside. Like the majority of the market, the crypto king (BTC) will probably dictate Chainlinks next move. If we are to follow Wykoff theory, we could expect further upside. I made a post back in May 22' private post titled "Link... Whales have been accumulating" I remember reading many articles at the time that stated big players were buying up Chainlink. Price action also found support at various Fibonacci levels, in addition to strong buy signals. RSI Levels were at record lows, in addition to a whopping 90% correction at the time. Unfortunately, I never got around to publishing that idea, it would've made a fantastic post. I am no expert on Wykoff theory, so I've included information taken from various online sources. Hopefully it helps, Much love and lots of profits to you all. What is Wyckoff Accumulation? Each cycle in the market begins with accumulation. This phase is marked by a range trend, where the market is relatively stable and rangebound. During this phase, institutional investors buy the stock at lower prices. Also, the volume tends to decline in this phase because the buying interest gradually absorbs the selling pressure. Another way to confirm accumulation is to look at the support level. You may notice higher lows, indicating that the buyers are gaining power. Slowly, the trading volume begins to rise. This is a key indicator of the shift in sentiment and suggests a breakout trend. As the accumulation progresses, you may see signs of strength in the price action, where the asset breaks above the trading range’s upper boundary. This breakout often indicates that the market is ready for an upward move. During the Wyckoff Accumulation process, smart money builds substantial positions at favourable prices before the broader market realizes the potential for an upward move. The accumulation may resemble a “compressed spring” on the chart. The longer it is, the better the indication of a breakout. Markup: The second phase of accumulation is the markup, which follows a breakout. According to Wyckoff, traders should find entry points through the pullback zones in this phase. Wyckoff Events PS— Preliminary Support , where substantial buying begins to provide pronounced support after a prolonged down-move. Volume increases and price spread widens, signalling that the down-move may be approaching its end. SC— Selling Climax, the point at which widening spread and selling pressure usually climaxes and heavy or panicky selling by the public is being absorbed by larger professional interests at or near a bottom. Often price will close well off the low in a SC, reflecting the buying by these large interests. AR— Automatic Rally , which occurs because intense selling pressure has greatly diminished. A wave of buying easily pushes prices up; this is further fueled by short covering. The high of this rally will help define the upper boundary of an accumulation TR. ST— Secondary Test , in which price revisits the area of the SC to test the supply/demand balance at these levels. If a bottom is to be confirmed, volume and price spread should be significantly diminished as the market approaches support in the area of the SC. It is common to have multiple STs after a SC. Springs or shakeouts usually occur late within a TR and allow the stock’s dominant players to make a definitive test of available supply before a markup campaign unfolds. A “spring” takes price below the low of the TR and then reverses to close within the TR; this action allows large interests to mislead the public about the future trend direction and to acquire additional shares at bargain prices. A terminal shakeout at the end of an accumulation TR is like a spring on steroids. Shakeouts may also occur once a price advance has started, with rapid downward movement intended to induce retail traders and investors in long positions to sell their shares to large operators. Test — Large operators always test the market for supply throughout a TR (e.g., STs and springs) and at key points during a price advance. If considerable supply emerges on a test, the market is often not ready to be marked up. A spring is often followed by one or more tests; a successful test (indicating that further price increases will follow) typically makes a higher low on lesser volume. SOS — Sign Of Strength , a price advance on increasing spread and relatively higher volume. Often a SOS takes place after a spring, validating the analyst’s interpretation of that prior action. LPS—Last Point of Support , the low point of a reaction or pullback after a SOS. Backing up to an LPS means a pullback to support that was formerly resistance, on diminished spread and volume. On some charts, there may be more than one LPS, despite the ostensibly singular precision of this term. BU—“Back-Up” . This term is short-hand for a colourful metaphor coined by Robert Evans, one of the leading teachers of the Wyckoff method from the 1930s to the 1960s. Evans analogized the SOS to a “jump across the creek” of price resistance, and the “back up to the creek” represented both short-term profit-taking and a test for additional supply around the area of resistance. A back-up is a common structural element preceding a more substantial price mark-up, and can take on a variety of forms, including a simple pullback or a new TR at a higher level. Each Phase Explained. Phase A: Phase A marks the stopping of the prior downtrend. Up to this point, supply has been dominant. The approaching diminution of supply is evidenced in preliminary support (PS) and a selling climax (SC). These events are often very obvious on bar charts, where widening spread and heavy volume depict the transfer of huge numbers of shares from the public to large professional interests. Once these intense selling pressures have been relieved, an automatic rally (AR), consisting of both institutional demand for shares as well as short-covering, typically ensues. A successful secondary test (ST) in the area of the SC will show less selling than previously and a narrowing of spread and decreased volume, generally stopping at or above the same price level as the SC. If the ST goes lower than that of the SC, one can anticipate either new lows or prolonged consolidation. The lows of the SC and the ST and the high of the AR set the boundaries of the TR. Horizontal lines may be drawn to help focus attention on market behaviour. Sometimes the downtrend may end less dramatically, without climactic price and volume action. In general, however, it is preferable to see the PS, SC, AR and ST, as these provide not only a more distinct charting landscape but a clear indication that large operators have definitively initiated accumulation. In a re-accumulation TR (which occurs during a longer-term uptrend), the points representing PS, SC and ST are not evident in Phase A. Rather, in such cases, Phase A resembles that more typically seen in distribution (see below). Phases B-E generally have a shorter duration and smaller amplitude than, but are ultimately similar to, those in the primary accumulation base. Phase B: In Wyckoffian analysis, Phase B serves the function of “building a cause” for a new uptrend (see Wyckoff Law #2 – “Cause and Effect”). In Phase B, institutions and large professional interests are accumulating relatively low-priced inventory in anticipation of the next markup. The process of institutional accumulation may take a long time (sometimes a year or more) and involves purchasing shares at lower prices and checking advances in price with short sales. There are usually multiple STs during Phase B, as well as upthrust-type actions at the upper end of the TR. Overall, the large interests are net buyers of shares as the TR evolves, with the goal of acquiring as much of the remaining floating supply as possible. Institutional buying and selling imparts the characteristic up-and-down price action of the trading range. Early on in Phase B, the price swings tend to be wide and accompanied by high volume. As the professionals absorb the supply, however, the volume on downswings within the TR tends to diminish. When it appears that supply is likely to have been exhausted, the stock is ready for Phase C. Phase C: It is in Phase C that the stock price goes through a decisive test of the remaining supply, allowing the “smart money” operators to ascertain whether the stock is ready to be marked up. As noted above, a spring is a price move below the support level of the TR (established in Phases A and B) that quickly reverses and moves back into the TR. It is an example of a bear trap because the drop below support appears to signal resumption of the downtrend. In reality, though, this marks the beginning of a new uptrend, trapping the late sellers (bears). In Wyckoff's method, a successful test of supply represented by a spring (or a shakeout) provides a high-probability trading opportunity. A low-volume spring (or a low-volume test of a shakeout) indicates that the stock is likely to be ready to move up, so this is a good time to initiate at least a partial long position. The appearance of a SOS shortly after a spring or shakeout validates the analysis. As noted in Accumulation Schematic #2, however, the testing of supply can occur higher up in the TR without a spring or shakeout; when this occurs, the identification of Phase C can be challenging. Phase D: If we are correct in our analysis, what should follow is the consistent dominance of demand over supply. This is evidenced by a pattern of advances (SOSs) on widening price spreads and increasing volume, as well as reactions (LPSs) on smaller spreads and diminished volumes. During Phase D, the price will move at least to the top of the TR. LPSs in this phase are generally excellent places to initiate or add to profitable long positions. Phase E: In Phase E, the stock leaves the TR, demand is in full control and the markup is obvious to everyone. Setbacks, such as shakeouts and more typical reactions, are usually short-lived. New, higher-level TRs comprising both profit-taking and acquisition of additional shares (“re-accumulation”) by large operators can occur at any point in Phase E. These TRs are sometimes called “stepping stones” on the way to even higher price targets. Who Was Richard Wykoff? Richard Demille Wyckoff (1873–1934) was an early 20th-century pioneer in the technical approach to studying the stock market. He is considered one of the five “titans” of technical analysis, along with Dow, Gann, Elliott, and Merrill. At age 15, he worked as a stock runner for a New York brokerage. Afterward, while still in his 20s, he became the head of his firm. He also founded and, for nearly two decades, wrote and edited The Magazine of Wall Street, which, at one point, had more than 200,000 subscribers. Wyckoff was an avid student of the markets, as well as an active tape reader and trader. He observed the market activities and campaigns of the legendary stock operators of his time, including JP Morgan and Jesse Livermore. From his observations and interviews with those big-time traders, Wyckoff codified the best practices of Livermore and others into laws, principles, and techniques of trading methodology, money management, and mental discipline. Mr. Wyckoff observed numerous retail investors being repeatedly fleeced. Consequently, he dedicated himself to instructing the public about “the real rules of the game” as played by the large interests, or “smart money.” In the 1930s, he founded a school that would later become the Stock Market Institute. The school's central offering was a course that integrated the concepts that Wyckoff had learned about identifying large operators' accumulation and distribution of stock with how to take positions in harmony with these big players. His time-tested insights are as valid today as they were when first articulated. Speculative Setup, DYOR.
by bL1TZZ
25
Best Editors' Picks of 2023We present our awards for the best Editors' Picks of 2023! This marks our second year of recognizing outstanding open-source Community scripts. From the 84 picks in 2023, our PineCoders have cast their votes, highlighting three exceptional indicator scripts and one outstanding library. Each author of these noteworthy entries will receive 100,000 TradingView coins. The awardees: •  Intrabar Analyzer by KioseffTrading •  Machine Learning: Lorentzian Classification by jdehorty • Harmonic Patterns Based Trend Follower by Trendoscope • SimilarityMeasures by RicardoSantos Congratulations to the winners, and a heartfelt thank you to all Pine Script™ coders who contribute their open-source publications to our Community scripts . We eagerly anticipate another year of remarkable scripts in 2024! What are Editors' Picks ? The Editors' Picks showcase the best open-source script publications selected by our PineCoders team. Many of these scripts are original and only available on TradingView. These picks are not recommendations to buy or sell anything, nor to use a specific indicator. Our aim is to highlight the most interesting recent publications to encourage learning and sharing in our community. Any open-source Community scripts can be picked if they're original, provide good potential value to traders, include helpful descriptions, and comply with the House Rules.
AMEX:SPY
by PineCoders
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