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Snaps

Your essential 20 second market digests.
CL1!
Energy remains 2022’s best sector

Top dogs in the energy sector are asking themselves, “what financial crisis?” as it remains the hottest sector of the year.

DXY
The currency catch-up

The mighty greenback reminds us what makes it mighty, bouncing back from its recent slouch while others fall into the red.

TOTALDEFI
Myth busters

Yuga labs might just have some competition brewing as Mythos says “this metaverse town ain't big enough for the two of us”.

TOTAL
Music to DeFi's ears

Warner Music Group looks ready to put another brick in the wall of crypto adoption with a new metaverse push on the way.

TWTR
A little bird told me

Tears have been brought to the eyes of Twitter shareholders as Elon makes one final (they hope) decision on his $44bn buyout.

BTCUSD
Bit bullions

Is Bit the new bullion? It very well might be as Bitcoin's correlation with gold becomes stronger every day.

SPX
Is the labor gap closing?

As the stock market starts Q4 on an absolute hot streak, we're handed data that shows the first sign of the labor market losing strength.

TOTAL
A threat to the US economy?

Regulators are getting serious about crypto as growing institutional investment in the space has them thinking – ‘no more mister nice guy”.

TOTAL
You gotta Keep Up with those regulations

It looks like Kim K has yet to get to the “securities” part of her law degree. It’s a shame too, cause it’s gonna cost her way more than those diamond earrings she lost in the sea that time.

GBPUSD
Closing poundora’s box

The UK’s new government makes a swift u-turn on its tax cutting policies after pandemonium broke out for the pound and UK bonds (otherwise known as gilts).

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Trade ideas

Bank of England Emergency Bond PurchaseLast week, UK pension funds, which hold highly leveraged bond derivative positions, were facing a nearly $1 trillion loss as bond prices crashed and yields rose. The crash in the bond market has been underway for years, but the tipping point occurred when the UK prime minister pledged to cut taxes at a time when inflation is soaring into the double digits. Cutting taxes worsens inflation because less taxes means consumers have more money to spend on inflating goods. Cutting taxes while inflation is high therefore risks worsening inflation or inducing hyperinflation. Fear of this caused the price of UK bonds to crash and yields to spike. (As many of you know well, bond prices move down when yields rise). This crash caused pension funds with highly leveraged bond positions to experience amplified losses, which caused these funds to need to put up more cash collateral on their losing positions. This could have caused a downward spiral because these funds may have had to sell bonds to raise more cash, which would have had a negative feedback loop that could have sent prices down further, amplifying losses more, and creating the need to raise even more cash collateral. The Bank of England had to make an emergency purchase of bonds. However, by purchasing bonds, the Bank of England has taken an action that will now make inflation worse (there will be a lag effect). Whenever a central bank purchases bonds, it is adding liquidity to the system (when the central bank buys bonds this has the effect of increasing the money supply). Increasing the money supply when inflation is at a multi-decade high is super risky. At best it could risk inflation staying elevated for longer, at worst it could spiral into hyperinflation. In the chart above, reproduced below, you can see that when priced in the British pound, crude oil prices are barely declining (as we would have expected from all the rate hikes). If anything, crude oil is looking poised to increase further. The Bank of England, and other central banks, are trapped. Until they stop monetary easing (adding to the money supply) and tighten the money supply such that rates are higher than core inflation, inflation will continue to get worse. Yet, as we now see in the UK, central banks cannot tighten the money supply sufficiently to accomplish this without causing a financial crisis. The rapidity with which the Bank of England switched back on the money printer, despite double-digit inflation, has me convinced that central banks will choose the hyperinflation route. In fact, hyperinflation is already happening in some countries. Argentina has hiked rates to 75% (not 75 bps, 75% or 7,500 bps) and yet inflation continues to spiral higher. There is actually no limit to how bad inflation can get. When people need to pay $100 trillion dollars for food, as in Zimbabwe in 2008, people usually stop believing that central bank fiat notes are valuable and the system collapses. Look at the chart below. I did not log-adjust the chart so that you can see that hyperinflation is when commodity prices rise exponentially over time. For the chart, I used the Invesco Commodity Index Tracking Fund (DBC) and priced it in Argentine pesos. I used cross plots on a smoothened moving average. This level of hyperinflation always leads to some kind of crisis. Either interest rates must crush demand and cause economic decline, or hyperinflation eventually causes a monetary crisis whereby people stop using the currency altogether. Commodity hyperinflation also leads to political instability and the rise of fascist or communist dictators. Furthermore, when these crises occur on a global scale, they can precipitate conflict, and conflict in turn can worsen commodity shortages. For those who have been thinking that inflation has peaked globally, there is no chart that I have seen which validates that conclusion. Indeed, as shown in the chart below, commodity prices continue to break record highs in some parts of the world. In most currencies, commodity prices appear to be bull flagging. Compare the below two charts. One shows how commodity prices continue to spiral higher in Argentina, despite the central bank hiking rates all the way to 75%, compared to 2008, when commodity prices fell while the central bank raised interest rates to just 12%. This shows that we are dealing with a much more dangerous type of inflation. I posted these figures to show just how bad inflation can get and the risks associated with monetary easing. Many people are believing the pig-in-a-python theory, where they think inflation is transitory and will improve when the massive COVID stimulus passes through the pipeline. However, what they fail to realize is that central banks have been putting an endless stream of pigs in the python for decades through monetary easing. Economies have become totally dependent on monetary easing and central banks are now trapped in needing to maintain it. Yet, if central banks continue monetary easing, inflation cannot come down. It just keeps spiraling higher so long as monetary easing continues, assuming commodity shortages also continue. Commodity shortages are deep-rooted and are due in part to war, deglobalization, aging and less productive populations, and climate change to name several factors. Monetary policy has little efficacy on these supply issues. Sri Lanka was the canary in the coal mine. It was the first central government to fall due to commodity hyperinflation. And yet, even after a central government collapse, commodity prices in Sri Lanka are still high. The chart below shows that commodities appear to be bull-flagging, and poised to go higher. Core inflation which is typically stable in the United States is now exploding to a 40-year high. If the Federal Reserve is to be successful at hiking rates to quell inflation, it must hike rates above the core inflation level. There is virtually no central bank with an interest rate higher than core inflation. Indeed, Japan continues to maintain negative interest rates. As I noted in a prior post, because negative interest rates incentivize the creation of money through credit, negative interest rates reflect limitless growth of the money supply. However, as alluded to above, the Fed is trapped. It must hike rates above core inflation, but it also cannot hike rates above core inflation. Decades of monetary easing have left a highly leveraged economy totally reliant on low interest rates. Hiking rates as far as would be needed to quell inflation would likely lead to an economic depression. Pension funds are already under tremendous strain from the hiking and yet the charts show that the scope of tightening that will be necessary is not even in sight yet. The best-case scenario is that commodity supplies improve and demand softens enough to stabilize rates but not so much that economies decline significantly. Even in this perfect mitigation scenario, stock market returns are likely to be muted for years to come.
Editors' picks
12
Has Bitcoin finally Bottomed? All the indicators could say SO!Speculations, Data analysis, well-known Patterns, Fundamentals, Daily News and more are several tools we use to predict what could be the next move of our favourite instrument : Bitcoin. Genesis Bitcoin (BTC) was invented by a pseudonymous individual or group named Satoshi Nakamoto in 2008 and is the world’s first enduring cryptocurrency that succeeded where decades of digital cash experiments failed. Bitcoin’s monetary policy is enforced through a unique blend of software, cryptography and financial incentives rather than the whim of trusted third parties. The Bitcoin network is powered by a cryptographically secure, verifiable database called the blockchain — itself a technological phenomenon. The Bitcoin ecosystem consists of a global network of stakeholders, including the miners that secure the network and drive the issuance of the Bitcoin currency, the traders who speculate on this radically market-driven asset, and the builders working to onboard people to the cryptocurrency paradigm. How Bitcoin was built influences its patterns Bitcoin's 19th million coin was mined recently, increasing the circulating coins proportion to 90% of the total supply. Besides, there is a common pattern known as the rainbow chart which displays the logarithmic regression path bitcoin follows. The cyclical behaviour of the security can be explained by the following facts : Bitcoin tends to be overall bullish because the supply is limited and the amount of coins being released in circulation is halved every four years. Each block mined now provides a reward of 6.25 BTC . A total of 210,000 blocks are mined between each halving dates, with a more visible aspect of the cycles : From the 1st block to the 70,000th block, Bitcoin appears to be in a bullish phase, from the 70,001st block to the 140,000th block a bearish phase and from the 140,001st block to the 210,000th block a sideways phase. Bitcoin is the most dominant cryptocurrency. Indeed, it influences the whole cryptocurrency market due to its market capitalization. It's dominancy is also cyclical and since 2016, it falls below 40% exactly when we are entering the bearish phase (>140,000 blocks being mined) while the bullish phase is catarterized by a dominance around 70% of the total market. The average drawdown during an era (Between two halving dates) is 80%. The only indicator to consider: The MVRV Ratio and Z-score The MVRV ratio was created by Murad Mahmudov & David Puell hot on the heals of the invention of the Realized Cap concept by the Coinmetrics team of Nic Carter and Antoine Le Calvez. Realized Cap is an alternative approach to Market Cap as a measure of network valuation. Rather than using the last traded price and multiplying by the coins in circulation as seen in Market Cap, Realized Cap approximates the value paid for all coins in existence by summing the market value of coins at the time they last moved on the blockchain. MVRV is simply the ratio comparing the two, i.e. MVRV = Market Cap / Realized Cap. It’s useful for getting a sense of when the exchange traded price is below “fair value” and is also quite useful for spotting market tops and bottoms (Source: Coinmetrics.com). The MVRV ratio is calculated by dividing the total bitcoin market value (MV) by its realized value (RV). Therefore, the metric represents the extent in which the current bitcoin market valuation is overextended beyond (values >1) or actually at a discount (values <1) compared to the holders’ aggregated cost base. From the MVRV ratio we obtain the MVRV z-score, which first calculates the difference between the total bitcoin market value and its realized value, and then divides that by the standard deviation of the market valuation — a common statistical procedure called “standardization.” The MVRV z-scores, therefore, represent the number of standard deviations that each bitcoin market valuation is increased or decreased against its realized value (Remember z-score >1 means overextended and z-score <1 discount) What do indicators say? We are currently at the 3rd halving era which occurred on May 11th 2020, more precisely the END of the bearish phase. The crossover between the 140,000th block mining date and the lows logarithmic regression indicated 18,000 USD per bitcoin, pretty close to the actual realized Low 17592.78. The MVRV ratio is at 1 giving sights of a FAIR VALUE (Source: CryptoQuant). The actual Drawdown of the bearish period was around 75% (80% average since inception). (These Explanations are just for educational purposes and are not financial advices)
Editors' picks
Long
7
AMD Stuck in a Severe DowntrendPrimary Chart: Linear Regression Channel and Two Long-Term Anchored VWAPs No matter what method is used to analyze and define the trend, AMD has been stuck in a severe downtrend since its all-time high on November 30, 2021. Like other growth and technology stocks (except for FAANG stocks and Microsoft), AMD's November 2021 peak occurred a month before the S&P 500 ( SP:SPX ) topped on January 4, 2021. The linear regression channel, set a two-standard deviations from the linear regression line, evidences the downtrend as of today, October 6, 2022. Price is hovering just under the linear regression channel's midline, which is the linear regression "line of best fit." Two anchored VWAPs also confirm the validity of the downtrend as well. The first anchored VWAP is anchored to the all-time high in November 2021. That VWAP is well overhead at $102.38 as of today, and it slopes downward. Note how it has been resistance at major swing highs after sharp bear rallies over the past year. The second anchored VWAP is anchored to the pandemic-crash lows in March 2020. That VWAP also lies well overhead at $92.16 as of today. These VWAPs show that sellers remain in control despite the impressive bear rallies that have repeatedly occurred since the all-time high. Until the structure changes materially, and that could take a fair amount of time to unfold, the downtrend remains in effect. Bounces should be sold at proper resistance levels preferably with confirmation that price has begun to reverse back lower in the short term. If readers are interested, SquishTrade may post a shorter-term view that includes key resistance levels where the current bear rally may find strong resistance. These levels could be watched for reversals where price in the short-term rejoins the larger-degree downtrend. ________________________________________ Author's Comments: (1) Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate in the comment section. Shared charts are especially helpful to support any opposing or alternative view. (2) This technical-analysis view does not constitute a trade recommendation or trade setup. Instead, it attempts to offer technical commentary that describes and analyzes price levels, trends, price action, or the broader technical environment as of the publication date. Technical-analysis commentary does not equate to trade setups or recommendations. Within a given price environment, traders bear responsibility for their own trading strategy, risk tolerance, and time frame, and for any due diligence associated with such trades. (3) This technical-analysis viewpoint could change at a moment's notice, e.g., when price violates a key level of invalidation for a particular view. Further, proper risk-management techniques are vital to trading success. (4) To the extent countertrend price moves are discussed, consider that countertrend or mean-reversion trading, e.g., trading a rally in a bear market, remains higher risk and lower probability even for the most experienced traders and investors. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified / licensed financial adviser or other financial or investment professional before entering any trade, investment or other transaction.
Editors' picks
6
2 earning reports to watch October 2022It’s that time of year again; earning session for US stocks. With so many other variables contributing to volatility in the US markets (e.g., inflation, Fed rate hikes, recession, oil prices, quantitative easing), anything out of the ordinary can result in huge moves in stock prices. This has already been witnessed in an early report from Nike (NYSE: NKE) last week, where it missed on some metrics and was punished with a -12.8% fall in its stock price. So, with this in mind, here are two earning reports to watch this October. Advanced Micro Devices (NASDAQ: AMD) AMD updates the market with its earnings on Tuesday October 25, alongside some of the other major companies on the NASDAQ, including Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG). AMD shares fell +23% in September, partly impacted by the weak report from sector compatriot Micron Technology (NASDAQ: MU). It is the weak demand outlook that Micron painted for personal-computer products that makes AMD’s upcoming announcement one to watch. Similarly, Taiwan Semiconductor (NYSE: TSM) is reporting on October 13, which could serve as another barometer for the industry before AMD delivers its report. Netflix (NASDAQ: NFLX) It may be a make or break earnings report for Netflix on Tuesday 18 October. Netflix shares climbed +8.4% over September, and over +30% since its last market update in June, where it reported a loss of almost 1 million subscribers. In fact, Netflix was one of the top S&P 500 performers last month, where the broader market index fell by -8.0%. In the upcoming announcement, investors will be looking out for more details concerning the company’s plan to diversify its revenue base with ad-tier subscription and its heretofore mild penetration into the gaming space. Some surveys point to almost half of Netflix’s subscribers considering a switch to the company’s ad-tier plans, which would mean that Netflix would have to fill that subscriber revenue gap by selling $5.4 billion worth of ad space.
Editors' picks
7
Copper’s many tangosIn the following charts below, we will highlight why copper looks interesting to us right now. Firstly, the Copper Outright prices (orange) vs the Calendar spread (black). Copper calendar spread tend to move in-line with its outright prices, until major turning points, when the calendar spread leads the outright price movement. In February 2022, we observed the copper calendar spread making a significant move lower, with the outright prices following suit in April. With the calendar spread making a significant move higher now, is this what they call déjà vu? Secondly, copper prices and the Chinese Yuan have a relatively high correlation as China is the world’s largest buyer of the metal, and by a significant margin. The recent weakness in the Yuan has led copper prices lower, but with the CNYUSD pair seemingly recovering now, could some strength in the Yuan lead the copper rally? Thirdly, the Gold/Copper ratio generally trades within a pretty defined range, with out-of-range moves happening during major market events. The ratio’s recent high can be attributed to copper weakness compared with gold. With signs of the ratio retracing off the upper range, have we marked the end of this move? And is it time for copper to gain some ground against gold? Looking at the price charts, we see copper trading near the significant long-term support level of 3.3. Previous attempts to break this support in July and September were both rejected. On a shorter timeframe, we see a descending wedge pattern forming, which is generally considered a reversal pattern. The same setup is also observed on the Micro Copper contract, which offers greater flexibility and precision in execution. Copper’s interesting relationships with major currencies and commodities, allow us to analyze it from multiple angles. With some relationships at major inflection points now, we lean bullish on copper. Entry at 3.44, stop at 3.1335. Target at 3.8320 and 4.0000 . If you’re keen on understanding more about Copper and its many relationships, do check out our previous research piece: www.cmegroup.com The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. 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: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
Editors' picks
Long
13
Inflation & Interest Rate Series – The CPI Rally Content: • Why CPI could be at the beginning of a rally? • On 14 Dec 21, Fed: “Inflation is not transitory” changes everything • Strategy to counter inflation 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. If you are into shorter-term trading, the live data feed is definitely a must for traders. In part 2 of this series, we will do a deep dive on if CPI were to decline, to at what specific level? Before we can consider inflation is under control. Stay tuned for our next episode in this series, we will discuss more on the insight of inflation and rising interest rates. More importantly, how to use this knowledge, turning it to our advantage in these challenging times for all of us. COMEX Micro Gold 0.1 = US$1 1.0 = US$10 1700 points = US$17,000 Eg. 100 points profit = US$1,000
Editors' picks
3
The SEC vs. Ripple Labs, Inc.A brief history In 2004, a few years before the introduction of the white paper and Bitcoin by Satoshi Nakamoto, Ryan Fugger conceived the idea now known as Ripple. Initially, Ripple was not based on blockchain technology. The development of blockchain technology and its implementation within Ripple began in 2012 after Ryan Fugger handed over his project to Chris Larsen, David Schwarz, and the former co-founder of the infamous Mt. Gox, Jed McCaleb. Subsequently, this group of entrepreneurs founded OpenCoin and that same year began to use RipplePay source code to create their own ledger-based payment network for financial institutions. Later, in 2013, OneCoin was renamed to Ripple Labs Inc. and began raising funds. That same year, Jed McCaleb departed from the company to pursue the Stellar Lumens (XLM) project. Meanwhile, the Ripple cryptocurrency rose from a mere fraction of a cent to the all-time-high value of 3.55 USD in 2018. Although, after tens of thousands of percent in gains, Ripple lost more than 90% of its value within the following year. After that, in March 2020, XRP found a bottom and started to rise in a new bull market propelled by an unprecedented amount of quantitative easing and stimulus checks being handed out to American citizens by the government. However, despite other cryptocurrencies reaching new all-time highs, Ripple's performance remained muted in comparison to the previous bull cycle, with many people blaming it on the SEC lawsuit from December 2020. In a new uptrend, Ripple reached 1.98 USD before erasing most of its gains and returning to the range between 0.20 USD and 0.40 USD. After two years of court proceedings, the case nears its end, which has started the bullish speculation that elevated the price to a recent high of 0.55 USD, and which led us to announce a warning to investors. Just two weeks ago, we called the bounce characteristic of “buy the rumor, sell the fact” behavior. Today, we still hold this notion and remain bearish on XRPUSD. Accordingly, we stick to our price targets of 0.30 USD and 0.28 USD. The rationale behind our reasoning is described below. The SEC lawsuit against Ripple Labs Inc. In December 2020, the SEC filed an action against Ripple Labs Inc., alleging that the company raised 1.3 bn. USD through an unregistered digital asset securities offering. Based on the SEC's complaint, Christian Larsen, the company's co-founder, and Bradley Garlinghouse raised capital to finance the company's business by selling cryptocurrency tokens to investors in the U.S. and globally. In addition to that, Ripple distributed billions of XRP tokens in exchange for labor and various services. As if it was not enough, Larsen and Garlinghouse executed personal sales worth approximately 600 mil. USD, potentially breaking federal securities laws by not registering their sales of XRP tokens. The latest developments within the lawsuit and Hinman's remarks A few days ago, U.S. District Court Judge Analisa Torres ruled to release the documents from the former Director of the Securities and Exchange Commission's Division of Corporation Finance. These documents relate mainly to the speech of Hinman at the Yahoo Finance All Economic Summit in 2018. In his 2018 speech, Hinman said that some cryptocurrencies would not be considered securities (and which many investors seem to consider bullish for XRP in the past few days). However, we would like to remind investors that right at the beginning of his speech, Hinman noted that opinions conveyed in the speech are opinions of his own, and not those representing the SEC. Then, just about a minute later, Hinman proceeded to distinguish between securities and potentially “something other than a security.” He noted that if a cryptocurrency carried a third-party promotion, it would most likely fit the security description. Subsequently, he described a promotion as raising funds (through selling tokens instead of issuing a stock) by promoters to fund a company's operations with the goal of achieving financial gains for themselves and their investors. Furthermore, he provided the example of the SEC case versus W.J.Howey Co. from 1946. In that example, Hinman outlined how the character of a transaction is a determining factor in whether an asset is a security or not. He later continued clarifying how a transaction could potentially not represent a securities offering. For that matter, he stated that the network on which a cryptocurrency is based would have to be sufficiently decentralized, and “purchasers would no longer have reasonable expectations that a person or a group will carry out managerial and entrepreneurial efforts”. According to Hinman's following remarks, only under such conditions, a transaction might not represent an investment contract. After that, Hinman finally proceeded to make remarks about Ethereum “while putting aside a fundraising of that company.” He stated that at “the current” time (in 2018), offers and sales of Ethereum were not securities transactions. Then, he said that over time there might be other sufficiently decentralized systems, like in the case of Bitcoin and Ethereum, while omitting any other cryptocurrencies, including Ripple. In next Hinman's remarks, he talked about “a plethora of federal regulations that apply beyond the securities laws.” Furthermore, he noted “a few things” that the SEC could look at in order to determine whether an asset is a security. “A few things the SEC could look at” or ask 1. Is there a person or a group who sponsors the promotion and creation of the sale of the asset? 2. Does a person or a group who sponsors the promotion and creation of the sale of the asset play a significant role in the development and maintenance of that asset and its potential increase in value? 3. Does a person or a group who sponsored the promotion and creation of the sale of the asset retain a stake and/or other interests in the digital asset? 4. Did the promoter raise an amount of funds in excess of what might be needed to establish the running and functional network? If so, did the promoter indicate to investors how these funds might be used to support the value in the 5. secondary market (or increase the value of the enterprise)? 6. Does the promoter continue to expend funds from the proceeds for enhancing the functionality or to just enhance the secondary market value? 7. Do people or entities other than the promoter exercise governance rights and have a meaningful influence on the network? 8. Is the token creation commensurate with meeting the needs of real users rather than feeding speculation? 9. Are independent actors setting the price, or is the promoter supporting the market? Our assessment As it is impossible to tell what will be the outcome of the legal battle between the SEC and Ripple, we are allowed only to speculate about the court ruling. However, based on Hinman's introductory remarks in his speech regarding personal opinions and not those of the SEC or its staff, we would argue that the speech is a weak point of evidence for Ripple. Indeed, we think the same about Ethereum and Bitcoin statements. Hinman said that Ethereum and Bitcoin were not cryptocurrencies at that particular time (during the speech - in 2018). Meanwhile, the lawsuit pertains to the period around 2013 and not to 2018. In addition to that, Hinman did put aside the early stages of Ethereum and its fundraising. Furthermore, he did also mention several requirements for a cryptocurrency to be potentially viewed as something else than “a security.” These requirements would require no third-party promoter and a sufficiently decentralized network, among many other requirements like no reliance on entrepreneurship of a company's leadership. However, after Ryan Fugger sold his project in 2012, the development of Ripple blockchain technology solely relied on the company's new management. Furthermore, the management (allegedly) profited from the sales of XRP as Larsen and Garlinghouse executed personal sales worth approximately 600 mil. USD. In our opinion, all these points represent a significant obstacle for Ripple to winning the SEC lawsuit. DISCLAIMER: This content is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade. The article serves solely educational purposes and contains merely alleged information and not actual claims about the actions of those described in the article.
Editors' picks
101
London Bridge is Falling Down!CME_MINI:M6B1! U.K. financial markets went into a freefall last week as Prime Minister Liz Truss announced aggressive income tax cuts amid deep fiscal trouble. British pound is trading at $1.11 to USD, half of its value in 2007. However, it’s unfair to blame everything on a new PM and a new King. Both got their jobs just a month ago. Sterling’s downfall started at the Bretton Woods in 1944, where US dollar replaced it as the default currency in international settlement. More recently, Brexit made UK weaker and less integrated into the global economy. Let’s take a quick look at what happened in the last decade: David Cameron (2010-2016) • Mr. Cameron was reelected Prime Minister for a second 5-year term in May 2015 • To fulfill his campaign promise, he organized a referendum on June 23rd, 2016 • When asked if the UK should stay in the European Union, 51.9% of the voters said No • On July 13th, 2016, Mr. Cameron resigned Theresa May (2016-2019) • Theresa May became the new Prime Minister after Mr. Cameron resigned • In the following three years, she failed to negotiate exit terms with the EU • On July 24, 2019, Theresa May resigned Boris Johnson (2019-2022) • Former London Mayor Boris Johnson replaced Theresa May as Prime Minister • He engineered a hard Brexit in January 2020 without finalizing exit terms • Johnson led UK government through global pandemic and Russia-Ukraine conflict • On July 7, 2022, Boris Johnson announced his resignation Liz Truss (September 6th, 2022 - Present) • On September 23rd, Liz Truss announced the so-called “UK mini-budget” • Key points: cut income tax from 20% to 19% and abolished a 45% higher tax rate • New budget was received poorly by investors, causing market panic last week When each of the Prime Ministers left office, they saw Sterling weaker than the day they assumed office: Cameron, from $1.7 to $1.3; May, from $1.3 to $1.2; Johnson, from $1.2 to $1.15; Truss, in less than a month, from $1.15 to $1.09 before rebounding to $1.11. Where Will Sterling Go from Here? Recent depreciation of Sterling can be explained by the Interest Rate Parity (IRP) theory. IRP states that the interest rate differential between two countries is equal to the differential between the forward exchange rate and the spot exchange rate. It basically says that a country with higher interest rates would lead to a stronger currency. • In 2022, the Fed raised interest rates five times for 300 basis points (bps), to 3.00%-3.25% • In comparison, the Bank of England raised rates three times for 125 bps, to 2.25% • European Central Bank raised rate only once for 75 bps, to 0.75% • The Fed outruns the Bank of England and the ECB in both interest rate level and the frequency of rate hikes • As prescribed by the IRP, aggressive Fed tightening results in a strong dollar, and weak Sterling and Euro In the next year, I expect the pending global recession could result in a soft landing in the US, but hard landing in both the UK and the European continent. In the long run, exchange rates reflect the relative strengths of two countries. The divorce of the UK from the EU makes them both weaker players on the world stage. In 2021, the European Union had an aggregate GDP of $17.9 trillion, making the EU Block the 2nd largest economy in the world behind the US. However, after exclusion of UK’s $3.11 trillion GDP, the 27-nation EU would rank 3rd behind China. UK ranks 5th, after the United States, China, Japan, and Germany. This is a far cry from the mighty British Empire which accounted for a quarter of the world economy in 1870. Today’s British Commonwealth is a loose network of countries with shared culture and history. None uses Sterling as legal currency except for the UK. How to Trade a Bearish View in British Pound? The next Fed rate-setting meeting is scheduled on November 1-2. October may be a calm month in terms of US monetary policy actions. However, in a crisis mode, it’s quite possible for both the Truss administration and Bank of England to utter emergency measures to strength the British financial markets, with Pound Sterling included. I would watch the British government actions closely in the next few weeks. We could wait for a rebound of Sterling before putting on the Short Futures trade. CME Micro GBP/USD futures ( CME_MINI:M6B1! ) has a notional value of £6,250. Initial margin is $255 per contract. December contract (M6BZ2) is currently quoted at $1.1172. Barring a new "Lehman moment", the Fed would stay on its course to raise rates and fight inflation. I expect dollar to resume its rise against the Sterling in November and December. On July 13th, my trade idea, The Demise of Euro Is Not Greatly Exaggerated, called for shorting the Euro. The Euro has since fallen a whopping 2% to $0.98 from on par with the dollar. My opinion on a bearish Euro CME:6E1! still holds today. Financial market is extremely volatile this year. Getting an information edge increases your odds of success in managing risk. I suggest leveraging real-time market data for a better gauge of market situation. TradingView users already have access to delayed data. A Pro user could upgrade to real-time CME market data for only $4 a month, a huge discount at the time of high inflation. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
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ETHEREUM - Here's What To Look Out For 📚Ethereum is in a massive ABC correction. We are now in C wave which is broken down into 5 waves, which follow the impulse schematic of Elliott Waves Principles. We are currently on the 5th wave, which is also broken down into 5 subwaves (red numbered brackets). We are currently on the 3rd SUBwave and expecting a 3rd minor wave lower. Trade idea: - Watch for the 2nd minor wave correction to breakdown (red trendline break) - Enter with stops above the correction - Targets: 880, medium term target of 700 and then 600 When we're on the 5th SUBwave, we can look for any reversal patterns to get in on the next bull run! See below for our last Ethereum analysis which played out perfectly
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How to create auto trading bots for zero costHello Everyone, Following are the things we discussed 🎲 Minimal Components of Auto Trading System: Source where signals are generated Exchange/Broker where orders are placed Integration component which bridges both 🎲 In this example Source - is our tradingview system and a sample script which generate alerts. Do not use this script for trading as it is only created for demonstration. Exchange - We are going to use BingX exchange for this example as we only have this implementation in our integration system. Integration System - www.pipedream.com is used for integration. This is cloud based integration product which is very flexible. Platform also allows users to contribute towards the product. Hence, it is very easy for us to develop integration to any broker or exchange which has API support. 🎲 Limitations BingX APIs are fairly new and hence there are not much features. There is no option to place stop order. It has option to place only limit/market orders Stop loss is not possible via API 🎲 Steps: 🎯BingX - Create account and enable perpetual futures trading - Setup google authenticator and add valid email and phone. - Create API - it will ask for Google authenticator code and email and phone OTPs. - Store api key and secret key in safe place. 🎯Tradingview - Create a script which can send stop, target, ticker information as signal. - Study the existing idea about customising alerts for better understanding on how to achieve this. 🎯Pipedream - Create account and setup BingX as source (needs API Key and Secret Key derived from BingX) - Create Webhook trigger and capture webhook URL. - Provide this URL in alerts to generate alert messages which are sent to webhook by default. - Once alert is sent, load the alert in pipedream source and built rest of the workflow including calculate leveraged position and bracket order trades. - Once tested, deploy the workflow so that workflow will keep listening to incoming alerts to generate trades. Please note: the discrepancy in leverage calculation caused due to two things: Lower timeframe used for generating faster alerts. Since the volatility is small, gaps can be huge. The workflow did not run at once. Hence the delay caused rest of the issues resulting in miscalculations. These problems however will not come when orders are placed via alerts and executed automatically.
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Jumping S-curvesIn this post, I will explain what jumping S-curves means and how you can identify potential S-curves before they jump . First, let's begin with the chart above (also copied below). This is a yearly chart of McKesson Corporation (MCK), a medical supplies company. As you can see in the chart below, this stock has been soaring over the past year despite most other stocks being significantly lower. Here is the performance of the S&P 500 over the same time period. Whenever I see something highly unusual in a chart, such as extreme outperformance, I check the higher timeframes to see what's driving price on a technical level. Below is the yearly chart for MCK. When I examine price action over a long time period, I always log adjust my chart. Below is the log-adjusted chart. Upon seeing this chart I immediately knew what was going on: the stock price jumped S-curves. I will try to illustrate below how I reached this conclusion. To begin, I drew Fibonacci levels from the last reaction low to the last reaction high on the yearly timeframe. The previous reaction low was the bottom of 2008 because that bottom was a Fibonacci retracement of some earlier reaction high, the reaction high is the top in 2015 because price did not surpass that high without first undergoing a Fibonacci retracement (to the golden ratio). As you can see above, from 2015 to 2018 the price retraced down to the golden ratio (0.618) on the yearly chart. It is often from this retracement level that the base of the second S-curve is created. (For simplicity, I only included the 0.618 Fibonacci level on the chart). Some may say that this pattern is merely a bull flag or pennant. (See chart below) Indeed, bull flags and pennants can be another way to visualize S-curve jumps. Whereas, on a deeper, more mathematical level, S-curve jumps are logarithmic spirals (approximated as Fibonacci spirals or Golden spirals). If you wish to delve deeper into logarithmic spirals, including the Golden spiral, you can check out this Wikipedia page: en.wikipedia.org These Fibonacci or Golden spirals are present on mostly every chart and they appear on mostly every timeframe (hence they are fractal ). One of the best charts you can use to visualize these spirals is the chart of Bitcoin. Below are charts of Bitcoin which attempt to show the endless fractal nature of Fibonacci spirals (or "S-curve jumps"). I've only illustrated a few of the spirals, but indeed there are numerous spirals. (I tried to do my best using the tools on Trading View to draw these spirals, but it can be quite hard to manipulate the curves perfectly to price action.) One may ask what about when price falls? That is obviously not an S-curve jump since the price is falling. Actually, when price is crashing it is usually just an S-curve jump, or Fibonacci spiral, on the inverted chart. Although I have not tested it with scientific rigor, I do hypothesize that Bitcoin's price movement is a series of infinitely fractal and competing Fibonacci spirals on various timeframes, including Fibonacci spirals on inverted scales. Price movement can be thought of as an infinite series of S-curve dilemmas where infinitely fractal S-curves, including those of which are inverse S-curves, compete to govern the next price move. Each dilemma is resolved when an S-curve reaches its inflection point, such that it governs price movement and price moves rapidly in that direction until it approaches capacity and faces its next dilemma. Those who know Calculus may recognize this chart. Indeed this is the graph of a logistic function. The mathematical terminology for an "S-curve" is sigmoid function . Here are some more interesting charts of S-curves (none of which is intended to be investment advice) Meridian Bioscience (VIVO) jumps S-curves on its yearly chart The U.S. Dollar Index jumps S-curves on its yearly chart The entire price action of Chinese EV Company (NIO) is an S-curve that just completed a perfect golden ratio retracement Japan's faces a population S-curve dilemma Citigroup underwent S-curve growth up until the Great Recession. Then it crashed or underwent S-curve growth on the inverted chart. In summary, price movement involves an endless series of S-curves or Fibonacci spirals. Identifying an S-curve on a high time frame before it reaches its inflection point and breaks out can lead to tremendous gains (among the most lucrative gains one can realistically make in the financial markets).
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Elliott Wave Quick Cheat SheetElliott Wave Quick Cheat Sheet Note that I post a quick guide for beginners. I was struggled as a beginner but thanks to my mentor. (I post a quick guide here as sometimes I need to peek as for my cheat sheet) By now we all have learned patterns like Head and Shoulders, Wedge, Triangle, Double top, Double bottom, Pennant (literally a triangle or diagonal), bear/bull flag. Until I discovered Elliott Wave, it answered why we have these patterns but there are 5 core patterns of EW: Impulse, Flat, Diagonal, Zigzag and Triangle. I think Elliott Wave patterns are more advanced because you can see the whole picture even 200 years old chart of SPX. What is Elliott Wave Theory? Found by Ralph Nelson Elliott in the 1930s. "is a form of technical analysis that finance traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology and price levels, such as highs and lows, by looking for patterns in prices." - Wikipedia If the trend is impulsive, it must have 5 waves. We have impulsive patterns like impulse and diagonal. The counter trend we have 3 waves patterns like flat, zigzag, and except triangle (5 waves) for a correction. 1) Impulse (53535) Must have 5 waves. Wave 4 never touch wave 1. Invalid if wave 4 touch wave 1. Inside 5 waves, subwave 1, 3, 5 MUST be an impulse wave; subwave 2 and 4 MUST be corrective. If you can't see subwave 1, 3, 5 are impulse, chance is invalid. 1, 3, 5 tend to equal size. When an impulse wave has an extension, wave 3 is usually extended When wave 3 extended, we will have a double RSI divergence to complete a wave 3. If wave 3 is over extended, typically wave 5 is truncated. Important note: wave 2 and 4 have usually different pattern. If wave 2 flat, wave 4 must be zigzag and vice versa. Wave 4 sometimes can be a triangle. Diagonal must have 5 waves. Can be 53535 or 33333 sub-waves. Hybrid 2 types: Leading and Ending Leading Diagonal is the beginning of a trend (wave A or 1). Ending Diagonal is the end of a trend (wave C or 5). 2) Leading Diagonal (only wave A or 1) It can be overlapped but not required. Has 2 entries points (unspoken rules) right at wave 2 and 4. Wave 3 cannot be shortest even if expanding diagonal. 3) Ending Diagonal (only wave C or 5) Usually goes back to starting point. Then it would either direction. Or the starting point can be wave 4 or wave B. The reason I say it would either direction because it depends on where the main wave is. For example we have an extented wave 3. It can happen on wave 5 inside of wave 3. That's why it goes either direction. Leading Diagonal is the beginning of a trend. Ending Diagonal is the end of a trend. Unspoken rule that if wave 1 is a leading diagonal, expect to have an over extended wave structure. When the end of a trend, we expect to have a new 5 wave move for a trend reversal. If we see a new 3 wave move, we expect the correction continues. It's all 3 and 5 that matters. Corrective patterns we have zigzag, flat and triangle. 4) Zigzag has 535 sub-waves. (wave 2, 4, and B) It looks like impulsive but has only 3 waves. Only label it as (ABC) 5) Flat has 335 subs-waves. (wave 2, 4, and B) 3 type: regular, running, expanding Only label it as (ABC) Regular: all size of ABC is equal Running: size AC is equal but B is biggest. Expanding: B is 1 or 1.382 max of size A. C is Fib 1.236, 1.618, 2.236 Fib extension of size AB. For example of an expanding flat, sometimes we call it a double top pattern. Usually C wave can extend to 1.618. 6) Triangle has 33333 sub-waves. (only wave 4 or wave B) Label is as (ABCDE) When you see it, prepare for a reversal or short term reversal. 7) Combination (aka complex pattern) (wave 333) Only label it as (WXY) It's a combination of zigzag or flat or triangle. Fibonacci retracement: When you spot a wave 1 and wave 2 is a pull back wave, look for entry for wave 3 at 0.50, 0.618 or 0.768. Stop loss at starting point at wave 1. In bull market, it only pull back to 0.382.The timing of wave 2 is 1/4 or 1/3 of wave 1. Entry for wave C, the wave B is usually at 0.5, 0.618, 0.786, 1.0 or 1.236 (below starting point of wave A). The timing of wave B is 1/4 or 1/3 of wave A, or it can be equal or twice size of wave A. Fibonacci extension: Wave 1 and 3 and 5 tend to have equal size but when wave 3 extends, it usually extends to 1.618, 2.236 from wave 0,1,2. Wave C can extend to 1, 1.236, 1.382, 1.618, 2.236 max. If extend beyond 2.236, you may not count wave correctly. RSI: Wave 3 and 5 will have bearish divergence. Double divergence if wave 3 is extended. RSI above 40 in bull market. Below 40 in bearish market. But wave 4 will below 70 and complete when have continuation hidden divergence between wave 2 and 4. My observation is between wave 1 and 2, or wave A and B should not have a divergence. My opinion on EWT and how I think to master it: Elliot Wave is a double sword tool because not everybody counts waves correctly and it can hurt you financially. You MUST MUST take some mentorships until you understand why each pattern runs like the way it is in real life. It's a forecast tool so it can be wrong. It hurts. Stop loss is a must. Or better don't trade until you can see a trend. To master it, all you need is check if it's 3 waves or 5 waves. If wave 4 is overlapped wave 1, so the 5 wave move is invalid unless diagonal. Must also master Fibonacci because I think Fibonacci and Elliott wave are husband and wife. Understand both so you can count correctly. Master RSI. If you are struggled to find a trend of your stock, you need to check the index like SPY or Nasdaq or sector, Bitcoin. Because the stock maybe a follower, it can look ugly. The leader has better details of trend. A stock can go ahead before the trend of the index or can be a bit lag behind. If it goes before the trend of index, it will wait. Understand bond yield and dollar index. If you see waves overlap 2 3 times, maybe you should check if it's a diagonal or triangle. Big opportunity if you found one. The sizes of wave 2 and 4 are smaller or bigger a bit but can't be too small or too big. Need to be obvious. Don't try to make it wave 2 or wave 4 because chance is a 3 wave move. I know Elliott Wave is complicated so that's why we MUST memorize the rules and guidance. I wish you the best on trading.
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Traders gaining momentum: Fall edition!Hey everyone! 👋 Grab your beverage of choice: it's time to sit back, relax, and take a look at some of the hottest up and coming authors on TradingView. All of these folks deserve a follow, so be sure to show them some love! ❤️❤️ If you think we’re missing someone, be sure to make it known below in the comments. Also, we’ll be doing these roundups from time to time so be sure follow us so you don’t miss any of them! Let’s jump in. We’ve sorted each Author by the asset class they focus on. Click on their profile and see if you like the ideas they're putting out! Multi-Asset: Trade_Journal TrendLINEBoys NoFomoCharts ZenMode Valerus_Forex Vixtine SquishTrade LupaCapital Stocks & Indices: dpuleo19 nuggetrouble rossgivens MarthaStokesCMT-TechniTrader Crypto: decklyndubs natef1 Currencies: jamison_fx DemoDiaryFX_Trading CarterKyleCapital Lightwork_ WallStreetIntelligence And there you have it! Our roundup. As we mentioned before, don’t forget to follow TradingView for regular educational content :) Think we missed any up-and-coming accounts? Point them out in the comments! Obviously, don’t shill yourself. 😉 Cheers! - Please remember Editors' Picks and all the authors we mention are our attempt to show undiscovered traders, unique market insights, and interesting educational material. Anyone can be featured in Editors' Picks or in posts like this. All it takes is publishing an idea from your account. We try to be as fair as possible, following many of you, and reading all the different ideas published daily. That's it! High quality content, consistency, clarity, and the will to help others is what we look for. You can read all of our guidelines below: www.tradingview.com www.tradingview.com www.tradingview.com
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📖 Jesse Livermore famouse Quotes 📖Jesse Livermore famous quotes: “Don’t take action with a trade until the market, itself, confirms your opinion. Being a little late in a trade is insurance that your opinion is correct. In other words, don’t be an impatient trader.” - Jesse Lauriston Livermore. “There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.” - Jesse Lauriston Livermore. “He will risk half his fortune in the stock market with less reflection than he devotes to the selection of a medium-priced automobile.” - Jesse Lauriston Livermore. “Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight...” - Jesse Lauriston Livermore. “Profits always take care of themselves but losses never do.” - Jesse Lauriston Livermore. “Go long when stocks reach a new high. Sell short when they reach a new low.” - Jesse Lauriston Livermore. “It is not good to be too curious about all the reasons behind price movements.” - Jesse Lauriston Livermore. 🚀 Follow profile for more! 🚀
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Trendline and Channel Tutorial: Part 2In part 2 we discuss how to construct and utilize sloped trendlines (TL) and Channels in order to better understand the ebb and flow of supply and demand. Like most other charting techniques understanding supply and demand and its relationship to trends and channels depends on you staring at hundreds and thousands of bar charts. Unfortunately, there just isn't a shortcut. It's hard work. Uptrends represent the "stride of demand." They are a graphic representation of the willingness of the composite investor to enter new longs at consistently higher prices. The parallel channel top is the overbought or supply line. A point in the trend where the composite investor might be reliably expected to reduce their long positions. The median line represents (roughly) the center of the channel. At times (as in the commodities example) the median line may have a basis in the chart pattern, but more generally is simply scribed roughly in the center of the channel. The median line is useful in gauging supply and demand relative to the channel boundaries. TLs need to be constantly adjusted and often are messy. Most of the time these adjustments occur with a significant lag, but even with the delay the channel helps to define and visualize the aggresiveness or lack thereof of the supply or demand. In the markets that I am most interested in, I constantly adjust the channel elements to best reflect the latest pivots and chart elements. In my analysis I also use volume, Wyckoff principles and other techncial methods to build the viewpoint. TLs and channels are like any other technical pattern in that they are much stronger and more understandable when combined with multiple methods and tactics. These patterns are fractal. They occur in all time perspectives from 1 minute to decades and are generally analyzed in the same manner. Generally Speaking: -The relationship of the market to the demand line and the supply line relate to the aggresiveness of the demand. -Ideally a reaction higher from a demand line should cover the entire distance to the supply line. A failure to push to the overbought line (the channel top) is often a sign that the trend is weakening. -A modest overthrow of a supply line is generally a sign of demand, but if the overthrow occurs late in the trend and represents a significant acceleration, there is potential that it is terminal (see the commodities chart). -A failure to decline completely back to the supply line is a sign of relative strength. -How markets relieve overbought conditions within the channel is important. A move to the supply line with an overbought RSI (or momentum oscillator of your choice) that subsequently moves laterally is a bullish show of demand or strength. -A modest violation of an uptrend would suggest a weakening in the underlying trend while an inability to fully decline to the uptrend would suggest a trend gaining strength. Bloomberg Commodity Index Daily: The channel in commodities that has defined trading for most of the last two years displays many of the concepts. Note that like most other TLs and channels the process can be messy. Adjusting demand, supply and median lines as the market evolves takes practice. -From the pandemic low in late March 2020 commodities began an extended daily/weekly perspective bull market. At the end of September (B) the market formed a pivot that allowed the projection of an initial demand line. It also allowed the projection of an initial supply line from point A. -As the channel progressed, the markets behavior made it clear that demand was strengthening. Highs were overthrowing the initial projected supply line, reactions from the initial supply line were finding support ABOVE the demand line and when momentum (RSI) became overbought, it was being relieved through mostly lateral to higher prices. All represented strong underlying demand. -While the initial supply line proved inadequate it did provide a median line to the eventual channel. The median line offered important support or resistance on multiple occasions. -Soon after point C, a new supply line could be projected. -From March through September 2021 the market held solidly above the midpoint of the channel. This is clearly a sign of strong demand and bodes well for additional gains. -After testing the demand line in late 2021, the market once again moved back to the supply line. The easy move higher (no notable counter trend reactions) suggested a lack of sellers. Combined with the prior long lateral move above the midline, it was obvious that buyers were in complete control. -In February 2022 price exploded above the top of the supply line as the demand that had been evident for months completely overwhelmed the available supply. -Often a significant overthrow of the supply line is terminal. In this case the market produced a three drives pattern before beginning a steep decline. The break below the pattern trendline is a good example of a type 3 trendline. In Part 3 we will look at another example (Ten year Treasury yields) and explore using demand and supply lines as a trading vehicle. And finally, many of the topics and techniques discussed in this post are part of the CMT Associations Chartered Market Technician’s curriculum. Good Trading: Stewart Taylor, CMT Chartered Market Technician Taylor Financial Communications 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.
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QQE M15 Scalping StrategyOne of the best technical strategies I've found for scalping on shorter time frames is the QQE m15 scalping strategy. You can see a setup here in an uptrend where the QQE signals a short and the chart formation confirms this. This document here describes the strategy in better detail. www.fxtradingrevolution.com You can see the specific QQE signal I use in TV - there are also good videos on youtube that show a few different strategies for this. I'm going to try to codify it now as well. It's hard without the aid of human analysis but I think with a trend indicator, it should be easy to produce high quality signal for an automated system. I have to adjust the settings a bit as I'm just using it for confirmation and it's providing too many signals but the document describes some parameters to try.
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Trading FlowchartHello, dear TradingView members. This educational idea is a Trading Flowchart. It starts with simply explaining the main steps to make before trading and opening positions and how to identify our situation to gain better results. Before we start to trade, we should identify the trend. What is a trend? A trend is a direction in which an asset's price changes over time. Financial market traders identify market trends with the help of technical analysis. Technical analysis is a framework that identifies market trends as predictable price trends within a market (when the price reaches a support or resistance level). Since future prices are unknown at any given time, a trend can only be determined in hindsight (vs. forward). However, this shortcoming does not stop people from predicting future trends. The terms "bull market" and "bear market" represent increasing (rising) and decreasing (descending) market trends, respectively. Peak and bottom: In the price chart, the bottoms are the points where the demand pressure exceeds the supply, and the prices start to rise after a period of decline. On the contrary, the peaks are the points where the supply pressure exceeds the demand, and the prices start to decrease after an increase. There are three types of trends in general: Uptrend (Rising trend) Sideways trend Downtrend (Declining trend) Uptrend (Rising trend): When the price of a symbol or asset increases generally, the price trend is said to be bullish, bullish, bullish, or bearish. An increasing trend does not mean that the prices always have an upward movement; the price may sometimes go up and sometimes go down, but the result of this fluctuation is the price increase. The rising trend in the price chart can be recognized by looking at rising floors (when the new price floor is higher than the previous floor). Sideways trend: A lateral trend line is formed when the market remains stable, i.e., the price does not reach the highest or lowest price point. Many professional traders do not pay much attention to lateral trends. However, lateral trends play an essential role in scalping trades. Downtrend (Declining trend): When the price of a symbol or asset declines generally, its price trend is bearish, bearish, bearish, or bearish. A downward trend, like an upward trend, does not mean that the prices will always go down, but it means that the price may sometimes go down and sometimes go up, but the result of this fluctuation is a price reduction. A downward trend in the price chart can be recognized by looking at falling peaks (when the new price peak is lower than the previous peak). One way an analyst can see a trend line is by plotting trend lines. A trend line is a straight line that connects two or more price points. This line continues on the chart as a support or resistance line. An uptrend line is a straight line drawn to the right and up, connecting two or more low points. The second low point in drawing the upward trend line must be higher than the starting point. Uptrend lines support and show that even as prices rise, demand is more significant than supply. As long as prices remain above the trendline, the uptrend is considered unchanged. A break below the uptrend line indicates that a change in our trend may occur. A downtrend line is a straight line drawn to the right and down that connects two or more high points. The height of the second point must be lower than the first point so that the line has a downward slope. Downtrend lines act as resistance and show that supply is greater than demand even as the price declines. As long as prices remain below the trendline, the downtrend is considered intact. A break above the downtrend line indicates that a change in trend may occur. Familiarity with trend analysis Trend line analysis is a technique used in technical analysis. Trend analysis seeks to predict the price of a currency in more distant intervals with the help of data obtained by trends. Trend analysis uses historical data like price movement and trading volume to predict long-term trends in market sentiment. Trend analysis tries to predict a trend, such as an uptrend in the market, and follow that trend until the data indicates a trend reversal. Trend line analysis is essential because trends' movement ultimately leads to investors' profits. Examining a trend with the help of historical data of the desired currency predicts the future price of that currency for traders. Trading strategies with trend lines Now that we understand the meaning of trend lines and their types let's look at the strategies many traders use to identify trends and learn when it's the best time to open positions. To try to make better predictions on how the market will behave, so we can trade safer, we can use indicators. What are indicators? In technical analysis, a technical indicator is a mathematical calculator based on price history, volume, or (in the case of a futures contract) options contract information related to the timing of the contracts, which aims to predict financial market trends. Technical indicators are the central part of technical analysis and are usually designed as a chart pattern to predict market trends. Indicators are generally placed on price chart data to show where the price is headed or whether the price is in an oversold or overbought state. Many technical indicators have been developed, and new types have been invented by traders to obtain better results. New indicators are often simulated on historical price and volume data to see how effective they have been in predicting future events. Here are a few examples of those indicators: The Relative Strength Index (RSI): The Relative Strength Index (RSI) is a strategy that helps identify currency price movements and buy and sell signals. RSI determines the positive and negative trend of the stock price by observing the average profit and loss in a certain period. The RSI is a percentage ranging from zero to 100 on a scale. Here is a complete educational idea of how RSI works: Fibonacci Retracement: Fibonacci Retracement is a method of using the Fibonacci tool in the chart of a financial asset, which is used to determine the amount of price correction and find possible return points (support and resistance) of that asset, starting from the endpoint to the particular initial. Here is a complete educational idea of how Fibonacci Retracement works: There are many more indicators we can use to get a better understanding of the market. For example, The Elliot Waves, Ichimuko Clouds, MACD, and The Bollinger Bands: I hope this flowchart gives you a better perspective on how to trade safer. Have you ever used this flowchart accurately? What do you think the pros and cons are? Do you think I missed something? Let us know your ideas. Good luck.
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Inflation & Interest Rate Series / Dollar and Gold I have started this inflation and interest rate series, in our last video, we discussed "Inverted Yield". Today will be discussing the relationship between: . Inflation . Interest rate . Dollar and . Gold Today's Content: • Why with higher interest rates, it strengthens the USD • Is USD the strongest currency? If not, then who? • Strategy to counter inflation • Interest rate higher, but a lower USD? Dollar Index: . Measure the value of the dollar against a basket of six foreign currencies. . These are: the Euro, Swiss franc, Japanese yen, Canadian dollar, British pound, and Swedish krona. . With the increase of money supply over the decades, it causes currencies dilution. When currencies weaken, inflation follows. COMEX Gold 0.1 = US$10 1.0 = US$100 10 points = US$1,000 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. Stay tuned for our next episode in this series, we will discuss more on the insight of inflation and rising interest rates. More importantly, how to use this knowledge, turning it to our advantage in these challenging times for all of us.
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Trendlines & Channels Tutorial: Part 1This will be a multi part series on trendlines and channels, what they represent, how to draw and use them, and how I design trades around them. For the sake of simplicity this series will focus on uptrends. Importantly, the principles are roughly the same for both uptrends and downtrends except that downtrends often develop more quickly. I see many TL tutorials, but I don't see much attention paid to what a TL or a channel top represents. Whether a long-term pattern or a shorter-term pattern like a key reversal or a gap, being thoughtful and understanding the supply/demand dynamic that forms each pattern will make you a better analyst/trader. Trendlines represent the willingness of the composite investor to follow price higher/lower. In other words, uptrends represent the stride of demand and downtrends represent the stride of supply. As long as the composite investor is willing to buy/sell at consistently higher/lower levels, demand/supply remains consistent and the existing uptrend/downtrend is intact. Channel tops are known as supply lines and represent areas where supply, generally profit taking, should be expected to develop. The relationship between price and the TL and the channel top can offer important insight into the strength or weakness of the underlying trend. Failures to push to either the trendline or the chanell top potentially warn of a change in the underlying trend. We will cover this in part 2. What trendlines don't offer, at least in my approach, are standalone trading opportunities. Automatically buying trendline touches or selling trend line breaks must be combined with tactical entry techniques in order to build a safe trade. Most specifically, TLs don’t offer reliable sell signals when they are broken. Tests, both of TLs and channels are simply "get ready" warnings. A break of an uptrend does not change the underlying trend from up to down but to neutral. More work is typically needed to turn the trend. A TL is two or more points connecting support or resistance pivots of roughly the same magnitude. A trend channel is formed by building a parallel trendline connecting an intervening pivot on the opposite side of the pattern. The channel top in an uptrend is the overbought or supply line. It bears repeating, proper trendlines are drawn between intervening lows of roughly equal magnitudes and should never be forced. A TL is not tradable or informative if it does not conform to the natural path of the market. “Trendlines should be pretty.” Trendlines evolve. Initial projected trendlines are consistently inconsistent. More often than not they will have to be adjusted as price action evolves. In my estimation there are three primary types of trendlines: Type (1) These trendlines are shallow and take a significant number of bars to resolve themselves. They are more useful for defining the trend than for trading. Type (2) These trendlines are typically very steep and run along intraday or daily price lows or highs. These trendlines are very useful as entry triggers and become important as existing type 1 trendlines and channels are tested. Type (3) These trendlines define the bottom/top portion of a tradable pattern or formation including rectangles. A pattern TL is more apt to provide tradable support or resistance, particularly if the market is overbought or oversold during a testing phase. The horizontal lines along the top of lateral congestion fall into this classification. In part 2 I will cover how to utilize these sloped TLs and Channels to help understand the ebb and flow of supply and demand. And finally, many of the topics and techniques discussed in this post are part of the CMT Associations Chartered Market Technician’s curriculum. Good Trading: Stewart Taylor, CMT Chartered Market Technician Taylor Financial Communications 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.
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Education
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Pine scripts

Sector RotationThis script is attempt to create and observe the real-time and historical performance of the all major sectors of Indian Market in one screen. for Data Presentation I used Short sector names so that I can manage to get space and efficient presentable data. Short Names and Actual Sector Names BNF : CNX-BANKNIFTY IT : CNX-IT PRMA : CNX - PHARMA FMCG : CNX-FMCG AUTO : CNX-AUTO MTAL : CNX-METAL MDIA : CNX-MEDIA RLTY : CNX-REALTY IFRA : CNX-INFRA ENGY : CNX-ENERGY PSU-B : CNX-PSU-BANK PVT-B : NIFTY-PVT-BANK F-SRV : CNX-FINANCE CONSM : CNX-CONSUMPTION C-DUBL : NIFTY_CONSR_DURBL You can use this script in 30-min, Daily, Weekly and Monthly Time Frames. The green Square denotes the current Symbol Performance. The Blue Border boxes are created when one sector intersects other sector. In this Update following features are added Now users have control over sectors, what are all the sectors you wanted to plot you can select from the input menu. Currently user can highlight any one sector in different border color so that user can easily spot and track particular sector. This thicker blue line denotes lowest and highest point of the current timeframe.
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Pine Script™ indicator
6
HH-LL ZZAnother ZigZag, yes... I believe though this concerns another angle/principle, therefore I wanted to share How does it work? Given: source for level breach -> close X breaches -> 3 Let's say this is the latest found 'lower low' (LL - blue dot under bar): This bar has been triggered because 3 bars closed under low of previous 'trigger bar' (TB ) The high and low of this new TB  will act as triggers (aqua blue lines, seen in image above) Then there are 2 options: - again 3 bars closes under the latest TB , in that case the TB  moves to that new LL. - 3 bars closes higher than the high of previous TB  The high and low of this new TB  act again as trigger If a new TB  LL/HH is found, the script checks previous LL/HH and searches the highest/lowest point in between. If necessary, the temporary highest/lowest will be adjusted: Another example: The last 2 points can change (repaint). Yellow coloured lines/labels are set and won't change anymore. Concluded: In case of these settings: source for level breach -> close X breaches -> 3 once a new TB  is found, the high and low act as trigger lines - when 3 bars closes under that low , a new LL is found, this will be the new TB  - when 3 bars closes above that high , a new HH is found, this will be the new TB  and so on... Settings: source for level breach -> close or high/low - H/L X breaches -> 1 -> 10 line style -> solid, dotted, dashed show level breaches -> new found TB (blue/lime coloured) show Support/Resistance (lines at the right) repaint warning can be removed show labels / lines This ZZ can be used for Harmonic patterns, Trend evaluation, support/resistance,... In this script, I also used new features - text_font_family = font.family_monospace -> link - display=display.pane -> link Cheers!
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Pine Script™ indicator
17
Black Scholes Option Pricing Model w/ Greeks [Loxx]The Black Scholes Merton model If you are new to options I strongly advise you to profit from Robert Shiller's lecture on same . It combines practical market insights with a strong authoritative grasp of key models in option theory. He explains many of the areas covered below and in the following pages with a lot intuition and relatable anecdotage. We start here with Black Scholes Merton which is probably the most popular option pricing framework, due largely to its simplicity and ease in terms of implementation. The closed-form solution is efficient in terms of speed and always compares favorably relative to any numerical technique. The Black–Scholes–Merton model is a mathematical go-to model for estimating the value of European calls and puts. In the early 1970’s, Myron Scholes, and Fisher Black made an important breakthrough in the pricing of complex financial instruments. Robert Merton simultaneously was working on the same problem and applied the term Black-Scholes model to describe new generation of pricing. The Black Scholes (1973) contribution developed insights originally proposed by Bachelier 70 years before. In 1997, Myron Scholes and Robert Merton received the Nobel Prize for Economics. Tragically, Fisher Black died in 1995. The Black–Scholes formula presents a theoretical estimate (or model estimate) of the price of European-style options independently of the risk of the underlying security. Future payoffs from options can be discounted using the risk-neutral rate. Earlier academic work on options (e.g., Malkiel and Quandt 1968, 1969) had contemplated using either empirical, econometric analyses or elaborate theoretical models that possessed parameters whose values could not be calibrated directly. In contrast, Black, Scholes, and Merton’s parameters were at their core simple and did not involve references to utility or to the shifting risk appetite of investors. Below, we present a standard type formula, where: c = Call option value, p = Put option value, S=Current stock (or other underlying) price, K or X=Strike price, r=Risk-free interest rate, q = dividend yield, T=Time to maturity and N denotes taking the normal cumulative probability. b = (r - q) = cost of carry. (via VinegarHill-Financelab ) Things to know This can only be used on the daily timeframe You must select the option type and the greeks you wish to show This indicator is a work in process, functions may be updated in the future. I will also be adding additional greeks as I code them or they become available in finance literature. This indictor contains 18 greeks. Many more will be added later. Inputs Spot price: select from 33 different types of price inputs Calculation Steps: how many iterations to be used in the BS model. In practice, this number would be anywhere from 5000 to 15000, for our purposes here, this is limited to 300 Strike Price: the strike price of the option you're wishing to model % Implied Volatility: here you can manually enter implied volatility Historical Volatility Period: the input period for historical volatility ; historical volatility isn't used in the BS process, this is to serve as a sort of benchmark for the implied volatility , Historical Volatility Type: choose from various types of implied volatility , search my indicators for details on each of these Option Base Currency: this is to calculate the risk-free rate, this is used if you wish to automatically calculate the risk-free rate instead of using the manual input. this uses the 10 year bold yield of the corresponding country % Manual Risk-free Rate: here you can manually enter the risk-free rate Use manual input for Risk-free Rate? : choose manual or automatic for risk-free rate % Manual Yearly Dividend Yield: here you can manually enter the yearly dividend yield Adjust for Dividends?: choose if you even want to use use dividends Automatically Calculate Yearly Dividend Yield? choose if you want to use automatic vs manual dividend yield calculation Time Now Type: choose how you want to calculate time right now, see the tool tip Days in Year: choose how many days in the year, 365 for all days, 252 for trading days, etc Hours Per Day: how many hours per day? 24, 8 working hours, or 6.5 trading hours Expiry date settings: here you can specify the exact time the option expires The Black Scholes Greeks The Option Greek formulae express the change in the option price with respect to a parameter change taking as fixed all the other inputs. ( Haug explores multiple parameter changes at once .) One significant use of Greek measures is to calibrate risk exposure. A market-making financial institution with a portfolio of options, for instance, would want a snap shot of its exposure to asset price, interest rates, dividend fluctuations. It would try to establish impacts of volatility and time decay. In the formulae below, the Greeks merely evaluate change to only one input at a time. In reality, we might expect a conflagration of changes in interest rates and stock prices etc. (via VigengarHill-Financelab ) First-order Greeks Delta: Delta measures the rate of change of the theoretical option value with respect to changes in the underlying asset's price. Delta is the first derivative of the value Vega: Vegameasures sensitivity to volatility. Vega is the derivative of the option value with respect to the volatility of the underlying asset. Theta: Theta measures the sensitivity of the value of the derivative to the passage of time (see Option time value): the "time decay." Rho: Rho measures sensitivity to the interest rate: it is the derivative of the option value with respect to the risk free interest rate (for the relevant outstanding term). Lambda: Lambda, Omega, or elasticity is the percentage change in option value per percentage change in the underlying price, a measure of leverage, sometimes called gearing. Epsilon: Epsilon, also known as psi, is the percentage change in option value per percentage change in the underlying dividend yield, a measure of the dividend risk. The dividend yield impact is in practice determined using a 10% increase in those yields. Obviously, this sensitivity can only be applied to derivative instruments of equity products. Second-order Greeks Gamma: Measures the rate of change in the delta with respect to changes in the underlying price. Gamma is the second derivative of the value function with respect to the underlying price. Vanna: Vanna, also referred to as DvegaDspot and DdeltaDvol, is a second order derivative of the option value, once to the underlying spot price and once to volatility. It is mathematically equivalent to DdeltaDvol, the sensitivity of the option delta with respect to change in volatility; or alternatively, the partial of vega with respect to the underlying instrument's price. Vanna can be a useful sensitivity to monitor when maintaining a delta- or vega-hedged portfolio as vanna will help the trader to anticipate changes to the effectiveness of a delta-hedge as volatility changes or the effectiveness of a vega-hedge against change in the underlying spot price. Charm: Charm or delta decay measures the instantaneous rate of change of delta over the passage of time. Vomma: Vomma, volga, vega convexity, or DvegaDvol measures second order sensitivity to volatility. Vomma is the second derivative of the option value with respect to the volatility, or, stated another way, vomma measures the rate of change to vega as volatility changes. Veta: Veta or DvegaDtime measures the rate of change in the vega with respect to the passage of time. Veta is the second derivative of the value function; once to volatility and once to time. Vera: Vera (sometimes rhova) measures the rate of change in rho with respect to volatility. Vera is the second derivative of the value function; once to volatility and once to interest rate. Third-order Greeks Speed: Speed measures the rate of change in Gamma with respect to changes in the underlying price. Zomma: Zomma measures the rate of change of gamma with respect to changes in volatility. Color: Color, gamma decay or DgammaDtime measures the rate of change of gamma over the passage of time. Ultima: Ultima measures the sensitivity of the option vomma with respect to change in volatility. Dual Delta: Dual Delta determines how the option price changes in relation to the change in the option strike price; it is the first derivative of the option price relative to the option strike price Dual Gamma: Dual Gamma determines by how much the coefficient will changedual delta when the option strike price changes; it is the second derivative of the option price relative to the option strike price. Related Indicators Cox-Ross-Rubinstein Binomial Tree Options Pricing Model Implied Volatility Estimator using Black Scholes Boyle Trinomial Options Pricing Model
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Pine Script™ indicator
5
TPO Market Profile [Kioseff Trading]REPOST; SCRIPT WORKS!! Due to technical error, this script was republished! Thank you for your support (: Hello! This indicator comprises a real time TPO Market Profile! The script works on any timeframe 1 second or greater - the script calculates relative to the timeframe selected for your chart. The image above shows the 1-minute BTCUSD chart; 650 +/- tick levels are set. To see the script in full functionality - try using bar replay on a cryptocurrency 1-minute chart (start at the beginning of a regular hours session). Be sure to adjust the tick spread if necessary (: So far, the script's held up in real time - I've not had any array loop errors or timeouts. The TPO profile updates accordingly with changes in time / high and low prices. Letters are appended to the profile in real time. The image above shows configurations for the indicator. I plan to update the indicator quite a bit over the coming days - more to come. You can select the timeframe change the indicator accounts for. For instance, you can have set the indicator to reset every day, every 30 minutes, every 5 minutes, every week, month, etc. In the image above, I configured the indicator to recalculate every 3 months. Consequently, the indicator will record a TPO profile for three consecutive, reset, then record a TPO profile for the next 3 months. This setting makes the indicator compatible with any timeframe greater than 1 minute. You can also use a drag & drop time-start bar to modify the starting point for the market profile TPO calculation. The indicator hosts an option to auto calculate the tick spread between levels. However, as you switch timeframes and assets, sometimes, you'll have to manually set the tick range (: Thanks for checking it out; more to come! Sep 4 Release Notes: UPDATE: The indicator can work on seconds-based charts. The image above shows the indicator working on the 1-second chart. (Screenshot is old; characters are now numbered instead of strange unicode) Release Notes: Added value area + vah + val. Font update. Changed characters to numbered once the alphabet is exhausted. POC, VAH, and VAL label located left of the first bar of the interval. Initial balance range can be toggled. Spaced the characters (more legible). Quite a bit of aesthetic changes so check it out! Soon, I'll release a version of the script that shows VAH, POC, VAL, and TPO letters from previous sessions. I coded this feature into this indicator; however, it was removed due to load time complications. This feature will be its own script (: If the script has trouble loading please let me know (:
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Pine Script™ indicator
9
Tick StatisticsTick Statistics: I have seen many questions/queries related to tick data in TV telegram channels. This script will help pine scripts to understand how ticks work, how to capture and process tick data. This is an educational indicator script for pine scripters. The indicator shall work only on real time candles. Tick data capture is initiated as soon as indicator is loaded on the chart. You might not get correct statistics on 1st candle in case indicator is loaded when real time candle is in progress, in such case you can monitor the statistics generated for subsequent candles. Generated statistics is shown on the chart by placing 2 diamond shapes above and below the candle. Diamond shape below the candle will have candles ‘tick data’ listed in a table. This can be view by placing mouse pointer on the diamond shape. Refer to point 1 below for more details. Diamond shape above the candle will have statistics as mentioned in point no 2 onwards. To view the statistics place the mouse point on the diamond shape. The shape will appear in green color when both tick price and tick volume are both moving in the same direction. The diamond shape in red color means tick price and tick volume are moving in opposite direction. The script captures tick by tick data and generate statistics below: 1. List of tick data with details below: (this is stored in the diamond shape placed below the candle) a. Tick no b. Tick type – Up tick (Up), Down tick (Dn), No change (--) c. Tick price d. Volume e. Price difference (as compared to previous tick price) f. Volume difference (as compared to previous tick volume) 2. Tick statistics a. Total ticks b. Number of up ticks c. Number of down ticks d. Number of No change ticks 3. Volume Statistics a. Total volume b. Up tick volume c. Down tick volume d. Volume associated with ticks where there is no change e. Candle volume (just for reconciliation purpose) 4. Max-min statistics a. Max volume = <> at price = <> at tick no = <> b. Min volume = <> at price = <> at tick no = <> c. Max price = <> at volume = <> at tick no = <> d. Min price = <> at volume = <> at tick no = <> 5. Candle summary a. Price << Up >> (if price is up as compared to 1st tick <> otherwise b. Volume <> (if up tick volume is more than down tick volume <> otherwise
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Pine Script™ indicator
15
Strength of Divergence Across Multiple IndicatorsOverview: One-stop shop for all your divergence needs, including: (1) A single metric for divergence strength across multiple indicators. (2) Labels that make it easy to spot where the truly strong divergence is by showing the overall divergence strength value along with the number of divergent indicators. Hovering over the label shows a breakdown of each divergent indicator and its individual divergence strength value. (3) Fully customizable, including inputs for pivot lengths, divergence types, and weights for every component of the divergence strength calculation. This allows you to quickly and easily optimize the output for any chart. Don't worry, the default settings will have you covered if you're not interested in what's going on under the hood. The Divergence Strength Calculation: The total divergence strength value is the sum of the divergence strengths of all indicators for which divergence was detected at a given bar. Each indicator's individual divergence strength is comprised of two basic components: (1) |ΔPrice| - the magnitude of the change in price over the divergence period (pivot-to-pivot), and (2) |ΔIndicator| - the magnitude of the change in indicator value over the divergence period. Because different indicators' scales and volatility can vary greatly, the Δ values are expressed in terms of standard deviation to ensure that the values are meaningful and equitable across all indicators and assets/instruments/currency pairs, etc: |ΔIndicator| = |indicator_value_1 - indicator_value_2| / 2 * StDev(indicator_series,100) Calculation Weights: All components of the calculation are weighted and can be modified on the Inputs page in settings (weights are simply multipliers). For example, if you think hidden divergence should carry less weight than regular divergence, you can assign it a lesser weight. Or if you think RSI divergence is worth more than OBV divergence, you can adjust their weights accordingly. List of weights: Regular divergence weight - default = 1 Hidden divergence weight - default = 1 ΔPrice weight - default = 0.5 (multiplied by the ΔPrice component) ΔIndicator weight - default = 1.5 (multiplied by the ΔIndicator component) RSI weight - default = 1.1 OBV weight - default = 0.8 MACD weight - default = 0.9 STOCH weight - default = 0.9 Development for additional indicators is ongoing, as is research into the optimal weight configuration(s). Other Inputs: Pivot lengths - specify the number of bars before and after each pivot high/low to consider it a valid candidate for divergence. Lookback bars and Lookback pivots - specify the number of bars or the number of pivots to look back across. Price sources - specify separate price sources for bullish and bearish divergence Display settings - specify how lines and labels should display, including which divergence strength values should show the largest labels. Include/exclude specific divergence types and indicators. Please report any bugs, or let me know if you have any enhancement suggestions or requests for additional indicators. @reees
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Pine Script™ indicator
53
RSI Past Can Turn RSI Into a Directional ToolThe Relative Strength Index was created by J. Welles Wilder to measure overbought and oversold conditions. It’s also found popularity as an overall measure of direction because upward-trending stocks often hit overbought conditions. The opposite can be true with underperformers. Today’s custom script, RSI Past, attempts to capture this secondary use of RSI as a directional indicator. RSI Past achieves this by comparing how many bars have passed since RSI's most recent overbought and oversold readings. It then plots a simple difference between those two numbers. Stocks with “bullish” signals will have positive readings that will increase each time RSI hits an overbought condition. “Bearish” readings are just the opposite, growing more negative as oversold conditions occur. An examination of some individual stocks may show the usefulness of this approach. Meta Platforms , for example, hit an oversold condition almost exactly one year ago, and has remained under heavy selling pressure since: Exxon Mobil , on the other hand, flipped to a bullish reading last October and has trended higher since: This raises some interesting questions for Apple, shown on the main chart above. AAPL’s RSI Past has maintained a bullish reading for over a year -- unlike most other big technology stocks and the broader Nasdaq-100. Could this reflect bigger directional strength, especially with prices holding the $150 level that’s had relevance several times mid-2021? TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more. Important Information TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means. This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates. Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com .
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Pine Script™ indicator
5
ABC 123 Harmonic Ratio Custom Range Interactive█ OVERVIEW This indicator was designed based on Harmonic Trading : Volume One written by Scott Carney. This is about harmonic ratios which expanded through retracement and projection. Derivation is pretty much explained here such as Primary, Primary Derivation, Secondary Derivation and Secondary Derivation Extreme. Derivation value depends on minimum retracement or maximum projection. This derivation value utilize Fibonacci value which later expand to Harmonic Ratio. █ INSPIRATION Inspired by design, code and usage of CAGR . Basic usage of custom range / interactive, pretty much explained here . Credits to TradingView. This build is based and visualized upon Harmonic Trading Ratios. This build also was stripped down from XABCD Harmonic Pattern Custom Range Interactive . █ CREDITS Scott Carney, Harmonic Trading : Volume One (Page 18) █ FEATURES Table can positioned by any position and font size can be resized. Labels can be either changed to alphabets or numbers. █ HOW TO USE Draw points from Point A to Point C. Dont worry about magnet, point will attached depends on High or Low of the candle. █ USAGE / TIPS EXAMPLES (Description explained in each image)
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Pine Script™ indicator
3
Machine Learning: kNN (New Approach)Description: kNN is a very robust and simple method for data classification and prediction. It is very effective if the training data is large. However, it is distinguished by difficulty at determining its main parameter, K (a number of nearest neighbors), beforehand. The computation cost is also quite high because we need to compute distance of each instance to all training samples. Nevertheless, in algorithmic trading KNN is reported to perform on a par with such techniques as SVM and Random Forest. It is also widely used in the area of data science. The input data is just a long series of prices over time without any particular features. The value to be predicted is just the next bar's price. The way that this problem is solved for both nearest neighbor techniques and for some other types of prediction algorithms is to create training records by taking, for instance, 10 consecutive prices and using the first 9 as predictor values and the 10th as the prediction value. Doing this way, given 100 data points in your time series you could create 10 different training records. It's possible to create even more training records than 10 by creating a new record starting at every data point. For instance, you could take the first 10 data points and create a record. Then you could take the 10 consecutive data points starting at the second data point, the 10 consecutive data points starting at the third data point, etc. By default, shown are only 10 initial data points as predictor values and the 6th as the prediction value. Here is a step-by-step workthrough on how to compute K nearest neighbors (KNN) algorithm for quantitative data: 1. Determine parameter K = number of nearest neighbors. 2. Calculate the distance between the instance and all the training samples. As we are dealing with one-dimensional distance, we simply take absolute value from the instance to value of x (| x – v |). 3. Rank the distance and determine nearest neighbors based on the K'th minimum distance. 4. Gather the values of the nearest neighbors. 5. Use average of nearest neighbors as the prediction value of the instance. The original logic of the algorithm was slightly modified, and as a result at approx. N=17 the resulting curve nicely approximates that of the sma(20). See the description below. Beside the sma-like MA this algorithm also gives you a hint on the direction of the next bar move.
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Pine Script™ indicator
18
Delta Volume Channels [LucF]█  OVERVIEW This indicator displays on-chart visuals aimed at making the most of delta ​volume information. It can color bars and display two channels: one for delta ​volume, another calculated from the price levels of bars where delta ​volume divergences occur. Markers and alerts can also be configured using key conditions, and filtered in many different ways. The indicator caters to traders who prefer chart visuals over raw values. It will work on historical bars and in real time, using intrabar analysis to calculate delta ​volume in both conditions. █  CONCEPTS Delta Volume ​The ​volume delta concept divides a bar's ​volume in "up" and "down" ​volumes. The delta is calculated by subtracting down ​volume from up ​volume. Many calculation techniques exist to isolate up and down ​volume within a bar. The simplest techniques use the polarity of interbar price changes to assign their ​volume to up or down slots, e.g., On Balance Volume or the Klinger Oscillator . Others such as Chaikin Money Flow use assumptions based on a bar's OHLC values. The most precise calculation method uses tick data and assigns the ​volume of each tick to the up or down slot depending on whether the transaction occurs at the bid or ask price. While this technique is ideal, it requires huge amounts of data on historical bars, which usually limits the historical depth of charts and the number of symbols for which tick data is available. This indicator uses intrabar analysis to achieve a compromise between the simplest and most precise methods of calculating ​volume delta. In the context where historical tick data is not yet available on TradingView, intrabar analysis is the most precise technique to calculate ​volume delta on historical bars on our charts. TradingView's Volume Profile and CVD - Cumulative ​Volume Delta Candles indicators use it. Other ​volume delta indicators such as my Realtime 5D Profile use realtime chart updates to achieve more precise ​volume delta calculations. Indicators of that type cannot be used on historical bars however; they only work in real time. This is the logic I use to assign intrabar ​volume to up or down slots:  • If the intrabar's open and close values are different, their relative position is used.  • If the intrabar's open and close values are the same, the difference between the intrabar's close and the previous intrabar's close is used.  • As a last resort, when there is no movement during an intrabar and it closes at the same price as the previous intrabar, the last known polarity is used. Once all intrabars making up a chart bar have been analyzed and the up or down property of each intrabar's ​volume determined, the up volumes are added and the down volumes subtracted. The resulting value is ​volume delta for that chart bar, which can be used as an estimate of the buying/selling pressure on an instrument. Delta ​Volume Percent (DV%) This value is the proportion that delta ​volume represents of the total intrabar ​volume in the chart bar. Note that on some symbols/timeframes, the total intrabar ​volume may differ from the chart's ​volume for a bar, but that will not affect our calculations since we use the total intrabar ​volume. Delta ​Volume Channel The ​​DV channel is the space between two moving averages: the reference line and a DV%-weighted version of that reference. The reference line is a moving average of a type, source and length which you select. The DV%-weighted line uses the same settings, but it averages the DV%-weighted price source. The weight applied to the source of the reference line is calculated from two values, which are multiplied: DV% and the relative size of the bar's ​volume in relation to previous bars. The effect of this is that DV% values on bars with higher total ​volume will carry greater weight than those with lesser ​volume. The ​DV channel can be in one of four states, each having its corresponding color:  • Bull (teal): The DV%-weighted line is above the reference line.  • Strong bull (lime): The bull condition is fulfilled and the bar's close is above the reference line and both the reference and the DV%-weighted lines are rising.  • Bear (maroon): The DV%-weighted line is below the reference line.  • Strong bear (pink): The bear condition is fulfilled and the bar's close is below the reference line and both the reference and the DV%-weighted lines are falling. Divergences In the context of this indicator, a divergence is any bar where the slope of the reference line does not match that of the DV%-weighted line. No directional bias is assigned to divergences when they occur. Divergence Channel The divergence channel is the space between two levels (by default, the bar's low and high ) saved when divergences occur. When price has breached a channel and a new divergence occurs, a new channel is created. Until that new channel is breached, bars where additional divergences occur will expand the channel's levels if the bar's price points are outside the channel. Prices breaches of the divergence channel will change its state. Divergence channels can be in one of five different states:  • Bull (teal): Price has breached the channel to the upside.  • Strong bull (lime): The bull condition is fulfilled and the ​DV channel is in the strong bull state.  • Bear (maroon): Price has breached the channel to the downside.  • Strong bear (pink): The bear condition is fulfilled and the ​DV channel is in the strong bear state.  • Neutral (gray): The channel has not been breached. █  HOW TO USE THE INDICATOR Load the indicator on an active chart (see here if you don't know how). The default configuration displays:  • The ​DV channel, without the reference or DV%-weighted lines.  • The Divergence channel, without its level lines.  • Bar colors using the state of the ​DV channel. The default settings use an Arnaud-Legoux moving average on the close and a length of 20 bars. The DV%-weighted version of it uses a combination of DV% and relative ​volume to calculate the ultimate weight applied to the reference. The DV%-weighted line is capped to 5 standard deviations of the reference. The lower timeframe used to access intrabars automatically adjusts to the chart's timeframe and achieves optimal balance between the number of intrabars inspected in each chart bar, and the number of chart bars covered by the script's calculations. The Divergence channel's levels are determined using the high and low of the bars where divergences occur. Breaches of the channel require a bar's low to move above the top of the channel, and the bar's high to move below the channel's bottom. No markers appear on the chart; if you want to create alerts from this script, you will need first to define the conditions that will trigger the markers, then create the alert, which will trigger on those same conditions. To learn more about how to use this indicator, you must understand the concepts it uses and the information it displays, which requires reading this description. There are no videos to explain it. █  FEATURES The script's inputs are divided into four sections: "DV channel", "Divergence channel", "Visuals" and "Marker/Alert Conditions". DV Channel Here, you specify what you want to use as a reference line: its MA type, source and length. This is the ​DV channel's baseline. The DV%-weighted line will use the same settings, except that it will be calculated from the DV%-weighted source. By default, the DV%-weighted line is capped to five standard deviations of the reference line. You can change that value here. This section is also where you can disable the relative ​volume component of the weight, and choose the selection mode of the lower timeframe used to access intrabars. Divergence Channel This is where you configure the key price values to use in determining the channel's levels and breaching conditions. These choices have an impact on the behavior of the channel. More generous level prices like the default low and high selection will produce more conservative channels, as will the default choice for breach prices. In this section, you can also enable a mode where an attempt is made to estimate the channel's bias before price breaches the channel. When it is enabled, successive increases/decreases of the channel's top and bottom levels are counted as new divergences occur. When one count is greater than the other, a bull/bear bias is inferred from it. Visuals You can control here the display and appearance of most of the script's visuals: the reference line, the DV%-weighted line, the ​DV channel, the divergence channels and its levels, bar colors, a divergence mark, the color of markers and the information box which by default appears in the lower left of the chart. Marker/Alert Conditions Here, you specify the conditions that will trigger up or down markers. The trigger conditions can include a combination of state transitions of the ​DV and the divergence channels. The triggering conditions can be filtered using a variety of conditions. Configuring the marker conditions is necessary before creating an alert from this script, as the alert will use the marker conditions to trigger. Markers only appear on bar closes, so they will not repaint. Keep in mind, when looking at markers on historical bars, that they are positioned on the bar when it closes — NOT when it opens. Raw values The raw values calculated by this script can be inspected using a tooltip and the Data Window. The tooltip is visible when you hover over the top of chart bars. It will display on the last 500 bars of the chart, and shows the values of ​DV, DV%, the combined weight, and the intermediary values used to calculate them. █  INTERPRETATION The aim of the ​DV channel is to provide a visual representation of the buying/selling pressure calculated using delta ​volume. The simplest characteristic of the channel is its bull/bear state. One can then distinguish between its bull and strong bull states, as transitions from strong bull to bull states will generally happen when buyers are losing steam. While one should not infer a reversal from such transitions, they can be a good place to tighten stops. Only time will tell if a reversal will occur. One or more divergences will often occur before reversals. The nature of the divergence channel's design makes it particularly adept at identifying consolidation areas if its settings are kept on the conservative side. A gray divergence channel should usually be considered a no-trade zone. More adventurous traders can use the ​DV channel to orient their trade entries if they accept the risk of trading in a neutral divergence channel, which by definition will not have been breached by price. If your charts are already busy with other stuff you want to hold on to, you could consider using only the chart bar coloring component of this indicator: At its simplest, one way to use this indicator would be to look for overlaps of the strong bull/bear colors in both the ​DV channel and a divergence channel, as these identify points where price is breaching the divergence channel when buy/sell pressure is consistent with the direction of the breach. I have highlighted all those points in the chart below. Not all of them would have produced profitable trades, but nothing is perfect in the markets. Also, keep in mind that the circles identify the visual you would be looking for — not the trade's entry level. █  LIMITATIONS  • Because this script uses intrabars at a lower timeframe than the chart's, its realtime values will only update when a new intrabar completes.   You can see which lower timeframe is used in the script's information box.  • The script will not work on symbols where no ​volume is available. An error will appear when that is the case.  • Because a maximum of 100K intrabars can be analyzed by a script, a compromise is necessary between the number of intrabars analyzed per chart bar   and chart coverage. The more intrabars you analyze per chart bar, the less coverage you will obtain.   The setting of the "Intrabar precision" field in the "DV channel" section of the script's inputs   is where you control how the lower timeframe is calculated from the chart's timeframe. █  NOTES Volume Quality If you use ​volume, it's important to understand its nature and quality, as it varies with sectors and instruments. My Volume X-ray indicator is one way you can appraise the quality of an instrument's intraday ​volume. For Pine Script™ Coders  • This script uses the new overload of the fill() function which now makes it possible to do vertical gradients in Pine. I use it for both channels displayed by this script.  • I use the new arguments for plot() 's `display` parameter to control where the script plots some of its values,   namely those I only want to appear in the script's status line and in the Data Window.  • I wrote my script using the revised recommendations in the Style Guide from the Pine v5 User Manual. █  THANKS To PineCoders . I have used their lower_tf library in this script, to manage the calculation of the LTF and intrabar stats, and their Time library to convert a timeframe in seconds to a printable form for its display in the Information box. To TradingView's Pine Script™ team. Their innovations and improvements, big and small, constantly expand the boundaries of the language. What this script does would not have been possible just a few months back. And finally, thanks to all the users of my scripts who take the time to comment on my publications and suggest improvements. I do not reply to all but I do read your comments and do my best to implement your suggestions with the limited time that I have.
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How to create auto trading bots for zero costHello Everyone, Following are the things we discussed 🎲 Minimal Components of Auto Trading System: Source where signals are generated Exchange/Broker where orders are placed Integration component which bridges both 🎲 In this example Source - is our tradingview system and a sample script which generate alerts. Do not use this script for trading as it is only created for demonstration. Exchange - We are going to use BingX exchange for this example as we only have this implementation in our integration system. Integration System - www.pipedream.com is used for integration. This is cloud based integration product which is very flexible. Platform also allows users to contribute towards the product. Hence, it is very easy for us to develop integration to any broker or exchange which has API support. 🎲 Limitations BingX APIs are fairly new and hence there are not much features. There is no option to place stop order. It has option to place only limit/market orders Stop loss is not possible via API 🎲 Steps: 🎯BingX - Create account and enable perpetual futures trading - Setup google authenticator and add valid email and phone. - Create API - it will ask for Google authenticator code and email and phone OTPs. - Store api key and secret key in safe place. 🎯Tradingview - Create a script which can send stop, target, ticker information as signal. - Study the existing idea about customising alerts for better understanding on how to achieve this. 🎯Pipedream - Create account and setup BingX as source (needs API Key and Secret Key derived from BingX) - Create Webhook trigger and capture webhook URL. - Provide this URL in alerts to generate alert messages which are sent to webhook by default. - Once alert is sent, load the alert in pipedream source and built rest of the workflow including calculate leveraged position and bracket order trades. - Once tested, deploy the workflow so that workflow will keep listening to incoming alerts to generate trades. Please note: the discrepancy in leverage calculation caused due to two things: Lower timeframe used for generating faster alerts. Since the volatility is small, gaps can be huge. The workflow did not run at once. Hence the delay caused rest of the issues resulting in miscalculations. These problems however will not come when orders are placed via alerts and executed automatically.
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