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Editors' picks

SPX: A Dangerous Resistance. 👀• The SPX is correcting today, back to its 21 ema in the 1h chart, as usual; • In the daily chart, there’s still some upside left, as we have yet to retest the 4,100 area, but the index is quite far from its 21 ema in this time frame; • If it loses the 21 ema in the 1h chart, or does a clear bearish structure, then it might correct to the 21 ema in the daily chart, around the 3,800; • As long as the trend remains bullish in the 1h chart, hardly a sharper correction will materialize; • Therefore, let’s pay attention to the 21 ema (1h), and on how the index will react from here, as it is near the resistance at 4,100; • So far, no clear top sign. I’ll keep you updated on this, as usual. Remember to follow me to keep in touch with my daily analyses!
Editors' picks
9
All Declines Are Not EqualIt is pertinent to remember that there are always stocks to sell into rising markets and stocks to buy into falling markets. Even in a general market correction it is important to distinguish that all declines are not equal under the surface. By that we mean that while prices may all head in a southern direction, what is important is the point from which that decline began in the more structural price pattern of each individual stock. In other words, we seek to identify what the individual price patterns technically signify in the supply and demand factors underlying the decline. In the past, we have characterized declines in three distinct patterns (Fig 1). Figure 1: Chart Pattern A (Figure 2) for educational examples): Declines that may occur within the framework of a structural uptrend in a stock. This pattern would imply that the stock had emerged from a base, or from a secondary consolidation within an uptrend and has declined, or may decline, back toward (or into) that congestion area that now represents support (or an area of demand) for the stock; or pull back within an extended uptrend to create a new area of congestion representing support. We would not expect stocks representative of this pattern technically to fall to new lows (although in any volatile environment, support levels can be temporarily breached). On balance, we would perceive these Chart A patterns to be among the market leaders, which could be bought into weakness with the longer-term trend in mind. Notice price uptrends, breakouts through multi-year resistance levels; perhaps a secondary resistance level and the Monthly MACDs on Buy signals (rising). Figure 2: Examples of Chart A: As an Educational Exercise FLEX, JBL, GFF, Monthly: Chart Pattern B (see Figure 3 for educational examples): Initial declines, which break below an established support level following an extended uptrend, frequently defining a “topping“ pattern (see arcs) and initiating a structural downtrend for the stock. The Monthly MACD has moved into a declining Sell signal (see red arrows) often with a negative divergence. Patterns of this type can be expected to fall to new lows, often following a kickback rally toward the broken support, now defined as resistance (offering an opportunity to sell into strength), and to underperform the market during weakness (go down more). This is the pattern to watch for with stocks and / or groups, to guard against a reversal of trend from positive to negative (from a trend of demand to one of supply). Some names that had continued to lift in uptrends during the initial markets’ decline through 2022 are now appearing vulnerable (see Figure 3 below). Figure 3. Examples of Chart B; As an Educational Exercise UNH, LHX, Monthly Chart Pattern C (see Figure 4 for educational examples): Secondary declines, generally occur in stocks that have experienced initial structural declines (Pattern B) in the recent past, and thereafter may have bounced into resistance (formerly support) where they encountered supply (selling) and have thereafter fallen back, sometimes establishing a trading range that is eventually penetrated once again to the downside, accompanied by a declining MACD, on a Sell signal; thus extending the structural decline already in place. New lows in price are generally established for the stock. Such stocks experience their own private corrections and bear markets, sometimes even under the surface of a rallying equity market, as well as into an overall declining market. By virtue of observing the differing characteristics of individual stock declines, one can utilize rallies to sell weaker names, but also utilize dips to accumulate stronger names, as evidenced by which of the three chart patterns a stock portrays. However, in a general market decline, whatever the pattern, one might still consider overall protective measures. Figure 4. Examples of Chart C: As an Educational Exercise AMZN, PYPL, Monthly. Louise Yamada CMT LYAdvisors LLC 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.
Editors' picks
20
Playboy Stock Options trading - Rolling puts into sharesSummary: picking through the garbage to see if any value left for future. bankruptcy or big move in 5-10 years. Rolling short puts into stock for potential change based on new catalyst of joint venture. key concepts: Sizing- Having enough but not too much of an investment idea in a portfolio. Risk/reward- Assigning probabilities to various up and down scenarios. Choosing exposure based on opportunity. Expected returns- Factoring most likely outcomes of decisions and positions. Long options vs stock for example. Survivability- Choosing a trade structure or vehicle that allows ability to endure wild adverse moves. FATSO- 5 level of analysis acronym. F- fed not pivoting yet, but hints at easing and market likes that. A- accounting wise plby is beat up and priced for potential bankruptcy at low price/sales, price/book. T- Technical trend shows its still in downtrend, some volume accumulation, way below 200 day ma S- social sentiment, used to be popular meme stock, some young crowd still follows, did nfts so associated, low hype now 0- options view is still very volatile, high IV, stock price is so low that trading the options doesnt make much sense *stocks below 5$ are penny stocks, so many institutions cant even hold the shares if their mandates wont allow. warning: penny stocks are risky and will lose you money. this is not advice. you will lose money.
Editors' picks
Long
25
Tesla Analysis 26.01.2023Hello Traders, welcome to this free and educational analysis. I am going to explain where I think this asset is going to go over the next few days and weeks and where I would look for trading opportunities. If you have any questions or suggestions which asset I should analyse tomorrow, please leave a comment below. I will personally reply to every single comment! If you enjoyed this analysis, I would definitely appreciate it, if you smash that like button and maybe consider following my channel. Thank you for watching and I will see you tomorrow! You can also check out my previous analysis of this asset:
Editors' picks
47
Will Exxon march higher or perform a fake out?Since our previous post on Exxon Mobil, it has increased significantly in value against our expectations. Unfortunately, with the upcoming earnings, the stock might get an additional boost in price, which is already hovering near all-time highs. As a result, XOM breaking above $114.66 will force us to abandon our price target on the downside. However, even if a breakout occurs, we will continue to pay close attention to subsequent price action and monitor volume very closely. To support the idea of a fakeout, we would like to see a continual drop in volume accompanying price growth on the daily chart (just like on the monthly chart). As for the outlook beyond the short-term, we remain worried that ranging oil prices between $70 and $85 per barrel will threaten the well-being of this stock title. Furthermore, higher taxes on energy companies, economic slowdown, and oil down more than 35% since its 2022 peak will put pressure on further price increases. Illustration 1.01 Illustration 1.01 shows the hourly chart of XOM. The yellow arrow points to a technical glitch at NYSE, which saw multiple stock companies plunge and turn on circuit breakers. We can potentially discard this movement. Illustration 1.02 Illustration 1.02 displays the monthly chart of XOM. The red arrow indicates a continual decline in volume, which is a bearish technical development. Illustration 1.03 Illustration 1.03 shows the daily chart of XOM and the updated setup. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Editors' picks
43
SPX Triangle Will Break Soon but Which Way?Which Way Will the SPX Triangle Break? Consider All the Arguments Ever since the October 2022 lows, the S&P 500 SP:SPX has been consolidating especially when considered on larger time frames like daily and weekly. This consolidation has formed what is known as a triangle pattern (or symmetrical triangle). A triangle is a consolidation pattern that represents equilibrium in the balance between buyers and sellers. The range narrows and price action compresses until the consolidation ends. The Primary Chart above shows the current triangle that has formed. It is essentially a collision between a 3-month uptrend and a 13-month downtrend (lasting over a year since January 2022 highs). So long as price remains in this triangle, uncertainty about the intermediate term direction will likely remain. Many triangles have arisen this year, and each one has led to new lows. This one may as well, as the yield curves and macro data support this outcome. But price could whipsaw out the top of the triangle for a month or two before heading to lows. All possibilities remain on the table. For further discussion on the details of this triangle, please refer to the linked chart and post under Supplementary Chart A below. Supplementary Chart A 1. Arguments for Bear-Market Continuation and Further Declines to New Lows VIX has been trending lower to new lows. But this argument cuts both ways—it lies at multi-year support as well as the support zone for this entire bear market. It’s not a spot to be complacent. On the other hand, VIX could be forming a new seasonal range lower than the past few years. The downtrend in volatility must be respected until it breaks. But the break could be vicious and fast, occurring in a matter of hours / days. For now, VIX keeps failing right at the down TL from early October 2022 peaks. Supplementary Chart B (VIX) Consider the orange-colored down trendline from mid-October 2022 highs. Price continues to fail at that down TL. But price is also in the yellow rectangle, which is the major support / demand zone for volatility over the entire bear market to date. The pink uptrend line is a multi-year uptrend line where VIX has found support since 2017. SPX shows a daily bearish divergence on RSI. But no weekly divergences yet. Stochastics and another indicator (EFI) both show clear divergences on the daily. But sometimes triple divergences form. And sometimes, these divergences are erased with higher price action. Divergence create the conditions for a decline, they don’t guarantee one. And without weekly divergences yet, this minor daily divergence is too weak a signal to take to the bank. As of the December 2022 FOMC meeting, the Fed had not paused and it had not pivoted. In fact, the Fed remained hawkish, communicating a “higher for longer” message to markets. The FOMC’s published SEP (Summary of Economic Projections) showed that rates were forecasted to peak at 5.1% (on average) which was higher than its prior rate forecast of 4.6%. The Fed’s projections also showed that it expected no rate cuts throughout 2023. In other words, higher for longer, even if rate hikes were paused. Will the Fed’s messaging and policy from December 13, 2022, remain steadfast? If so, the markets will likely struggle to find a way higher unless they continue to completely disbelieve the Fed. Note that rate markets (and equity prices) are currently disagreeing with the Fed about rate cuts later this year. That all could change on February 1, 2023. Money supply has continued to shrink. Tom McClellan said to financial media recently that M2SL has been shrinking while GDP has been growing, and this has never happened—the ratio of M2/GDP has never been shrinking this fast. Note that there is a lag b/w M2 changes and the effects on markets. But M2 has been shrinking for a while now. Note that when M2 rises faster than GDP, this can fuel rallies a year later, but this is the opposite of that scenario. However, note that US Treasury Department maneuvering relating to the debt-ceiling crisis could hamper the Fed’s efforts to drain liquidity from markets. Other than its general effect on markets, this maneuvering is well beyond the scope of this article and the author’s knowledge. Consumer spending and corporate profits cannot hold up much longer given the leading economic indicators (PMIs, ISMs, Empire State Manufacturing Index, retail sales reports from December, mortgage applications, and housing data). But equity markets don’t seem convinced. Markets can remain irrational longer than traders can remain solvent. Gold on a ratio chart to SPX (GLD/SPX) is still outperforming. This is not an all-clear signal for equities, especially the blue-chip index of US stocks. Supplementary Chart B (GLD/SPX) Typically, a bear-market bottom / final low does not happen while yield curves remain inverted. One WS analyst stated unequivocally yesterday that 85% of the yield curves are currently inverted. According to that firm's indicators, if more than 55% of the yield curves are inverted, a recession always follows. But when? The timing is the tricky part especially for traders and investors. Bear markets can fool the vast majority. The 3m/10y curve has been inverted to levels not seen since 1981. The inversion has fallen deeper into negative territory than any other inversion on the data available on TradingView’s charts. The final bear-market low typically happens after the Fed has pivoted and cut rates for some time. And remember, when the Fed cuts, it’s not because the economic outlook and corporate earnings are bright. Rather, the Fed cuts because of deteriorated economic conditions, tanking earnings and earnings estimates, horrible employment numbers (a recession). Supplementary Chart C.1 (3m/10y) For further discussion on the 10y/3m yield curve, see the post linked here: Supplementary Chart C.2 Recent PMI data from SP Global was negative economically (US Manufacturing PMI at 46.7 while December was 46.2, and US Services PMI at 46.6 while December was at 44.7) though it moderated somewhat (slightly less negative) from the prior month’s data. “The US economy started 2023 on a disappointingly soft note with business activity contracting sharply again in January. It showed subdued customer demand and impact of high inflation on client spending. January data also indicated a “faster increase in cost burdens at private sector firms. Although well below the average rise seen over the prior two years, the rate of cost inflation quickened from December and was historically elevated.” The commentary by SP Global’s economist provided along with their recent PMI report noted that “not only has the survey indicated a downturn in economic activity at the start of the year, but the rate of input cost inflation as accelerated into the new year, linked in part to upward wage pressures, which could encourage a further aggressive tightening of Fed policy despite rising recession risks.” This suggests that even if inflation has peaked, it may not be heading to the 2% target as fast as it moved down from the peak to the current levels. And it implies that stagflation may be around the corner as economic growth slows but sticky inflation does not dissipate. Major past selloffs in markets have been preceded by a very low unemployment (UE) rate. The rate has been as low as 3.5% recently. One analyst, Eric Johnston at Cantor Fitzgerald, noted that investors would do well by buying markets when the UE rate is 9% to 10%, and selling the market when it reaches extreme lows from 3% to 4%. UE rates haven’t begun to significantly roll over, and the Fed has remained focused on the tight labor markets and services sectors as sources of more sticky inflation. So if PMIs from January are showing wage pressures increasing somewhat, that doesn’t suggest the Fed will be *cutting* rates soon, though a pause may be discussed as rates approach 5%. Taxes as a percentage of GDP are at the level that coincides with recessions. Taxes are 18% of GDP. 2. Arguments for a Rally That Precedes New Bear Market Lows First, a rally that breaks the down trendline does not immediately negate the bear market. The 2000-2002 bear market experienced a substantial multi-month break of its down trendline (complete with a successful backtest after the break) before the next major leg down to new lows occured. Supplementary Chart D (2000-2002 Example) SPX continues to stabilize above major support / resistance zones such as 3900 and 3950. And it has closed above 4000 three consecutive days this week: January 23, 24, and 25. When it meets the down TL, it has not been reacting lower the way it has on every other test of the trendline during this bear market. It’s spending quality time with the TL, which is a new phenomenon / characteristic when price and the TL meet. SPX continues to hold above major anchored VWAPs from August, October, and December 2022, which range from 3850 to 3900. AAPL's price action is fairly bullish in the short-to-intermediate term. Here are the bullish technicals arising on AAPL's chart. AAPL’s daily chart shows a failed breakdown beneath major support levels over the past year. AAPL broke below $134.37 and $129.04 and fell to a new low, but quickly reclaimed $129.04 and $134.37, so this constitutes a failed breakdown. The failed breakdown is visible on the daily chart, so this is supportive of prices for several weeks to a couple months. $134.37 was the level coinciding with the lows from October 13 and November 4, 2022. $129.04 was the June 2022 low, which was undercut in December 2022 and early January 2023. Price broke below all these levels and then immediately reclaimed them. AAPL’s failed breakdown coincided with a tag of the parallel downtrend channel from the all-time high. AAPL shows positive (bullish) divergences with momentum indicators on both the daily and weekly charts. AAPL remains right at or slightly above the down TL from the mid-August 2022 highs, which was a fairly steep 5-month downtrend. AAPL remains above a short-term TL from June lows, but it also remains contained in its downtrend channel from the all-time high. AAPL is in no-man’s land, with some bullish forces that brought it here (divergences and failed breakdowns) Supplementary Chart E.1 (AAPL's Failed Breakdown) Supplementary Chart E.2 (AAPL's Parallel Channel Support) NDX (Nasdaq 100) broke above its down TL (linear chart only) and has held above it as well. It also has been making higher lows since the October 2022 lows. Supplementary Chart F.1 (NDX QQQ Log TL) Supplementary Chart F.2 (NDX QQQ Linear TL) IWM broke above its down TL on both log and linear charts. But it remains at critical resistance at the $188-$192 zone. It remains above intermediate term VWAPs from swing highs and lows in August, October and December 2022 (which are around $180), but it still remains below the VWAP anchored to its all-time high. Supplementary Chart G (IWM Linear TL) HYG broke above its down TL. Like other TL breaks, this could ultimately be a false signal, but here it has persisted for some time. HYG had a breakout above its down TL in the 2007-2009 bear market driven by the great financial crisis. This breakout was a false signal b/c the bear market was not over until early 2009, when the SPX made new lows. HYG resumed a downtrend after breaking above its down TL and went back to lows again and made lower lows, a move that coincided with SPX heading to new lows in Q1 2009. HYG shows a small bearish divergence on RSI on the daily chart. Wait for a larger bearish divergence to form on both daily and weekly charts perhaps. VIX has been trending lower to new lows. But this argument cuts both ways—it lies at multi-year support as well as the support zone for this entire bear market. It’s not a spot to be complacent. On the other hand, VIX could be forming a new seasonal range lower than the past few years. The downtrend must be respected until it breaks. VIX keeps failing right at the down TL from early October 2022 peaks. Consumer spending and corporate profits cannot hold up much longer given the leading economic indicators (PMIs, ISMs, Empire State Manufacturing Index, retail sales reports from December, mortgage applications, and housing data). But equity markets don’t seem convinced. Markets can remain irrational longer than traders can remain solvent. Earnings at major publicly traded companies may not be deteriorating quickly enough to disprove the “soft-landing” narrative that pervades markets. Recession does not mean stocks go straight to lows when yield curves have inverted. Recessions take time to unfold, just as the damage to economies takes time when rates are restrictive. There is a lag. Both FTSE and DAX have taken out the highs from mid-December 2022. FTSE is approaching multi-year highs. Both have broken above down TLs from the bear market. Both have decisively reclaimed 200-day SMAs. Both have been forming higher highs and lows Multi-week bear-traps occur frequently where significant down trendlines are broken until the bear market resumes in earnings in a period of several weeks or months. The 2000-2002 bear market provides an excellent example of this. So a break to the upside in the triangle pattern on SPX may last for several weeks or even months before the real downside move begins. Just because it’s been challenging and choppy does not mean it won’t get worse and more trappy. The third year of a presidential term (US markets) is nearly always bullish. There have been exceptions according to Tom McClellan (technical expert citing 1939 as an exception to this rule but noting that Hitler’s army was marching across Poland at the time). Some have said that the most bullish quarter of the presidential cycle is Q1 of the third year (technical expert Mark Newton speaking to financial media on January 24, 2022). Breadth has been strong lately, and some technical analysts have cited “breadth-thrust” indicators as giving bullish signals. Markets continue to disbelieve the Federal Reserve. Consider the differential b/w the Fed’s forecasts and the rate markets forecasts about whether rate cuts will happen this year, and where the terminal rate will be. So even if the Fed remains hawkish at the next meetings, perhaps it won’t matter. Markets will do what they want to do, including "fighting the Fed." You don't have to fight the Fed though or any other central bank. But don't fight the trend either. The Fed’s messaging at the February 1, 2023 FOMC presser may be slightly more dovish, or it may be interpreted as dovish if Powell so much as mentions a pause in hikes, or that the FOMC is discussing a pause. Even if Powell remains hawkish, sometimes markets can interpret the Fed Chair’s statements (sometimes ambiguous) the wrong way—recall that this happened at the July FOMC in 2022, after which Powell cleared up the confusion at Jackson Hole in August 2022 (tanking markets immediately). Equity positioning remains fairly underweight US equities according to financial experts on this subject. This could lead to momentum chase higher to trap all the bears before the real decline gets underway. Maybe stocks continue higher until two things occur: EPS estimates fall further, employment numbers start getting quite ugly, and the Fed is not as accomodative as it has been in past economic recessions (because while inflation has peaked, it may not fall directly to the 2% target, and with easing financial conditions, perhaps inflation could stop falling rise in Q1 2023) Equal-weighted S&P 500 (RSP) has broken above its down TL on a daily close as of January 25, 2023. The offense-defense ratio (consumer discretionary divided by consumer stables) RCD/RHS shows a breakout in this ratio above 8-month highs in the ratio’s value. This potentially signals near-term strength in equity markets as offensive stocks (consumer discretionary) outperform stocks defensive names (consumer staples) ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. 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 financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
Editors' picks
32
Crude oil a leading inflation indicatorTwo observation made the last two years between crude oil and CPI: 1) There were 5 waves up and 2) 3 significant peaks However, between the last 2 peaks of crude, it was a lower low follow-by its downtrend, and CPI followed this downtrend subsequently. Among many commodities, crude oil moves the most in tandem with CPI, but crude seems to lead in this study. Refer to the daily chart on your own, try drawing a downtrend line, you will see crude oil prices has broken above its downtrend line recently. If crude oil is going to transit to an uptrend from here, we will have to track CPI very closely. The inflation fear is still there. Did a video on this observation last week, refer to the link below. Crude Oil Futures Minimum fluctuation 0.01 = $10 0.10 = $100 1.00 = $1,000 10.00 = $10,000 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. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. 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
Editors' picks
Long
3
Equities Set To Outperform Rickety Real EstateInvestment wisdom states that “the only bad time to buy real estate is later.” Every rule though, has its exceptions. Current US real estate is clearly in exception territory given recessionary fears, high mortgage rates, and dim fundamentals. Real estate sector is the largest store of wealth. It is also the source of significant job creation. Crisis in this sector has massive adverse consequences. Hence, policy makers typically leave no stone unturned in defending the sector. Despite the headwinds, new data released last week show rising mortgage applications on softening rates and real estate prices. This collectively makes an outright short position perilous. Instead, this case study argues that a measured approach would be a spread with a long position in S&P 500 Index combined with a short position in S&P Real Estate Select Sector index. An entry at 20.611 with a target at 22.119 supported by a stop loss at 19.749 will deliver a compelling 1.75 reward to risk ratio with ample upside and limited downside. INTEREST RATES INVERSELY AFFECT ASSET VALUES The value of a financial asset is the cumulative discounted value of all future cash flows. Higher the discounting rate, lower the value. Persistent and sticky inflation is compelling the Federal Reserve to keep rates higher for longer. High mortgage rates are forcing out first time buyers while squeezing leveraged asset owners. Future rents discounted to present value is sharply lower relative to a period when federal funds rate was near zero. With the US Federal Reserve having hiked interest rates by 4.5% in 2022, mortgage rates have doubled in the same period, touching a 20-year high of 6.2%. This has made real estate investments less attractive. With no rate reversals in sight, mortgage rates are likely to stay elevated despite recent softening. Mortgage rates are down a full percentage point from recent peak but still double what they were a year ago. Absent a sector specific relief, real estate stocks will underperform relative to the broader S&P 500 index. Since 2017, this ratio of the S&P 500 index to the Real Estate Select Sector has risen by a stunning 54% over the last 6 years. WEAKENING US HOUSING MARKET After peaking in July 2020, new home sales in the US have trended 37% lower and down to pre-pandemic levels. Existing home sales exhibit similar trend, which have fallen for eleven (11) straight months, point to a frail US housing market. New data released last week point to rise in mortgage demand as rates soften and real estate prices ease. DISTRESSED DEBT IN REAL ESTATE & RISING REDEMPTIONS FROM PROPERTY FUNDS Global property market faces $175 billion of distressed debt. As rates rise, rising financing costs will force leveraged owners to foreclose at fire sale prices. Abrupt stop to years of easy money supply has sent shock waves to the sector. Compounded by a pandemic that has changed the way people work and live, commercial real estate owners are in a precarious place. This predicament is showing up in property funds facing rising redemptions. US-based investment manager - KKR - has imposed limits on redemption from its $1.5 billion KKR Real Estate Select Trust fund (KREST). KKR's cap on redemption echoes a move by Blackstone which announced in December that it would limit investor withdrawals from its $69 billion private real estate fund (BREIT). Starwood Capital also placed caps on redemptions late last year. Investors are hankering for redemption as fears of price correction stemming from high mortgage costs, persistent inflation and an uncertain economy amplified by recessionary gloom. GLOOMY REAL ESTATE OUTLOOK The sector is pessimistic about current and future home sales as evident from NAHB’s Housing Market Index. Over the past six months, new building permits have collapsed drastically as participants see lower demand for new homes. Vindicating these fears are a sharp drop in new building permits which are down 30%. Home order cancellations are also on the rise sharply. With all the impact combined, a rise in unsold inventory hit the markets, with marginal & first time home-buyers priced out of the market due to expensive mortgage rates. The US Federal Reserve is determined to tame inflation down to 2% even at the expense of hurting labor market. Should that occur, a soft labor market reduces appetite for expensive mortgage payments. That would set a real estate contagion in motion, pushing property prices even lower. TECHNICALS POINT TO BOUYANT S&P 500 AND SHAKY REAL ESTATE SELECT SECTOR Since bottoming in November 2022, the S&P 500 Index has rallied 11% as it faces resistance at its long term (200-day) moving average. The S&P 500 Index is trading below its point of control. In contrast, the S&P 500 Real Estate Select Sector index points being overbought based on RSI and is yet to reach its long-term moving average. The index is trading above its point of control making it wobbly and prone to downward correction. TRADE SETUP Spread trade requires that the notional value of a long leg is equivalent to the short leg of the trade. Therefore, five (5) lots of long position in CME E-Mini Micro S&P 500 Futures expiring in March 2023 requires two (2) lots of short position in CME E-Mini Real Estate Select Sector Futures in March 2023. CME offers margin credits for spread trades. Clearing brokers might charge differently from the Exchange imposed margins. CME E-Mini Micro S&P 500 Futures (5 lots): 5 x USD 5 x S&P 500 Index = 5 x 5 x 4015.25 = ~$100,381 CME E-Mini Real Estate Select Sector Futures (2 lots): 2 x USD 250 x S&P 500 Real Estate Select Sector Index = 2 x 250 x 194.65 = ~$97,325 Entry: 20.611 Target: 22.119 Stop Loss: 19.749 Reward/Risk Ratio: 1.75 Profit at Target: ~$7,350 Loss at Stop Loss: ~$4,200 MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER 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. This material has been published for general education and circulation only. It does not offer or solicit to buy or sell and does not address specific investment or risk management objectives, financial situation, or needs of any person. Advice should be sought from a financial advisor regarding the suitability of any investment or risk management product before investing or adopting any investment or hedging strategies. Past performance is not indicative of future performance. All examples used in this workshop are hypothetical and are used for explanation purposes only. Contents in this material is not investment advice and/or may or may not be the results of actual market experience. Mint Finance does not endorse or shall not be liable for the content of information provided by third parties. Use of and/or reliance on such information is entirely at the reader’s own risk. These materials are not intended for distribution to, or for use by or to be acted on by any person or entity located in any jurisdiction where such distribution, use or action would be contrary to applicable laws or regulations or would subject Mint Finance to any registration or licensing requirement.
Editors' picks
Long
18
When downside volatility becomes an advantage.It’s been a while since we looked at the Russell 2000. For the uninitiated, the Russell 2000 index is a small-cap stock market index that is made up of the smallest 2000 stocks in the Russell 3000 Index. The small-cap nature means a few things, volatility tends to be higher for one. And capturing this downside volatility using the Russell 2000 as compared with the S&P 500 has almost always proven more fruitful. When to take this trade you may ask? The recession bellwether indicator of the 2Y – 10Y yield spread is a simple place to start. With the benefit of hindsight, shorting each of the indexes at the peak ‘inversion’ points proves to be a decently successful strategy. Especially so using the Russell 2000. So the next question to ask is if we are near the peak point of inversion? To answer this, we have to circle back to research from last week, where we discussed the expected rate path for the Federal Reserve (Fed). In short, markets seem to be pricing in a Fed pause, followed by a pivot in the coming year. Looking back at the charts, this shift in stance (or pause) highlighted in the top chart generally marks the turning points for the 2y-10y yield curve inversion, highlighted in the bottom chart. Therefore, with markets expecting a pause as early as the first quarter, we suspect that the turning point for the yield curve inversion is just around the corner. On price action, the 1900 level proves to be of significant resistance, with multiple attempts to break through being rejected. As prices creep towards this resistance level once again, we think this might just provide another attractive opportunity for trading. Zooming out to a daily timeframe, the 0.382 Fibonacci levels marked by the previous high and low, also coincide close to the resistance levels on the shorter timeframe. The proven downside volatility, along with the coming turning point in the yield curve inversion, keeps us bearish on the Russell 2000. Additionally, the price action points to significant resistance overhead, around the 1900 level. Setting our stop at 2035 level (one Average True Range away & close to the next resistance level) and take the profit level at 1690, with each 1-point increment in the Russell 2000 futures contract equal to 50$. 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. A full version of the disclaimer is available in our profile description.
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What’s one of the quickest ways of cutting costs? You guessed it – cutting staff. And that’s exactly what Hasbro (along with countless other companies) are doing right now to try and get their spending back in line with their profits. In Hasbro’s case however, it might not be enough. Its share price has been tumbling and investors are starting to wonder how the company might get back on track.

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Do you really want to fight the FED?The current week will bring a lot of exciting events for market participants. Several big corporations are set to disclose their earnings for the fourth quarter of 2022, and the release of important financial data (Dallas FED Manufacturing Index, Chicago PMI, ISM Manufacturing, employment cost, CB consumer confidence, ADP employment change, etc.) is likely to give more mixed signals about the economy. As if it was not enough, U.S. central bankers are expected to raise interest rates by 25 basis points on Wednesday. We believe the FED’s rate hike will further weigh on the economy, resulting in more mom-and-pop businesses going bankrupt due to soaring debt servicing costs (and persistent inflation). Inadvertently, this will put more pressure on the labor market, which we expect to start revealing more underlying economic problems in the coming months. This view coincides with the Economic projections of Federal Reserve Board members and Federal Reserve Bank presidents from December 2022. These projections show that the FED anticipates the median unemployment rate to reach 4.6% in 2023. As a matter of fact, since 1949, each 1% increase in unemployment has accompanied a recession (unemployment in December was 3.5%). Therefore, we would argue that the FED implicitly points to a recession in the second half of 2023. Furthermore, the market sentiment is becoming overly bullish and complacent while not pricing in a significant economic downturn. As a result, we think market conditions are moving closer to creating a perfect setup for a big repricing event. With that said, we remain bearish on SPX (beyond the short-term) and maintain our price target at $3 400. Some of the companies reporting their earnings this week: Apple Alphabet Amazon Exxon Mobil Corp. Pfizer McDonald's Caterpillar Phillips 66 Spotify Meta Platforms Canon J&J Snacks Foods NXP Semiconductors Ryanair Holdings SoFi Technologies Whirpool Corp. Illustration 1.01 Illustration 1.01 shows the daily chart of SPX. The yellow arrow indicates the bullish breakout above the sloping resistance. Now, we will pay close attention to the price action. If the price breaks above the horizontal resistance, it may further bolster the bullish odds in the short term. Contrarily, the failure of the price to break above this level may signal exhaustion. Technical analysis Daily time frame = Bullish Weekly time frame = Slightly bullish Illustration 1.02 Illustration 1.02 displays the weekly chart of SPX. Yellow arrows indicate the price’s retracements toward the 50-week SMA, which represent corrections of the primary trend. Recently, the price broke above the 50-week SMA (unlike on the previous occasions). However, this does not necessarily mean the primary bearish trend has reversed. To support a bullish case in the short-term, we would like to see the price hold above the 50-week SMA. The breakout below this moving average will be bearish and hint at exhaustion. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
31
LINKUSDT - About to FACEMELT 🤯Hi Traders, Investors and Speculators of the Charts 📈📉 Altcoins have gained some ground on BTC and the markets are currently taking a breather after continues upside price action. Chainlink, however, has been trading range for an extended period of time. This is bullish according to the Wyckoff Method Analysis; pointed out on the chart to the left. LINKUSDT is currently trading in accumulation phase and a potential parabolic move towards the upside can be expected after a longer period of rangebound trading. The first large resistance zone is at $14, nearly a 110% increase form the current price just under $7. While you're here 👀 Checkout this trading plan for SYSUSDT . Syscoin is an altcoin with massive upside potential and currently trading in it's ideal accumulation zone (bargain!) : _______________________ 📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍 We thank you for your support ! CryptoCheck
Long
32
Chromia CHR price, good rise is still aheadToday we'll look at the situation on the chart of the CHRUSDT trading pair We don't know why, but we can see that the crypto community's interest in Chromia CHR is growing. Please share in the comments why CHR might be interesting for investment ? The chart shows that the potential for CHRUSD price to rise at least to the ATH is huge. Short- and medium-term target for growth is $0.23 The long-term growth target is $0.28, and ideally $0.48-0.50 In our opinion, the ideal CHR buy zone for medium and long-term investments is around $0.15 _____________________ Did you like our analysis? Leave a comment, like, and follow to get more
28
RLinda ! GOLD-> Breaking support, moving to consolidationGold makes all buyers nervous as the price breaks the prospect of a continued upward move. What's next? As we can see, the price breaks the support of the price channel and forms numerous retests, which can be considered as an attempt to fix the price under the line. There is a consolidation formation with the approximate boundaries of 1935-1917, which means that the price can trade within these boundaries for quite a long time. But at the same time there is a probability of a scenario for selling, provided the price breaks through the support of 1917, the price can go down to 1900. At the moment the price is in consolidation 1935-1917, the market passes into the phase of accumulation (phase of neutrality). It is acceptable to trade both selling and buying, but at the same time it is worth to observe the risks. Regards, R. Linda!
23
SPX: A Dangerous Resistance. 👀• The SPX is correcting today, back to its 21 ema in the 1h chart, as usual; • In the daily chart, there’s still some upside left, as we have yet to retest the 4,100 area, but the index is quite far from its 21 ema in this time frame; • If it loses the 21 ema in the 1h chart, or does a clear bearish structure, then it might correct to the 21 ema in the daily chart, around the 3,800; • As long as the trend remains bullish in the 1h chart, hardly a sharper correction will materialize; • Therefore, let’s pay attention to the 21 ema (1h), and on how the index will react from here, as it is near the resistance at 4,100; • So far, no clear top sign. I’ll keep you updated on this, as usual. Remember to follow me to keep in touch with my daily analyses!
Editors' picks
9
BITCOIN The month is closing on an enormous buy signalWe only look at Bitcoin (BTCUSD) on the monthly time-frame when it is necessary to keep a long-term perspective and not miss the big picture. This is one of those times as the monthly (1M) candle, following January's hyper strong rise and impressive start to the year, is now testing the 1M MA50 (blue trend-line). This is a critical Resistance and last time BTC closed above it was on July 2022. Needless to say, a close above it will be a massive buy signal. The true catalyst though may be the 1M RSI. As you see it is also testing its MA trend-line (yellow), having been trading below it since May 2022. The real interesting fact here is that every time the 1M RSI broke above its MA, Bitcoin was well past its bottom and trading on its new Bull Cycle. An astonishing feat is that the time range between those RSI monthly break-outs is quite similar, 39 months then 42 months and if it closes above it now, then 45 months. We can say that each sequence is 3 months longer. On top of that, the 1M candles that made those break-outs are not far off in terms of rises, each representing very strong monthly closings (+47%, +33%, +33% and now +40%). Based on all the above, it appears that the market is on the verge of breaking out to a new multi-month rally. Do you agree? Feel free to let me know in the comments section below! ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support me, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
Long
7
GBPUSD: Will the price go lower again before the FOMC?GBPUSD: Will the price go lower again before the FOMC? The market is moving against the US dollar during the European morning. All focus for the next two days will be on the FOMC (Wednesday, February 1) This is creating a pause in the market over the past 2 weeks. Technical Analysis: Price is testing a strong daily resistance coming from the top of the structure. The selling pressure near the top must be very high. Must be a strong reason for GBP to move above the 4-hour structure as long as the price has not made that move all these days. The economic calendar for today is almost empty and this will help the currency pairs to move down again. Thanks and good luck!
24
🥇 GOLD The price has stopped. Consolidation zone Gold goes into consolidation. Forms a 1940 resistance range (1935) - 1918 - support. The strong growth since the end of November is exhausting and the price needs to gather energy for further moves 1) A global H&S pattern is forming. 2) 1935, a strong resistance zone, is keeping the price down 3) Strong support area keeps the price down 4) Volume profile - price forms a strong consolidation. The area 1930-1925 is a heavy zone and it is not worth trading in this area 5) It is acceptable to sell from resistance 6) It is acceptable to sell from support This price halt and global reversal patterns may form the first signals for a possible correction. Trade carefully!
16

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Pine scripts

CVD - Cumulative Volume Delta (Chart)█   OVERVIEW This indicator displays cumulative ​volume delta (​CVD) as an on-chart oscillator. It uses intrabar analysis to obtain more precise ​volume delta information compared to methods that only use the chart's timeframe. The core concepts in this script come from our first ​ CVD indicator , which displays CVD​ values as plot candles in a separate indicator pane. In this script, CV​D values are scaled according to price ranges and represented on the main chart pane. █   CONCEPTS Bar polarity Bar polarity refers to the position of the close price relative to the open price. In other words, bar polarity is the direction of price change. Intrabars Intrabars are chart bars at a lower timeframe than the chart's. Each 1H chart bar of a 24x7 market will, for example, usually contain 60 bars at the lower timeframe of 1min, provided there was market activity during each minute of the hour. Mining information from intrabars can be useful in that it offers traders visibility on the activity inside a chart bar. Lower timeframes (LTFs) A lower timeframe is a timeframe that is smaller than the chart's timeframe. This script utilizes a LTF to analyze intrabars, or price changes within a chart bar. The lower the ​LTF, the more intrabars are analyzed, but the less chart bars can display information due to the limited number of intrabars that can be analyzed. Volume delta Volume delta is a measure that separates ​volume​ into "up" and "down" parts, then takes the difference to estimate the net demand for the asset. This approach gives traders a more detailed insight when analyzing volume​ and market sentiment. There are several methods for determining whether an asset's volume​ belongs in the "up" or "down" category. Some indicators, such as On Balance Volume​ and the Klinger Oscillator , use the change in price between bars to assign ​volume​ values to the appropriate category. Others, such as Chaikin Money Flow , make assumptions based on open, high, low, and close prices. The most accurate method involves using tick data to determine whether each transaction occurred at the bid or ask price and assigning the ​volume​ value to the appropriate category accordingly. However, this method requires a large amount of data on historical bars, which can limit the historical depth of charts and the number of symbols for which tick data is available. 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. This indicator uses intrabar analysis to achieve a compromise between simplicity and accuracy in calculating ​volume delta on historical bars. Our Volume Profile indicators use it as well. Other ​volume delta indicators in our Community Scripts , such as the Realtime 5D Profile , use real-time chart updates to achieve more precise ​volume delta calculations. However, these indicators aren't suitable for analyzing historical bars since they only work for real-time analysis. This is the logic we use to assign intrabar ​volume to the "up" or "down" category:  • 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 comprising a chart bar are analyzed, we calculate the net difference between "up" and "down" intrabar volume​ to produce the volume​ delta for the chart bar. █   FEATURES CVD resets The "cumulative" part of the indicator's name stems from the fact that calculations accumulate during a period of time. By periodically resetting the volume​ delta accumulation, we can analyze the progression of ​volume delta across manageable chunks, which is often more useful than looking at ​volume delta accumulated from the beginning of a chart's history. You can configure the reset period using the "CVD Resets" input, which offers the following selections:  • None : Calculations do not reset.  • On a fixed higher timeframe : Calculations reset on the higher timeframe you select in the "Fixed higher timeframe" field.  • At a fixed time that you specify.  • At the beginning of the regular session .  • On trend changes : Calculations reset on the direction change of either the Aroon indicator, Parabolic SAR , or Supertrend .  • On a stepped higher timeframe : Calculations reset on a higher timeframe automatically stepped using the chart's timeframe and following these rules: Chart TF ​HTF < 1min 1H < 3H 1D <= 12H 1W < 1W 1M >= 1W 1Y Specifying intrabar precision Ten options are included in the script to control the number of intrabars used per chart bar for calculations. The greater the number of intrabars per chart bar, the fewer chart bars can be analyzed. The first five options allow users to specify the approximate amount of chart bars to be covered:  • Least Precise (Most chart bars) : Covers all chart bars by dividing the current timeframe by four.   This ensures the highest level of intrabar precision while achieving complete coverage for the dataset.  • Less Precise (Some chart bars) & More Precise (Less chart bars) : These options calculate a stepped ​LTF in relation to the current chart's timeframe.  • Very precise (2min intrabars) : Uses the second highest quantity of intrabars possible with the 2min ​LTF.  • Most precise (1min intrabars) : Uses the maximum quantity of intrabars possible with the 1min ​LTF. The stepped lower timeframe for "Less Precise" and "More Precise" options is calculated from the current chart's timeframe as follows: Chart Timeframe Lower Timeframe Less Precise More Precise < 1hr 1min 1min < 1D 15min 1min < 1W ​2hr​ 30min > 1W 1D 60min The last five options allow users to specify an approximate fixed number of intrabars to analyze per chart bar. The available choices are 12, 24, 50, 100, and 250. The script will calculate the LTF​ which most closely approximates the specified number of intrabars per chart bar. Keep in mind that due to factors such as the length of a ticker's sessions and rounding of the LTF​, it is not always possible to produce the exact number specified. However, the script will do its best to get as close to the value as possible. As there is a limit to the number of intrabars that can be analyzed by a script, a tradeoff occurs between the number of intrabars analyzed per chart bar and the chart bars for which calculations are possible. Display This script displays raw or cumulative volume​ delta values on the chart as either line or histogram oscillator zones scaled according to the price chart, allowing traders to visualize volume​ activity on each bar or cumulatively over time. The indicator's background shows where CVD​ resets occur, demarcating the beginning of new zones. The vertical axis of each oscillator zone is scaled relative to the one with the highest price range, and the oscillator values are scaled relative to the highest volume​ delta. A vertical offset is applied to each oscillator zone so that the highest oscillator value aligns with the lowest price. This method ensures an accurate, intuitive visual comparison of volume​ activity within zones, as the scale is consistent across the chart, and oscillator values sit below prices. The vertical scale of oscillator zones can be adjusted using the "Zone Height" input in the script settings. This script displays labels at the highest and lowest oscillator values in each zone, which can be enabled using the "Hi/Lo Labels" input in the "Visuals" section of the script settings. Additionally, the oscillator's value on a chart bar is displayed as a tooltip when a user hovers over the bar, which can be enabled using the "Value Tooltips" input. Divergences occur when the polarity of ​volume delta does not match that of the chart bar. The script displays divergences as bar colors and background colors that can be enabled using the "Color bars on divergences" and "Color background on divergences" inputs. An information box in the lower-left corner of the indicator displays the HTF used for resets, the ​LTF used for intrabars, the average quantity of intrabars per chart bar, and the number of chart bars for which there is LTF data. This is enabled using the "Show information box" input in the "Visuals" section of the script settings. FOR Pine Script™ CODERS  • This script utilizes `ltf()` and `ltfStats()` from the lower_tf library.   The `ltf()` function determines the appropriate lower timeframe from the selected calculation mode and chart timeframe, and returns it in a format that can be used with request.security_lower_tf() .   The `ltfStats()` function, on the other hand, is used to compute and display statistical information about the lower timeframe in an information box.  • The script utilizes display.data_window and display.status_line to restrict the display of certain plots.   These new built-ins allow coders to fine-tune where a script’s plot values are displayed.  • The newly added session.isfirstbar_regular built-in allows for resetting the ​CVD segments at the start of the regular session.  • The VisibleChart library developed by our resident PineCoders team leverages the chart.left_visible_bar_time and chart.right_visible_bar_time variables to optimize the performance of this script.   These variables identify the opening time of the leftmost and rightmost visible bars on the chart, allowing the script to recalculate and draw objects only within the range of visible bars as the user scrolls.   This functionality also enables the scaling of the oscillator zones.   These variables are just a couple of the many new built-ins available in the chart.* namespace.   For more information, check out this blog post or look them up by typing "chart." in the Pine Script™ Reference Manual .  • Our ta library has undergone significant updates recently, including the incorporation of the `aroon()` indicator used as a method for resetting ​CVD segments within this script.   Revisit the library to see more of the newly added content! Look first. Then leap.
Editors' picks
Pine Script™ indicator
16
Smart Money Concepts [LuxAlgo]This all-in-one indicator displays real-time market structure (internal & swing BOS / CHoCH), order blocks, premium & discount zones, equal highs & lows, and much more...allowing traders to automatically mark up their charts with widely used price action methodologies. Following the release of our Fair Value Gap script, we received numerous requests from our community to release more features in the same category. "Smart Money Concepts" (SMC) is a fairly new yet widely used term amongst price action traders looking to more accurately navigate liquidity & find more optimal points of interest in the market. Trying to determine where institutional market participants have orders placed (buy or sell side liquidity) can be a very reasonable approach to finding more practical entries & exits based on price action. The indicator includes alerts for the presence of swing structures and many other relevant conditions. Features This indicator includes many features relevant to SMC, these are highlighted below: Full internal & swing market structure labeling in real-time Break of Structure (BOS) Change of Character (CHoCH) Order Blocks (bullish & bearish) Equal Highs & Lows Fair Value Gap Detection Previous Highs & Lows Premium & Discount Zones as a range Options to style the indicator to more easily display these concepts Settings Mode: Allows the user to select Historical (default) or Present, which displays only recent data on the chart. Style: Allows the user to select different styling for the entire indicator between Colored (default) and Monochrome. Color Candles: Plots candles based on the internal & swing structures from within the indicator on the chart. Internal Structure: Displays the internal structure labels & dashed lines to represent them. (BOS & CHoCH). Confluence Filter: Filter non-significant internal structure breakouts. Swing Structure: Displays the swing structure labels & solid lines on the chart (larger BOS & CHoCH labels). Swing Points: Displays swing points labels on chart such as HH, HL, LH, LL. Internal Order Blocks: Enables Internal Order Blocks & allows the user to select how many most recent Internal Order Blocks appear on the chart. Swing Order Blocks: Enables Swing Order Blocks & allows the user to select how many most recent Swing Order Blocks appear on the chart. Equal Highs & Lows: Displays EQH/EQL labels on chart for detecting equal highs & lows. Bars Confirmation: Allows the user to select how many bars are needed to confirm an EQH/EQL symbol on chart. Fair Value Gaps: Displays boxes to highlight imbalance areas on the chart. Auto Threshold: Filter out non-significant fair value gaps. Timeframe: Allows the user to select the timeframe for the Fair Value Gap detection. Extend FVG: Allows the user to choose how many bars to extend the Fair Value Gap boxes on the chart. Highs & Lows MTF: Allows the user to display previous highs & lows from daily, weekly, & monthly timeframes as significant levels. Premium/Discount Zones: Allows the user to display Premium, Discount, and Equilibrium zones on the chart Usage Users can see automatic CHoCH and BOS labels to highlight breakouts of market structure, which allows to determine the market trend. In the chart below we can see the internal structure which displays more frequent labels within larger structures. We can also see equal highs & lows (EQH/EQL) labels plotted alongside the internal structure to frequently give indications of potential reversals. In the chart below we can see the swing market structure labels. These are also labeled as BOS and CHoCH but with a solid line & larger text to show larger market structure breakouts & trend reversals. Users can be mindful of these larger structure labels while trading internal structures as displayed in the previous chart. Order blocks highlight areas where institutional market participants open positions, one can use order blocks to determine confirmation entries or potential targets as we can expect there is a large amount of liquidity at these order blocks. In the chart below we can see 2 potential trade setups with confirmation entries. The path outlined in red would be a potential short entry targeting the blue order block below, and the path outlined in green would be a potential long entry, targeting the red order blocks above. As we can see in the chart below, the bullish confirmation entry played out in this scenario with the green path outlined in hindsight. As price breaks though the order blocks above, the indicator will consider them mitigated causing them to disappear, and as per the logic of these order blocks they will always display 5 (by default) on the chart so we can now see more actionable levels. The Smart Money Concepts indicator has many other features and here we can see how they can also help a user find potential levels for price action trading. In the screenshot below we can see a trade setup using the Previous Monthly High, Strong High, and a Swing Order Block as a stop loss. Accompanied by the Premium from the Discount/Premium zones feature being used as a potential entry. A potential take profit level for this trade setup that a user could easily identify would be the 50% mark labeled with the Fair Value Gap & the Equilibrium all displayed automatically by the indicator. Conclusion This indicator highlights all relevant components of Smart Money Concepts which can be a very useful interpretation of market structure, liquidity, & more simply put, price action. The term was coined & popularized primarily within the forex community & by ICT while making its way to become a part of many traders' analysis. These concepts, with or without this indicator do not guarantee a trader to be trading within the presence of institutional or "bank-level" liquidity, there is no supporting data regarding the validity of these teachings.
Pine Script™ indicator
417
Harmonic Patterns Based Trend FollowerEarlier this week, published an idea on how harmonic patterns can be used for trend following. This script is an attempt to implement the same. 🎲 Process 🎯 Derive Zigzag and scan harmonic patterns for last 5 confirmed pivots 🎯 If a pattern is found, highest point of pattern will become the bullish zone and lower point of the pattern will become bearish zone. 🎯 Since it is trend following method, when price reaches bullish zone, then the trend is considered as bullish and when price reaches bearish zone, the trend is considered as bearish. 🎯 If price does not touch both regions, then trend remains unchanged. 🎯 Bullish and bearish zone will change as and when new patterns are formed. 🎲 Note Patterns are not created on latest pivot as last pivot will be unconfirmed and moving. Due to this, patterns appear after certain delay - patterns will not be real time. But, this is expected and does not impact the overall process. When new pattern formed When price breaks over the zones 🎲 Output 🎯 Patterns formed are drawn in blue coloured lines. Due to pine limitation of max 500 lines, older patterns automatically get deleted when new ones come. 🎯 Bullish Zone and Bearish Zone are plotted in green and red colours and the zone will change whenever new pattern comes along. 🎯 Bar colors are changed according to calculated trend. Trend value can be 1 or -1 based on the current trend. You can also find the value in data window. 🎯 For simplicity purpose, input option for selection of specific patterns are not provided and also pattern names are not displayed on the chart.
Editors' picks
Pine Script™ indicator
30
Hurst Diamond Notation PivotsThis is a fairly simple indicator for diamond notation of past hi/lo pivot points, a common method in Hurst analysis. The diamonds mark the troughs/peaks of each cycle. They are offset by their lookback and thus will not 'paint' until after they happen so anticipate accordingly. Practically, traders can use the average length of past pivot periods to forecast future pivot periods in time🔮. For example, if the average/dominant number of bars in an 80-bar pivot point period/cycle is 76, then a trader might forecast that the next pivot could occur 76-ish bars after the last confirmed pivot. The numbers/labels on the y-axis display the cycle length used for pivot detection. This indicator doesn't repaint, but it has a lot of lag; Please use it for forecasting instead of entry signals. This indicator scans for new pivots in the form of a rainbow line and circle; once the hi/lo has happened and the lookback has passed then the pivot will be plotted. The rainbow color per wavelength theme seems to be authentic to Hurst (or modern Hurst software) and has been included as a default.
Editors' picks
Pine Script™ indicator
28
Machine Learning: Lorentzian Classification█ OVERVIEW A Lorentzian Distance Classifier (LDC) is a Machine Learning classification algorithm capable of categorizing historical data from a multi-dimensional feature space. This indicator demonstrates how Lorentzian Classification can also be used to predict the direction of future price movements when used as the distance metric for a novel implementation of an Approximate Nearest Neighbors (ANN) algorithm. █ BACKGROUND In physics, Lorentzian space is perhaps best known for its role in describing the curvature of space-time in Einstein's theory of General Relativity (2). Interestingly, however, this abstract concept from theoretical physics also has tangible real-world applications in trading. Recently, it was hypothesized that Lorentzian space was also well-suited for analyzing time-series data (4), (5). This hypothesis has been supported by several empirical studies that demonstrate that Lorentzian distance is more robust to outliers and noise than the more commonly used Euclidean distance (1), (3), (6). Furthermore, Lorentzian distance was also shown to outperform dozens of other highly regarded distance metrics, including Manhattan distance, Bhattacharyya similarity, and Cosine similarity (1), (3). Outside of Dynamic Time Warping based approaches, which are unfortunately too computationally intensive for PineScript at this time, the Lorentzian Distance metric consistently scores the highest mean accuracy over a wide variety of time series data sets (1). Euclidean distance is commonly used as the default distance metric for NN-based search algorithms, but it may not always be the best choice when dealing with financial market data. This is because financial market data can be significantly impacted by proximity to major world events such as FOMC Meetings and Black Swan events. This event-based distortion of market data can be framed as similar to the gravitational warping caused by a massive object on the space-time continuum. For financial markets, the analogous continuum that experiences warping can be referred to as "price-time". Below is a side-by-side comparison of how neighborhoods of similar historical points appear in three-dimensional Euclidean Space and Lorentzian Space: This figure demonstrates how Lorentzian space can better accommodate the warping of price-time since the Lorentzian distance function compresses the Euclidean neighborhood in such a way that the new neighborhood distribution in Lorentzian space tends to cluster around each of the major feature axes in addition to the origin itself. This means that, even though some nearest neighbors will be the same regardless of the distance metric used, Lorentzian space will also allow for the consideration of historical points that would otherwise never be considered with a Euclidean distance metric. Intuitively, the advantage inherent in the Lorentzian distance metric makes sense. For example, it is logical that the price action that occurs in the hours after Chairman Powell finishes delivering a speech would resemble at least some of the previous times when he finished delivering a speech. This may be true regardless of other factors, such as whether or not the market was overbought or oversold at the time or if the macro conditions were more bullish or bearish overall. These historical reference points are extremely valuable for predictive models, yet the Euclidean distance metric would miss these neighbors entirely, often in favor of irrelevant data points from the day before the event. By using Lorentzian distance as a metric, the ML model is instead able to consider the warping of price-time caused by the event and, ultimately, transcend the temporal bias imposed on it by the time series. For more information on the implementation details of the Approximate Nearest Neighbors (ANN) algorithm used in this indicator, please refer to the detailed comments in the source code. █ HOW TO USE Below is an explanatory breakdown of the different parts of this indicator as it appears in the interface: Below is an explanation of the different settings for this indicator: General Settings: Source - This has a default value of "hlc3" and is used to control the input data source. Neighbors Count - This has a default value of 8, a minimum value of 1, a maximum value of 100, and a step of 1. It is used to control the number of neighbors to consider. Max Bars Back - This has a default value of 2000. Feature Count - This has a default value of 5, a minimum value of 2, and a maximum value of 5. It controls the number of features to use for ML predictions. Color Compression - This has a default value of 1, a minimum value of 1, and a maximum value of 10. It is used to control the compression factor for adjusting the intensity of the color scale. Show Exits - This has a default value of false. It controls whether to show the exit threshold on the chart. Use Dynamic Exits - This has a default value of false. It is used to control whether to attempt to let profits ride by dynamically adjusting the exit threshold based on kernel regression. Feature Engineering Settings: Note: The Feature Engineering section is for fine-tuning the features used for ML predictions. The default values are optimized for the 4H to 12H timeframes for most charts, but they should also work reasonably well for other timeframes. By default, the model can support features that accept two parameters (Parameter A and Parameter B, respectively). Even though there are only 4 features provided by default, the same feature with different settings counts as two separate features. If the feature only accepts one parameter, then the second parameter will default to EMA-based smoothing with a default value of 1. These features represent the most effective combination I have encountered in my testing, but additional features may be added as additional options in the future. Feature 1 - This has a default value of "RSI" and options are: "RSI", "WT", "CCI", "ADX". Feature 2 - This has a default value of "WT" and options are: "RSI", "WT", "CCI", "ADX". Feature 3 - This has a default value of "CCI" and options are: "RSI", "WT", "CCI", "ADX". Feature 4 - This has a default value of "ADX" and options are: "RSI", "WT", "CCI", "ADX". Feature 5 - This has a default value of "RSI" and options are: "RSI", "WT", "CCI", "ADX". Filters Settings: Use Volatility Filter - This has a default value of true. It is used to control whether to use the volatility filter. Use Regime Filter - This has a default value of true. It is used to control whether to use the trend detection filter. Use ADX Filter - This has a default value of false. It is used to control whether to use the ADX filter. Regime Threshold - This has a default value of -0.1, a minimum value of -10, a maximum value of 10, and a step of 0.1. It is used to control the Regime Detection filter for detecting Trending/Ranging markets. ADX Threshold - This has a default value of 20, a minimum value of 0, a maximum value of 100, and a step of 1. It is used to control the threshold for detecting Trending/Ranging markets. Kernel Regression Settings: Trade with Kernel - This has a default value of true. It is used to control whether to trade with the kernel. Show Kernel Estimate - This has a default value of true. It is used to control whether to show the kernel estimate. Lookback Window - This has a default value of 8 and a minimum value of 3. It is used to control the number of bars used for the estimation. Recommended range: 3-50 Relative Weighting - This has a default value of 8 and a step size of 0.25. It is used to control the relative weighting of time frames. Recommended range: 0.25-25 Start Regression at Bar - This has a default value of 25. It is used to control the bar index on which to start regression. Recommended range: 0-25 Display Settings: Show Bar Colors - This has a default value of true. It is used to control whether to show the bar colors. Show Bar Prediction Values - This has a default value of true. It controls whether to show the ML model's evaluation of each bar as an integer. Use ATR Offset - This has a default value of false. It controls whether to use the ATR offset instead of the bar prediction offset. Bar Prediction Offset - This has a default value of 0 and a minimum value of 0. It is used to control the offset of the bar predictions as a percentage from the bar high or close. Backtesting Settings: Show Backtest Results - This has a default value of true. It is used to control whether to display the win rate of the given configuration. █ WORKS CITED (1) R. Giusti and G. E. A. P. A. Batista, "An Empirical Comparison of Dissimilarity Measures for Time Series Classification," 2013 Brazilian Conference on Intelligent Systems, Oct. 2013, DOI: 10.1109/bracis.2013.22. (2) Y. Kerimbekov, H. Ş. Bilge, and H. H. Uğurlu, "The use of Lorentzian distance metric in classification problems," Pattern Recognition Letters, vol. 84, 170–176, Dec. 2016, DOI: 10.1016/j.patrec.2016.09.006. (3) A. Bagnall, A. Bostrom, J. Large, and J. Lines, "The Great Time Series Classification Bake Off: An Experimental Evaluation of Recently Proposed Algorithms." ResearchGate, Feb. 04, 2016. (4) H. Ş. Bilge, Yerzhan Kerimbekov, and Hasan Hüseyin Uğurlu, "A new classification method by using Lorentzian distance metric," ResearchGate, Sep. 02, 2015. (5) Y. Kerimbekov and H. Şakir Bilge, "Lorentzian Distance Classifier for Multiple Features," Proceedings of the 6th International Conference on Pattern Recognition Applications and Methods, 2017, DOI: 10.5220/0006197004930501. (6) V. Surya Prasath et al., "Effects of Distance Measure Choice on KNN Classifier Performance - A Review." . █ ACKNOWLEDGEMENTS @veryfid - For many invaluable insights, discussions, and advice that helped to shape this project. @capissimo - For open sourcing his interesting ideas regarding various KNN implementations in PineScript, several of which helped inspire my original undertaking of this project. @RikkiTavi - For many invaluable physics-related conversations and for his helping me develop a mechanism for visualizing various distance algorithms in 3D using JavaScript @jlaurel - For invaluable literature recommendations that helped me to understand the underlying subject matter of this project. @annutara - For help in beta-testing this indicator and for sharing many helpful ideas and insights early on in its development. @jasontaylor7 - For helping to beta-test this indicator and for many helpful conversations that helped to shape my backtesting workflow @meddymarkusvanhala - For helping to beta-test this indicator @dlbnext - For incredibly detailed backtesting testing of this indicator and for sharing numerous ideas on how the user experience could be improved.
Editors' picks
Pine Script™ indicator
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RedK K-MACD : a MACD with some more musclesMoving Averages are probably the most commonly used analysis tools, and MACD is possibly the first charting indicator a trader gets to learn about. MACD Basic concept ---------------------------- Without repeating all the tons of documentation about what MACD does, let's quickly re-visit the MACD concept from a 10-mile altitude (note we're keen on simplifying here rather than being technically accurate - so please forgive the use of any "common lingos") - MACD goal is to represent the distance between 2 Moving Averages (MAs) - one fast and one slow, relatively - as an unrestricted zero-based oscillator. - The value of the main MACD line is the distance, or the displacement between the 2 MA's - usually a signal line is used (which is another MA of that distance value) to enable better visualization of the change (and rate of change, since this is all depicted on a time axis) of that displacement - this represents price momentum (price movement in the recent period versus movements for a relatively longer period). - the difference between the main MACD line and its signal is then represented as a histogram above and below the zero line. in this case, that histogram is really redundant, since it shows a value that is already represented visually by the main line and its signal line. How K-MACD is different --------------------------------- K-MACD takes that simple concept of the classic MACD and expands around it - the idea is to use the same simple approach to representing price momentum while bringing in more insight to price moves in the short, medium and long terms, ability to represent more than 2 MA's and to enable better identification of tradeable patterns (like Volatility Contraction and others) - while still keeping things simple and visually clean. K-MACD is an indicator that allows us to view how price moves against 3 moving averages: a fast / slow pair, and a "market" Filter or Baseline (very long) that will be used as a flag for Bear/Bull market mode. Many traders and trading literature use the 200 day (40 week) SMA as that key filter so in total, there are 4 MA lines in K-MACD (excluding the "orange" signal line): * Price Proxy: Which is a very fast moving average that will represent the price itself - let's use a WMA(3) or something close to that here - there will be a signal line to enable better visualization of this similar to a classic MACD - that's the orange line * Fast & Slow MA's : Use whatever represents the "medium term" momentum for your trading - Some traders use 20 and 50, others use 10 and 20 .. if on your price chart, you keep using a pair of MA's for this, use the same settings in K-MACD - these will be represented by the 3-color Momentum Bars that fluctuate above and below the baseline * Filter/Baseline MA: Should be your long (Bullish/Bearish Mode) MA. so 100 or 200 or any other value you consider your market to be bearish below and bullish above. on K-MACD this is actually the blue zero line - everything else is "relative" to it Review the sample chart which explains various elements and the "price chart" setup that K-MACD represents. With K-MACD you can clean up your chart from those various Moving Averages - or use a different set than the ones you already have K-MACD represent - or other indicators (like ATR channels..etc) Other "muscles" in the K-MACD --------------------------------------------- - Relative vs Classic Calculation Mode A key issue with the classic MACD is that the displacement between the 2 moving averages is represented as "absolute or direct" values - as the price of the underlying increases with time, you can't really use these values to make useful comparison between the past and now (see below example) - also you can't use them to compare 2 different instruments. - The "Relative" calculation option in K-MACD addresses that issue by relating all "distances" to the Baseline MA as percentage (above or below) - you can see this clear when you look at the above chart the far left versus the far right and compare K-MACD with the classic MACD - the Classic option is still available - More MA "type" options for all MA lines: choose between SMA, EMA, WMA, and RSS_WMA (which i use a lot in my trading and is my default for the Price Proxy) - More Alerts: a total or 9 alerts (in 3 groups) are available with K-MACD (Momentum above or below baseline, Price Proxy crossing signal line, and Price Proxy crossing baseline) - New 52 week High / Low markers: These will show as Green/red circles on the zero line in K-MACD. this will only work for 1D timeframe and above, i'm just using a simple approach and would like to keep it that way. - i know i added some more features not covered above :) -- if you have questions about any of the settings, feel free to ask below Closing thoughts ------------------------- K-MACD is a combination of couple of indicators i published in the past (xMACD and Mo_Bars) - so you can go back and read about them if needed - I then added improvements to accommodate ideas from swing trading literature and common practices that i plan to focus on in future. So K-MACD is really part of my own trading setup. I assume here that most traders are familiar with what a MACD is - so kept this post short - if you thing we should expand more about the concepts covered here let me know in the comments - i can make some separate posts with examples and more details. I hope many fellow traders find this work useful - and feel free let me know in comments below if you do.
Pine Script™ indicator
12
Fair value bands (Dynamic risk levels, fair value metrics)— Overview Fair value bands, like other band tools, depict dynamic points in price where price behaviour is normal or abnormal, i.e. trading at/around mean (price at fair value) or deviating from mean (price outside fair value). Unlike constantly readjusting standard deviation based bands, fair value bands are designed to be smooth and constant, based on typical historical deviations. The script calculates pivots that take place above/below fair value basis and forms median deviation bands based on this information. These points are then multiplied up to 3, representing more extreme deviations. By default, the script uses OHLC4 and SMA 20 as basis for the bands. Users can form their preferred fair value basis using following options: Price source - Standard OHLC values - HL2 (High + low / 2) - OHLC4 (Open + high + low + close / 4) - HLC3 (High + low + close / 3) - HLCC4 (High + low + close + close / 4) Smoothing - SMA - EMA - HMA - RMA - WMA - VWMA - Median Once fair value basis is established, some additional customization options can be employed: Trend mode Direction based Cross based Trend modes affect fair value basis color that indicates trend direction. Direction based trend considers only the direction of the defined fair value basis, i.e. pointing up is considered an uptrend, vice versa for downtrend. Cross based trends activate when selected source (same options as price source) crosses fair value basis. These sources can be set individually for uptrend/downtrend cross conditions. By default, the script uses cross based trend mode with low and high as sources. Cross based (downtrend not triggered) vs. direction based (downtrend triggered): Threshold band Threshold band is calculated using typical deviations when price is trading at fair value basis. In other words, a little bit of "wiggle room" is added around the mean based on expected deviation. This feature is useful for cross based trends, as it allows filtering insignificant crosses that are more likely just noise. By default, threshold band is calculated based on 1x median deviation from mean. Users can increase/decrease threshold band width via input menu for more/less noise filtering, e.g. 2x threshold band width would require price to cross wiggle room that is 2x wider than typical, 0x erases threshold band altogether. Deviation bands Width of deviation bands by default is based on 1x median deviations and can be increased/decreased in a similar manner to threshold bands. Each combination of customization options produces varying behaviour in the bands. To measure the behaviour and finding fairest representation of fair and unfair value, some data is gathered. — Fair value metrics Space between each band is considered a lot, named +3, +2, +1, -1, -2, -3. For each lot, time spent and volume relative to volume moving average (SMA 20) is recorded each time price is trading in a given lot: Depending on the asset, timeframe and chosen fair value basis, shape of the distributions vary. However, practically always time is distributed in a normal bell curve shape, being highest at lots +1 to -1, gradually decreasing the further price is from the mean. This is hardly surprising, but it allows accurately determining dynamic areas of normal and abnormal price behaviour (i.e. low risk area between +1 and -1, high risk area between +-2 to +-3). Volume on the other hand is typically distributed the other way around, being lowest at lots +1 to -1 and highest at +-2 to +-3. When time and volume are distributed like so, we can conclude that 1) price being outside fair value is a rare event and 2) the more price is outside fair value, the more anomaly behaviour in volume we tend to find. Viewing metric calculations Metric calculation highlights can be enabled from the input menu, resulting in a lot based coloring and visibility of each lot counter (time, cumulative relative volume and average relative volume) in data window: — Alerts Available alerts are the following: Individual - High crossing deviation band (bands +1 to +3 ) - Low crossing deviation band (bands -1 to -3 ) - Low at threshold band in an uptrend - High at threshold band in a downtrend - New uptrend - New downtrend Grouped - New uptrend or downtrend - Deviation band cross (+1 or -1) - Deviation band cross (+2 or -2) - Deviation band cross (+3 or -3) — Practical guide Example #1 : Risk on/risk off trend following Ideal trend stays inside fair value and provides sufficient cool offs between the moves. When this is the case, fair value bands can be used for sensible entry/exit levels within the trend. Example #2 : Mean reversions When price shows exuberance into an extreme deviation, followed by a stall and signs of exhaustion (wicks), an opportunity for mean reversion emerges. The higher the deviation, the more volatility in the move, the more signalling of exhaustion, the better. Example #3 : Tweaking bands for desired behaviour The faster the length of fair value basis, the more momentum price needs to hit extreme deviation levels, as bands too are moving faster alongside price. Decreasing fair value basis length typically leads to more quick and aggressive deviations and less steady trends outside fair value.
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Pine Script™ indicator
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Dynamic Linear Regression ChannelsPlots new linear regression channels from points where a previous channel is broken thus keeping the length of bars in the trend dynamic. Regression channels are useful in detecting trend changes, support and resistance levels and to trade mean reversions. Note: Setting higher values of upper and lower deviation may result in error if the price never breaks the channel and the script references too many bars than supported.
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Pine Script™ indicator
34
Musashi_Fractal_Dimension === Musashi-Fractal-Dimension === This tool is part of my research on the fractal nature of the markets and understanding the relation between fractal dimension and chaos theory. To take full advantage of this indicator, you need to incorporate some principles and concepts: - Traditional Technical Analysis is linear and Euclidean, which makes very difficult its modeling. - Linear techniques cannot quantify non-linear behavior - Is it possible to measure accurately a wave or the surface of a mountain with a simple ruler? - Fractals quantify what Euclidean Geometry can’t, they measure chaos, as they identify order in apparent randomness. - Remember: Chaos is order disguised as randomness. - Chaos is the study of unstable aperiodic behavior in deterministic non-linear dynamic systems - Order and randomness can coexist, allowing predictability. - There is a reason why Fractal Dimension was invented, we had no way of measuring fractal-based structures. - Benoit Mandelbrot used to explain it by asking: How do we measure the coast of Great Britain? - An easy way of getting the need of a dimension in between is looking at the Koch snowflake. - Market prices tend to seek natural levels of ranges of balance. These levels can be described as attractors and are determinant. Fractal Dimension Index ('FDI') Determines the persistence or anti-persistence of a market. - A persistent market follows a market trend. An anti-persistent market results in substantial volatility around the trend (with a low r2), and is more vulnerable to price reversals - An easy way to see this is to think that fractal dimension measures what is in between mainstream dimensions. These are: - One dimension: a line - Two dimensions: a square - Three dimensions: a cube. --> This will hint you that at certain moment, if the market has a Fractal Dimension of 1.25 (which is low), the market is behaving more “line-like”, while if the market has a high Fractal Dimension, it could be interpreted as “square-like”. - 'FDI' is trend agnostic, which means that doesn't consider trend. This makes it super useful as gives you clean information about the market without trying to include trend stuff. Question: If we have a game where you must choose between two options. 1. a horizontal line 2. a vertical line. Each iteration a Horizontal Line or a Square will appear as continuation of a figure. If it that iteration shows a square and you bet vertical you win, same as if it is horizontal and it is a line. - Wouldn’t be useful to know that Fractal dimension is 1.8? This will hint square. In the markets you can use 'FD' to filter mean-reversal signals like Bollinger bands, stochastics, Regular RSI divergences, etc. - Wouldn’t be useful to know that Fractal dimension is 1.2? This will hint Line. In the markets you can use 'FD' to confirm trend following strategies like Moving averages, MACD, Hidden RSI divergences. Calculation method: Fractal dimension is obtained from the ‘hurst exponent’. 'FDI' = 2 - 'Hurst Exponent' Musashi version of the Classic 'OG' Fractal Dimension Index ('FDI') - By default, you get 3 fast 'FDI's (11,12,13) + 1 Slow 'FDI' (21), their interaction gives useful information. - Fast 'FDI' cross will give you gray or red dots while Slow 'FDI' cross with the slowest of the fast 'FDI's will give white and orange dots. This are great to early spot trend beginnings or trend ends. - A baseline (purple) is also provided, this is calculated using a 21 period Bollinger bands with 1.618 'SD', once calculated, you just take midpoint, this is the 'TDI's (Traders Dynamic Index) way. The indicator will print purple dots when Slow 'FDI' and baseline crosses, I see them as Short-Term cycle changes. - Negative slope 'FDI' means trending asset. - Positive most of the times hints correction, but if it got overextended it might hint a rocket-shot. TDI Ranges: - 'FDI' between 1.0≤ 'FDI' ≤1.4 will confirm trend following continuation signals. - 'FDI' between 1.6≥ 'FDI' ≥2.0 will confirm reversal signals. - 'FDI' == 1.5 hints a random unpredictable market. Fractal Attractors - As you must know, fractals tend orbit certain spots, this are named Attractors, this happens with any fractal behavior. The market of course also shows them, in form of Support & Resistance, Supply Demand, etc. It’s obvious they are there, but now we understand that they’re not linear, as the market is fractal, so simple trendline might not be the best tool to model this. - I’ve noticed that when the Musashi version of the 'FDI' indicator start making a cluster of multicolor dots, this end up being an attractor, I tend to draw a rectangle as that area as price tend to come back (I still researching here). Extra useful stuff - Momentum / speed: Included by checking RSI Study in the indicator properties. This will add two RSI’s (9 and a 7 periods) plus a baseline calculated same way as explained for 'FDI'. This gives accurate short-term trends. It also includes RSI divergences (regular and hidden), deactivate with a simple check in the RSI section of the properties. - BBWP (Bollinger Bands with Percentile): Efficient way of visualizing volatility as the percentile of Bollinger bands expansion. This line varies color from Iced blue when low volatility and magma red when high. By default, comes with the High vols deactivated for better view of 'FDI' and RSI while all studies are included. DDWP is trend agnostic, just like 'FDI', which make it very clean at providing information. - Ultra Slow 'FDI': I noticed that while using BBWP and RSI, the indicator gets overcrowded, so there is the possibility of adding only one 'FDI' + its baseline. Final Note: I’ve shown you few ways of using this indicator, please backtest before using in real trading. As you know trading is more about risk and trade management than the strategy used. This still a work in progress, I really hope you find value out of it. I use it combination with a tool named “Musashi_Katana” (also found in TradingView). Best! Musashi
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Pine Script™ indicator
24
True Trend Average BandsThis is the indicator I am most proud of. After reading Glenn Neely's book "Mastering Eliott Waves" / "Neowave" and chatting with @timwest who got acknowledged by Neely, we came up with the idea of an moving average which does calculate the real average price since a trend started. Addionally I adapted a method from Neely Neowave and Tim Wests TimeAtMode to not force a timeframe on a chart but instead let the charts data decide which timeframe to use, to then calculate the real average price since the trend started. It took me a while to get this right and coded, so take a moment and dive deeper and you might learn something new. We assume that the price is in multiple trends on multiple timeframes, this is caused by short term traders, long term traders and investors who trade on different timeframes. To find out in which timeframe the important trends are, we have to look out for significant lows and highs. Then we change the timeframe in the chart to a value so that we have 10 to 20 bars since the significant low/high. While new bars are printed, and we reach more than 20 bars, we have to switch to a higher timeframe so we have 10 to 20 bars again. In the chart you see two significant trends: a downtrend on the 3 week timeframe and an uptrend from the 2 month timeframe. Based on the logic I have described, these are the two important timeframes to watch right now for the spx (there is another uptrend in the yearly chart, which is not shown here). Now that we understand how to find the important timeframes, let's look what the magic in this script is that tells us the real average price since a trend started. I developed a new type of moving average, which includes only the prices since a trend started. The difference to the regular sma is that it will not include prices which happened before the significant low or high happened. For example, if a top happened in a market 10 days ago, the regular sma20 would be calculated by 10 bars which happened before the top and 10 bars which happened after the top. If we want to know the average price of the last 10 bars we manually have to change the ma20 to the ma10 which is annoying manual work, additionally even if we use the ma10 in this case, and we look at yesterday's bar the ma10 will include 9 bars from after the top and one bar before the top, so the ma10 would only show the real average price for the current bar which is not what we want. To come up with a solution to this problem, the True Trend Average searches for the lowest/highest bar in a given period (20 bars). Then starts to calculate the average value since the low/high. For example: if the price reaches a new 20 day high and then trades below it, the day of the high will be the sma1, the day after it's the sma2, ... up to the maximum look back length. This way, we always know what the average price would have been if someone sold/bought a little bit every bar of his investment since the high/low. Why is this even important? Let's assume we missed selling the top or buying the low, and think it would have been at least better to buy/sell a little bit since the new trend started. Once the price reaches the true trend average again, we can buy/sell, and it would be as good as selling/buying a little bit every day. We find prices to buy the dip and sell the bounce, which are as good as scaling in/out. There is a lot more we can learn from these price levels but I think it is better to let you figure out yourself what you can learn from the information given by this indicator. Think about how market participants who accumulate or distribute feel when prices are above or below certain levels. Now that we understand this new type of moving average, let's look into the lines we see in the chart: The upper red band line shows the true trend average high price since the last significant top within 20 bars. The lower red band line shows the true trend average hl2 price since the last significant top within 20 bars. The lower green band line shows the true trend average low price since the last significant low within 20 bars. The upper green band line shows the true trend average hl2 price since the last significant low within 20 bars. The centerline is the average between the upper red band and the lower green band. The teal lines show 1 standard deviation from the outer bands. Before today only a few people had access to this indicator, now that it is public and open source, I am curious if you will find it useful and what you will do with it. Please share your findings. /edit: The chart only shows the 3week timeframe so here are the other two trends from the 2month and 1year timeframe
Pine Script™ indicator
10

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Educational ideas

10 Golden rules of investing Investments are neither complex nor difficult. There is a set of golden rules that help investors stay on track to achieve their ultimate financial goals. When it comes to money management, investments play a key role in creating wealth. At first, it can be difficult for you to decide which product to choose, where to invest, how much to keep, and so on. But as you continue, you will get a better understanding of how the investment market works. Keep in mind that no matter how disciplined you are and no matter what rules you follow, investing comes with risks and you can still get back less than you invested. Here is our summary of the 10 Rules Every Investor Should Know: 1. Do your own research Don't blindly trust what someone says on the internet, make sure it's backed up by multiple credible sources. Most people are biased about the cryptocurrencies they own, so naturally they can't say anything but good things about the coins in their portfolio while attacking the ones that aren't. Do your best to understand the positives and negatives of cryptocurrencies and develop an unbiased opinion. 2. Set clear goals Knowing your financial goals and the time frame for which you are investing can help you stick to your strategy. For example, if you have long-term goals, such as saving money for your children's education or for a personal retirement that may be decades away, you may be less tempted to invest before that time. 3. Never invest in something you don't understand Before investing in any investment, take the time to research it thoroughly so you understand exactly what is involved and what the risks are. Funds, for example, issue a Key Investor Information Document (KIID) or a Key Information Document (KID) that explains the fund's main functions and fees. You must read this before investing. If you are investing in individual projects, make sure you know what the company is doing and how it plans to make money in the future. In the cryptocurrency market, projects also have various documentation, white paper, roadmap. Before investing, you need to study all this and subscribe to the social networks of the project in order to understand the general mood of the project and investors and be aware of the latest news. 4. Don't put all your eggs in one basket Today, this rule is more relevant than ever. We all know the saying "don't put all your eggs in one basket", but it's especially important to apply this rule when investing. Spreading your money across a range of different asset types and geographies means you won't be too dependent on one type of investment or region. This means that if one of them performs poorly, some of the other investments may make up for those losses, although there are no guarantees. 5. The greater the potential return, the higher the level of risk The prospect of higher returns may be attractive, but there is usually a greater risk of losing funds. Think carefully about your approach to risk. You may be more comfortable choosing less risky investments, even if returns are likely to be lower. However, remember that no investment is without risk, and there is always a chance that you can return less than you invested. If, nevertheless, the temptation to enter a highly profitable and high-risk asset eats you up from the inside - invest, however, with a very small part of your total deposit. 6. Long-term investments are not always accompanied by high returns. First of all, it is necessary to understand for ourselves what profitability we want to receive from a company or project. Reading the documentation and roadmap, we do not assume that the company will exist for decades. First of all, we argue that with due efforts, the capitalization of the project can double. Yes, it may take several years. However, the goal should be expressed in terms of percentage of profit, and not in terms of the investment period. After all, it may happen that the value of assets will return to the price values of a decade ago or, even worse, the company will simply close. 7. If something seems too good to be true, it usually is. Beware of highly speculative investments that seem too good to be true, don't follow the crowd and invest (or sell) just because other people do. For example, many investors invested in the digital currency bitcoin in the second half of 2017, when its price rose, but its value fell by half in a month. In mid-December 2017, Bitcoin was trading at almost $20,000, but by mid-January 2018, it had fallen below $10,000. Those who at that moment could not cope with stress and sold “at the bottom” lost A fortune. 8. Income reinvestment or cost averaging can help increase overall returns The DCA strategy helps to avoid asset volatility and allows you not to constantly monitor a company or project. If you are not looking for a quick return on your investment, then you may want to consider reinvesting your funds to buy more of your investment, which will potentially increase in value and increase your overall profit. Simply put, your earnings also generate a return, which is known as compound interest. However, keep in mind that reinvesting income rather than receiving it as cash means you could lose it or see its value drop. If any income you receive is automatically reinvested – for example, if you invest in shares directly and subscribe to Automatic Dividend Reinvestment (ADR) – you will also not be able to choose the price at which you will buy any additional shares, so it can be low or high. 9. Review your portfolio and rebalance Markets are constantly changing, and so are your investments. You will be investing for many years, so it is important to carry out regular checks to stay on top of your money. Sometimes your initial asset allocation can get out of balance, so you need to rebalance it. For example, the market can fluctuate in different directions, effectively changing the percentage of your investment. Do you want to work on maintaining a percentage that will help you reach your goals? If you don't take action, you can have a lot more of one asset class than another when the market fluctuates. As part of the rebalancing process, you buy or sell certain investments to return to your desired asset allocation. This can help prevent a portfolio from being too aggressive when the goal is to minimize risk. In addition, by rebalancing you will avoid having too many assets of a certain class and restore your portfolio back to the original set of assets. 10. Don't try to time the market In an ideal world, you could buy investments just before they appreciate and sell before they fall. However, no one knows which direction the stock markets will move next, so trying to predict market ups and downs can result in you buying or selling at the most inopportune times. Buying and holding investments can help you stay committed to your investments for the long term by avoiding panic decisions when the markets are volatile. If you want to start investing, use these golden rules. By using these simple investment strategies, you can make your money work for you and take care of your future. If you think that the potential reward is not worth the risk, then investing is not for you.
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✅ THE ULTIMATE BEGINNER'S GUIDE TO INVESTING 👊There are a lot of myths surrounding investing. Some say that it is too complicated for a beginner, and you can't figure it out on your own. Others portray the image of a successful investor who travels all the time and does almost nothing. So, let's find out how things really are. What Is Investing? Investment is the long-term investment of funds, finances and other capitals in a variety of instruments in order to generate income in the future. Furthermore, there are two types of investments in relation to objects of investment. The first type is investment in the real sector (real investments). However, the subject of today's article is related to the second type of investment - financial investments, not investments in the real sector. Let's dot all the i's and and cross the t's to define with you what we mean by financial investments. Financial investments are long-term investments of finances in securities, shares, bonds, mutual funds, precious metals and other derivative instruments of securities. Financial investments are also called portfolio investments. Portfolio investing means that an investor can invest in several financial instruments at once, thus forming a specific "portfolio of investments. A portfolio helps an investor to diversify his risks, that is, even if there is a completely failed investment, the investor is able to offset his losses at the expense of more successful instruments from his portfolio. Structure Of The Financial Investment Market Before considering investing and financial instruments, it is necessary to understand how this market is structured. The structure of the financial market can be divided into three main segments: -Stock market -Debt market -Foreign exchange market The stock market is where shares of various issuers and other derivatives that give the right of ownership are traded. The debt market, also called credit market, is characterized by investments in debt instruments, such as government and corporate bonds. It is generally believed that the debt market is the most risk-free and conservative, but low-yielding way of investing, the yield on which will not exceed, and often coincide with the yield on a bank deposit. Here much depends on whose bonds you invest in and at what point. The third and extreme segment in this classification is the foreign exchange market, where it is possible to purchase contracts (both options and futures) for the purchase of currency in the forex market. In addition, in recent years, a new market is beginning to take shape - the cryptocurrency market. Due to the popularity and rise in the value of Bitcoin, this market has expanded significantly in 2016-2017 and more and more types of cryptocurrencies are coming to the market. Why Should You Invest Money? The question of why to invest in various financial assets often arises in people who are just beginning to become interested in ways of making passive income. One could say that this skill belongs to the obligatory skills of a person who wants to come to success, just as one used to need to know how to speak French or ride a horse. Another thing is that the vast majority of people spend almost all of their money on daily expenses - food, clothes, rent, and often credit as well. This is a kind of dependence on the bank, the state, and the place of work. And professionalism in one area or another is not yet a guarantee of good profits. Everyone in the modern world just needs to learn how to manage their finances and how to multiply them. Almost everyone periodically thinks about saving and achieving financial freedom, providing a peaceful old age, and investing in the future of their children. A certain role is played by the state, allocating pensions to elderly people from the pension fund, in which accumulated amounts of deductions from wages for a lifetime. However, the size of pensions is known to all - it is simply impossible to provide a decent old age for them. Many pensioners who have worked all their lives live on the brink of poverty. Why is the situation different in developed countries? Older people travel around the world and live life to the fullest. And these are not celebrities or oligarchs - they are ordinary average people. The answer lies in the fact that investments play a huge role in people's lives in developed countries. Up to 80% of Americans invest in shares of large companies and receive dividends on them. The question of why they need to invest does not arise there - they start investing at a young age. It is enough to look at the figures: In the US the volume of investments in investment funds is twice as much as the volume of bank deposits; In Europe, the volume of investments in investment funds is five times less than the volume of bank deposits. Moreover, do not forget that the investor gets an opportunity to receive dividends from shares - investment income, which in the long run may exceed salaries by several times. Investing For Beginners: The Power Of Compound Returns In simple terms, compound return is the re-investment of profits earned during previous successful investments. The process can be represented as the use of dividends, interest paid, and other income distribution options. Depending on the share of reinvested funds from the total amount of profits, a distinction is made between full or partial reinvestment. It is impossible to predict in advance the profitability of reinvestment, but the investor can control the process by adjusting the timing, amount, selected instruments, and external circumstances. Reinvestment is the practice of using dividends, interest, or any other form of income received as a result of investments, to obtain new profits through the purchase of shares, units, or other assets, instead of just spending what is earned. Let's take a closer look at the principles of reinvestment and the factors that affect its result. If you're planning to reinvest profits to increase your overall income, consider how to do so with minimal risk of loss while earning a steady income. To increase the chances of successful reinvestment, stick to three basic principles: Use only available funds to invest. If you're not sure you'll need some or all of the money you're investing shortly, don't reinvest profits. For reinvesting, take as much money as you can set aside for the long term. Diversify your investments. The golden rule for investors is to diversify their capital by diversifying their financial instruments. A balanced portfolio is the best protection against sudden market movements and losses. While one asset falls in value, the rest grow and generate income. Make sure that investments generate income without exposing your entire capital to excessive risk. A professional investment manager can help with the selection of tools and investment strategies if there is no possibility to study the intricacies of stock trading independently. As in the case of initial investment, reinvestment should be made competently, choosing the safest and most promising assets, and avoiding excessively risky transactions. Any action by an investor must produce an ultimate return. You can receive dividends and spend them on your personal needs, or use the extra profits to multiply your invested capital. Sometimes the external conditions for investments are not so favorable, and an investor prefers to wait out a dangerous period, withdrawing all assets into currency. Such behavior was demonstrated by Warren Buffett, 89, who decided in 2020 to get rid of assets, including investment bank Goldman Sachs, American carriers, and go into "cash", despite positive market dynamics and a relatively weak dollar. This decision analysts explain the preparation of the guru of investments to the stock crash, incomparable even with 2008 when Buffett has maintained an optimistic view of U.S. assets. The decision on the advisability of reinvestment is based on some factors: Inflation rate. If money is depreciating rapidly, reinvesting means trying to catch up with inflation while trying to maintain the same capital value. In a hyperinflationary environment, it makes no sense to wait for an investment to yield a limited return or to result in a loss due to the loss of value of the money invested. Affordable financial instruments. The recent top assets for reinvestment include real estate, currency, and deposits. As the stock market develops, the center of attention has shifted toward stocks, bonds, and indices. U.S. stocks are growing in popularity, with different stock exchanges providing access to them. Risk appetite. Some companies prefer to close their positions or limit investments to reduce possible negative consequences. Others are prepared to keep risking for the sake of profitability. Every financial instrument has its profitability and risk limits. The higher the projected return on reinvestment, the more justified this step is. The situation in the economy can facilitate or limit opportunities for investing and reinvesting. The worse things are in the country's economic sector, the less reason to reinvest profits. In addition to objective factors that influence the decision to reinvest income, there are subjective features of a person and his circumstances that make him agree or refuse to make further investments. A person invests his earnings where he can earn the most profit. As a rule, the decision to reinvest is made based on an analysis of alternative returns. If a person buys a car for $100,000 instead of opening a bank deposit with the profits he earns, it means that in addition to that amount over the 5 years the car will lose the amount of unaccrued interest - for example, 5% for each year. And instead of owning a car worth $100,000, one could earn $128,000. Timing The Market: What Investment Returns Can You Expect? On the whole, we can say that the world economy is growing at about five percent a year. Of course, in dollars. Slightly lower should be the currency yield from investments in bonds, but their use is assumed only as a reserve, not strategic growth. Is it possible to earn more? Yes, if something important happens: technological advances, breakthroughs in new industries - and the investor is at the root of it. Those who first appreciated the prospects of switching from coal to oil in the past are some of the richest clans on the planet today, such as the Rothschild clan. You do not have to go far, it was enough to assess the prospects for the development of electronics and, in particular, computer technology thirty years ago - and we can say a billion is already in the pocket. Let's look at examples, of how much could be earned on different types of investments. The average annual return on the S&P 500 over the past ten years is about 13.6%. Thus, if an investor were to put into his portfolio the same securities that make up the index, he would get a much higher return than on a deposit in a bank. During the same period, credit institutions attracted deposits at 4-5 percent. And in the bond market for government securities, the yield was, as we see from the previous example, 5.2 percent per annum. The yield on corporate bonds was even higher - 6-10 percent, depending on the reliability of the companies. Thus, having placed money through a broker at the exchange, the investor could count on the bond market, if not twice, but one and a half times more than in the bank. At the same time, of course, such investments are not subject to deposit guarantees. But, on the other hand, if you buy bonds from major companies, their existence is ensured at least access to raw materials. Behind them, unlike credit institutions, there are usually real production assets that generate stable revenues. And what about other types of investments? Analysts of the real estate market say that properties have risen in price by more than 16% over the year. But these figures should be treated with extreme caution: Firstly, realtors always, under all circumstances, claim that prices are going up, even if the trend is the opposite. Secondly, the posted proposals - it is not the real price of an object, to sell something, the cost must be discounted, which remains at the level of non-public agreement between the seller and the buyer. The real estate market is much less transparent and not as liquid as the stock market. In addition, the cost of admission varies significantly. Investments in real estate most often require at least a few hundred thousand, if it is not a collective scheme, while for the purchase of the same bond on the New York Stock Exchange just a thousand dollars is enough. It must be said that one of the most profitable types of investment in 2021 was simply buying foreign currency. The dollars rose by more than 20% and the euro by almost 30%. This suggests that those who invested money in instruments denominated in foreign currencies managed to make the most money on investments. Even though the interest initially looked more than modest. How Much Money Should Beginners Invest? The fact is that any investment activity involves a certain risk. Therefore, before engaging in investment activities, it is necessary to create the proverbial financial safety cushion. This should include all mandatory payments, medicine, food, and even entertainment. Otherwise, an unsuccessful start in investing and the difficulties you will encounter in the absence of a "cushion" will most likely discourage you from continuing to learn to be an investor, and it rarely works out well for anyone the first time. So, you already have a financial safety cushion. Now you need to invest the first sum of money. But the size of that amount will predetermine the type of instruments available to you. If the bonds have a face value of 50 dollars (please note that we will not take into account brokerage commissions, because our discussion is about the principle of approach to the first investment), then having this very $50, you can go and buy bonds? No, not really! The minimum investment required to purchase a single bond is about $1,000, though bonds are generally sold in $5,000 increments. You can buy shares for $500 since their prices can start from $10. However, it would be rather unethical of us to recommend to a beginning investor to start investing in such a risky instrument as stocks. The dividend yield on them is not guaranteed, and no one can promise an increase in the price. This is why our logic leads us to believe that one should begin investing with an amount of about $1000-$3000. Moreover, we advise such a trick. Put every "extra" amount of money on a separate account, not a brokerage account, but a time deposit account with the ability to deposit and withdraw partially, you can even do it on the same account where you "lay" a safety cushion. As soon as you manage to accumulate "extra" $3000, i.e. you don't need them for other vital necessities, you have to withdraw them, transfer them to the brokerage account and buy the next portion of the securities. Yes, stocks are cheaper and sometimes sold by the lot, but we wouldn't recommend starting with them. Start filling your portfolio with corporate bonds, and try investing some in stocks, let's say 10% of your capital. 10% is an insignificant amount in case of loss, but in case of high returns, can significantly raise the average return of your portfolio. How Can You Start Investing? When you finally decide to start investing, you might be wondering what steps you should take. Here are our recommendations: Decide on an investment horizon. When it comes to bonds, the stock market has a conventional division into short-term securities and long-term securities. For example, Federal Loan Bonds are limited to a specific term (3, 5, 7, and even 10 years). Shares, on the other hand, are considered indefinite assets. They exist as long as the company operates and remains public. Choose an investment instrument. Decide where best to invest your money. An investor decides which securities he will buy, whether he will invest in business development, entrust his savings to a mutual fund and management company or simply open a deposit in a bank. Be guided by risk and return. Fixed-income securities (like federal bonds) are considered less risky than stocks and bonds issued by businesses. To make it easier for you to choose the right investment instrument, first determine your risk profile. This is the type of behavior you have in the financial market. It will take into account your goals, desired returns, investment horizon, and risk tolerance. Depending on your risk attitude, your risk profile may be conservative, rational, or aggressive. Conservative investors prefer low-risk instruments with small returns, aggressive investors are willing to risk capital for the sake of high potential returns, and rational investors choose the golden mean. The Beginner's Guide To Where To Invest Your Money By definition, it is necessary to invest in something. There are a great many options where you can invest your capital. Among the most common instruments, we should note the following: -shares -bonds -investment funds -real estate -own business Let us consider different ways to invest your capital according to the risk appetite. Instruments for the conservative investor A conservative investor who is not prepared for possible losses can include low-risk instruments in his investment portfolio: bonds, bond exchange traded funds (ETFs), real estate investment funds, deposits, as well as structured products with full capital protection and ISH. Most often, it is recommended that beginning investors work with conservative instruments at first, and then add other instruments to their portfolios over time. Instruments for the aggressive investor Aggressive investors, i.e. investors who are ready to risk a considerable part of their capital for the sake of high potential profitability, invest their entire portfolio in stocks, derivatives (futures, options) and structured products without capital protection. Such investors often have extensive experience in the stock market, a large amount of capital and will be able to survive a failure painlessly. Instruments for the moderate risk investor An investor with a moderate risk profile combines high-risk instruments with conservative ones. Adding conservative instruments to the portfolio reduces risks, while high-risk instruments allow for higher returns. The classic scheme: 50% of the portfolio in conservative instruments, 50% in high-risk instruments. In addition to the above, the portfolio may also include precious metals in an investor-friendly form, equity ETFs (due to the greater number of shares in one ETF, equity funds are less risky), structured products and ISMs with partial capital protection. With knowledge of all available financial instruments, each investor can choose the most appropriate ones for his level of expertise and experience, as well as for the comfortable riskiness. The main thing is to approach investments consciously, correlating each instrument to your financial plan and investment objective. Potential Risks Of Investing Risks can have an internal or external nature and are not always predictable. Their main types are: Liquidity risk - the risk that interest in an asset will plummet and the value will be well below the purchase price; Inflation - decrease in purchasing power and loss of liquidity of all assets; Currency risk - decrease in the value of assets that are related to foreign currency; Legal risk - change of risks as a result of changes in the regulatory framework. There is also the possibility of force majeure, for example, man-made or natural factors. As a rule, they are stipulated in the contract with the investor as separate clauses. Other risks can be adjusted if you constantly monitor changes in the global and domestic financial markets. Another rule that can help reduce the likelihood of losses is the creation of an investment portfolio and its timely adjustment. Still, there are some ways to reduce the possible risks. It is easier to manage risks at the planning stage of a portfolio. It's impossible to reduce risks to zero, but a few simple principles will keep your investors and their capital as safe as possible: Invest evenly in different types of assets. If you choose to invest in securities, invest in different areas. Don't invest the last of your money. Always leave savings-a "safety cushion." If your assets depreciate, no one will pay you insurance. Examine projects and assets carefully before investing. Invest in projects that have positive feedback from past investors. Do not work with those who promise you huge earnings with no risk. Do not give in to emotions. Act decisively and sensibly, without panicking at the slightest price movement. Set yourself a limit on the maximum losses. Let's say you choose 25%. If your assets fall in price by 25%, you will sell them to avoid even greater losses. The key to successful investing is to choose quality assets (reliable stable securities). You should not give in to gambling and invest all of your capital in risky projects. What To Look For When Choosing An Investment Broker Before deciding which broker will provide you with services, decide on your investment objectives: have you already decided what markets you are going to enter, and what assets would you like to trade? Before taking any step in investing, it is better to define your goals precisely. Now let's see what to consider when choosing a broker. Step 1: Check the license You need to start by checking if your broker has a license. Central banks regularly check the compliance of brokers and can revoke the license if any violations are found. If the license is revoked, the broker will suspend its work and must return the invested funds to the clients. Step 2: Gather information from open sources Familiarize yourself with the broker's website. It will be good to check the organization's data on financial performance. A little dive into the history of the company will not be superfluous. Check if there have been any legal proceedings, malfunctions, license suspensions - and for what reasons. Check what has been written about the broker in the industry media, but do not forget to do fact-checking, i.e. pay attention to the reliability of the source and double-check the data. Step 3: Check the fees and commissions Brokers receive a commission on the amount of a transaction. Study the rates on the websites of different brokers. Large organizations usually offer several rate plans. To choose the most appropriate one, determine in advance what markets you plan to trade (stock, futures, over-the-counter) and how often. Brokers may charge not only transaction fees, but also commissions for depositing and withdrawing funds, using a trading platform, submitting phone orders, and other fees. In addition, it is important to remember the existence of a subscription fee - if there is one, the broker will earn even in the absence of transactions. Consider custody services, which may be fixed and included in the brokerage fee or may vary depending on the number of securities. Step 4 . Evaluate the convenience of the service If you are planning to use a trading terminal, i.e. software for making transactions at the exchange - look at what kinds there are and how they work, which one is offered by the broker and whether you understand its interface. Brokers now have mobile applications for trading. If they are available in the demo version - download and try it, in this way you will understand if the interface is convenient and if you feel comfortable working with the application. Step 5: Check out the education and analytics sections Training materials, investment ideas, analysis, and research articles and forecasts are useful for beginners and more advanced investors alike. Many brokers now offer articles, webinars, podcasts, video courses, and more to clients. This can be another factor that will make you pay attention to this particular organization. Beginner's Tips To Get Started With Investing It is impossible to completely avoid risk while investing in the financial market. Therefore, the investor is faced with the task - to minimize possible losses, at an optimal level of profitability concerning the goals and horizons of their achievement. For this purpose, studying the experience of famous investors and financiers is suitable. Here are a few tips to help avoid unnecessary mistakes. Discipline Even with minimal investments, a sequence of steps, analysis of the situation, and regular additions to the portfolio will lead to the desired income. Do not relax when you get the first earnings - it is better to reinvest them to achieve the goal as soon as possible. Persistence and calmness Everyone's journey is a series of ups and downs. Investors are no exception. A cool mind and control of emotions will not allow you to make mistakes in a critical situation. And the accumulated experience will help to avoid their repetition in the future. The right environment Communication with like-minded people will put you in the right mood, and monitoring market information and not only - will help you to navigate faster in the situation and make the right decisions. Reading professional literature, visiting topical forums and social networking pages - all will form your thinking. Constant learning The world does not stand still, and the world of investments is no exception. Self-education, observations of experienced colleagues, and reading financial literature will expand opportunities and open new promising directions. Mistakes of beginning investors It is not possible to avoid mistakes altogether - as in any business in which you are just starting. However, they can be minimized. Lack of a safety cushion. No one can guarantee your success in investing. If unforeseen circumstances arise, you must have a safety cushion of 3-6 months' salary. Lack of funds for the beginning Often brokers offer to begin from the minimum amount, say 300 dollars, however, such investments without additional permanent deposits will not be effective. Lack of basic education After studying, say, three books on the securities market and an economics textbook, many people start to feel self-confidence in the market. This is where the first serious errors begin, such as underestimating the risks or choosing sub-optimal instruments. Remember - knowledge must be gained, updated, and constantly expanded. The desire to get rich quickly In the search for super-profits, private investors can often meet crooks and all sorts of fraudsters on their way. A reasonable assessment of the prospects of income and the choice of well-known intermediary companies will reduce the risks as much as possible. Using substandard sources Sources of quality information are not difficult to find - to date has written many useful books and created a huge number of training materials.
Education
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DEMONS OF TRADING | Don't Think Like This Have you ever wondered what helped all those professionals of Wall Street become successful? You will be surprised, but the key to their reached heights is hidden in their mistakes. Yes, that is right. Most professional and successful traders made many mistakes before they got to the top. Making mistakes is ordinary and sometimes even necessary because you learn when you make them. The crucial point of this idea is never to repeat those mistakes because some errors may cost us a fortune. That is why we gathered 10 most common trading mistakes to prevent you from faults and losses. Little preparation Entry to the Forex market is relatively easy, so people have a light-minded attitude towards trading knowledge. Beginner traders, especially, think that theory is not a big deal, and they will be able to build it up without a peep. However, it does not work this way. Miscalculating the risk/reward ratio For some reason, many traders believe that higher win trades are more profitable than lower ones. Sometimes, this idea even gets paid off, and due to blind luck, trades, where the potential risk exceeds the reward, benefit. However, in most cases, such trades are a sure way to lose money in the longer term. Avoiding risk management Risk management should be the core of your trading because it helps cut down losses. Trading without risk management is like skydiving without a parachute. Neglecting market events Relevant market news is essential as economic events influence the direction of trading during the day. So, if you are not aware of the financial reports or earnings, you might skip the volatility. To win the game, you need to develop your thinking and how you participate in the game. You are in a market trading against professional traders. Your goal is to think like a professional. That is the only way to survive in this game. Dear followers, let me know, what topic interests you for new educational posts?
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📊 Chart Patterns Cheat SheetPatterns are the distinctive formations created by the movements of security prices on a chart and are the foundation of technical analysis. A pattern is identified by a line connecting common price points, such as closing prices or highs or lows, during a specific period. Technical analysts seek to identify patterns to anticipate the future direction of a security’s price. These patterns can be as simple as trendlines and as complex as double head-and-shoulders formations. 🔹 Reversal patterns are those chart formations that signal that the ongoing trend is about to change course. If a reversal chart pattern forms during an uptrend, it hints that the trend will reverse and that the price will head down soon. Conversely, if a reversal chart pattern is seen during a downtrend, it suggests that the price will move up later on. 🔹 Continuation chart patterns are those chart formations that signal that the ongoing trend will resume. Usually, these are also known as consolidation patterns because they show how buyers or sellers take a quick break before moving further in the same direction as the prior trend. Trends don’t usually move in a straight line higher or lower. They pause and move sideways, “correct” lower or higher, and then regain momentum to continue the overall trend. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
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Pure trendline breakout strategy; Manticore Investems Pure trendline break strategy is based on indicators: Tradelines with Breaks (FREE) - TwB Position entry signals, trendline breakout. We look for signals on the ~h4 interval. We take a position on lower intervals when we see entry signals there as well. Order block Detector (FREE) - ObD Generates us support and resistance for the price (red - sell, green - buy) Pivot Based Trailing Maxima & Minima (FREE) - Pbt Helps determine the current trend of the market on a given interval, serves as an add-on informing us about market trends. In the green zone - buy, red - sell. SuperOSC (FREE) - sOSC Informs us about the strength of the market at a given moment (on a specific candle) In addition: LuxAlgo Price Action Concept (PREMIUM). Strategy description: Basically we trade after large signals generated on h4/d1 intervals. When we take a position we look for the optimal place to enter from m15-h1. We use resistances and supports as SL/TPs. Trading style: scalping / daytrading. Ideal entry setup: 1) Signal generated on the h4/d1 TwB interval. 2) ObD secure our position / ObD do not interfere with a potential sell or buy 3) The trend set by Pbt agrees with the direction we are playing. (Green zone - buy / Red zone - sell). 4) The candle after which we enter is not drawn on the sOSC Examples below: H4 interval buy signal: 1) Pbt - Green buy zone 2) TwB - upward signal 3) sOSC - the candle that generated the buy signal did not cross the dashed lines When we take a position we go down to lower intervals to best estimate SL:TP H1 interval: H1 interval buy signal: 1) Pbt - Green buy zone 2) TwB - upward signal 3) sOSC - the candle that generated the buy signal did not cross the dashed lines Estimation of risk and timing of exit: Risk estimation: 1) We use ObD to determine the optimal risk, they serve as resistance to the price. 2) We set positions below the buy / sell zones from Pbt 3) We go to lower intervals, set SL under the TwB level of the opposite trendline Determining take profit: 1) We play out positions to supports or resistances generated by ObD 2) We close the position when we see that after the close of the h4/h1 candle the sOSC is drawn above or below the dashed line 3) We can close positions when we see that the movement is losing strength and there are opposition signals to our position on low intervals. It works best to close positions after reaching ObD supports/resistances in conjunction with a drawn-out sOSC. LuxAlgo Price Action Concept indicator (PREMIUM), serves as an aid in determining the strength of a given support or resistance (the higher the %, the stronger the resistance)
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Market Cycles: What They Are and the Psychology Behind Them All markets go through cycles of expansion and contraction. 📈When a market is in an expansion phase (an uptrend), there is a sentiment of optimism, belief, and greed. Typically, these are the main emotions that lead to a strong buying activity. Sometimes, a strong sense of greed and belief overtakes the market in such a way that a financial bubble can form. In such a scenario, many investors become irrational, losing sight of the actual value and buying an asset only because they believe the market will continue to rise. They get greedy and irrational by the impressive bullish movement, expecting to make huge profits. As the market gets heavily overbought, the local top is created. In general, this is considered to be the point of the highest risk. In some cases, the market will start a sideways movement while smart money steadily sells the asset. This is also called the distribution stage. However, some markets don't present a clear distribution stage, and the downtrend starts sharply after the top is reached. ➖➖➖➖➖➖➖➖➖ 📉 When the market starts reversing, the euphoric mood can quickly turn into complacency, as many traders refuse to admit that the uptrend came to an end. As prices continue to fall, the market sentiment quickly moves to the bearish side. It often includes feelings of anxiety, denial, and panic. In this context, by the anxiety we mean the moment when bullish biased market participants start to question why the price is falling, which soon leads to the denial stage. The denial period is marked by a sense of unacceptance. Many investors keep holding their losing positions, either because "it's too late to sell" or because they want still believe that "the market will come back soon." But as the prices drop even lower, the selling wave gets stronger. At this point, fear and panic often lead to what is called a market capitulation (when holders give up and sell their assets close to the local bottom). Eventually, the downtrend stops as the volatility decreases and the market stabilizes. Typically, the market experiences sideways movements before feelings of hope and optimism start arising again. Such a sideways period is called the accumulation stage. Let me know, traders, what do you want to learn in the next educational post?
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Learn to Read the Strength of the Candlestick | Trading Educati What it is? Candlestick rejection strategy is a pure price action swing trading strategy. It makes use of the concept of price rejection or candlestick rejection patterns to invalidate counter-trend momentum for a trade continuation. By applying such candlestick rejection strategy onto swing trading, it allows trades to capture spots at which market prices are at rest during retracements before rejoining back the existing dominant trend. How to use? Some trade recommendation for such candlestick rejection strategy is to use it as a candlestick rejection pattern on counter-trend moves. This means that we pick candlestick rejection pattern only for the sake of searching for breakout continuation with the dominant trend at counter trend waves.Entry can be made after the breakout occurs at the high or low of The Mother Bar and stop loss order can be placed at the opposing breakout side's high or low. Further trade help can also be incorporated to help increase the trade's probability of success. For instance, it can be used together with other technical tools such as dynamic moving averages and Fibonacci retracement tool. Some may even want to consolidate other trading strategies to further increase trade’s probability of success. ✅LIKE AND COMMENT MY IDEAS✅ Please, like this post and subscribe to our tradingview page!👍
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Educational (divergence + volume)Hi guys, in order to spot a divergence you should be careful which timeframe you're looking at. for example in the left picture, the daily timeframe is showing higher highs in price (at each candle) and lower highs in RSI (at each candle). but note that these are not highs and lows and as long as you can't find signs of accumulation and distribution in highs and lows (as long as there's no valid consolidation) you can't name them as highs and lows. so there's no divergence. but in the lower time frame (what is shown is 4h) you can see it more clearer that for every candle in the daily time frame, you have a specific trend in the 4H timeframe. so you can name them as highs and lows and yes, there is a divergence now. also, keep in mind that in the lower timeframe. every time you're making a new high in rsi, you should expect it to be more volatile and be more sensitive in a way that in the next new rsi high, you have less time spent in the overbought area. The next part is about the volume profile. you have less resistance in front of the price movement where there is less volume traded in the past. BUT NOT ALWAYS! less trades made in the past in an area means two things: 1- you can expect the price to move faster and sharper and take less time in that area 2- if the price wants to make a low or high or a pattern, it's less predictable and there's more chance of wrong analysis and fake patterns. Feel free to leave any comments and ask questions!
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Fitting patterns to your bias? I saw a post in twitter which marked a particular converging triangle on BTCUSDT chart on 4H timeframe (As shown below) and implying more bearishness ahead. But, is it really correct analysis? Risk of drawing patterns manually is that we can fit any pattern to price action based on our bias. To overcome this, we need to follow a standard method to draw patterns on chart. Below is my algorithm for drawing patterns. Draw zigzag on chart Find and draw a trend line joining 2 or more pivot lows where price has not breached the trend line towards downside. Find and draw a trend line joining 2 or more pivot highs where price has not breached the trend line towards upside. While drawing, trend lines can touch the pivot candle at any point. But, candles should not lie outside trend line. Take fake outs into consideration to make minor adjustments. At least one among the above trend line should join 3 or more pivots. Another one can have just two pivots. Do you see clear pattern after following these steps? If yes, then you found your pattern and also a skill to define them objectively without bias.
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Following Moby WickWho is Moby Wick? If you heard about aggressive market participants, and passive market participants, then Moby Wick, is a passive market participant, that places big limit orders in the market. I sure you heard about whales of institutional trading. Because it places big limit orders, Moby Wick, will never be able to fill a complete order at one single price level, and it will ever be able to fill the complete order in one single order. So being a big player, is not necessarily easy. And so, because of the two mentioned above, Moby Wick will leave clues, or marks in the market, that we as small fishes in the see, we need to swim along Moby Wick, and take advantages of those clues that it leaves behind. Why we need to follow Moby Wick? Because big orders are pulling the market in their direction, and nothing makes more sense, especially in crypto, then to follow big orders, or Moby Wick. HOW CAN YOU SPOT MOBY WICK? First you need to understand, that even though, Moby Wick is swimming in a big sea, now is approx. 1 trillion USD, and if you get down to Bitcoin, the largest part of the sea, it is around 450 billion USD. Now even though you see this 450 billion USD market cap, as a trader, you actually need to pay attention to traded volume, which is much lower. At the time writing, the traded volume 26 billion USD. This traded volume, which means that includes selling or buying to any other altcoin or fiat currency, it did not happen all at a single price level, in one single trade, but in thousands of trades at every price level from the daily range, obvious wright? So how can you spot Moby Wick? As I said earlier, it leaves market clues, because it is forced to do so. Why? 1. There is not enough liquidity at a single price level, so Moby Wick don’t want to risk paying the slippage, or having the completed order filled at bad prices. Because of this, Moby Dick, needs to fill the order in more than one try. 2. Most of the trades are limit orders, but if Moby Wick places a large BUY order for example, then that order will be visible in the order book, and everyone will buy, buy buy…so who is going to sell to them after? This why, it is going to place multiple limit trades at same level. After the initial limit order was filled, the price will reject and then come back for more. I will show you in the following graphic what I mean. You can see how many times the price came back to the same level, rejecting aggressively. Why the price will return to that level? Because Moby Wick is refilling, or adding more to its position. Why the price rejects aggressively creating candles with wicks? Because all the SELL orders will be hitting the BUY wall set by Moby Wick, and those orders will be filled quickly. Another explanation on how to spot Moby Wick, or whales. 1. Search for doji, evening star, morning star, or shooting star candles. ( big wicks candles ) 2. Make sure they are forming in the trend direction / continuation, after a small retracement. 3. Check if the price will reject aggressively a second time from the same level. Don’t Stumble Trading. Trade Safe!
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ADA: Ranging Sideways Between 40 Cents and 36 CentsHi Everyone! The White Energy in the Weekly went up to level 133. The Red Line in the Weekly triggered upward pressure that lasts until the White Energy in the Weekly falls down to level 66.5 (Half of 133). I can see $0.36 Cents acting as support for a while. We have a new 4-Day beginning 2-Days and 6-hours from now. At which point; we may begin to see potential for a chance to slow bleed down to $0.30 to $0.32 Cent range. I'm anticipating a Second Test of Support around $0.30 to $0.32 eventually in Phase B of Accumulation. However, it will take a while to do it. Hence, the reason I said, "Slow Bleed Down to $0.30 to $0.32 Cents eventually." REMEMBER: During a period of upward pressure; we can anticipate the price action to range sideways at worst or go upward at best during this upward pressure still seen in the Weekly. We may have to wait till the next Weekly candle before we have a chance to break down below $0.36 Cents to the $0.30 to $0.32 Cent range I'm anticipating for our Second Test of Support in Phase A. Hope this was helpful. Happy Trading and Stay Aewsome! David
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Nvidia Multi-Timeframe Analysis 29.01Hello Traders, welcome to this free and educational technical analysis . Nvidia is looking very bullish on the weekly timeframe, considering that we are creating a massively bullish inverted head and shoulders. On the daily timeframe I am now just looking for a retest of the neckline of the head and shoulders and some bullish confirmation on the lower timeframes to enter a long to capitalize on the next massive move towards the upside. Thank you for watching and I will see you tomorrow! You can also check out my previous analysis of this asset:
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