Tag: News events

Categories
Crypto Daily Topic

The Smallest Unit of Argentina’s Currency is Now at Parity With One Satoshi

The smallest unit of the Argentinian Peso – Argentinian currency, is now at parity with one Satoshi (Sat) – the smallest unit of Bitcoin. 

The smallest unit of the Argentinian Peso – Argentinian currency, is now at parity with one Satoshi (Sat) – the smallest unit of Bitcoin. 

The smallest unit of the Argentinian Peso – Argentinian currency, is now at parity with one Satoshi (Sat) – the smallest unit of Bitcoin. 

Argentina is the latest country to witness this, well, unfortunate level of a currency slump. Taking to Reddit, an Argentinian citizen with the username OneMoreJuan brought this to the world’s attention: “I am from Argentina, and the smallest unit of our currency has reached the value of 1 Satoshi (1 Sat). Every FIAT currency in history has failed. Buy Bitcoin.” 

One Bitcoin has 100 million Sats. One Argentinian Peso (ARS) has 100 cents, which is now roughly equal to or less than 1 Sat. This illustrates the dramatic depths to which the currency has sunk. 

A Chain of Problems Each Triggered by the Last

Several factors have triggered this unfortunate turn of events for the currency. One is the central bank’s overzealous response to the economic crisis exacerbated by the current Corona pandemic. The bank has resorted to printing more money to meet shortages, which in turn has caused too much money to flood the economy, causing massive inflation. 

Another trigger is the government’s own policies, which include limits on currency conversions, stifling regulations for finance players, and high fees -factors that have rendered it even impossible for the Peso to be tradable with the US Dollar. Instead, the country is now using an unofficial rate – the ‘blue dollar.’ At the time of writing, the blue dollar is sitting at 119 ARS to the US Dollar.

Using this rate, the price of one Bitcoin in the unofficial market is roughly $1,050,000 ARS, while the official going price is $650,000. Thus, 0.01 ARS is equal to around 1 Sat. 

Bad to Worse

The latest events are happening in the backdrop of a recession that began in 2018. Now, after the pandemic crisis, inflation has skyrocketed to 50%  – a factor that’s also pushing more Argentinians to purchase Bitcoin. 

A Pinch Felt by Many

Argentina isn’t the only country whose economy is fighting to stay above the water. The Lebanese Lira recently tumbled to new lows, with one Lira acquiring the value 1 Satoshi. The Vietnamese Dong had it even worse. One Dong has been less than the value of one-millionth of Bitcoin for a while now. Other national currencies whose value is below one Sat are the Sierra Leone Leone, Iranian Rial, the Lao Kip, and more. 

With this ominous trend, what’s the future of other somewhat unstable currencies, especially with a global pandemic that’s shown no sign of abating? This remains to be seen. 

Categories
Forex Daily Topic Forex Price-Action Strategies

High Impact News Events and Risk Management

In today’s lesson, we are going to demonstrate an example of price action trading on the daily chart. The lesson has a message if a high impact news event comes in between, what daily traders should do?. Let us get started.

In today’s lesson, we are going to demonstrate an example of price action trading on the daily chart. The lesson has a message if a high impact news event comes in between, what daily traders should do?. Let us get started.

In today’s lesson, we are going to demonstrate an example of price action trading on the daily chart. The lesson has a message if a high impact news event comes in between, what daily traders should do?. Let us get started.

This is EURJPY daily chart. The chart produces a bullish engulfing candle, which suggests that the buyers may dominate in the pair. Traders on different time frames may get themselves ready to go long on the pair. Traders who trade on the daily chart, they are to wait for the price to consolidate and produce a bullish reversal candle to go long on the pair. Let us proceed to the next chart.

The pair produces another bullish candle before creating the corrective candle. It means the buyers on the H4, H1, or 15M may have found some entries and drove the price towards the North last day. Anyway, the daily traders may keep an eye on the pair to go long upon a bullish engulfing candle closing above the last candle’s highest high.

Here it comes. A bullish engulfing candle closes above the daily resistance. The buyers may trigger a long entry right after the candle closes by setting stop loss below the candle’s lowest low. The nearest significant swing high is quite far away. It offers a tremendous reward considering the risk.

The price heads towards the North for one more candle. However, it does not get as bullish as expected. The good thing is it is a bullish candle. The buyers must hold the trade at least up to the level, which offers 1:1 risk-reward.

The pair produces a doji candle. The price hits the level, which offers 1:1 risk-reward. Then, it ends up producing a candle, which neither a bullish nor a bearish candle. Technically, the buyers shall take out at least 50% profit and let the rest of it run. As far as the price action is concerned, the price still may go towards the North further. I may give you information that this is the Wednesday market dated 11/09/2019. Here I have something interesting to show you before we start Thursday trading.

Source: Forex Factory

The pair we are dealing with here is EURJPY. Look at those news events with the EURO. The EURO pairs are to ride on a roller coaster on such news days. Let us not guess, but have a look at the daily chart to find out how it looks.

The price goes towards the trend’s direction. Do not miss the lower spike. You can see that it hits the stop loss. It is painful, but this is how the Forex market is. Thus, traders must take extra care of their positions before such high-impact news event. Otherwise, they may lose their hard-earned profit by getting hit such high impact news events.

 

Categories
Forex Market

Dealing With Liquidity & Volatility In The Forex Market

What is liquidity?
When a trader starts his trading journey, one of the things he finds most attractive is the amount of liquidity offered by the forex market. The latest

What is liquidity?
When a trader starts his trading journey, one of the things he finds most attractive is the amount of liquidity offered by the forex market. The latest

What is liquidity?

When a trader starts his trading journey, one of the things he finds most attractive is the amount of liquidity offered by the forex market. The latest figures suggest that the daily trading volume of forex is close to $5.1 trillion.

Liquidity is the ability to trade a currency pair on demand. In simple terms, it is the measure of how easily a currency can be exchanged. When you are trading major currency pairs, you have an exceedingly high amount of liquidity. This liquidity is provided by financial institutions, big businesses, and retail traders as well. However, not all the currency pairs are liquid; liquidity depends on whether a currency pair is major, minor, or exotic. Major pairs typically have high liquidity compared to the other currency pairs. In the next section, we will look at some of the money management principles in trading with respect to liquidity.

Liquidity and Risk

A market with low liquidity has chaotic moves and gaps because of the absence of buyers and sellers at any given point of time. These gaps occur when news announcements are made over the weekend or if an event happens at the same time. The chart below depicts such a gap after a news release.

According to money management principles, when you know that there will be a change in liquidity levels between Friday to Monday, it is not advised to carry huge positions on Friday. The risk drastically increases, if the price opens above your stop loss on Monday, it will become a market order, and this loss will be much higher than the predefined loss (determined using stop-loss). A conservative trader especially should not take any positions during times of news releases.

Retail forex traders need to manage liquidity risk by lowering their leverage and putting stop losses based on higher time frames. In this way, you would be safe from any kind of gaps that happen at the beginning of the week.

Volatility

Volatility refers to the currency fluctuations in the global exchange market. Price movements can vary from hour to hour, minute to minute, and second to second, depending on many factors. A lot of forex traders enjoy volatility, but it comes with a risk. Therefore it is important to manage volatility and do plenty of research before placing a trade.

Eliminating the risk of volatility

In order to make the most out of volatility, follow the below-mentioned techniques:

Volatility strategies

Money management, in relation to volatility, essentially suggests traders invest in strategies that can perform in different market conditions. Some of the strategies that can be used to turn the volatility in your favor include widening your targets, placing tight stop-losses, and analyzing the higher timeframes.

Stay diversified

Don’t rely too much on any asset class or forex pair. If one investment performs poorly, other investments may perform better over that same period and thereby reducing your overall losses. This happens due to the difference in volatility across various asset classes. A balanced portfolio protects from losses and provides a high return on investment.

Money management should always be a top priority for every trader, as these principles guide us while taking trading decisions. A lot more concepts related to money management will be discussed in the upcoming articles.