Tag: Technical Analysis

Categories
Crypto Videos

Become A God Of Crypro Trading With The Hammer Pattern

https://youtu.be/wrrqTnZZEp0

https://youtu.be/wrrqTnZZEp0

Profiting from the crypto market – Hammer pattern trading

Hammer Candlestick – explained

A hammer is a candlestick price pattern charting that occurs when a cryptocurrency trades significantly lower than its opening but quickly rallies within the candle period to near-opening price. This looks hammer-shaped candlestick, where the lower shadow is at least double the size of the real body. The candlestick body represents the difference between the open and close prices, while the shadow represents the highs and lows within the period.

Reading the Hammer Candlestick

A hammer occurs after a cryptocurrency has been declining, implying that the market is attempting to create a bottom. Hammers signal that sellers might have capitulated.

Hammers are most effective when the least three or more declining candles precede them. A hammer should look somewhat similar to the letter “T.” However, one thing to note is that a hammer candlestick doesn’t indicate a price reversal until it is confirmed.

Confirmation of the hammer pattern occurs if the candle following it closes above the hammer’s closing price. Candlestick traders will mostly look to enter their long positions or exit their short positions during or after the confirmation candle appears. Traders that are entering new long positions can benefit from setting a stop-loss below the low of the hammer’s shadow.

Hammer candle vs. Doji candle

A doji candle is another type of candlestick with a small body. A doji candle signifies indecision as it has both an upper and a lower shadow. Dojis, depending on the variation, may signal a price reversal or a trend continuation. This differs from the hammer candle, which occurs after a price decline and signals a potential upside reversal, and only has a long lower shadow.

Things to consider

As with any technical analysis tool, there is no assurance that the price will do as expected, even after the confirmation of the pattern. A long-shadowed hammer paired with a strong confirmation candle may push the price high for some time due to market instability. This may not be the best spot to buy because the stop-loss is far away from the entry point.
Hammer pattern also doesn’t provide a price target, which makes setting up a profit target quite difficult.

Categories
Forex Basic Strategies

The ABC pattern: One of the Traders’ Favorites

Trading ABC pattern is one of the most frequently used trading strategies by Forex/financial traders. Once the price makes a breakout, makes a correction, and produces a reversal candle upon finding point C, traders trigger their entry. It is a favorite pattern among all kinds of financial traders. It brings profit at least on 80% occasions. In today’s lesson, we are going to demonstrate an example of an ABC pattern trading.

Trading ABC pattern is one of the most frequently used trading strategies by Forex/financial traders. Once the price makes a breakout, makes a correction, and produces a reversal candle upon finding point C, traders trigger their entry. It is a favorite pattern among all kinds of financial traders. It brings profit at least on 80% occasions. In today’s lesson, we are going to demonstrate an example of an ABC pattern trading.

Trading ABC pattern is one of the most frequently used trading strategies by Forex/financial traders. Once the price makes a breakout, makes a correction, and produces a reversal candle upon finding point C, traders trigger their entry. It is a favorite pattern among all kinds of financial traders. It brings profit at least on 80% occasions. In today’s lesson, we are going to demonstrate an example of an ABC pattern trading.

The chart shows that the price after being bearish has a double bounce at a level of support. It produces a bullish engulfing candle followed by another bullish candle. However, the price starts having consolidation. Since it is double bottom support, the buyers may keep their eyes on the chart.

The chart produces another bullish candle followed by a long bullish one. The price usually makes a correction after such a move. The buyers are to wait for the price to make a bearish correction and produce a bullish reversal candle to go long in the pair above the last highest high.

As expected, the price starts having the correction. It produces two bearish candles. The buyers hope that the chart produces a bullish engulfing candle closing above the last highest high to trigger a long entry. This is what pushes the price with more momentum. Let us find out what happens next.

The chart produces an inside bar. This is not a strong bullish reversal candle. However, the price finds its support. This is called the C point. If the price makes a breakout at the last highest high, the ABC pattern traders trigger a long entry.

The price makes a breakout closing well above the last highest high. The buyers may trigger a long entry right after the candle closes by setting stop loss below the last support (C point). Take Profit is to be set with 1R. Let us proceed to the next chart and find out how the trade goes.

The price heads towards the North with good bullish momentum. It produces two consecutive bullish candles and hits the target (1R). Here is an important point to remember. The ABC pattern is a widely used trading strategy. Thus, the price often reverses once it hits the target. Thus, the traders are recommended that they close the whole trade and enjoy the profit. Trailing Stop Loss and partial profit-taking do not work well in this pattern. Do some backtesting and get well acquainted with this pattern. It may bring you a handful of pips.

Categories
Forex Market Analysis

Daily F.X. Analysis, April 08 – Top Trade Setups In Forex – Choppy Sessions Continued! 

Daily F.X. Analysis, April 08 – Top Trade Setups In Forex – Choppy Sessions Continued! 

Daily F.X. Analysis, April 08 – Top Trade Setups In Forex – Choppy Sessions Continued! 

Daily F.X. Analysis, April 08 – Top Trade Setups In Forex – Choppy Sessions Continued! 

On the forex front, the U.S. dollar weakened against its major peers, with the ICE Dollar Index dropping 0.8% on the day to 99.91. Later in the day, the U.S. Federal Reserve will release its latest monetary meeting minutes. Whereas, the Bank of France will report Industry Sentiment Indicator for March (90 expected).

Economic Events to Watch Today     

 

 

EUR/USD – Daily Analysis

The EUR/USD rebounded 0.9% to 1.0895, snapping a six-day decline. Official data showed that German industrial production grew 0.3% on month in February (-0.8% expected). Previously, an uptick in German’s industrial production for February may not provide support to the EUR/USD because the futures tied to the S&P 500 futures are starting to reporting a 0.60% drop and will likely draw bids for the greenback during the day ahead. 

The European stocks remained on the upside, with the Stoxx Europe 600 Index gaining 1.9%. Germany’s DAX jumped 2.8%, France’s CAC rose 2.1%, and the U.K.’s FTSE 100 was up 2.2%, which is extending slight support to the single currency Euro.

Today, the European data docket is light, so apart from this, Federal Reserve’s March meeting minutes will be key to watch, which are scheduled to release at 18:00 GMT. While on the technical side, the immediate bias would remain bearish in the pair until the hourly chart descending trendline drawn from overnight highs is intact. 

Daily Support and Resistance

  • S1 1.0647
  • S2 1.0762
  • S3 1.0827

Pivot Point 1.0876

  • R1 1.0941
  • R2 1.0991
  • R3 1.1106

EUR/USD– Trading Tips

Looking at the 4-hour timeframe, the EUR/USD is trading within a symmetric triangle pattern, which is keeping the pair within 1.0922 – 1.0765 trading zone. Right now, the pair is trading at 1.0858, having an immediate support level of around 1.07990 and 1.0765. The EUR/USD violated the support level of 1.085, which is now working as a resistance. A bearish breakout of 1.07990 level may extend selling bias until the next support level of 1.0650 while the MACD has crossed over 0, converting the bearish sentiment into bullish. 

We can’t fully really on the MACD right now as the lack of trends in the market is causing its value to toss above and below 0, signaling a neutral bias. But the 50 periods exponential moving average is also keeping the EUR/USD in a bearish mode, extending an immediate resistance around 1.08856. So, let’s consider taking selling trades below 1.091 to target 1.0775 and bullish above the same to target 1.0946 today.

GBP/USD– Daily Analysis

The GBP/USD bounced 0.9% to 1.2340. The pair doesn’t seem to show much interest as the death toll from the coronavirus increased by 621 to 4,934. The total number of confirmed infections rose to 47,806. Apart from the coronavirus intensifying concerns, the GBP currency could remain bearish in the European trading hours, mainly due to the sluggish data. As in result, the U.S. 10-year Treasury yields remain flashing green around 0.68% with major Asian stocks marking gains.

At the Brexit front, the European Union and many others are forcing the Tory administration for the delay in the Brexit deadline while Cabinet Office Minister Michael Gove showing a willingness to leave talks unless there was a broad outline of a deal.

At the USD front, the U.S. Dollar taking bids on the day, as the S&P 500 futures slumped by 0.5%, indicating the risk-off sentiment in the global market after New York reported 731 deaths from coronavirus on Monday- the biggest daily rise. On the other hand, Spain’s daily losses of coronavirus deaths also increased for the 1st-time in 5-days.

Looking forward, investors will keep their eyes on every incoming detail about the virus for fresh direction. Moreover, Brexit headlines will also key to watch as the EU-UK policymakers are finalizing the timetable for further Brexit talks in April and May.

Daily Support and Resistance

  • S1 1.2075
  • S2 1.2201
  • S3 1.2269

Pivot Point 1.2327

  • R1 1.2395
  • R2 1.2453
  • R3 1.2578

GBP/USD– Trading Tip

On Wednesday, the GBP/USD continues trading around 1.2298 within a symmetric triangle pattern, which is supporting Sterling at 1.220 and along with resistance around 1.2490. On the 4-hour timeframe, the GBP/USD pair may find resistance around 1.2470, along with support around 1.2278. In the case of market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. Whereas, the chances of buying remains solid over 1.2275 until 1.2520. The MACD and 50 EMA are also supporting the neutral bias, so let’s consider taking buying trades over 1.2209 with a target of 1.2400 and sell trades below 1.2335. 

USD/JPY – Daily Analysis

During Wednesday’s early Asian session, the USD/JPY currency pair flashing green and struggles to cross above the 109.00 level mainly due to the latest recovery in the U.S. Dollar in the wake of the risk-off market sentiment. Whereas, the fresh bid in the safe-haven Japanse yen is one of the key factors behind the limit to the pair’s gains. 

Right now, the USD/JPY pair is trading at 108.81 and consolidates in the range between the 108.50 – 109.00. Yesterday’s risk-on sentiment extended to Europe due to the optimism that the pace of new COVID-19 cases may be slowing, but the U.S. markets were failed to hold. Despite this, the U.S. Secretary of Housing said there are signs that COVID-19 cases in the U.S. could level out sooner than predicted.

At the USD front, the U.S. Dollar taking bids on the day, as the S&P 500 futures slumped by 0.5%, indicating the risk-off sentiment in the global market after New York reported 731 deaths from coronavirus on Monday- the most prominent daily rise. On the other hand, Spain’s daily losses of coronavirus deaths also increased for the 1st-time in 5-days.

At the U.K. front, the Foreign Secretary looking confident about the UK PM Boris Johnson’s health and said that he would recover from pandemic while describing him as a “fighter.” Moreover, Japan’s Prime Minister Abe has announced a state of emergency in Tokyo and 6-other provinces. He plans to control the economic fallout of COVID-19 as well as a substantial fiscal stimulus package. The package, worth ¥16.5trn, equates to 20% of GDP. Consequently, the USD/JPY currency pair is moving nowhere as investors seem confused about whether to buy USD/JPY over a stronger dollar or sell over the increased safe-haven appeal. 

Daily Support and Resistance

  • S1 105.37
  • S2 106.64
  • S3 107.08

Pivot Point 107.91

  • R1 108.35
  • R2 109.17
  • R3 110.44

USD/JPY – Trading Tips

As we can see on the 4-hour timeframe, the USD/JPY’s symmetric triangle pattern still remains intact, perhaps due to a lack of high impact economic events in the market. The USD/JPY is trading choppy above and below 108.884, and it’s strictly following a narrow trading range of 108.650 – 107.250. With that being said, the USD/JPY’s immediate support is likely to be found around 108.700. On the 4 hour timeframe, the Japanese pair has closed a bullish engulfing candle over 50 EMA, which is suggesting odds of more buying in the USD/JPY currency pair. 

The USD/JPY may exhibit further room for buying until 109.680, and violation of this can open more room for buying until 110.500 and 111.450. On the lower side, support continues to hold around 108.750. Let’s look for buying traders over 108.850 today.  

All the best for today! 

Categories
Crypto Market Analysis

Daily Crypto Review, Apr 8 – BCH and BSV halving countdown; Cryptos consolidating after a move up

The cryptocurrency market established its position after the gains it made yesterday. Bitcoin is currently trading for $7,338, which represents an increase of 0.76% on the day. Meanwhile, Ethereum gained 0.42% on the day, while XRP gained 1.33%.

The cryptocurrency market established its position after the gains it made yesterday. Bitcoin is currently trading for $7,338, which represents an increase of 0.76% on the day. Meanwhile, Ethereum gained 0.42% on the day, while XRP gained 1.33%.

The cryptocurrency market established its position after the gains it made yesterday. Bitcoin is currently trading for $7,338, which represents an increase of 0.76% on the day. Meanwhile, Ethereum gained 0.42% on the day, while XRP gained 1.33%.

CyberVein took the position of today’s most prominent daily gainer, with gains of 47.18%. Bytecoin lost 8.52% on the day, making it the most prominent daily loser.

Bitcoin’s stayed at the same place dominance-wise. Its value is now 64.25%, which represents a 0.1% difference to the downside when compared to yesterday.

The cryptocurrency market capitalization increased over the past 24 hours. Its current value is $209.34 billion. This value represents an increase of $4.65 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Twitter CEO, as well as the founder of Square Jack Dorsey, has started a fund, which will help with fighting COVID-19. The fund is called Start Small LLC. Dorsey is seeding the fund with $1 billion, which is roughly 28% of his wealth.

Honorable mention

BCH/BSV

Bitcoin Cash will complete its block reward halving in the next 9 hours, with Bitcoin Satoshi’s Vision following shortly after.

By performing a block reward halving, Bitcoin Cash will cut its block reward from 12.5BCH down to 6.25BCH.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day consolidating and testing the upside and downside relative to the level it is in right now. The largest cryptocurrency tried to break the $7,420 resistance level many times, but with no success. It also tested the $7,085 level once again, but the bulls quickly reacted to the price going down and jumped in to help stabilize the market.


Bitcoin’s volume is slightly lower than yesterday, while its RSI dropped out of the overbought territory and is now at the value of 64.

Key levels to the upside                    Key levels to the downside

1: $7,420                                           1: $7,085

2: $7,750                                           2: $6,850

3: $8,000                                            3: $6,640

Ethereum

Ethereum spent the past 24 hours fighting to stay above the $168 level. After a sharp increase in price, ETH dropped down from $176 to $162. However, the ETH bulls jumped in and brought the price above the $168 resistance level, making it support.


Though Ethereum’s volume reduced by quite a bit, it is still elevated compared to the previous week. Its RSI level is currently at 69.

Key levels to the upside                    Key levels to the downside

1: $178.6                                             1: $168

2: $185                                              2: $158 

3: $193.6                                            3: $147.5

Ripple

XRP also tested where it will find a suitable place to consolidate. The price fluctuated between the $0.19 and $0.205, trying to find the stabilization point. XRP failed to break $0.205 to the upside, but also retested $0.19 right after failing to break to the upside. After failing to break to the downside as well, XRP consolidated right below the $0.2 level.


XRP’s volume is just slightly lower when compared to yesterday, while its RSI level is at 67.

Key levels to the upside                    Key levels to the downside

1: $0.2                                                1: $0.19

2: $0.205                                            2: $0.165

3: $0.227                                             3: $0.147

Categories
Crypto Videos

Master Doji Candlestick Trading! Unlock Your Potential!

https://youtu.be/C5LQwNyf0Sw

https://youtu.be/C5LQwNyf0Sw

Profiting from the crypto market – Doji candle trading

Doji candlesticks

The Doji star, better known as the Doji candlestick, is a unique candle that signals indecision in the crypto market. It shows that neither the crypto bulls nor bears are in control. However, not everything is that simple. The Doji candlestick has five variations. Each one of them shows something different. This is why it’s important to understand how to spot and read different Doji candle variations.

The Doji candlestick is characterized by its cross-like shape. This happens when a cryptocurrency pair opens and closes at the exact same level leaving a very small or even non-existent body while also exhibiting upper and lower wicks of equal length. While Doji mostly represents indecision in the market, it can also indicate a slowing momentum of an existing trend.

Doji candle in technical analysis

The Doji candle can be a very important piece of information as it can provide crypto traders with a moment to stop trading and reflect. However, it is important to consider the Doji candle in conjunction with other tools when timing your market exit point.

Doji candle variations

While the traditional Doji star shows indecisiveness, other variations can have different implications.
The picture on the screen will show different variations of the Doji candlestick, as well as its outcomes.

Trading the Doji candlestick

Traders use various ways to trade various Doji candlestick patterns. However, they all look for signals that complement the Doji candlestick in order to execute high-probability trades.

Trading the Doji star

 

The chart shows the Doji star appearing right at the bottom of an existing downtrend. This Doji pattern suggests that neither bulls nor bears are in control, meaning that a trend reversal is possible. At this point, it is crucial to take a look at supporting signals from other tools and indicators. This example makes use of the stochastic indicator, which is currently in the oversold territory, which adds to the bullish bias.

A popular Doji trading strategy involves looking for Dojis, which appear near support and resistance levels. The chart highlights the Dragonfly Doji, which appeared near trendline support. In this case, the Doji doesn’t appear at the top of the uptrend, so it doesn’t mark a trend reversal. The Dragonfly Doji, in this case, shows the rejection of lower-level prices. This potential bullish signal is further supported by the candle appearing near the trend support.

Categories
Forex Course

95. Adding Pivot Points to Your Range Strategy

Introduction

Introduction

Introduction

In the previous two lessons, we completely understood the basics of pivot points as well as how to calculate and interpret them. And now, we can move on and start applying this indicator to our charts and find trading opportunities using it.

In this lesson, we shall use the pivots points in our range trading strategy. We will be giving you a complete guide on the trading range with the assistance of pivot points.

Incorporating Pivot Points into Ranges

The Basics

As we already learned, pivot point has S1, R1, S2, R2, etc. which represents Support and Resistance whose working principles are the same as the typical Support and Resistance. According to the definition, support is the area in which the market tends to hold and move up, and resistance is the area where the market holds and typically moves downwards.

Talking about a range, it is the state of the market which moves in a sideways direction and repeatedly bounces off from support and resistance level. So, we shall be testing the pivot points as the place where the market can hold and possibly reverse.

The Thumb Rule

When the market is at any of the upper Resistance levels, we look to go Short on the security. When the price is at any of the lower Support levels, we look to go Long on the security.

Live Chart Example

Below is the chart of GBP/CAD on 15min timeframe. We can see that currently, the market is in a range (as shown in the box). The market was ranging on the 16th of March. With these values of 16th March, we calculate the pivot points for the next day and find trading opportunities.

Now consider the same chart after we’ve determined the P, S1, R1, S2, R2 pivot levels. Following up range, we can see that the S1 level was formed exactly at the bottom of the range. Now, both S1 and the bottom of the range is indicating a Buy a signal. Hence, when the price touches the S1 level, we can go long on this pair.

From the chart, we can clearly see that we found two opportunities to hit the buy at the first Support level S1.

Placements

Having a predetermined take profit and stop loss is vital in trading. In this particular example, the take profit can be placed at the pivot point (P) and stop loss below the S1 such that the trade yields 1:1 Risk Reward. Note that there are times when the take profit can be placed at the R1 level as well. But this requires expertise in technical analysis as well as in pivot points.

The above example is the way for traders to get the hang of how to trade pivot points. To do it more professionally, one must use other technical analysis tools to have a confirmation on the pivot levels. For instance, if there appears a Doji candle at the S1 level and also the stochastic indicator is indicating that the market is in the oversold area, then there are more odds in our favor that the support will work in the direction we predicted.

So, to sum it up, one must use the pivot point levels by clubbing it with other technical tools to find optimum results. We hope you comprehended this lesson to the best of your ability. Cheers!

[wp_quiz id=”69435″]
Categories
Forex Market Analysis

Daily F.X. Analysis, April 07 – Top Trade Setups In Forex – Risk-off Sentiment In Play! 

On the forex front, the ICE U.S. Dollar Index was little changed on the day at 100.79. On Tuesday, eyes will be on the series of low impact economic events from the Eurozone, U.K., and U.S. economy, but these may not drive major price action in the market. So we should focus on the technical side of the market. The German Federal Statistical Office will report February industrial production (-0.9% on month expected).

On the forex front, the ICE U.S. Dollar Index was little changed on the day at 100.79. On Tuesday, eyes will be on the series of low impact economic events from the Eurozone, U.K., and U.S. economy, but these may not drive major price action in the market. So we should focus on the technical side of the market. The German Federal Statistical Office will report February industrial production (-0.9% on month expected).

On the forex front, the ICE U.S. Dollar Index was little changed on the day at 100.79. On Tuesday, eyes will be on the series of low impact economic events from the Eurozone, U.K., and U.S. economy, but these may not drive major price action in the market. So we should focus on the technical side of the market. The German Federal Statistical Office will report February industrial production (-0.9% on month expected).

France’s INSEE will release the February trade balance (5.05 billion euros deficit expected). The U.S. Labor Department will report JOLTS job openings for February (6.5 million expected). The Federal Reserve will post February consumer credit (+14.0 billion dollars expected).

Economic Events to Watch Today     

 

 

EUR/USD – Daily Analysis

The EUR/USD slipped 0.1% to 1.0796, down for a sixth straight session. Official data showed that German factory orders dropped 1.4% on month in February (-2.5% expected). On the other hand, the eurozone Sentix Investor Confidence Index declined to -42.9 in April (-37.5 expected) from -17.1 in March.

The uptick in German’s industrial production for February may not provide support to the EUR/USD because the futures tied to the S&P 500 futures are starting to reporting a 0.60% drop and will likely draw bids for the greenback during the day ahead.

In the meantime, if the German data represents that the manufacturing output was already facing a renewed recession ahead of COVID-19 concerns seen in March, the EUR currency may draw offer, possibly testing support at 1.0770.  

It is worth mentioning that Industrial Production usually releases by the Statistisches Bundesamt Deutschland, which measures outputs of the German factories and mines. Whereas, the changes in industrial production are broadly watched as a significant sign of strength in the manufacturing sector. A high figure is understood as positive or bullish for the EUR. Hence, a low reading is seen as negative (or bearish). The German Federal Statistical Office will report February industrial production (-0.9% on month expected).

Daily Support and Resistance

  • S1 1.0653
  • S2 1.0732
  • S3 1.0769

Pivot Point 1.081

  • R1 1.0847
  • R2 1.0889
  • R3 1.0967

EUR/USD– Trading Tips

On Tuesday, the EUR/USD is trading bearish at 1.088, having an immediate support level of around 1.07990. On the 4-hour chart, the EUR/USD has violated the support level of 1.085, which is now working as a resistance. A bearish breakout of 1.07990 level may extend selling bias until the next support level of 1.0650. While the MACD is staying below 0, supporting the odds selling movements in the market. At the same time, the 50 periods exponential moving average is also keeping the EUR/USD in a bearish mode. Bearish crossover of 1.081 area can open further room for selling until 1.065 level. So, let’s consider taking selling trades below 1.081 and bullish above the same to target 1.0946 today.

GBP/USD– Daily Analysis

The GBP/USD lost 0.3% to 1.2224. U.K. Prime Minister Boris Johnson has been admitted to intensive care as his coronavirus symptoms worsened. Meanwhile, the Markit U.K. Construction PMI slid to 39.3 in March (44.0 estimated) from 52.6 in February.

As per the latest report, the death toll from the coronavirus increased by 621 to 4,934. The total number of confirmed infections rose to 47,806. Apart from the coronavirus intensifying concerns, the GBP currency could remain bearish in the European trading hours, mainly due to the sluggish data. As in result, the U.S. 10-year treasury yields remain flashing green around 0.68% with major Asian stocks marking gains.

At the coronavirus front, the decreasing fear of coronavirus is also the reason behind the risk-on market sentiment. While the declining figures from Spain, Italy, and the U.K., the recent decline in the British death losses from the top of April 04 figures of 708 to 439 providing support to the market, but it seems doubtful as per the experts.

At the USD front, the U.S. dollar losing its bullish momentum on the day, mainly due to the risk recovery sentiment in the market. The fresh stimulus package hints from the U.S. also keeps the USD lower. Looking forward, investors will keep their eyes on the coronavirus updates. As well as, the government/central bank struggles to control the deadly disease will also be essential to watch for near-term direction.

 

Daily Support and Resistance

  • S1 1.1909
  • S2 1.21
  • S3 1.2184

Pivot Point 1.229

  • R1 1.2375
  • R2 1.248
  • R3 1.267

GBP/USD– Trading Tip

The GBP/USD is trading at 1.2330 within a symmetric triangle pattern, which is supporting Sterling at 1.220 and along with resistance around 1.2490. On the 4-hour timeframe, the GBP/USD pair may find resistance around 1.2470, along with support around 1.2278. In the case of market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. Whereas, the chances of buying remains solid over 1.2275 until 1.2520. The MACD and 50 EMA are also supporting the bullish bias, so let’s consider taking buying trades over 1.2209 with a target of 1.2400. 

USD/JPY – Daily Analysis

During Tuesday’s Asian session, the USD/JPY currency pair failed to continue its 3-days winning streak and faced some fresh supply while dropped to 108.67 level, mainly due to modest declines in the U.S. dollar in the wake of risk-on market sentiment. The fresh recovery in the risk market weakened the safe-haven JPY and collaborated the pair limit the downside. The USD/JPY is trading at 108.79 and consolidates in the range between the 108.67 – 109.28.

The decreasing number of new coronavirus cases is also the reason behind the risk-on market sentiment. While the declining figures from Spain, Italy, and the U.K., the recent decline in the British death losses from the top of April 04 figures of 708 to 439 providing support to the market and weakened the Japanese yen’s safe-haven status.

Moreover, the risk-on market sentiment could also be attributed to the fresh pickup in the U.S. Treasury bond yields. The Japanese government is showing a willingness to declare a state of emergency for Tokyo, and other big cities further weighed on the Japanese yen, which was also seen as a factor helping limit the downside.

On the other hand, the United States President Donald Trump is also showing a readiness to declare another aid package after the House Speaker Nancy Pelosi gave hints for the same. The risk sentiment got a boost, driving the Japanese yen higher.

Daily Support and Resistance

  • S1 105.37
  • S2 106.64
  • S3 107.08

Pivot Point 107.91

  • R1 108.35
  • R2 109.17
  • R3 110.44

USD/JPY – Trading Tips

The USD/JPY is also forming a symmetric triangle pattern on the 4-hour chart in the wake of thin volatility and trading volume in the market. The USD/JPY is trading choppy around 108.884, still staying above previously violated the choppy trading range of 108.650 – 107.250. With this, the USD/JPY’s best immediate support is likely to be found around 108.700. On the 4 hour timeframe, the Japanese pair has closed a bullish engulfing candle over 50 EMA, which is suggesting odds of more buying in the USD/JPY currency pair. The USD/JPY may exhibit further room for buying until 109.680, and violation of this can open more room for buying until 110.500 and 111.450. On the lower side, support continues to hold around 108.750. Let’s look for buying traders over 108.850 today.  

All the best for today! 

Categories
Crypto Market Analysis

Daily Crypto Review, Apr 7 – BTC secures its place above $7,000; Altcoins surge with ETH leading the way

The cryptocurrency market had another great day while Bitcoin established its price above the $7,000 level. Altcoins increased in value significantly, with many of them surpassing Bitcoin’s gains. Bitcoin is currently trading for $7,330, which represents an increase of 3.92% on the day. Meanwhile, Ethereum gained an astonishing 15.08% on the day, while XRP gained 7.36%.

Digibyte took the position of today’s most prominent daily gainer, with gains of 20.97%. Swipe lost 1.16% on the day, making it the most prominent daily loser.

Bitcoin’s lost some dominance in the past 24 hours as many altcoins surpassed its gains. Its value is now 64.35%, which represents a 1.15% difference to the downside when compared to yesterday.

The cryptocurrency market capitalization increased considerably over the past 24 hours. Its current value is $204.99 billion. This value represents an increase of $7.87 billion when compared to the value it had yesterday.

What happened in the past 24 hours

The Bank of Korea has launched a new pilot program for its central bank digital currency. This launch came rather early as Korea was afraid some other country could take the lead in the industry.

The South Korean central bank reevaluated the CBDC proposal after closely observing what other developed nations, such as Japan and the US, were doing.

Honorable mention

Steem

Tensions between Steem and the Hive community continue to escalate as Steem executes a soft fork so it could freeze up to 20 accounts that were owned by the network’s former witnesses.

These frozen accounts hold around 17.6 million STEEM, which is worth approximately $3.2 million and equates to nearly 5% of Steem’s total supply.

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Technical analysis

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Bitcoin

Bitcoin bulls pushed the price up yet again, establishing the level above $7,000. On top of that, Bitcoin broke many resistance levels. Besides $6,850, which was broken yesterday,Bitcoin went through the 7,085 one as well. However, the $7,420 level stopped its uptick as there was simply no pressure to reach above that one too.


Bitcoin’s volume increased slightly, while its RSI on the 4-hour chart is deep in the overbought, standing at the value of 76.

Key levels to the upside                    Key levels to the downside

1: $7,420                                           1: $7,085

2: $7,750                                           2: $6,850

3: $8,000                                            3: $6,640

Ethereum

Ethereum had a fantastic day as ETH bulls pushed its price up more than 15%. The second-largest cryptocurrency pushed through $147.5 and $158 and $168 resistances, only to be stopped at the $178.6 resistance level. This parabolic move is pretty unstable and might require a pullback to stabilize.


Ethereum’s volume increased substantially, while its RSI level is unbelievably high, sitting at 89.5.

Key levels to the upside                    Key levels to the downside

1: $178.6                                             1: $168

2: $185                                              2: $158 

3: $193.6                                            3: $147.5

Ripple

XRP had a great couple of days, with its price constantly rising. However, the past 24 hours were especially great as XRP managed to break its $0.19 resistance level. The move was stopped by the $0.2 key level as there wasn’t enough bullish presence.


XRP’s volume almost doubled during the spike, while its RSI level went deep into the overbought territory, currently sitting at 85.

Key levels to the upside                    Key levels to the downside

1: $0.2                                                1: $0.19

2: $0.205                                            2: $0.165

3: $0.227                                             3: $0.147

Categories
Forex Price-Action Strategies

Breakout Confirmation Candle and the Difference It Makes

Breakout trading strategy traders first wait for the breakout with good momentum. Then, they are to wait for the breakout confirmation candle. A breakout can be confirmed in two ways. It can take the price towards the trend, or it could come out as in inside bar reversal candle. As long as the candle closes below the breakout level, it confirms the breakout. However, these two types of breakout confirmation push the price towards the trend a bit differently. In today’s article, we are going to demonstrate an example of this.

Breakout trading strategy traders first wait for the breakout with good momentum. Then, they are to wait for the breakout confirmation candle. A breakout can be confirmed in two ways. It can take the price towards the trend, or it could come out as in inside bar reversal candle. As long as the candle closes below the breakout level, it confirms the breakout. However, these two types of breakout confirmation push the price towards the trend a bit differently. In today’s article, we are going to demonstrate an example of this.

Breakout trading strategy traders first wait for the breakout with good momentum. Then, they are to wait for the breakout confirmation candle. A breakout can be confirmed in two ways. It can take the price towards the trend, or it could come out as in inside bar reversal candle. As long as the candle closes below the breakout level, it confirms the breakout. However, these two types of breakout confirmation push the price towards the trend a bit differently. In today’s article, we are going to demonstrate an example of this.

The price after being bearish makes a bullish correction. The last candle comes out as a bearish pin bar. This is a strong bearish reversal signal. The sellers are to wait for the price to head towards the level of support, where the price has a bounce earlier.

The price heads down with good bearish momentum. It seems that it is going to make a breakout at the drawn level. The breakout sellers are to keep their eyes on the pair closely to take a short entry upon a bearish breakout and breakout confirmation.

Here it comes. The last candle breaches the level of support closing well below it. This is an explicit breakout, which the sellers wait for. If the next candle confirms the breakout, the sellers may drive the price towards the South further.

The next candle comes out as a bullish inside bar. However, it closes within the breakout level. It means the breakout is valid. It is not an A+ breakout confirmation. It offers less reward and does not drive the price towards the trend with good momentum. If the candle came out as a bearish candle closing below the breakout candle, it would be a different ball game. The price may make a move towards the downside by offering 1R at least. Let us see what happens here.

The next candle comes out as a bearish candle. Some sellers may trigger a short entry. In most cases, it does not travel as far as it has traveled to offer the entry.

It produces a strong bearish candle. It seems that the sellers are in control. The question is whether it travels the same distance of Stop Loss-Entry or not. Let us find out from the next chart.

The price starts making an upward correction. It goes back within the breakout level. This chart does not look good for the sellers any more unless it makes a bearish breakout at the last lowest low.

We have seen that the breakout candle and breakout momentum are good. However, the price does not head towards the trend and travel the distance as it usually does. This is what happens if the breakout confirmation candle comes out as an inside bar reversal candle. Thus, it is best if we skip taking such entry.

Categories
Forex Elliott Wave

Validation Rules on Impulsive Waves – Intermediate Level

Introduction

Introduction

Introduction

In our previous articles, we have seen that impulsive waves have construction rules. However, some rules, or principles, allow the wave analyst to validate or confirm each guideline. These rules are divided into two groups, which we will detail in this educational article. 

First Rule – Validation of the Trend Line 2-4

This rule will apply once the impulsive pattern ends. The wave analyst must trace the trendline joining the end of waves 2 and 4. Then, the impulsive wave will be confirmed if the price action pierces the trendline 2-4 in the same or less proportion of time it took to form wave 5.

In case the fifth wave takes longer, the price develops a terminal structure or wave 4 that has not still ended, another possibility is the wave analyzed does not correspond to an impulsive formation, but to a corrective wave.

Second Rule – Retracement from the fifth wave

Within an impulsive wave, the wave analyst must recognize which the extended segment is. Depending on this factor, it will be possible to determine the level at which the price could fall, determined by the wave 2 and 4 price range within the momentum structure.

First Wave Extension

In this case, the retracement should go to the end of wave 4. However, if the price extends its retracement beyond the end of wave 4, then the impulsive wave will end up with a larger correction in terms of price and time.

Third Wave Extension

The price has to return to the fourth wave area of ​​the impulsive pattern and will generally finish near the end of that wave. If the retracement comprises more than 61.8% of the complete motive sequence, then the third wave would involve a higher degree impulse wave completion.

Fifth Wave Extension

When the extension appears in the fifth wave, the price should reverse at least 61.8% of that wave, although it might not retrace the complete wave. If the price retraces the complete progression of the fifth wave, then the retracement would complete a higher degree pattern.

In this case, the following could happen:

  1. The fifth wave extension pattern is part of a higher degree impulse, which is also a fifth wave extension, or
  2. The extension of the fifth wave is a wave C of a flat pattern or a zigzag.

Fifth Wave Failure

A fifth wave failure occurs when wave 5 of an impulsive sequence is shorter than wave 4 high. It generally occurs when the opposing trend is stronger than the initial impulsive movement trend. Consequently, if the wave analyst detects this type of failure, it should notice that the movement following the fifth wave is highly likely to reverse the forward movement of the impulsive movement completely.

On the other hand, if the motive movement was bullish, there should not be further highs until the price has fully retraced the impulsive bullish sequence. This affirmation is analogous if the impulse is bearish.

Conclusions

In this educational article, we have seen how to validate an impulsive sequence in terms of its correction. Also, we commented on the potential of the next path, respecting the fifth wave retracement and what is the extended wave in the impulsive sequence.

Likewise, we have seen the case of the failure in a fifth impulsive wave and what will be the impact in the next movement.

In the next educational article, we will see the process of validation of corrective structures.

Suggested Readings

  • Neely, G.; Mastering Elliott Wave: Presenting the Neely Method; Windsor Books; 2nd Edition (1990).

 

Categories
Crypto Videos

Make Crypto Trading Profits Using Forex Techniques – The Three Line Strike!

https://youtu.be/lSp0UuMZxM4

https://youtu.be/lSp0UuMZxM4

 

Generate profit trading cryptocurrencies – Three Line Strike

Many traders rely only on indicators, while only a few take into consideration patterns that appear in the market. Even fewer people are spotting small candlestick patterns, which they might think of as insignificant. However, they are far from insignificant.

Three Line Strike

A three-line strike represents a continuation group of candlesticks that is formed by three candlesticks in the direction of a trend, then followed by a final candlestick that pulls back to the starting point.
There are two versions of a three-line strike: Bullish/Bearish

The bullish three line strike consists of three strong bullish candlesticks that close higher than the last one, then followed by a final candle, also known as the strike candle. The strike candle goes in the opposite (bearish) direction and opens at or higher than the third candlestick, but closes below the open of the first candle in the pattern.

A bearish three line strike is everything, but in reverse, three strong descending candles that close progressively lower followed by a bullish strike candlestick. The strike candle opens at or lower than the third candle close and closes above the first candlestick open.

Validating the pattern

To validate this pattern, we need to confirm that the first three candles are at least of average size. They need to have a defined stair-case like appearance in order to be reliable.
A bullish three line strike should be treated as an extension of the three white soldiers pattern, while a bearish three line strike as an extension of the three black crows pattern.

Market Sentiment

The assumption behind the three-line strike amongst traders is that the strike candle shows a temporary correction that will not be prolonged, while the main trend will follow the first three candles. The pullback of the strike candle is a reaction to the strong move to one direction in the first part of the pattern.

Buyers should use the low point of the pattern to create an entry opportunity. Sellers, on the other hand, should use the high point of the pattern to create an opportunity to sell high.

Three Line Strike Reliability

The three-line strike is not a very common pattern in cryptocurrencies. However, it is quite reliable when paired up with volume indicators, and traded with the larger time frame trend. A thing to note is that the bearish three line strike is slightly more reliable than the bullish one when it comes to crypto trading.

While the bearish pattern was accurate over 60% of the time, the bullish one was accurate, only 50% of the time.
Bullish Three Line Strike – Example
The example will show a chart which created a bullish three line strike. The first three candlesticks lined up in a three white soldiers formation, signaling reliability.

A buy signal was confirmed when the low of the strike candle reached below the first candle open.
Bearish Three Line Strike – Example
This example will show a chart that illustrates a bearish three line strike. The high of the strike candle does not reach the open of the first candle, but remains within tolerance levels, and is close enough to be classed as a bearish continuation.

Categories
Forex Videos

Combine Fundamental &Technical Analysis To Master Forex

 

 

 

Combine Fundamental & Technical Analysis To Master The Forex Market

In this video, we will be looking at combining fundamental and technical analysis, which are the yin and yang of forex trading. Professionals, including institutional traders, tend to take a balanced approach when incorporating fundamental and technical analysis into their trading. Whereas some professional traders will lean towards fundamental analysis and incorporate technicals into where they see price action going based on current or future economics. However, many retail traders tend to lean towards technical analysis.
Traders who wish to be more rounded need to take both of these into consideration in order to be more consistent, and this involves having a good knowledge base of both.

Fundamental data releases can offer us the directional bias when trading. As well as waiting for the release, markets will often anticipate price action direction leading up to an economic data release, especially if analysts believe the data is going to be above or below expectations. And therefore, it is important to try and second guess what the markets are expecting in the run-up to the release and then where price action will go once the data has been delivered into the market. For example, sometimes market data might be worse than expected by the markets, and yet price action goes in the reverse direction as you might expect. This is one of the reasons we see a lot of volatility surrounding high-level data releases, which is because people have varying opinions on the effects of the data.
However, traders are advised to play the probability game; i e., if the market data release is bad, we should expect bearish price action, and if the market data is good, we should expect bullish price action. If technical indicators subsequently work in line with the data, and in line with the fundamentals of the data release, then we should trade accordingly Having pinpointed an ideal entry. This way, we will be stacking the odds in our favor for a successful trade.
There are many ways to incorporate fundamental and technical analysis into your trading, but in this video, we will be looking at three methods.

Method 1, Involves breakout trading with fundamental analysis, which capitalizes on training when a section breaks outside of its trading range.

Example A, the catalyst for range breakouts is usually due to the release of market data news events And where such data causes extra volume to come into a particular currency pair yeah and push it outside of a consolidation range into new highs or new lows depending on the nature of the release. Because data releases can cause extra market volatility, it is always wise to air on the side of caution when trading around such events. Previous support and resistance levels can be breached, and a great deal of uncertainty can enter into the market, and at this time, it is always advisable to use tight stop losses.

 


Example B, Once our support or resistance line, is breached on an economic data release we can assume that the market has taken the data in one of two ways, and in this example, we have a dovish stance towards the Canadian dollar and whereby this particular pair, the USDCAD, has reacted in a bullish direction. Therefore we have bad economic data coming into the market about the Canadian economy, and this is supported by a price action breaching the line of resistance and where price action subsequently moves in an upward direction and whereby we should only be considering a buy trade.

By planning around data releases, we can look for technical breakouts, adjust positions accordingly incorporating tight stop losses, and even utilize the data release to leave us in a trade in order to maximize profits. Remember, the art of trading is to latch onto trends because that is where the most amount of pips are to be gained.

Method 2 combines range-bound trading with fundamental analysis.

Example C, Range bound trading involves identifying a trend with the use of a couple of simple Lines, which show us support and resistance levels and areas where the price is likely to bounce off of the support or resistance in order to maintain the price action range.

Traders use the support and resistance lines to buy at the support line in an ascending trend and to sell at the resistance line in a declining trend. Example D, This example shows a chart with a strong bearish trend.

We do not want any news data release to potentially adversely affect our descending trend and interfere with our profitable trade. Therefore, ideally, we would look to not have open trades surrounding data releases, especially if they are potentially of a high impact nature. Therefore precautions should be taken to avoid trading around high impact news events, but if you find yourself in an open and profitable trade with a looming data release, which might be of high impact in nature, we suggest you close the trade, or partially close the trade, or insert tight stop losses in order not to reverse the profits you have made on a successful range bound trade.


Method 3, Using oscillators with fundamental analysis. Example E, Oscillators are often used in technical analysis. They are often used to establish overbought or oversold conditions. Here, in this chart, we can see one such oscillator, the RSI, or relative strength indicator.


Example F, By incorporating oscillators such as the RSI, we are easily able to identify areas where price action might reverse having been oversold or overbought, and if these coincide with support and resistance lines on our chats, we must be aware of this and be prepared to take the necessary action. However, should these also coincide with new data releases, we should give them extra emphasis because even if the data goes in line with our chart, and yet our charts are telling us that the market is overbought or oversold, we could see conflicting price action.
Therefore please take all of these into consideration when setting up your next trade and consider adopting some of these methods into your trading strategy. Remember that new data releases, especially of a high-impact nature, can cause extreme market volatility.

Categories
Forex Market Analysis

Daily F.X. Analysis, April 06 – Top Trade Setups In Forex – Risk-off Sentiment In Play! 

On the forex front, the U.S. dollar continued to see safe-haven buying. The ICE U.S. Dollar Index rose 0.4% on the day to 100.58, extending its rally to a third straight session. Later today, the Research firm Markit will publish March U.K. Construction PMI (44.0 expected). The eurozone Sentix Investor Confidence Index for April will be released (-37.5 expected). The German Federal Statistical Office will report February factory orders (-2.5% on month expected).

On the forex front, the U.S. dollar continued to see safe-haven buying. The ICE U.S. Dollar Index rose 0.4% on the day to 100.58, extending its rally to a third straight session. Later today, the Research firm Markit will publish March U.K. Construction PMI (44.0 expected). The eurozone Sentix Investor Confidence Index for April will be released (-37.5 expected). The German Federal Statistical Office will report February factory orders (-2.5% on month expected).

On the forex front, the U.S. dollar continued to see safe-haven buying. The ICE U.S. Dollar Index rose 0.4% on the day to 100.58, extending its rally to a third straight session. Later today, the Research firm Markit will publish March U.K. Construction PMI (44.0 expected). The eurozone Sentix Investor Confidence Index for April will be released (-37.5 expected). The German Federal Statistical Office will report February factory orders (-2.5% on month expected).

Economic Events to Watch Today     

 

 

EUR/USD – Daily Analysis

The EUR/USD slid 0.5% to 1.0809, posting a five-day losing streak. Official data revealed that the eurozone’s retail sales surged 0.9% on month in February (+0.1% expected). Later today, the eurozone Sentix Investor Confidence Index for April will be released (-37.5 expected).

Speaking about the Germans Factory orders data, this data release by the Deutsche Bundesbank, which indicates the shipments, inventories, and new orders. A surged in the factory order total may show progress in the German economic growth, and it could also be a factor to boost inflation.

It is worth noting that the German Factory influences by two-ways either positively or negatively, the total Eurozone GDP. A high figure is considered as a positive or bullish for the EUR, while a low reading is negative.

Therefore, the pair could drop to 1.0773 previously low on mixed Ferman data. Moreover, if the greenback catches fresh bids on the turnaround in the risk sentiment, the EUR/USD currency pair could suffer in a more profound drop below 107.00 ahead.

As per the coronavirus latest report, the cases rose by 3,677 in Germany when compared with Sunday’s 5,936 new infections, showing the 4th-straight drop in the daily rate. The death toll rose by 92. Consequently, the EUR/USD is suffering badly and may trade sideways as the dollar also suffers alongside. 

    

Daily Support and Resistance

  • S1 1.0653
  • S2 1.0732
  • S3 1.0769

Pivot Point 1.081

  • R1 1.0847
  • R2 1.0889
  • R3 1.0967

EUR/USD– Trading Tips

The EUR/USD is trading bearish at 1.080, having an immediate support level of around 1.07990. On the 4-hour chart, the EUR/USD has violated the support level of 1.085, which is now working as a resistance. As of now, a bearish breakout of 1.07990 level may extend selling bias until the next support level of 1.0650. While the MACD is staying below 0, supporting the odds selling movements in the market. 

At the same time, the 50 periods exponential moving average is also keeping the EUR/USD in a bearish mode. Bearish crossover of 1.081 area can open further room for selling until 1.065 level. So, let’s consider taking selling trades below 1.081today.

GBP/USD– Daily Analysis

The GBP/USD sank 1.1% to 1.2262. The Markit U.K. Construction PMI for March will be released later in the day (44.0 expected). As per the latest report, the coronavirus cases rose to 33,718 as of 08:00 GMT on April 02, whereas there was a 24% rise in the death toll to 2,921 at the same time.

Meanwhile, the Washington Governor extended the stay-at-home order, whereas S&P declared its U.S. rating at AA+ with expectations of a recovery in 2021. As in result, the market’s risk-tone remains moderately heavy with the U.S. 10-year treasury yields dropped below 0.60%, and most Asian stocks are also flashing red.

As per the latest report, the death toll from the coronavirus increased by 621 to 4,934. The total number of confirmed infections rose to 47,806. Apart from the coronavirus intensifying concerns, the GBP currency could remain bearish in the European trading hours mainly due to the sluggish data, which is released early Monday and showed the British consumer confidence declined to the weakest since February 2009. 

On the flip side, the USD has ignored 7 million drops in the U.S. jobs for March, because the upbeat US ISM Non-Manufacturing PMI boded well for the greenback. However, the U.K. Services PMI data for March was revised down to 34.5 points, which will likely push the GBP lower.

Looking forward, the headlines related to the PM Johnson’s condition will remain driver seats. The U.S. dollar dynamics also will be critical to watch for fresh directions. Meanwhile, traders, all eyes will be on the U.K. government COVID-19 meeting, which is scheduled to happen at 0815GMT for new trading impetus. The meeting will be chaired by the U.K. Foreign Secretary Raab and include the advisers and officials.

 

Daily Support and Resistance

  • S1 1.1909
  • S2 1.21
  • S3 1.2184

Pivot Point 1.229

  • R1 1.2375
  • R2 1.248
  • R3 1.267

GBP/USD– Trading Tip

The technical side of the GBP/USD hasn’t changed much as it continues trading sideways in between the same trading range of 1.2275 – 1.2425. On the 4 hour timeframe, the GBP/USD is forming neutral candles despite worse than expected NFP figures from the U.S. Hence, the pair has gained slight support and recovered over 1.2265 resistance level, which is now working as a support. 

On the 4-hour timeframe, the GBP/USD pair may find resistance around 1.2470, along with support around 1.2278. In the case of market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. Whereas, the chances of buying remains solid over 1.2275 until 1.2520.

USD/JPY – Daily Analysis

During Monday’s Asian session, the USD/JPY currency pair flashing green and continue to gaining its traction for the 3rd-consecutive session mainly due to fresh risk recovery in the market.

The U.S. bond yields exhibited an uptick, which is providing support to the greenback and also kept the USD/JPY pair higher. Right now, the USD/JPY is trading at 109.25 and consolidates in the range between the 108.37 – 109.38.

However, the USD/JPY pair added to its intraday gains and rose further beyond the 109.00 round-figure marks, hitting fresh one-week tops in the last hour. A fresh drop in the death and cases of coronavirus gave a high relief to the trader. Whereas, the strong gain in the U.S. equity futures weakened the Japanese yen’s safe-haven demand.

On the other hand, the reason behind the Japanese bearish bias could also be TBS News report that the Japanese government is considering 6-months for a state of emergency declaration to control the coronavirus outbreak in Tokyo.

Daily Support and Resistance

  • S1 105.37
  • S2 106.64
  • S3 107.08

Pivot Point 107.91

  • R1 108.35
  • R2 109.17
  • R3 110.44

USD/JPY – Trading Tips

Technically, the USD/JPY pair is trading bullish a 109.177, having violated the choppy trading range of 108.650 – 107.250. With this, the USD/JPY’s best immediate support is likely to be found around 108.700. On the 4 hour timeframe, the Japanese pair has closed a bullish engulfing candle over 50 EMA, which is suggesting odds of more buying in the USD/JPY currency pair. 

With this, the USD/JPY may exhibit further room for buying until 109.680, and violation of this can open more room for buying until 110.500 and 111.450. On the lower side, support continues to hold around 108.750. Let’s look for buying traders over 108.850 today.  

All the best for today! 

Categories
Crypto Market Analysis

Daily Crypto Review, Apr 6 – Bitcoin above $7,000 – but will it stay there?

The cryptocurrency market had quite a good day as volume increased, and bulls gathered. Bitcoin led the market up to new highs and finally broke the $7,000 mark. It is currently trading for $7,067, which represents an increase of 4.33% on the day. Meanwhile, Ethereum gained 5.27% on the day, while XRP gained 3.39%.

The cryptocurrency market had quite a good day as volume increased, and bulls gathered. Bitcoin led the market up to new highs and finally broke the $7,000 mark. It is currently trading for $7,067, which represents an increase of 4.33% on the day. Meanwhile, Ethereum gained 5.27% on the day, while XRP gained 3.39%.

The cryptocurrency market had quite a good day as volume increased, and bulls gathered. Bitcoin led the market up to new highs and finally broke the $7,000 mark. It is currently trading for $7,067, which represents an increase of 4.33% on the day. Meanwhile, Ethereum gained 5.27% on the day, while XRP gained 3.39%.

Zilliqa took the position of today’s most prominent daily gainer, with gains of 16.97%. Steem lost 4.14% on the day, making it the most prominent daily loser.

Bitcoin’s dominance stayed at almost the same place over the weekend. Its value is now 65.5%, which represents a 0.23% difference to the downside when compared to Friday.

The cryptocurrency market capitalization increased greatly over the weekend. Its current value is $197.12 billion. This value represents an increase of $7.33 billion when compared to the value it had on Friday.

What happened in the past 24 hours

Michael Stay, a former Google’s software engineer as well as the current CTO of a DApp company Pyrofex, claims to have successfully hacked a certain zip file containing the private keys leading to over $300,000 in Bitcoin (BTC).

Honorable mention

Ripple

A new blockchain course that the Australian National University law school is offering this year now has full support from Ripple’s University Blockchain Research Initiative.

This partnership between ANU and UBRI will work on finding out more about how blockchain can disrupt the legal industry.

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Technical analysis

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Bitcoin

Bitcoin bulls pushed to reach new highs all throughout the weekend. The price went far above the resistance line of $6,850 three times, but came back quickly the past 2 times. This is the third time that its price has crossed the resistance. However, all three times, there wasn’t enough buying power to reach above $7,085. If Bitcoin doesn’t hold its gains, bears might get courageous and attack the downside.


Bitcoin’s volume increased compared to the previous week, while its RSI level on the 4-hour chart is 65.

Key levels to the upside                    Key levels to the downside

1: $7,085                                           1: $6,850

2: $7,420                                           2: $6,640

3: $7,750                                            3: $5,960

Ethereum

Ethereum followed Bitcoin in its jump up and even outperformed it. The second-largest cryptocurrency passed its $139 resistance level (for the first time, unlike Bitcoin passing through for the third time) and reached the level of $151. However, that level was quickly denied. Ethereum is still fighting to stay above this (now) support line as it enters the overbought territory.


Ethereum’s volume increased during the spike, while its RSI is currently in the overbought territory (at the value of 72).

Key levels to the upside                    Key levels to the downside

1: $168                                                1: $128

2: $178.6                                            2: $122.5 

3: $185                                                3: $100

Ripple

Even though XRP was the cryptocurrency that gained the least out of the top3, it still performed extremely well. XRP spent the weekend consolidating and preparing for a move, which is now happening. The third-largest cryptocurrency by market cap is reaching higher levels but is currently stuck around $0.185.


XRP’s volume increased when compared to the prior week, while its RSI level on the 4-hour chart reaches near the overbought territory, with the current value of 68.

Key levels to the upside                    Key levels to the downside

1: $0.19                                             1: $0.165

2: $0.2                                               2: $0.147

3: $0.205                                             3: $0.1

Categories
Forex Course

93. Introduction to Pivot Points

What is a Pivot Point?

What is a Pivot Point?

What is a Pivot Point?

The pivot point is a technical indicator that shows the levels typically used to determine the overall trend of the market in different timeframes. These points are essentially used by professional traders to identify support and resistance levels. As a retail trader, one must keep an eye on these levels to identify potential buy/sell signals. To put in simple terms, the pivot points and its corresponding support and resistance levels are places at which markets can possibly change its direction.

The reason this indicator is very enticing is because of its objective. Unlike other technical indicators, there is no decision making involved. The Pivot Points are very similar to the Fibonacci levels. This is because these levels are pretty much self-fulfilling. However, there are some differences in some respects, which shall be discussed in the next section.

It is important to know that the pivot point indicator is mostly designed for short-term traders who wish to take advantage of small price movements. The technique to trade this is similar to that of trading support and resistance, where we participate in the market on a break or bounce from these levels.

The Difference between Pivot Points and Fibonacci Retracements

Though Pivot points and Fibonacci retracements are made by drawing horizontal lines to depict potential support and resistance levels, there vary in few aspects. In Fibonacci levels, there is subjectivity involved in picking the swing lows and highs. But, in pivot points, there is no discretion involved.

In Fib retracements, the levels can be constructed by connecting any price points on a chart. Once the levels are determined, the lines are then drawn at percentages of the selected price range. In the case of pivot points, fixed numbers are used instead of percentages. And the fixed values are the high, the low, and the close of the prior day.

Interpreting Pivot Points

Pivot points indicator is typically used by traders who trade the market using technical analysis. This indicator can be applied to the Stock, Forex, Commodity, Futures as well as the Cryptocurrency market. This indicator is unique from the other indicators because it doesn’t move with the price action.

It is static, and the levels drawn remain at the same prices throughout the day. This means that traders can plan their strategy much in advance. For example, in most of the approaches, if the price falls below the pivot point, traders will go short on the security. And similarly, if the price goes above the pivot point, they will look for buying opportunities.

How do Pivot Points look?

When the standard pivot points are applied to the charts, it will look something like this (as shown below).

In the above chart, P stands for Pivot Point | S stands for Support | R stands for Resistance

There are R1, S1, R2, S2, etc. as well, but it shall be explained in the upcoming lessons. Stay tuned!

[wp_quiz id=”69068″]
Categories
Crypto Videos

Master Crypto Trading With The 3 Black Crows Formation!

https://youtu.be/jLj1_i4IbGQ

https://youtu.be/jLj1_i4IbGQ

Profiting from the crypto market – Three Black Crows pattern

Three black crows are a pattern that indicates a bearish reversal of an uptrend. The black crow formation consists of three consecutive candlesticks that each opened within the read body of the previous candle and closed at a lower price than the previous candle. Traders often use this pattern in conjunction with other tools and indicators to confirm a reversal.

Three Black Crows – Explained

Three black crows is a visual pattern, which means that there are no calculations included to create the indicator. This pattern occurs when the bears overtake the bulls during a trending market. It is important to note that the candlesticks should have short to no shadows.
Being a visual pattern, three black crows are best used as a sign to seek further confirmation from other trading tools. The confidence a trader can put into the pattern greatly depends on how well-formed the pattern actually forms. If the shadows are long, it may simply imply that a minor shift in momentum will occur between the bulls and the bears.

Using volume indicators can make the three black crows pattern much more accurate. Volume during the uptrend that leads up to the pattern should be relatively low, while the three candle black crow pattern comes with high volume.

Three Black Crows vs. Three White Soldiers


Three black crows pattern has a complete opposite, which is the three white knights pattern. This pattern looks and acts exactly the same, but is completely reversed. It signals a bear to bull reversal and has three bullish candles instead of bearish ones.

Notable info

If the three black crows pattern formation involves a significant move to the downside, traders should be careful and look for oversold conditions caused by market instability. To mitigate this threat of pattern failure, we have to use an oscillator that can help with confirmation of the market reversal.

Categories
Forex Market Analysis

Daily F.X. Analysis, April 03 – Top Trade Setups In Forex – U.S. Labor Market In Highlights! 

On the forex front, the U.S. dollar strengthened against its major peers, with the ICE Dollar Index climbing 0.6% on the day to 100.10. Today’s eyes will be on the Markit that will publish final readings of March Services PMI for the eurozone (28.2 expected), Germany (34.2 expected), France (29.0 expected), the U.K. (34.8 expected) and the U.S. (38.5 expected). The European Commission will post February retail sales (+0.1% on month expected).

On the forex front, the U.S. dollar strengthened against its major peers, with the ICE Dollar Index climbing 0.6% on the day to 100.10. Today’s eyes will be on the Markit that will publish final readings of March Services PMI for the eurozone (28.2 expected), Germany (34.2 expected), France (29.0 expected), the U.K. (34.8 expected) and the U.S. (38.5 expected). The European Commission will post February retail sales (+0.1% on month expected).

On the forex front, the U.S. dollar strengthened against its major peers, with the ICE Dollar Index climbing 0.6% on the day to 100.10. Today’s eyes will be on the Markit that will publish final readings of March Services PMI for the eurozone (28.2 expected), Germany (34.2 expected), France (29.0 expected), the U.K. (34.8 expected) and the U.S. (38.5 expected). The European Commission will post February retail sales (+0.1% on month expected).

Economic Events to Watch Today     

 

 

EUR/USD – Daily Analysis

The EUR/USD sank 1.1% to 1.0845, posting a four-day decline. Later today, the eurozone’s retail sales data for February will be reported (+0.1% on month expected). The market is lacking trading volume and volatility, but the focus will remain on the European economic events. The European Commission will report February January PPI (-0.8% on year expected).

Italy is showing some signs of slowing down in the virus cases despite this the market traders already priced in a recession in the Europan economy, especially in Germany, because the circumstances in Spain continue to rise very fast. The lockdown across Europe continues to weigh on economic activities.

The market risk-off sentiment could more worsen if the U.S. initial jobless claims ignore past expectations, which will send the EUR/USD currency pair to the fresh lowest level. 

Besides the weekly data, the 

Looking forward, the USD moves will continue to play a significant role, as attention shifts to the Euro area Final Services PMI report. Services PMI for the eurozone (28.2 expected), Germany (34.2 expected), France (29.0 expected), the U.K. (34.8 expected), and the U.S. (38.5 expected). The European Commission will post February retail sales (+0.1% on month expected). 

Most importantly, the U.S. Non-Farm Payrolls and ISM Non-manufacturing PMI data are scheduled to release later this Friday. The coronavirus related headline could also drag attention.

Daily Support and Resistance

  • S1 1.0772
  • S2 1.0886
  • S3 1.0958

Pivot Point 1.0999

  • R1 1.1071
  • R2 1.1112
  • R3 1.1226

EUR/USD– Trading Tips

The EUR/USD is trading bearish at 1.090, having an immediate support level of around 1.07990. On the 8-hour timeframe, the EUR/USD has violated the support level of 1.085, which is now working as a resistance. Now, a bearish breakout of 1.07990 level may extend selling bias until the next support level of 1.0650. 

The MACD has also crossed below 0, confirming the chances of more bearish movements in the market. The 50 EMA is also keeping the EUR/USD in a selling mode. For now, the eyes will remain on the U.S. NFP figures to determine further trends in the market. Bearish crossover of 1.1050 area can open further room for selling until 1.065 level. Let’s consider taking selling trades below 1.07990 today.

GBP/USD– Daily Analysis

The GBP/USD edged up 0.1% to 1.2390. The United Kingdom politics are getting warm after the voting to replace the opposition Labour Party leader Jeremy Corbyn closes. Moreover, the top U.K. judge gave warning that the British judiciary system will take hints from the European rules unless last Brexit-day.

As per the latest report, the coronavirus cases rose to 33,718 as of 08:00 GMT on April 02, whereas there was a 24% rise in the death toll to 2,921 at the same time.

Meanwhile, the Washington Governor extended the stay-at-home order, whereas S&P declared its U.S. rating at AA+ with expectations of a recovery in 2021. As in result, the market’s risk-tone remains moderately heavy with the U.S. 10-year treasury yields dropped below 0.60%, and most Asian stocks are also flashing red.

The U.S. Labor Department will release March nonfarm payrolls report (-100,000 jobs, jobless rate at 3.8% expected). The Institute for Supply Management will post its Non-manufacturing Index for March (43.0 expected). It’s going to be a big day, not only for the GBP/USD but also for the rest of the dollar related currency pairs. 



Daily Support and Resistance

  • S1 1.217
  • S2 1.2278
  • S3 1.2334

Pivot Point 1.2387

  • R1 1.2443
  • R2 1.2495
  • R3 1.2604

GBP/USD– Trading Tip

The GBP/USD trade sideways in between the same trading range of 1.2275 – 1.2425. On the 4 hour timeframe, the Cable has formed neutral candles as we may not see further trends until and unless the pair manages to come out of this narrow range. For that reason, the pair needs a solid fundamental reason, which we are not expecting from the United Kingdom today. Let’s see if U.S. claims help drive some price action in the market. On the 4-hour timeframe, the GBP/USD pair is pretty much likely to find resistance around 1.2470, along with support around 1.2278. In the case of market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. Whereas, the chances of buying remains solid over 1.2275 until 1.2520.

USD/JPY – Daily Analysis

The USD/JPY currency pair continues to taking bids and rose above the 108.00 level despite the high risk-off sentiment in the market, which would typically keep the Japanese yen secure. However, the pair’s bullish trend could be attributed to the sharp rise in oil prices. The USD/JPY currency pair is currently trading at 108.25 and consolidates in the range between the 107.81 – 108.27. The broad-based greenback strength also keeps the pair higher. 

As per the latest report, the COVID-19 cases have surpassed one million worldwide with over a death toll rate of over 50,000. Meanwhile, the Washington Governor extended the stay-at-home order, whereas S&P declared its U.S. rating at AA+ with expectations of a recovery in 2021. 

As well as, Japan is now facing a rise in cases that are increasing the market risk tone time by time, which eventually will likely be good for the safe-haven Japanese yen currency. As in result, the U.S. 10-year Treasury yields fell below 0.60%, down 3-basis points (bps), whereas the U.S. stock futures also mark losses of near 1.0% by the press time. Even so, stocks in Asia-Pacific are moderately positive after the recent Aussie, Japan data.

Lastly, Tokyo also reporting a record hit in daily coronavirus (COVID-19) cases extended school holidays through May 06. Recently, Japan’s Economy Minister Nishimura said that we would consider support for production rise and adopting of ECMO as part of the economic plans to combat from the COVID-19.

Daily Support and Resistance

  • S1 105.37
  • S2 106.64
  • S3 107.08

Pivot Point 107.91

  • R1 108.35
  • R2 109.17
  • R3 110.44

USD/JPY – Trading Tips

On Friday, the technical side of the market continues to exhibit choppy trading sessions within a wide trading range of 108.650 – 107.250. The best idea is to buy at the lower limit 107.250 and sell below 108.650 for now, but on the news release of U.S. nonfarm payroll, we can experience a potential breakout in the USD/JPY pair. 

The USD/JPY is trading at 108.270, consolidating sideways, right above a next support level of 107.750. On the higher side, a bullish breakout of 108.650 resistance level can lead the USD/JPY prices higher towards 109.750 level. Until then, we should look for doing choppy trading by selling below 108.600 and buying over 107.250. Below 107.200, the next support will stay around 105.990.

All the best for today! 

Categories
Crypto Market Analysis

Daily Crypto Review, Apr 3 – Bitcoin over $7,000? Is the downtrend finally over?

The cryptocurrency market had another, even more, successful push to the upside. The upswing was led by Bitcoin, which broke its immediate resistance. However, many altcoins outperformed it during the spike. Bitcoin is currently trading for $6,820, which represents an increase of 2.68% on the day. Meanwhile, Ethereum gained 3.99% on the day, while XRP gained 1.43%.

The cryptocurrency market had another, even more, successful push to the upside. The upswing was led by Bitcoin, which broke its immediate resistance. However, many altcoins outperformed it during the spike. Bitcoin is currently trading for $6,820, which represents an increase of 2.68% on the day. Meanwhile, Ethereum gained 3.99% on the day, while XRP gained 1.43%.

The cryptocurrency market had another, even more, successful push to the upside. The upswing was led by Bitcoin, which broke its immediate resistance. However, many altcoins outperformed it during the spike. Bitcoin is currently trading for $6,820, which represents an increase of 2.68% on the day. Meanwhile, Ethereum gained 3.99% on the day, while XRP gained 1.43%.

Swipe took the position of today’s most prominent daily gainer, with gains of 109.03%. Energi lost 5.453% on the day, making it the most prominent daily loser.

Bitcoin’s dominance increased half a percent in the past 24 hours as it was the one leading the push and gaining the most in value. Its value is now 65.73%, which represents a 0.5% difference to the upside when compared to yesterday.

The cryptocurrency market capitalization increased in the past 24 hours. Its current value is $190.79 billion. This value represents an increase of $5.49 billion when compared to the value it had yesterday.

What happened in the past 24 hours

The largest crypto exchange by market volume, Binance, has acquired the most popular crypto indexing website, CoinMarketCap. The purchase was made in secret, which means that the price is still undisclosed.

Binance CEO Changpeng Zhao announced that the deal officially closed March 31, even though a verbal agreement was there “a few months ago.”

Honorable mention

Stellar Lumens (XLM)

The Stellar Development Foundation has shown that it is thinking of the endangered during the times of crisis. It decided to dedicate 2.5 million Lumens to 6 non-profit organizations to help the coronavirus crisis. On top of that, they are very vocal in calling out the community to help.

The foundation will start the initiative off by donating 100,000 Lumens to each of the six charities, while the remaining funds will be used to match the community contributions on a 1-1 basis throughout the month of April.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin bulls finally mustered enough strength to reach above the immediate resistance of $6,640, which was contested many times over the past couple of days. The push was gradual rather than sudden, and BTC managed to even contest the next resistance level ($6,850) which held up well. However, one candle brought extreme volume and pushed Bitcoin just below $7,300 just briefly.


Bitcoin’s volume increased when compared to the previous days, while its RSI level is hovering below the overbought territory.

Key levels to the upside                    Key levels to the downside

1: $6,850                                           1: $6,640

2: $7,085                                           2: $5,960

3: $7,420                                            3: $5,000

Ethereum

Ethereum had a clean, steady run to the upside, with its price going from $130 all the way up to $143, where it is trading at the time of writing. The second-largest cryptocurrency by market cap finally had an increase in volume after a long period of low-volume trading. The price, at one point, briefly spiked all the way up to the $150 but was quickly brought back down.


Ethereum’s RSI level is currently in the overbought territory on the 4-hour chart, sitting at around $74. A few resistance levels have been added, but they have not been confirmed as key levels yet.

Key levels to the upside                    Key levels to the downside

1: $168                                                1: $128

2: $178.6                                            2: $122.5 

3: $185                                                3: $100

Ripple

Ever since XRP has left the descending trend, it has been quite stable and upside-oriented. However, its gains did not match the rest of the crypto market. This is the case with today’s gains as well, as XRP gained the least out of the top3 cryptos. However, the move to the upside was steady, and the volume was increased.


XRP’s volume increased multiple times during one 4-hour candle, while it was slightly increased over the rest of the day. Its RSI level is currently at 61.

Key levels to the upside                    Key levels to the downside

1: $0.19                                             1: $0.165

2: $0.2                                               2: $0.147

3: $0.205                                             3: $0.1

Categories
Forex Course

Introduction To Forex Course 4.0

Hello People,

Hello People,

Hello People,

As you all know, we have completed Course 3.0 successfully. Thanks a lot for the brilliant response and great job on the quizzes you all have taken. We have covered some of the most critical fundamentals pertaining to technical analysis in course 3.0. Please make sure to practice all the concepts we have discussed in a demo account. Without practice, it is impossible to ace the Forex Market using technical analysis. We have also made a quick navigation guide for Course 3.0 so that it’ll be easier for you to get a quick recap whenever required. You can find that guide in the link below.

Quick Navigation Guide – Forex Academy Course 3.0

With all these learnings in mind, we will be moving on to the Forex Academy Course 4.0. We have discussed most of the basics concerning technical trading in the previous course. Hence, we will be exploring some sophisticated strategies and intermediate to advanced concepts of technical analysis in Course 4.0. It is crucial to have acquired the knowledge of whatever we have studied in the previous course to catch up with these complex concepts. So it is highly recommended to finish the previous course before starting off with this one.

Topics that will be covered in Course 4.0

✫ Forex Chart Patterns & Their Importance

✫ Trading The Most Popular Chart Patterns

✫ Oscillators

✫ Momentum Indicators

✫ Pivot Points & their importance

Each of these topics will have about 7 to 10 course articles with corresponding quizzes. The USP of this course are the writers who prepared TOC and the related content. They are professional technical & price action traders who have a combined experience of 20+ years in the Forex market. So make sure to follow all the concepts that are discussed in this course and practice them well to become a successful Technical Trader. Also, try to answer the quiz questions until you get all the questions right. We wish you all the luck. Cheers!

Categories
Forex Elliott Wave

Analyzing the Triangle Pattern – Intermediate Level Part 3

In the previous article, we expanded the ideas of the triangle pattern; in particular, we talked about the contracting triangle and its variations. In this last part dedicated to the triangle pattern, we will review the non-limiting triangle.

In the previous article, we expanded the ideas of the triangle pattern; in particular, we talked about the contracting triangle and its variations. In this last part dedicated to the triangle pattern, we will review the non-limiting triangle.

In the previous article, we expanded the ideas of the triangle pattern; in particular, we talked about the contracting triangle and its variations. In this last part dedicated to the triangle pattern, we will review the non-limiting triangle.

Non-Limiting Triangle

Non-limiting triangles do not differ much from limiting triangles. Both types of triangles must meet the minimum construction requirements. However, they will have the following characteristics:

– Channeling. In the case of the non-limiting triangle, the trend lines are not convergent but divergent.

1. Congestion occurs just at or near the apex of the convergence lines.

The wave analyst should note that the term “just or near the apex” refers to the end of wave E being close to the intersection of both trend lines and the extent of wave E to be measured in terms of the time spent in the triangle formation.

b. The triangle pattern is considered Non-Limiting if the measurement of time elapsed from its beginning until the end of wave E, and the apex occurs after 40% of the interval has passed.

c. There must be a post-thrust correction that must return to the apex area.

If the triangle met any of these three conditions, then the triangle will be said to be of the non-limiting type.

Post-Triangular Thrust

The distance of the thrust outside the limits of the non-limiting triangle does not have a specific restriction. However, it can reach the length equivalent to the longest segment of the triangle. 

Likewise, once reached this extension, there is a possibility that the price will continue in the original direction of the thrust.

Expanding Triangles

Expanding triangles are very frequent in complex corrections. It is characterized because as it progresses in its formation, each segment, or the majority, is larger than the previous one.

The rules that characterize the expanding triangles are described below:

  1. Wave A or Wave B will always be the smallest wave in the triangle.
  2. In most cases, the E wave will be the longest.
  3. Expanding triangles cannot be part of wave B of a zigzag pattern. Nor can they be part of an intermediate wave, that is, waves B, C, or D of a triangle of higher degree.
  4. In most cases, the E wave will be the longest and most complex segment of the triangle. This wave can be formed by a zigzag or by a complex correction.
  5. Generally, wave E will pierce the trend line joining the ends of waves A and C.
  6. Line B-D should act similarly to contracting triangles.
  7. The extension of the thrust of the expanding triangle must be less than the longest wavelength of the triangle.
  8. When comparing the length from wave E to wave A, it must be verified that each previous wave must be greater than or equal to 50% of the next wave.

The following figure shows the three most common types of expanding triangles, of which the irregular is the most likely to appear in the real market.

 

In expanding triangles also exists limiting and non-limiting triangles. However, in this type of formations, there is no post-triangular variation between one and the other. The difference lies in the wave position that the triangle holds, which can be “standard” or be part of a complex correction.

Limiting Expanding Triangle

The term “limiting” refers to whether the triangle is a fourth wave or a B wave. Its main characteristics are described below.

1. An expansive limiting triangle usually appears in wave B, particularly in irregular failures or in flat wave formations with failure in wave C.

2. The thrust outside the triangle is a minimum of approximately 61.8% of the structure, measured from its highest to the lowest level.

Horizontal Expanding Triangle

This variation rarely appears in the real market. However, this does not mean that there is no possibility of it showing up in real markets.

The main characteristics of a horizontal triangle are:

1. Wave A must be the smallest of the formation.

2. Waves B, C, D, and E y must each exceed the final point of the previous wave.

3. There is a possibility that wave E will exceed the guideline of waves A-C.

Irregular Expanding Triangle

This variation is more common, and its characteristics are as follows:

1. Wave B is smaller than Wave A, while the rest of the waves maintain their increasing characteristics.

2. The longer the duration of the pattern, the higher the chance that the guideline will tilt up or down.

Continuous Expanding Triangle

This expanding triangle has a bias due, on the one hand, because wave B is longer than wave A, and on the other hand, because wave C is the shortest. The E wave, meanwhile, can be more volatile or “violent” than the rest of the waves.

Non-Limiting Expanding Triangle

These types of triangles tend to appear in complex corrective formations, for example, in the first or last stage of a complex sequence. In this sense, in a complex corrective structure, the thrust will generate a wave X.

Finally, concerning the apex, it is located before wave A and must be produced before it reaches 20% of the construction time of wave A.

Conclusions

With this article, we have ended the standard corrective patterns defined by the Elliott wave theory. As we have seen in previous examples, expansive triangles also usually appear on waves 4 and B. However, this does not mean that they cannot appear on wave 2.

In the next educational article, we will see the process of validating impulsive structures.

Suggested Readings

  • Neely, G.; Mastering Elliott Wave: Presenting the Neely Method; Windsor Books; 2nd Edition (1990).

 

 

 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Apr 2 – Bitcoin failing to break $6,640; What’s next?

The cryptocurrency market attempted another push towards new highs as Bitcoin bulls tried to get its price above $6,640. Even though most cryptos are in the green, the push was not successful, which may pose a problem in the short term. Bitcoin is currently trading for $6,595, which represents an increase of 4.63% on the day. Meanwhile, Ethereum gained 3.12% on the day, while XRP gained 1.95%.

The cryptocurrency market attempted another push towards new highs as Bitcoin bulls tried to get its price above $6,640. Even though most cryptos are in the green, the push was not successful, which may pose a problem in the short term. Bitcoin is currently trading for $6,595, which represents an increase of 4.63% on the day. Meanwhile, Ethereum gained 3.12% on the day, while XRP gained 1.95%.

The cryptocurrency market attempted another push towards new highs as Bitcoin bulls tried to get its price above $6,640. Even though most cryptos are in the green, the push was not successful, which may pose a problem in the short term. Bitcoin is currently trading for $6,595, which represents an increase of 4.63% on the day. Meanwhile, Ethereum gained 3.12% on the day, while XRP gained 1.95%.

Digitex Futures took the position of today’s most prominent daily gainer, with gains of 26.06%. IOTA lost 4.53% on the day, making it the most prominent daily loser.

Bitcoin’s dominance increased over half a percent over the past 24 hours as it was the one leading the push and gaining the most in value. Its value is now 65.23%, which represents a 0.54% difference to the upside when compared to yesterday.

The cryptocurrency market capitalization increased in the past 24 hours. Its current value is $185.3 billion. This value represents an increase of $5.8 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Statistics on crypto adoption came out recently, showing that online purchases using Bitcoin went down during Q1 of 2020. However, the same goes for Visa and some other apps. However, crypto exchanges saw a major increase in new accounts in 2020, showing that people are responding to the price drop opportunistically.

What seems to be the case here is that people recognize crypto as a way to hedge their portfolios, so they are investing. However, due to the economic crisis knocking at our doors, people that do not have enough funds simply can’t spend it on online purchases, which is reducing the real-world use cases significantly.

Honorable mention

Ripple

The class-action lawsuit against Ripple had an amendment which includes additional claims of false advertising as well as unfair competition, now claiming that XRP might not be a security.”

The investors’ sixth and seventh claims would appear to be a direct hedge for the event that the judge rules “against” the original suit, basically saying that XRP was an unregistered security, and therefore sold as such.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

After a steady day of consolidating, Bitcoin attempted another swift push towards the $6,640 resistance level. Even though the price reached over the level, it was quickly pushed down, announcing the fail of the push. Bitcoin is currently trading just under this key level. If the trend of Bitcoin failing to break the immediate resistances continues, we may expect a retest of the lows very soon.


Bitcoin’s volume almost tripled during the push, but quickly normalized. Its RSI level is now descending and is currently at the value of 59.

Key levels to the upside                    Key levels to the downside

1: $6,640                                           1: $5,960

2: $6,850                                           2: $5,000

3: $7,085                                            3: $4,300

Ethereum

We said yesterday that Ethereum would most likely not move without Bitcoin moving first, therefore deciding its direction. This is exactly what happened today. Ethereum followed Bitcoin to the upside, but only managing to reach its $139 resistance level before stopping the move. This key level held up strong, and ETH did not even manage to go above it.


Ethereum’s volume increased during the upswing but quickly dwindled to its usual low levels. Its RSI level is currently at 60.5.

Key levels to the upside                    Key levels to the downside

1: $168                                                1: $128

2: $178.6                                            2: $122.5 

3: $185                                                3: $100

Ripple

XRP didn’t have as good a day as BTC or ETH did, as its price didn’t increase as much. However, the fact that XRP didn’t go back under the descending trend seems to be good enough. XRP seems to be responding to a level between $0.1765 and $0.1785.



XRP’s volume increased each time the cryptocurrency retested the descending trend line. Its RSI is currently sitting at the value of 56.

Key levels to the upside                    Key levels to the downside

1: $0.19                                             1: $0.165

2: $0.2                                               2: $0.147

3: $0.205                                             3: $0.1

Categories
Forex Price-Action Strategies

The Benefit of Checking Minor Chart before Taking Entry

In one of our lessons, we have learned that when a breakout confirmation candle comes out with a long upper or lower shadow needs to be checked on the 15-min chart. The last 15 M candle plays a significant role to drive the price towards the breakout direction. A breakout confirmation candle with a long upper or lower shadow does not mean that the last 15M candle comes out as a reversal candle. We are going to demonstrate an example of this in today’s lesson.

In one of our lessons, we have learned that when a breakout confirmation candle comes out with a long upper or lower shadow needs to be checked on the 15-min chart. The last 15 M candle plays a significant role to drive the price towards the breakout direction. A breakout confirmation candle with a long upper or lower shadow does not mean that the last 15M candle comes out as a reversal candle. We are going to demonstrate an example of this in today’s lesson.

In one of our lessons, we have learned that when a breakout confirmation candle comes out with a long upper or lower shadow needs to be checked on the 15-min chart. The last 15 M candle plays a significant role to drive the price towards the breakout direction. A breakout confirmation candle with a long upper or lower shadow does not mean that the last 15M candle comes out as a reversal candle. We are going to demonstrate an example of this in today’s lesson.

The price after being bearish finds its support. The chart produces two bullish candles consecutively. A level of resistance produces a bearish reversal candle. The correction length looks good. Let us proceed to the next chart.

The next candle comes out as a bearish candle as well. However, it closes within the consolidation support. The sellers are to wait for a candle to breach the level closing well below it. It is waiting time for the sellers.

The last candle breaches through the consolidation support. The breakout does not look an explicit breakout. However, it closes below the level. If the next candle closes below the breakout level, that would confirm the breakout. The breakout confirmation candle holds the key for the sellers.

The last candle closes below the breakout candle. This confirms the breakout. However, look at the long lower spike. This looks ominous for the sellers. In naked eyes, it does not look to be a good confirmation candle for the sellers to trigger a short entry. Let us now flip over to the 15 M chart and find out how the last candle comes out.

This is the 15 M chart. The last candle is a strong bearish candle despite having a long lower spike. We do not need to flip over to any minor chart here. This means the pair is having a strong bearish momentum in the 15 M chart, which is a signal for the sellers to trigger a short entry.

As expected, the next candle comes out as a bearish candle. It seems that the price is going to hit 1R in a hurry. Let us proceed to the next chart to find out how the trade goes.

The price heads towards the South with one more candle. It hits the take profit level (1R) with ease. The price may make a more bearish move as well. The trade setup with a less promising breakout confirmation candle works wonderfully well for the traders. Do not forget to check the 15 M chart if the confirmation candle has a long upper/lower shadow. It may help you decide which entry to take and which one not to.

Categories
Forex Elliott Wave

Analyzing the Triangle Pattern – Intermediate Level Part 2

In our previous article, we saw that the triangle pattern is the most common of the three standard formations defined by R.N. Elliott. In this educational post, we will review the different types of variations of this corrective structure.

In our previous article, we saw that the triangle pattern is the most common of the three standard formations defined by R.N. Elliott. In this educational post, we will review the different types of variations of this corrective structure.

In our previous article, we saw that the triangle pattern is the most common of the three standard formations defined by R.N. Elliott. In this educational post, we will review the different types of variations of this corrective structure.

Contractive Triangle

Within the group of triangles, this formation is the most common of all. The minimum requirements of this structure are:

1. Once the contractive triangle is completed, the price must make a “thrust” that should be greater than or equal to 75% of the largest internal segment. On the other hand, this movement should not exceed 125% of the most extended triangle segment.

The following figure shows two cases. In the first, we see that wave A is the most extended segment of the contracting triangle after wave E is completed. The thrust can reach between 75% and 125% of wave A.

In the second case, we observe that wave B is the most extensive of the contracting triangle. Analogously to the previous case, we distinguish that the thrust made by the price should not be less than 75% nor greater than 125 of wave B.

2. In this type of triangle, the thrust must further exceed the highest (or lowest) end it reached during structure formation.

In other words, when the contracting triangle is about to be completed, two parallel lines should be drawn over the most extended segment, depending on which side the thrust is on, the price should touch the top or bottom line.

3. The E wave must be the smallest of all the segments of the triangle in terms of price.

As we observe in the following figure, the internal segment corresponding to wave E must be the smallest of all in terms of price, but not the time it takes for this movement to complete.

Limiting triangle

R.N. Elliott defined the limiting triangle as a formation that occurs in the waves fourth and B. Its name is because its completion must occur under specific conditions,

The completion of the limiting triangle in wave E must happen in the range of 20% to 40% before the apex point of the triangle.

Horizontal Limiting Triangle

1. The trendlines of the triangle must move in opposite directions.

In other words, when drawing the ends of the triangle corresponding to the end of waves A-C and B-D, the trendlines must correspond to a contracting triangle respecting the basic structure defined by Elliott.

2. The apex of the triangle must be within a range whose amplitude is 61.8% of the most extended segment of the triangle and whose center is the midpoint of that segment.

In the case of the previous figure, the most extended wave is wave B. However, this is analogous for the situation in which wave A or wave C is the longest in the triangle.

3. Wave D must be smaller than the internal leg corresponding to wave C. Likewise, the segment corresponding to wave E must be shorter than wave D.

 

Irregular Limiting Triangle

This type of triangle must perform a higher thrust and with greater speed than in the case of the horizontal triangle. The distinctive element of this formation is wave B, which must be longer than wave A. In general, its main characteristics are as follows.

  1. Wave B should not be higher than 261.8% of Wave A. Under normal conditions, it should be less than 161.8% of Wave A.
  2. Waves C, D, and E must be smaller than the previous wave.
  3. The trend lines of the triangle must have opposite directions.

Running Limiting Triangle

This type of wave can be confused with the Double Three corrective structure. Its main characteristics are:

  1. Wave B is longer than Wave A. It is also the largest segment of the triangle.
  2. Wave C is smaller than Wave B.
  3. Wave D is shorter than Wave C.
  4. Wave E is shorter than Wave D and is the smallest of the triangle.
  5. The thrust after the completion of wave E can become more extensive than wave B and even reach 261.8% of wave B.

Conclusions

In this educational article, we have examined the different variations of triangles and expanded their contracting variants. We must emphasize that its importance lies in the fact that this type of formations, in particular, the contracting triangle, is the most common of all triangular patterns. The knowledge of how triangles behave can provide the wave analyst with an advantage that would allow him to more accurately predict what the next market move would likely be.

In the next article, we will see the last part of the corrective formations. In particular, we will review the non-limiting triangles and their main characteristics.

Suggested Readings

– Neely, G.; Mastering Elliott Wave: Presenting the Neely Method; Windsor Books; 2nd Edition (1990).

Categories
Forex Market Analysis

Daily F.X. Analysis, April 01 – Top Trade Setups In Forex – Eyes on Advance ADP Figures 

The U.S. dollar failed to keep its momentum, with the Dollar Index marking a day-high of 99.93 before closing down 0.2% on the day to 99.01. Later today, eyes will be on the Markit as it will publish final readings of March Manufacturing PMI for the eurozone (44.6 expected), Germany (45.5 expected), France (42.9 expected), the U.K. (47.0 expected) and the U.S. (48.0 expected). The European Commission will report February jobless rate (steady at 7.4% expected). The German Federal Statistical Office will post February retail sales (+0.1% on month expected). Here’s a technical and fundamental outlook for today…

The U.S. dollar failed to keep its momentum, with the Dollar Index marking a day-high of 99.93 before closing down 0.2% on the day to 99.01. Later today, eyes will be on the Markit as it will publish final readings of March Manufacturing PMI for the eurozone (44.6 expected), Germany (45.5 expected), France (42.9 expected), the U.K. (47.0 expected) and the U.S. (48.0 expected). The European Commission will report February jobless rate (steady at 7.4% expected). The German Federal Statistical Office will post February retail sales (+0.1% on month expected). Here’s a technical and fundamental outlook for today…

The U.S. dollar failed to keep its momentum, with the Dollar Index marking a day-high of 99.93 before closing down 0.2% on the day to 99.01. Later today, eyes will be on the Markit as it will publish final readings of March Manufacturing PMI for the eurozone (44.6 expected), Germany (45.5 expected), France (42.9 expected), the U.K. (47.0 expected) and the U.S. (48.0 expected). The European Commission will report February jobless rate (steady at 7.4% expected). The German Federal Statistical Office will post February retail sales (+0.1% on month expected). Here’s a technical and fundamental outlook for today.

Economic Events to Watch Today     

 

 

EUR/USD – Daily Analysis

The EUR/USD was broadly flat at 1.1027. Official data showed that the eurozone’s CPI grew 0.7% on year in March (+0.8% expected), while the German jobless rate was steady at 5.0% (5.1% estimated). Later today, the eurozone’s February jobless rate (7.4% expected) and German retail sales (+0.1% on month estimated) will be released.

Italy marked as the second-highest country of confirmed cases in the world after the United States (140,470). Total cases are 92,472 confirmed, marking up the highest death rate in the world. 

Today, the manufacturing data are also scheduled to release in this day later. A disappointment on expectations by a big margin will likely send the greenback lower across the board. The European Commission will report February jobless rate (steady at 7.4% expected). The German Federal Statistical Office will post February retail sales (+0.1% on month expected).

Looking forward, all traders now keep their eyes on the German retail sales and manufacturing data, which is scuddled to release on at 06:00 GMT. The coronavirus headlines will take a driver’s seat while investors are likely to hold cash in the form of U.S. dollars due to intensifying coronavirus concerns.

Daily Support and Resistance

  • S1 1.0772
  • S2 1.0886
  • S3 1.0958

Pivot Point 1.0999

  • R1 1.1071
  • R2 1.1112
  • R3 1.1226

EUR/USD– Trading Tips

On Wednesday, the EUR/USD is trading slightly bearish at 1.097, having an immediate support level of around 1.0947. As we can see on the 4-hour chart above, the EUR/USD had formed a bullish channel supported the pair around 1.1060, but has now been violated. The breakout of an upward channel has a huge potential to drive the selling trend in the EUR/USD currency pair.

On the higher side, the EUR/USD pair is facing resistance at 1.1050 area. Bullish crossover of 1.1050 area can open further room for buying until 1.1145 level. Whereas, the chances of a bearish bias will remain strong if the pair closes a 4-hour candle below 1.0950 level today. On the lower side, the target is likely to target 1.0947 and 1.0885. 

GBP/USD– Daily Analysis

The GBP/USD was little changed at 1.2413. A day before, Sterling surged as traders reconciled their portfolios before the end of the first quarter of 2020, although analysts said the currency remained fragile.

However, the worse than expected economic events throughout the first quarter continued to weigh on the market’s risk-tone during the early Asian session.

Today, the US ADP Employment report and the ISM Manufacturing data are scheduled to release in this day later. A miss on expectations by a significant margin will likely send the greenback lower across the board. However, the losses could be temporary, mainly because the coronavirus outbreak is not showing any sign of slowing down with the number of cases in the U.S. continue to rise and reached above 177,000 so far. 

The economic calendar is mostly empty for the U.K.; therefore, the coronavirus updates will keep the driver’s seat until the U.S. session. Moreover, the ADP Employment Change and March month activity numbers from the world’s largest economy will be essential to watch for taking fresh direction.

Daily Support and Resistance

  • S1 1.202
  • S2 1.2208
  • S3 1.2319

Pivot Point 1.2396

  • R1 1.2507
  • R2 1.2584
  • R3 1.2772

GBP/USD– Trading Tip

The GBP/USD hasn’t moved much as it continues trading sideways around within a narrow trading range of 1.2275 – 1.2425. On the 4 hour timeframe, the Cable is forming bullish and bearish candles, showing a tug of war between the bulls and bears. We may not see further trends until and unless the pair manages to come out of this narrow range. In order to do this, the pair needs a solid fundamental reason, which we are not expecting from the United Kingdom.

On the 4-hour timeframe, the GBP/USD pair is pretty much likely to find resistance around 1.2470, along with support around 1.2278. In the case of market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. Whereas, the chances of buying remains solid over 1.2275 until 1.2520.

USD/JPY – Daily Analysis

The USD/JPY currency pair looking flat and hit the high of 107.95 from the low o 107.25 mainly due to the greenback continue to pick the bids as a safe-haven demand after the report in the U.S. said that experts expecting the virus could kill almost 100,000 and 240,000 Americans despite social distancing measures. 

The USD/JPY got support also from the Bank of Japan’s Tankan corporate survey, which showed Japanese manufacturers turned downbeat for the first time in seven years. The USD/PY is trading at 107.58 and consolidates in the range between the 107.25 – 107.94.

Besides, the risk sentiment in the market is getting worse time by time due to intensifying concerns over the coronavirus (COVID-19). As in result, the USD/JPY pair dropped earlier as JPY was getting strong bids due to its safe-haven demand while the U.S. dollar strength was supporting the pair to stay bullish. 

As per the latest report, the coronavirus outbreak is not showing any sign of slowing down with the number of cases in the U.S. continue to rise and reached above 177,000 so far. The coronavirus cases continue to increase in Europe, with Spain and Italy reporting a total of 200,000 cases so far.

The U.S. President Trump was increasing the possibilities of another major infrastructure package or some $2trn within the next relief bill. At the same time, the Democratic House Speaker, Nancy Pelosi, also declared that the United States should start developing and discussing the 4th stimulus bill. Thus, the USD/JPY pair can trade bearish in the wake of a weaker dollar and stronger yen.

Daily Support and Resistance

  • S1 105.37
  • S2 106.64
  • S3 107.08

Pivot Point 107.91

  • R1 108.35
  • R2 109.17
  • R3 110.44

USD/JPY – Trading Tips

On Wednesday, the USD/JPY is trading at 107.570, consolidating sideways, right above an immediate support level of 107.200. The USD/JPY’s trading range remains narrow as the upper limit stays at 108.500, and the lower limit rests at 107.150. 

We see neutral candles, which may trigger a breakout at any side of the market. But the bullish breakout of 108.650 resistance level can lead the USD/JPY prices higher towards 109.750 level. Until then, we should look for doing choppy trading by selling below 108.600 and buying over 107.250. Below 107.200, the next support will stay around 105.990. All the best for today!  

Categories
Crypto Market Analysis

Daily Crypto Review, Apr 1 – Crypto Outperforming Traditional Markets in Q1

The cryptocurrency market had a pretty stable day as most cryptos consolidated within previously achieved levels. Bitcoin is currently trading for $6,341, which represents a decrease of 1.23% on the day. Meanwhile, Ethereum gained 1.08% on the day, while XRP gained 1.13%.

The cryptocurrency market had a pretty stable day as most cryptos consolidated within previously achieved levels. Bitcoin is currently trading for $6,341, which represents a decrease of 1.23% on the day. Meanwhile, Ethereum gained 1.08% on the day, while XRP gained 1.13%.

The cryptocurrency market had a pretty stable day as most cryptos consolidated within previously achieved levels. Bitcoin is currently trading for $6,341, which represents a decrease of 1.23% on the day. Meanwhile, Ethereum gained 1.08% on the day, while XRP gained 1.13%.

ICON took the position of today’s most prominent daily gainer, with gains of 15.80%. Nervos Network lost 8.51% on the day, making it the most prominent daily loser.

Bitcoin’s dominance dropped almost a whole percent over the past 24 hours. Its value is now 64.69%, which represents a 0.78% difference to the downside when compared to yesterday.

The cryptocurrency market capitalization did not move much throughout the day. Its current value is $179.50 billion. This value represents a decrease of $0.41 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Digital payments company PayPal posted a new job listing, where it seeks to hire an Anti-Money-Laundering and Blockchain Strategy director that will work in their Global Financial Crimes (GFC) division.

The new director, which will be based in New York, will be in charge of evaluating the use cases of blockchain for the prevention of financial crimes.

Honorable mention

Bitcoin vs. the Traditional markets

April 1 brings us to the Q2 2020, as well as reports and analyses on how assets performed in Q1. Nikkei 225 was down 20%, which represents the worst quarter since 2008. The FTSE fell 14% for the period, which its second-worst quarterly performance ever. The S&P 500 lost 18% to close out Q1 2020, which is its worst quarterly performance since 1938.

While cryptocurrencies operate 24/7 and don’t exactly have quarters, it is important to look at them as well and compare the crypto market’s performance with the performances of other assets. The crypto market was down just 10% for 2020’s first three months, which is significantly less than the aforementioned traditional markets.

However, despite its relative resilience, bitcoin (and the rest of the market) has been trending downward along with traditional markets, which shows some form of correlation. This correlation across all assets can be explained by the saying that “macro matters more than micro.”

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin had a pretty stable day as there was no real volume to push the price up or down. The largest cryptocurrency by market cap still trades within a range, bound by $6,640 to the upside and $5,960 to the downside. As the price could not break the resistance level, we can expect a slow decline towards the support level if nothing changes on a macro level.


Bitcoin’s volume was steady and low in the past 24 hours. Its RSI level is currently at the value of 50.

Key levels to the upside                    Key levels to the downside

1: $6,640                                           1: $5,960

2: $6,850                                           2: $5,000

3: $7,085                                            3: $4,300

Ethereum

Ethereum spent the day with virtually no fluctuations. Its chart is mostly consisting of doji candles, hammer and inverted hammer candles, meaning that there is low volume, as well as great price direction indecisiveness. Ethereum gained just slightly over 1% on the day, which was just catching up to Bitcoin’s gains, which happened the day before. Ethereum most likely won’t move without Bitcoin moving first and deciding its direction.


Ethereum’s volume is extremely low, while its RSI value is currently at 53.

Key levels to the upside                    Key levels to the downside

1: $168                                                1: $128

2: $178.6                                            2: $122.5 

3: $185                                                3: $100

Ripple

XRP had a great day, even though its price gains do not show it. The third-largest cryptocurrency managed to get out of the descending range, which it was in for around a week. The price broke the upper trend line and then successfully retested the line, which held well.


XRP’s volume increased greatly during the retest of the trend line, while the rest of the day passed without much volume. Its RSI is currently at 54.

Key levels to the upside                    Key levels to the downside

1: $0.19                                             1: $0.165

2: $0.2                                               2: $0.147

3: $0.205                                             3: $0.1

Categories
Forex Videos

Win More Forex Trades With The Speculative Sentiment Index!

https://youtu.be/nYAvF4tj3UA

https://youtu.be/nYAvF4tj3UA

.Speculative Sentiment Index Index (SSI)

In this presentation, we will be looking at the speculative sentiment index and its significance in the forex market. If you have been researching some of the technical indicators that Traders use, such as the stochastic oscillator or perhaps the Bollinger bands or MACD, you will realize that the majority of them are lagging indicators. That is to say that the data they imprint on our computer screens are based on the previous or historical data, which it uses to plot the various graphs, moving averages and plot lines onto our charts.

Although this information, when carefully analyzed, helps us to determine to a great degree the potential future movements of price action, the very nature of such lagging indicators does not necessarily tell us what is happening at this very moment in time. Whereas price action, which is itself one of the only few leading indicators of price direction, does.
Although this does limit our trading ability to a certain extent, professional traders learn to marry the two together in order to tip the scales in their favor when it comes to pulling the trigger on trades.

Of course, the absolute perfect solution would be if we all traded the same way at the same time. This would be a perfect solution, but of course, it does not happen like this, because of the many different time frames being traded and the many different types of traders, from scalpers to intraday and swing to long term traders. But what if we could take a snapshot of what other traders are doing at any given time, and if we knew what they were doing, and if we could see statistically whether they were more long or more short on a particular pair, this would give us an added advantage, would it not?
This is exactly where the speculative sentiment index comes into play. It should be considered as a leading indicator, along with price action, and incorporated with your other technical tools to help you decide when to trade. So let’s take a look at how it works.


Example A, The speculative sentiment index or SSI is the accumulative trading positions data, which is captured in real-time by various brokers, as there is no central exchange.


Example B, The broker will then filter the information and offer it in graph format where each pair tells traders whether there are more buyers than sellers or vice versa. The information is provided as a ratio between the two groups.


Example C, If we know that there are more buyers or sellers on a particular currency pair that we are interested in trading, it can help to influence us either to take the trade or maybe even to wait on the sidelines. But one of the problems with the SSI is that the information will very likely differ from broker to broker, and from time frame to time frame, in which case it might be advisable for you to check two or three SSi’s on various brokers to help give you a clearer overall picture of which way price action is leaning.


Example D, Some SSiI’s provide more information than others. For example, you might expect to see the positioning, including the ratio of long to short.


Example E, The open interest


Example F, And the change between long and short positions

The more information, the better your decision-making processes will be.


Example G, Next we are going to look at how to use the SSI.


Example H, The positioning statement is one of the most utilized aspects of the SSI report.


Example I, Here we can see the numbers of traders who are long or short on a pair, and in this example, we can see that this broker offers the change in open interest, which is currently – 2.8% for the EURUSD pair. So for every one trader that is holding a long trade in this pair, there are 2.81 traders who are holding short positions. Any position that shows a minus in front of the number represents the number of short positions, while readings that are above zero represent the number of traders who are net long in the pair.

Although the SSI is a leading indicator, it is considered to be contrarian, that is to say, that the information that is supplied by the broker should be used to trade against the retail traders with currently open positions.

Example I, The rationale behind the contrarian aspect of this indicator using the 2.8% of EURUSD traders as an example who are short, means that eventually, the sellers will need to close those positions – by buying the pair to exit and because we know there is only one buyer for every 2.8 sellers, this position will eventually turn as the sellers close out their traders and leave a buying void behind them. And the opposite would apply if there were more buyers than sellers. To maximize the reversal potential of this indicator, it is advised to use it when there is a high ratio of change between the buyers and sellers.

Please remember to check SSI’s on a regular basis because some of them will be updated by the broker on a daily time frame basis, whereas some will update them once an hour or even every 20 minutes. It is important that if you decide to use this information to trade that it is as up-to-date as possible. Only then will it help you to determine whether a particular currency pair is bullish or bearish.

Categories
Forex Elliott Wave

Analyzing the Triangle Pattern – Intermediate Level – Part 1

The triangle is a corrective pattern that has five internal segments. In this educational article, we will review how to analyze the triangle formation.

The triangle is a corrective pattern that has five internal segments. In this educational article, we will review how to analyze the triangle formation.

The triangle is a corrective pattern that has five internal segments. In this educational article, we will review how to analyze the triangle formation.

Triangles and their Characteristics

Within the set of corrective structures defined by R.N. Elliott, triangle formations are more complex to analyze compared to flat and zigzag patterns. This complexity occurs because there is no specific time span that marks the end of this structure.

Despite the complexity of the triangles, it is the most common Elliott pattern to find in the real market. The knowledge of this formation will help wave analysts to understand the price position within the market.

Construction Rules

The construction rules defined for the triangle pattern are detailed as follow:

– Triangles have five internal waves, regardless of the complexity of the inner segments.
– A complete three-wave corrective structure builds each part that makes up the triangle.
– The triangle can have a bullish or bearish inclination. However, its internal structure should not change.
– The triangle has six reference points of the same degree, the origin of wave A, and the end of waves A, B, C, D, and E. From these six extremes, the wave analyst should only channel four points through the contraction lines. The points to consider are the end of wave A with the end of wave C and the end of wave B with the end of wave D.
– The base-line of the triangle is the line that joins the end of waves B and D, and its function is similar to the guideline that joins waves 2 and 4 in an impulsive wave.

The following figure represents the construction model of the triangle pattern.

As can be noted, the triangle pattern tends to appear in a fourth wave or a wave B, in some exceptional cases, this pattern could appear in a second wave.

GBPUSD Consolidates in a Triangle Sequence

The next figure illustrates the GBPUSD pair in its 4-hour timeframe. In the chart, we observe that the Cable rallied since September 03rd when the price found its bottom at level 1.19589.

Once the GBPUSD pair moved in three waves identified in green, the fourth wave consolidated sideways, developing an expanding triangle.

The triangle pattern reveals the alternation principle in terms of time and price.

The GBPUSD pair alternated in terms of time being the triangle pattern more extended in comparison with the second wave. In the same way, the retracement developed by the second wave is sharp compared with the narrow correction realized by the fourth wave.

JP Morgan Consolidated in a Triangle Pattern

The chart below shows JP Morgan Chase & Co (JPM) in its log-scale 2-day timeframe. The ticker JPM developed a bullish impulsive sequence subdivided in five waves from early 2016 when the price found buyers at $52.50 per share.

In the same way, the third wave that was formed corresponds to an extended wave, which makes us conclude that the first and fifth waves will not be extended, and they will be similar in terms of price, time, or both. In this case, both waves are identical in terms of time.

On the other hand, we observe that JPM consolidated developing an expanding triangle pattern with a slight bearish bias. Besides this structural bias, the internal sequence is respected by the price action.

Also, we distinguish the wide extension of the triangular sequence, which moved from late February 2018 until mid-August 2019, when JPM ended its internal wave E labeled in green.

Once JPM completed its fifth internal segment, the price action continued its previous bullish trend and soared to record highs at $141.10 per share.

Conclusions

From the cases analyzed, we can verify the Genn Neely’s affirmation that suggests that “the triangle pattern is a common formation that appears in the market.”

Also, we verified how the alternation principle works in the real market, while a corrective wave is simple, the other will be complex.

Finally, according to the examples reviewed, the triangle pattern could appear independently of the market analyzed,  as on currencies, stocks, indices, etc.

In the next article, we will review the different variations of the triangle pattern.

Suggested Reading

  • Neely, G.; Mastering Elliott Wave: Presenting the Neely Method; Windsor Books; 2nd Edition (1990).
Categories
Forex Market Analysis

Daily F.X. Analysis, March 31 – Top Trade Setups In Forex – Consumer Confidence Under Spotlight! 

On Tuesday, the market is mostly focusing on the major and medium impact economic events due to come out from the Eurozone and the United States. In the U.S., the Conference Board will publish March Consumer Confidence Index (110.0 expected). The Market News International will release March Chicago PMI (40.0 expected). S.P./Case-Shiller will report the 20-City Composite Home Price Index for January (+0.4% on month expected). 

On Tuesday, the market is mostly focusing on the major and medium impact economic events due to come out from the Eurozone and the United States. In the U.S., the Conference Board will publish March Consumer Confidence Index (110.0 expected). The Market News International will release March Chicago PMI (40.0 expected). S.P./Case-Shiller will report the 20-City Composite Home Price Index for January (+0.4% on month expected). 

On Tuesday, the market is mostly focusing on the major and medium impact economic events due to come out from the Eurozone and the United States. In the U.S., the Conference Board will publish March Consumer Confidence Index (110.0 expected). The Market News International will release March Chicago PMI (40.0 expected). S.P./Case-Shiller will report the 20-City Composite Home Price Index for January (+0.4% on month expected). 

Economic Events to Watch Today     

 

 

EUR/USD – Daily Analysis

The EUR/USD retreated 1.0% to 1.1029, snapping a five-day rally. Official data revealed that the eurozone’s Economic Confidence Index slid to 94.5 in March (91.6 expected) from 103.4 in February. 

Later today, the eurozone’s March CPI (+0.6% on-year estimated) and German jobless rate (5.1% expected, 5.0% in February) will be reported. The global equities recovered last week, as in result, the greenback weakened its bid tone and helped EUR/USD rise from 1.0636 to 1.1148. 

That was mainly due to the U.S. Federal Reserve declaring an open-ended asset purchase program, and the U.S. Senate passed a special $2 trillion fiscal relief package. 

Italy marked as the second-highest country of confirmed cases in the world after the United States (105,470). Total cases are 92,472 confirmed, marking up the highest death rate in the world. 

The eyes will be on the risk market sentiment, which could turn pro-risk, as the China data released in Asia showed the manufacturing activity recovered sharply to above-50 levels or expansion territory.

The risk-on rally could weaken the safe-haven demand for the U.S. dollar and send EUR/USD higher. On the data front, the German Import Price Index for February and the Unemployment Rate is scheduled to release with the preliminary Eurozone Consumer Price Index for March. Besides this, the U.S. Consumer Confidence and the Chicago Purchasing Managers’ Index are also scheduled to release.

Daily Support and Resistance   

  • S1 1.0862
  • S2 1.0958
  • S3 1.1002

Pivot Point 1.1054

  • R1 1.1099
  • R2 1.1151
  • R3 1.1247

EUR/USD– Trading Tips

Technically, the EUR/USD is trading slightly bearish at 1.099, having an immediate support level of around 1.0947. The major currency pair has formed a bullish channel which is supporting the EUR/USD pair around 1.1060, and below this, the next support is likely to be found around 1.1000. 

On the higher side, the EUR/USD pair is facing resistance at 1.1150 area. Bullish crossover of 1.1060 area can open further room for buying until 1.1185 level. Whereas, the chances of a bearish bias will remain strong if the pair continues to hold below 1.1060 level today. On the lower side, the target is likely to stay at 1.0947 and 1.0885. 

GBP/USD– Daily Analysis

The GBP/USD dropped 0.7% to 1.2364. We haven’t seen much movement in the GBP/USD as the United Kingdom continues to struggle efforts and seems very close to open the world’s biggest hospital, which built-in 10-days. They are also ordering approximately 15,000 ventilators more while saying that it needs to cope with the coronavirus outbreak.

The global news agency, Guardian, indicates the risk for the European Union citizens who have made their houses in the U.K. illegally. Whereas, Dr. Jenny Harries, deputy chief medical officer for England, said during his daily press conference on Sunday that the current limitations and lockdowns in the U.K. could continue for six months.

At the USA front, U.S. President Donald Trump did not suggest the overall lockdown in the country and said no to nationwide stay-at-home order while helping to continue the previous day’s risk-on tone. As in result, the U.S. ten-year treasury yields and most Asian stocks flashing green and mark moderate gains by the press time.

Looking forward, the final figures of the U.K.’s fourth quarter (Q4) GDP, expected to march 0.0% initial forecast, will likely offer fresh direction ahead of the U.S. data. However, news regarding the Brexit and the virus updates will be kay to watch.

Daily Support and Resistance

  • S1 1.2131
  • S2 1.2256
  • S3 1.2319

Pivot Point 1.238

  • R1 1.2444
  • R2 1.2505
  • R3 1.263

GBP/USD– Trading Tip

Technically, the GBP/USD is trading sideways around within a narrow trading range of 1.2275 – 1.2425. Since the Sterling has already crossed over 1.2275 resistance area, this is now going to work as a support. The MACD is still heading into the bullish zone, suggesting strong chances of buying the GBP/USD pair.

On the 4 hour timeframe, the GBP/USD pair is pretty much likely to find resistance around 1.2520, along with support around 1.2278. In the case of market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. Whereas, the chances of buying remains solid over 1.2275 until 1.2520.

USD/JPY – Daily Analysis

The USD/JPY currency pair found on the bullish track and rose to 108.72, mainly because the risk sentiment remains positive. The slight recovery in the greenback also keeps the pair higher. Elsewhere, the traders gave a little attention to Japan’s data-dump. 

Right now, the USD/JPY is currently tradings at 108.52 and consolidates in the range between the 107.78 – 108.72. However, the currency pair also took from the U.S. policymaker’s statement.

At the data front, Japan’s February month data dump, including Retail Sales, Industrial Production and Unemployment Rate, overall flashed upbeat signals. Whereas the Retail Sales (YoY) surprised markets by crossing -1.2% forecast to 1.7%, the preliminary figures of Industrial Production (MoM) also increased above 0.1% expected to 0.4%. While the Unemployment Rate remained stable at 2.4% with Job/Applicants Ratio returning below 1.47 forecast to 1.45.

At the U.S. economic front, U.S. President Donald Trump did not suggest the total lockdown in the country and suggested no to nationwide stay-at-home order while helped to continue the previous day’s risk-on tone. As in result, the U.S. ten-year treasury yields gain 5-basis points (bps) to 0.72%, and most Asian stocks flashing green and mark moderate gains by the press time. Consequently, the USD/JPY pair is exhibiting bullish and bearish biases both. Let’s look at the technical side. 

Daily Support and Resistance

  • S1 105.89
  • S2 106.85
  • S3 107.35

Pivot Point 107.82

  • R1 108.31
  • R2 108.79
  • R3 109.76

USD/JPY – Trading Tips

Technically, the USD/JPY is trading at 108.270, heading north to examine the resistance level of around 108.615. At the moment, the USD/JPY pair is consolidating within a narrow range, where the upper limit is 108.500, and the lower limit stays at 107.150. 

The USD/JPY may face a bullish pressure in the wake of the bullish engulfing candle, which has been formed on the 4-hour chart around 108.500 area. Such a pattern represents the dominance of bulls in the market. Consequently, the bullish breakout of 108.650 resistance level can lead the USD/JPY prices higher towards 109.750 level. Until then, we should look for doing choppy trading by selling below 108.600 and buying over 107.250. All the best for today!  

Categories
Crypto Market Analysis

Daily Crypto Review, Mar 31 – Opera browser openly supporting crypto; Markets in the green as BTC pushes towards $6,640

The cryptocurrency market has recovered from the downside push as Bitcoin regained strength and reconquered $6,000. In the past 24 hours, almost every single crypto was in the green. Bitcoin is currently trading for $6,419, which represents an increase of 6.53% on the day. Meanwhile, Ethereum gained 3.21% on the day, while XRP gained 2.4%.

The cryptocurrency market has recovered from the downside push as Bitcoin regained strength and reconquered $6,000. In the past 24 hours, almost every single crypto was in the green. Bitcoin is currently trading for $6,419, which represents an increase of 6.53% on the day. Meanwhile, Ethereum gained 3.21% on the day, while XRP gained 2.4%.

The cryptocurrency market has recovered from the downside push as Bitcoin regained strength and reconquered $6,000. In the past 24 hours, almost every single crypto was in the green. Bitcoin is currently trading for $6,419, which represents an increase of 6.53% on the day. Meanwhile, Ethereum gained 3.21% on the day, while XRP gained 2.4%.

Energi took the position of today’s most prominent daily gainer, with gains of 18.77%. There were no big losers on the other side as only two cryptos out of the top100 managed to be in the red. Status lost 1.444% on the day, making it the most prominent daily loser.

Bitcoin’s dominance dropped half a percent over the past 24 hours. Its value is now 65.47%, which represents a 0.56% difference to the downside when compared to yesterday.

The cryptocurrency market capitalization steadily increased over the course of the day. Its current value is $180.91 billion. This value represents an increase of $6.9 billion when compared to the value it had yesterday.

What happened in the past 24 hours

A web browser Opera now enables its users to access decentralized web pages with the .crypto domain extension. They made it possible through a partnership with Unstoppable Domains. This will allow users to access and surf decentralized websites, as well as to make cryptocurrency payments.

Honorable mention

Tron

Tron (TRX) founder Justin Sun posted a tweet announcing the release of Djed on Mar 28. Djed is a system for collateralized loans that he described as “something new.” However, the Djed platform was immediately criticized by the market as many think it is a copy of MakerDAO (MKR).

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin quickly and efficiently recovered from its most recent push down as its price regained previous levels. The largest cryptocurrency by market capitalization went over $6,000 yesterday, while it established its position today and even made a push towards new highs (namely the immediate resistance of $6,640). However, the push failed due to a lack of volume. Bitcoin’s future is still uncertain mostly due to external difficulties the world is facing rather than Bitcoin’s internal problems.


Bitcoin’s volume was somewhat higher than yesterday, but still at low levels. Its RSI level on the 4-hour chart is just above the middle of the range.

Key levels to the upside                    Key levels to the downside

1: $6,850                                           1: $5,960

2: $7,085                                           2: $5,000

3: $7,420                                            3: $4,300

Ethereum

Bitcoin’s downturn pushed Ethereum below the $128 support level, but as Bitcoin recovered, so did Ethereum. The second-largest cryptocurrency by market cap regained its previous support level and pushed higher up. The lack of volume prevented it from even reaching the $139 resistance level, forcing the price to consolidate within the range. Ethereum will most likely keep following Bitcoin’s price movements in the short term.


Ethereum’s volume is currently lower than the previous week’s volume, as well as overall. Its RSI level is just below the mid-range, with a value of 49.

Key levels to the upside                    Key levels to the downside

1: $168                                                1: $128

2: $178.6                                            2: $122.5 

3: $185                                                3: $100

Ripple

XRP passed over the $0.165 resistance level over the weekend, which was a great milestone towards establishing a stable price. However, the most recent downturn brought its price below this key level yet again. XRP quickly recovered and regained $0.165 as Bitcoin increased in price and pulled the whole market with it. However, the short-term future does not look good for XRP if it keeps trading within the descending range, making lower lows and lower highs.


XRP’s volume is on the same level as it was the previous week, while its RSI level is slowly descending. At the time of writing, its RSI has a value of 50.5.

Key levels to the upside                    Key levels to the downside

1: $0.19                                             1: $0.165

2: $0.2                                               2: $0.147

3: $0.205                                             3: $0.1

Categories
Forex Course

90. The ATR Indicator & Its Corresponding Trading Strategy

Introduction

Introduction

Introduction

ATR (Average True Range) is a popular volatility indicator in the market. It is used to find how much the instrument moves on an average over a given period of time. This indicator is introduced by J. Welles Wilder Jr. in his book, ‘New Concepts in Technical Trading Systems.’ Apart from ATR, this book also includes some of the most famous technical indicators such as RSI, ADX, and Parabolic SAR, etc.

The ATR indicator was originally developed to trade the commodities market, but it has been modified in such a way that it could be widely used for stocks, indices, and the Forex market as well. This indicator is not developed to indicate the price direction. Instead, it is used to measure the volatility of the instrument, which is caused by the gaps, up & down moves. ATR is a boundless indicator, unlike the other indicators we learned till now. Higher the ATR level, higher is the market volatility, and lower the ATR level, lower is the volatility of the underlying asset.

Below is an illustration of how this indicator looks on a price chart.

Trading With The ATR Indicator

The image below represents the ATR indicator on a GBP/AUD Forex chart. The orange box indicates the pullback phase, and at this phase, we can see the ATR indicator keeps going down. This means that there is currently low volatility in this pair. Conversely, the uptrend in the Green box indicates high ATR value. This means the big players are back in the business, and they are accumulating big chunks. As a result, the instrument is quite volatile. Furthermore, the yellow box again shows a decline in volatility.

Traders can use this indicator to get an idea of how far the price of an asset is expected to move on a daily basis. We suggest you use this way of trading only on higher timeframes such as daily, weekly, and monthly. If the last closed candle of a daily chart shows 50 ATR value, it means that the last candle has moved 50 pips, and we can expect the next day price movement to move similarly.

First of all, we must find out the ATR value of the last closing candle on the daily chart. Then we can look for buy/sell opportunities at the opening of a new day’s candle. The profit target should be based on the last day’s ATR value. Some traders also use double the value of the ATR indicator to place their take-profit orders. It all depends on what kind of trade you are. If the ATR value is 50, we can go for 50 pip target (conservative move), or you can even go for the 100 pip target (aggressive move)

We can also use the ATR indicator for placing Stop-loss orders. When the ATR gives us the value of the present day, we can use those values to place the stop-loss orders below or above our entry points. If the market hits the stop-loss, it means that the daily price range is moving in the opposite direction. Hence we must exit our positions as soon as we can. The major benefit of placing the stop-loss orders by using the ATR value is that we can avoid the ‘market noise.’ That is, the unusual up and down moves will not stop us out.

Changing the Settings of this Indicator affects its Sensitivity

The standard setting of this indicator is 14, which means the ATR indicator will measure the market based on the last 14 candles. If we use a setting lower than 14, it makes the indicator more sensitive, and it will show us a choppier ATR line. On the other hand, a setting above 14 makes the indicator less sensitive to the price action and shows smoother reading.

In short, most of the Traders use the ATR indicator to check the market volatility and to place the stop-loss & take-profit orders. The higher value of the indicator implies that we must go for deeper stops, and the low value means we must go for smaller stops.

That’s about the ATR indicator and its use cases. Try using this indicator to check the market volatility and place accurate stop-loss orders. There are traders who use this indicator to enter the market as well, but those are advanced strategies that we will be discussing in the future. Cheers.

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Categories
Forex Market Analysis

Daily F.X. Analysis, March 30 – Top Trade Setups In Forex – German Inflation Figures Ahead! 

The U.S. Dollar Index slid 0.9% on the day to 98.36 on Friday, wiping out most of its gains made in the prior week. During the day ahead, eyes will be on the European Commission will report the Eurozone’s March Economic Confidence Index (93.1 expected) and final readings of the Consumer Confidence Index (-11.6 previously).

The U.S. Dollar Index slid 0.9% on the day to 98.36 on Friday, wiping out most of its gains made in the prior week. During the day ahead, eyes will be on the European Commission will report the Eurozone’s March Economic Confidence Index (93.1 expected) and final readings of the Consumer Confidence Index (-11.6 previously).

The U.S. Dollar Index slid 0.9% on the day to 98.36 on Friday, wiping out most of its gains made in the prior week. During the day ahead, eyes will be on the European Commission will report the Eurozone’s March Economic Confidence Index (93.1 expected) and final readings of the Consumer Confidence Index (-11.6 previously).

The German Federal Statistical Office will post March CPI (+1.4% on-year expected). The Bank of England will release the number of mortgage approvals in February (68,200 expected) and the M4 money supply.

Economic Events to Watch Today    

 

 

EUR/USD – Daily Analysis

The EUR/USD jumped 1.0% to 1.1142, posted a five-day rally. Later today, the eurozone’s March Economic Confidence Index (93.1 expected) and German CPI (+1.4% on-year estimated) will be reported.

A series of economic fundamentals drove the pair, and even today market is likely to move on news. In particular, the U.S. initial jobless claims are expected to have risen to 1,000K from the preceding week’s 281K figure in the week ended March 20. The European Union’s upcoming emergency meeting to discuss further steps to combat the virus will be essential to watch. 

Global equities recovered last week, as in result, the greenback weakened its bid tone and helped EUR/USD rise from 1.0636 to 1.1148. That was mainly due to the US Federal Reserve declaring an open-ended asset purchase program, and the US Senate passed a special $2 trillion fiscal relief package. 

At the coronavirus front, Italy marked as the second-highest country of confirmed cases in the world after the United States (105,470). Total cases are 92,472 confirmed, marking up the highest death rate in the world. 

Looking forward, the traders will keep their eyes on the Eurozone consumer and business sentiment indices, which are scheduled to release along with the preliminary German Consumer Price index for March. Apart from this, the eyes will be on the Pending Home Sales and the Dallas Fed Manufacturing Index for taking near-term directions.

Daily Support and Resistance

  • S1 1.0673
  • S2 1.0835
  • S3 1.0935

Pivot Point 1.0997

  • R1 1.1097
  • R2 1.1159
  • R3 1.1321

EUR/USD– Trading Tips

On Monday, the direct currency pair EUR/USD is trading slightly bearish at 1.1025, having an immediate support level of around 1.0947. The major currency pair has formed a bullish channel which is supporting the EUR/USD pair around 1.1060, and below this, the next support is likely to be found around 1.1000. 

On the higher side, the EUR/USD pair is facing resistance at 1.1150 area. Bullish crossover of 1.1150 area can open further room for buying until 1.1195 level. Whereas, the chances of a bearish bias will remain strong if the pair continues to break below 1.1060 level today. On the lower side, the target is likely to stay at 1.0947 and 1.0885. 

GBP/USD– Daily Analysis

The GBP/USD surged 2.1% to a two-week high of 1.2457. The Bank of England (BOE) failed to offer any fireworks due to a lack of resources while disappointing U.K. Retail Sales, to 0.0% from 0.8% YoY forecast, also couldn’t recall the bears.

Guardian indicates the risk for the European Union citizens who have made their houses in the UK illegally. Whereas, Dr. Jenny Harries, deputy chief medical officer for England, said during his daily press conference on Sunday that the current limitations and lockdowns in the UK could continue for six months.

On the other hand, the United States President Donald Trump expects the virus figures to grow sharply in the next 2-weeks if they do not take lockdown seriously. As in result, the market’s risk-tone continues to flash red, with the US 10-year treasury yields declining below 0.70% and most Asian stocks marking losses by the press time.

Looking forward, the U.S. Dallas Fed Manufacturing and Pending Home Sales will be a key watch. Besides, the traders will also keep eyes on the virus headlines.

Daily Support and Resistance

  • S1 1.1678
  • S2 1.2019
  • S3 1.2234

Pivot Point 1.236

  • R1 1.2576
  • R2 1.2701
  • R3 1.3042

GBP/USD– Trading Tip

Technically, the GBP/USD is trading sideways around within a narrow trading range of 1.2275 – 1.2425. Since the Sterling has already crossed over 1.2275 resistance area, this is now going to work as a support. The MACD is still heading into the bullish zone, suggesting strong chances of buying the GBP/USD pair.

On the 4 hour timeframe, the GBP/USD pair is pretty much likely to find resistance around 1.2520, along with support around 1.2278. In the case of market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. Whereas, the chances of buying remains solid over 1.2275 until 1.2520.

USD/JPY – Daily Analysis

The USD/JPY currency pair just started to flashing green and rose above 108.00 level at the press time, mainly due to the broad-based greenback recovery. However, China’s rate cut by 20 basis points on early Monday and infusion of $7 billion liquidity into the banking system started to giving some support to the equity market and turns the market risk-off tone into risk-on. 

The USD/JPY pair is currently trading at 108.08 and consolidates in the range between the 107.14 – 108.20. The USD/JPY pair was recently trading near 107.25 and was representing a 0.60% loss on the day, having hit a session low of 107.12 a few minutes before press time, but now the pair got boost after slight recovery came in the equity market.

The People’s Bank of China cut the seven-day reverse repo rate to 2.2% from 2.4% and injected $7 billion or 50 billion Japanese yuan into the banking system, which recently gave some support to the equity market.

Before some time, the action by China had failed to put a bid under the risky assets. The futures on the S&P 500 were keeping losses and was reporting a 1% decline on the day. Stocks in Asia were also feeling the pull of gravity with Japan’s Nikkei index was dropping 3.4%. As a result, the safe-haven Japanese yen was getting bid as safe-haven demand.

Looking forward, the currency pair may drop to their lowest level in the future, mainly due to the fears about the Japanese government may declare a state of emergency due to intensifying coronavirus fears. 

Daily Support and Resistance

  • S1 106.51
  • S2 108.16
  • S3 108.75

Pivot Point 109.8

  • R1 110.4
  • R2 111.45
  • R3 113.09

USD/JPY – Trading Tips

The USD/JPY is trading at 107.570, heading towards testing double bottom support around 107.615. For now, the pair is stuck in a narrow range, where the upper limit is 108.500, and the lower limit stays at 107.050. The USD/JPY is facing a bearish pressure in the wake of an increased number of coronavirus cases around the globe which are driving safe-haven appeal in the market.  

Consequently, the bearish breakout of 108.150 support level can lead the USD/JPY prices lower towards 105.950 level. Until then, we should look for doing choppy trading by selling below 108.400 and buying over 108.250. All the best for today!  

Categories
Crypto Market Analysis

Daily Crypto Review, Mar 30 – Bitcoin back above $6,000 as Trump publicly supports printing $6.2 trillion

The cryptocurrency market, as it could not break the immediate resistances ahead, had a leg down over the weekend. The market stabilized with Bitcoin at above $6,000 for now. Bitcoin is currently trading for $6,223, which represents an increase of 1.34% on the day. Meanwhile, Ethereum gained 0.41% on the day, while XRP lost 1.28%.

The cryptocurrency market, as it could not break the immediate resistances ahead, had a leg down over the weekend. The market stabilized with Bitcoin at above $6,000 for now. Bitcoin is currently trading for $6,223, which represents an increase of 1.34% on the day. Meanwhile, Ethereum gained 0.41% on the day, while XRP lost 1.28%.

The cryptocurrency market, as it could not break the immediate resistances ahead, had a leg down over the weekend. The market stabilized with Bitcoin at above $6,000 for now. Bitcoin is currently trading for $6,223, which represents an increase of 1.34% on the day. Meanwhile, Ethereum gained 0.41% on the day, while XRP lost 1.28%.

Energi took the position of today’s most prominent daily gainer, with gains of 10.57%. On the other side, Steem lost 8.34% on the day, making it the most prominent daily loser.

Bitcoin’s dominance stayed at virtually the same place when compared to Friday’s value. Its value is now 66.03%, which represents a 0.13% difference to the downside when compared to before the weekend.

The cryptocurrency market capitalization took a big hit in the past 24 hours due to a sharp move down. Its current value is $174.01 billion. This value represents an increase of $13.06 billion when compared to the value it had on Friday.

What happened in the past 24 hours

Bitcoin (BTC) gains more and more support after the US President Donald Trump appeared to say he fully supported manipulating the dollar by printing $6.2 trillion.

Trump defended the Federal Reserve for printing more than $6 trillion with the words “It’s our money, we are the ones, it’s our currency,” which got quite a backlash.

Honorable mention

Ethereum

Data published the co-founder Covalent (an Ethereum analysis firm) Ganesh Swami announced that DeFi transactions are increasing its share of Ethereum block space, which goes at the expense of ETH transfers.

Swami said that the gas costs incurred by Ethereum transactions went up progressively.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

After not being able to break the $6,850 resistance for quite some time, a leg down from Bitcoin was to be expected (check our previous reports). The largest cryptocurrency by market capitalization fell below $6,000 psychological support (and $5,960 support level), but quickly recovered and stayed above it. Bitcoin is currently trading at just above $6,200.


Bitcoin’s volume is average when compared to the previous week, while its RSI level on the 4-hour chart went from severely oversold to the middle of the range.

Key levels to the upside                    Key levels to the downside

1: $6,850                                           1: $5,960

2: $7,085                                           2: $5,000

3: $7,420                                            3: $4,300

Ethereum

Ethereum went through a similar price path as Bitcoin did. Its price fell down below the $128 support level as bulls could not break the $139 reliably, but quickly recovered and went above the support level. It is currently trading at above $130, where it looks pretty safe from any downturns in the short-term.


Ethereum’s volume is on the same low levels as it was the previous week. Its RSI level has risen to the middle of the value range after almost reaching oversold territory during the price drop.

Key levels to the upside                    Key levels to the downside

1: $168                                                1: $128

2: $178.6                                            2: $122.5 

3: $185                                                3: $100

Ripple

XRP received a great surge in volume as its price rose above the $0.165. The weekend brought bad news for XRP as bears took over and brought its price below the key level of $0.165. However, the third-largest cryptocurrency quickly overcome the downtrend and went back up above this key level.


XRP’s volume increased greatly during the spike, while the rest of the volume is average when compared to the past week. Its RSI level is on the upswing, currently passing the value of 55.

Key levels to the upside                    Key levels to the downside

1: $0.19                                             1: $0.165

2: $0.2                                               2: $0.147

3: $0.205                                             3: $0.1

Categories
Crypto Videos

Maximise Profits By Trading Bull & Bear Flags In Crypto Trading

https://youtu.be/IrEzR7VjJSs

https://youtu.be/IrEzR7VjJSs

When it comes to consistently being profitable in crypto trading, the trend is definitely your friend. However, spotting the trend when it still in the early stages is very difficult, while running along with it all the way to the top is even more challenging.

More often than not, trends (both bullish and bearish) will pause their move briefly, which allows traders or investors to join the bandwagon. We saw this pause in many cases during the crypto market uptrends and downtrends. If a lot of new participants join, the asset price continues the trend. If not, we can expect a trend reversal.

Continuation patterns

A trader can use continuation patterns to spot trend extensions. These patterns occur in a variety of shapes, with some of the most popular being known as bull and bear flags.
A bull flag is a pattern that occurs during an uptrend when the price is trying to continue upward. On the other hand, the bear flag occurs in a downtrend when the price wants to go further down.

Each flag pattern has two main components:
The pole and The flag. The “pole” is a part of the pattern that signifies a strong impulsive move, which is backed by a surge in trading volume, as well as by the subsequent pause in the trend, which represents the “flag,” which resembles a falling or rising channel.

The flag pattern has shown to be an invaluable addition to a traders’ toolset. It is mainly used to calculate the target as well as the direction of the move. As an example, if the resistance breaks in a bull flag, we can be confident that the price will continue upwards and set the target to approximately the length of the pole. On the other hand, if the support of the bull flag is breached, we know that the pattern is invalid and that the trend continuation is unlikely.

Calculating the profit target

A cryptocurrency move after a bull flag breakout or bear flag breakdown usually corresponds to the size of the pole of the flag.
Therefore, the profit target is derived like this:
Bull flag breakout equals to the breakout price plus pole hight
Bear flag breakdown equals to from the breakout price minus the pole hight
Pole height equals to the pole high minus the pole low.

Example of the Bull Flag

Let’s take a look at Bitcoin (BTC) on a 6-hour chart, where it presented a bull flag breakout. Bitcoin cleared this particular flag resistance on Feb 20, 2017, which signaled a continuation of the rally. The rally ranged from the $917 (which was the low of the pole) to the possibility to go towards $1,228 (target measured by the pole height method brought us to $157, which was added to breakout price).
In this case, Bitcoin came just $10 shy of the predicted price target on Feb 24, 2017.

Example of the Bear Flag

An example of the bear flag would be Ethereum’s (ETH) 4-hour chart, starting Mar 17, 2018. Ethereum broke the flag support, which suggested the continuation of the depreciation from the $699 pole high. The target would be $463 if we used the pole height method, which got us to the $133, which were then deduced from breakdown price.
As the move confirmed, Ethereum was just $12 shy of reaching the exact target level on Mar 18, 2018.

Summary

Bull and bear flags can be utilized in strongly trending markets to predict the price target of the move. However, they do not always perform as intended. In some cases, they can present a so-called “false breakout,” which occurs when price breaches the boundary of the flag but quickly retraces.
The risk of false breakouts can be mitigated by waiting for a candlestick to close outside of the flag territory.

 

For more superb educational content please visit our website https://www.forex.academy/
Categories
Forex Price-Action Strategies

Forex Price Action: Trendline Breakout Strategy

In today’s lesson, we are going to demonstrate an example of trendline breakout trading. Price action trading is mainly based on support/resistance and breakout. It does not mean that support/resistance is only horizontal. A trendline works as support/resistance as well. Let us now proceed and find out how a trendline breakout offers entry.

In today’s lesson, we are going to demonstrate an example of trendline breakout trading. Price action trading is mainly based on support/resistance and breakout. It does not mean that support/resistance is only horizontal. A trendline works as support/resistance as well. Let us now proceed and find out how a trendline breakout offers entry.

In today’s lesson, we are going to demonstrate an example of trendline breakout trading. Price action trading is mainly based on support/resistance and breakout. It does not mean that support/resistance is only horizontal. A trendline works as support/resistance as well. Let us now proceed and find out how a trendline breakout offers entry.

The price has been bearish by obeying a down-trending trendline. The price has rejection at the trendline four times. Now, it is the sellers’ territory. However, one bullish candle may change the game.

Here it is. One big bullish candle breaches through the trendline’s resistance closing well above it. Usually, trendline breakout traders wait for the price to come back at the trendline again and get a reversal candle to take entry. This is the safest thing to do in trendline breakout trading.

The chart shows that the price heads towards the North for two more candles and comes down for a correction. Trendline’s resistance becomes support now, which is what happens with horizontal support/resistance. The buyers are to wait for a bullish reversal candle to go long in this chart. Typically, a bullish engulfing candle is the best reversal candle to go long as far as the trendline breakout trading strategy.

The chart produces two doji candles. These are reversal candles. However, look at the last candle. This is a bullish engulfing candle; thus, the buyers may go long right after the candle closes. Stop loss is to be set below the new support.

The next candle comes out as a bullish candle too. This looks good for the buyers. Since the price makes a breakout, confirms the breakout, and produces a bullish engulfing candle, it may make a new higher high. However, the safest option to set take profit is at the last swing high.

The price heads towards the North with good bullish momentum. The price hits the last swing high in a hurry. It gets us 2R here. As long as it offers us 1R, we shall go with it. If it offers less than 1R, we may skip taking the entry. The last candle comes out as a bullish candle. It suggests that the price may make a bullish breakout. That is another game. If we want to take a long entry upon the next bullish breakout, it would be based on a horizontal breakout trading strategy.

Trendline breakout trading is quite simple and rewarding. Stay tuned to get to more about trendline breakout trading strategy in our fore coming lessons.

 

Categories
Forex Course

89. Identifying Trading Signals Using The ‘ADX’ Indicator

Introduction

Introduction

Introduction

The ADX indicator is created by a technical analysis legend, ‘J Welles Wilder.’ ADX (Average Directional Index) shows how strong the market is trending in any direction. This indicator doesn’t have a negative value, so it is not like the oscillators that may fluctuate above and below the price action. The indicator gives a reading that ranges between 0 and 50 levels. Higher the reading goes, stronger the trend is, and lower the reading goes, weaker the trend is.

The ADX Indicator Consists of Three Lines.

  1. The ADX Line.
  2. The DI+ Line. (Plus Directional Movement Index)
  3. The DI – Line. (Minus Directional Movement Index)

The chart above is the visualization of the ADX indicator. We can see the green line (DM+), the Red Line (DM-), and the Yellow Line. (ADX)

Trend Direction and Crossovers

Buy Example

To take a buy trade using this indicator, the first requirement is that the ADX line should be above the 20 level. This indicates that the market is in an uptrend. We go long when the DI+ crosses the DI- from above as it indicates a buy signal.

The chart below is the EUR/AUD Forex pair, where we have identified a buy trade using the ADX indicator. As we can see, the market was in an uptrend, and it is confirmed by the ADX line going above the 20 level. At the same time, we can also see the crossover happening between the DI+ and DI- lines of this indicator. This clearly indicates a buying trade in this pair.

The stop-loss placed below the close of the recent candle is good enough, and we must exit our position when the ADX line (yellow line) goes below the 25 level.

Sell Example

The first requirement to take a seeling position using the ADX indicator is that the ADX line must be below the 20 level. This indicates that the market is in a downtrend. We go short when the DI+ line crosses the DI- line from below as it indicates a sell signal.

The below chart of the GBP/USD Forex pair indicates a sell signal. In a downtrend, when the ADX line (yellow line) goes below the 20 level, it confirms the strength of the downtrend. At the same time, when the DI+ crosses the DI-  from below, it shows that the sellers are ready to resume the downtrend.

Breakout Trading Using The ADX Indicator

This strategy is similar to the crossover strategy that is discussed above. However, we are adding the price action breakout part to it. The idea is to go long when the ADX line is above the 20 level and when the DI+ crosses the DI- line from above. Also, the price action must break above the major resistance level to confirm the buying signal.

As we can see, in the below USD/CAD Forex chart, when the ADX line goes above the 20 level, it indicates that the uptrend is gaining strength. It also means that we can expect a break above the resistance line soon. When the price action broke above the resistance line, we can see the crossover on the ADX indicator. This clearly indicates a buy trade in this currency pair.

We can exit the trades when the opposite signal is triggered. Most of the time, breakout trades travel quite far. So if your goal is to ride longer moves, exit your position when the momentum of the uptrend starts to die or when the price action approaches the major resistance area.

That’s about the ADX indicator and related trading strategies using this indicator. If you have any questions, please let us know in the comments below. Cheers!

[wp_quiz id=”68035″]
Categories
Forex Market Analysis

Daily F.X. Analysis, March 27 – Top Trade Setups In Forex – Weaker Dollar In Play! 

The greenback fell against its major peers, with the Dollar Index dipping 0.7% on the day to 100.94, down for a 4th consecutive session. France’s INSEE will release March Consumer Confidence Index (91 expected).

The greenback fell against its major peers, with the Dollar Index dipping 0.7% on the day to 100.94, down for a 4th consecutive session. France’s INSEE will release March Consumer Confidence Index (91 expected).

The greenback fell against its major peers, with the Dollar Index dipping 0.7% on the day to 100.94, down for a 4th consecutive session. France’s INSEE will release March Consumer Confidence Index (91 expected).

The U.S. Commerce Department will report February personal spending (+0.2% on month expected) and personal income (+0.4% on month expected). The University of Michigan (UOM) will report its final rea1dings of the March Consumer Sentiment Index (90.0 expected).

 Economic Events to Watch Today    

 

 

EUR/USD – Daily Analysis

The EUR/USD rallied 1.5% to 1.1047, posting a four-day winning streak. The risk-on market sentiment is also pushing the U.S. Dollar lower and sending the pair higher. The recovery in the risk-sentiment came after the U.S. Senate approved of the original $2 trillion fiscal stimulus package.

A series of economic fundamentals drove the pair, and even today market is likely to move on news. In particular, the U.S. initial jobless claims are expected to have risen to 1,000K from the preceding week’s 281K figure in the week ended March 20. 

If jobless claims fall in the 2 to 3 million range, which seems fairly possible, we will likely see a notable sell-off in the greenback. In that case, the EUR/USD currency pair could find a bid over the 50-day moving average at 1.10. 

On the other hand, the EUR/USD currency pair will also take cues from the Kansas Fed Manufacturing Activity index for March. The European Union’s upcoming emergency meeting to discuss further steps to combat the virus will be essential to watch. 

Markets are assuming that the Eurozone is going for a deep slowdown, and they need aggressive stimulus to stop the fallout from the virus outbreak. Later today, eyes will be on France’s INSEE, which is due to release March Consumer Confidence Index (91 expected).

Daily Support and Resistance

  • S1 1.0673
  • S2 1.0835
  • S3 1.0935

Pivot Point 1.0997

  • R1 1.1097
  • R2 1.1159
  • R3 1.1321

EUR/USD– Trading Tips

The EUR/USD is trading bullish at 1.1025, having an immediate support level of around 1.0947. The bullish channel has already been violated on the higher side, and it’s supporting is the bullish bias in the EUR/USD pair. On the higher side, the EUR/USD pair is facing resistance at 1.1070 area. 

Bullish crossover of 1.1070 area can open further room for buying until 1.1194 level. Whereas, the chances of a bearish bias will remain strong if the pair continues to hold below 1.1070 level today. On the lower side, the target is likely to stay at 1.0947 and 1.0885. 

GBP/USD– Daily Analysis

The GBP/USD surged 2.6% to 1.2192. The Bank of England said, after announcing a rate cut and additional bonds purchase last Thursday, it can expand asset purchases further if necessary. On the other hand, official data showed that U.K. retail sales declined 0.3% on month in February (+0.2% expected).

The policymakers could be called with the 24-hour prior notice to vote on the coronavirus support package on Friday. On the U.S. front, the coronavirus fears in the U.S. also increased with the death losses crossed 1,000 figures and an increase of 12,000 cases recorded in the single day on Wednesday.

The Bank of England (BOE) failed to offer any fireworks due to a lack of resources while disappointing U.K. Retail Sales, to 0.0% from 0.8% YoY forecast, also couldn’t recall the bears.

Later today, the U.S. Commerce Department will report February personal spending (+0.2% on month expected) and personal income (+0.4% expectation). The University of Michigan will report Consumer Sentiment Index (90.0 expected).


Daily Support and Resistance

  • S1 1.1339
  • S2 1.1535
  • S3 1.1662

Pivot Point 1.1731

  • R1 1.1858
  • R2 1.1927
  • R3 1.2122

GBP/USD– Trading Tip

The GBP/USD has violated the double top resistance level of 1.1945, and the pair now trades around 1.2180, the level which is marked as horizontal resistance. Today, the bullish breakout of the 1.2300 level can open the buying trend until the next resistance level of 1.2338 (50% Fibo level) and 1.2510 level, which accounts for a 61% retracement. On the lower side, the Cable can find support around 1.2035 and 1.1930. Let’s look for buying trades over the 1.1945 support level and selling below 1.2350 today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair flashing red and hit the session low near the 108.50, mainly due to broad-based U.S. Dollar weakness. While the greenback continues to lose its ground in the wake of the U.S. relief package. At the time of writing, the USD/JPY is trading at 108.78 and consolidates in the range between the 108.25 – 109.72. 

However, the currency pair faced rejection at 109.72 in early Asia and dropped below the 100-day average support at 109.00 a few minutes before press time to hit a session low of 108.55.

Whereas, the major Asian equity indices like Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s Kospi are flashing green.

It is worth to mention that the traders did not give much more attention to the Japanese Yen demand. So, the reason behind the pairs declines is the broad-based greenback weakness. The dollar index, which tracks the value of the greenback against majors, is currently trading at weekly lows near 99.30, having declined by nearly 200 pips on Thursday.

The U.S. dollar continues to lose its ground due to the unprecedented fiscal and monetary stimulus by the U.S. government and the Federal Reserve in the last five days.


Daily Support and Resistance

  1. S1 106.51
  2. S2 108.16
  3. S3 108.75
  4. Pivot Point 109.8
  5. R1 110.4
  6. R2 111.45
  7. R3 113.09

USD/JPY – Trading Tips

On Friday, the demand for safe-haven assets such as gold and Japanese yen has surged in the wake of an increased number of coronavirus cases around the globe. Consequently, the USD/JPY pair has dropped to trade at 108.350, down from the 109 level. On the 4 hour chart, the USD/JPY has violated the bullish channel, which is now suggesting bearish bias in the USD/JPY. 

The USD/JPY prices are holding around the next support level of 108.350, and around this level, we can expect USD/JPY to bounce off until 109.850. But in case, the USD/JPY exhibits a bearish breakout below 108.350 level; the pair may drop further until 106.450. 

All the best for today!  

Categories
Crypto Market Analysis

Daily Crypto Review, Mar 27 – XRP recording double-digit gains as Ripple Labs donates $200,000 to fight COVID-19

The cryptocurrency market is still in consolidation mode, with most cryptocurrency prices at almost the exact same level that they were yesterday. Bitcoin is currently trading for $6,574, which represents an increase of 0.6% on the day. Meanwhile, Ethereum gained 1.01% on the day, while XRP gained a solid 7.28%.

The cryptocurrency market is still in consolidation mode, with most cryptocurrency prices at almost the exact same level that they were yesterday. Bitcoin is currently trading for $6,574, which represents an increase of 0.6% on the day. Meanwhile, Ethereum gained 1.01% on the day, while XRP gained a solid 7.28%.

The cryptocurrency market is still in consolidation mode, with most cryptocurrency prices at almost the exact same level that they were yesterday. Bitcoin is currently trading for $6,574, which represents an increase of 0.6% on the day. Meanwhile, Ethereum gained 1.01% on the day, while XRP gained a solid 7.28%.

Quant took the position of today’s most prominent daily gainer, with gains of 31.45%. On the other side, EDC Blockchain lost 29.88% on the day, making it the most prominent daily loser.

Bitcoin’s dominance decreased by slightly less than 1% over the past 24 hours. Its value is now 66.16%, which represents a 0.88% difference to the downside when compared to yesterday’s value.

The cryptocurrency market capitalization was a bit more turbulent in movements in the past 24 hours than it was the day before. Its current value is $187.07 billion. This value represents an increase of $2.8 billion when compared to the value it had yesterday.

What happened in the past 24 hours

A report announced by the derivatives analysis firm Acuiti has shown a growing interest in supporting and listing crypto assets among trading firms. The study surveyed 86 companies from the buy-side, sell-side, as well as prop trading groups.

The survey showed that 26% of these firms had adopted cryptocurrencies in one way or another.

Honorable mention

Ripple

Ripple Labs announced that they had made a donation of $200,000 on Mar 25, going to two different non-profit organizations. These donations are made with the intention to aid the fight to contain the coronavirus throughout the US.

Ripple Labs stated that half the funds will go to the Tipping Point Emergency’s Response Fund, while the other half will go to the Silicon Valley Community Foundation’s COVID Regional Response Fund.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin did not show any major volatility throughout the day, but has made a couple attempts to break its immediate resistance of $6,850. All of the attempts were, however, quickly stopped as the resistance was too much to handle with such low volume. If the pattern of failing to get above resistances continues, we might see a move down and retest of the support level.


Bitcoin’s volume is at the same level as it was the day before, while its RSI level fell down to 56.

Key levels to the upside                    Key levels to the downside

1: $6,850                                           1: $6,640

2: $7,085                                           2: $5,960

3: $7,420                                            3: $5,000

Ethereum

Ethereum has not moved much, but all the moves it made were with deliberation. The second-largest cryptocurrency by market capitalization tried to break the $139 resistance level, which is only recently showed any significance. It did manage to go above it, but quickly returned below, where it is at at the time of writing.


Ethereum’s volume is just barely higher than yesterday, while its RSI level is currently at the value of 54. We are not listing the $139 resistance as a key level, as it is still considered a pivot point (as well as too insignificant historically).

Key levels to the upside                    Key levels to the downside

1: $168                                                1: $128

2: $178.6                                            2: $122.5 

3: $185                                                3: $100

Ripple

XRP, unlike the other two aforementioned cryptocurrencies, had quite a splendid day. Its price reached double-digit gains as it jumped from $0.16 all the way up to $0.18. However, the bulls could not take the price any higher, and the move ended there. XRP has fallen slightly since then and is currently trading at around $0.171.


XRP’s volume increased greatly during the price spike. While it has descended since, it is still higher than the average volume for the past week. XRP’s RSI level has left the overbought territory on the 4-hour chart and is currently sitting at the value of 62.5.

Key levels to the upside                    Key levels to the downside

1: $0.19                                             1: $0.165

2: $0.2                                               2: $0.147

3: $0.205                                             3: $0.1

Categories
Forex Market Analysis

Daily F.X. Analysis, March 26 – Top Trade Setups In Forex – U.K. Monetary Policy In Focus! 

The greenback weakened against its major rivals, with the U.S. Dollar Index dropping 0.7% on the day to 100.94, down for a fourth straight session. For now, the focus shifts to the major economic events which will be releasing through the day. 

The greenback weakened against its major rivals, with the U.S. Dollar Index dropping 0.7% on the day to 100.94, down for a fourth straight session. For now, the focus shifts to the major economic events which will be releasing through the day. 

The greenback weakened against its major rivals, with the U.S. Dollar Index dropping 0.7% on the day to 100.94, down for a fourth straight session. For now, the focus shifts to the major economic events which will be releasing through the day. 

The Bank of England (BOE) will hold its monetary policy meeting, after a rate cut and additional bonds purchase announced last Thursday (March 19). The European Central Bank will publish the Eurozone’s M3 money supply in February (+5.2% on-year expected).

Germany’s GfK Consumer Confidence Index for April will be released (7.5 expected). France’s INSEE will release March indicators on business confidence (97 expected) and manufacturing confidence (93 expected).

Economic Events to Watch Today    

 

 

EUR/USD – Daily Analysis

The EUR/USD jumped 0.9% to 1.0888, posting a three-day rebound. Most of the moment, the pair was driven by a series of economic fundamentals, and even today market is likely to move on news. In particular, the U.S. initial jobless claims are expected to have risen to 1,000K from the preceding week’s 281K figure in the week ended March 20. 

If jobless claims fall in the 2 to 3 million range, which seems fairly possible, we will likely see a notable sell-off in the greenback. In that case, the EUR/USD currency pair could find a bid over the 50-day moving average at 1.10. On the other hand, the EUR/USD currency pair will also take cues from the Kansas Fed Manufacturing Activity index for March. 

Meanwhile, the European Union’s upcoming emergency meeting to discuss further steps to combat the virus will be essential to watch. Markets are assuming that the Eurozone is going for a deep slowdown, and they need aggressive stimulus to stop the fallout from the virus outbreak.

Looking forward, the European Central Bank will release its monthly Economic Bulletin while the weekly Initial Jobless Claims, Goods Trade Balance, and Q4 Gross Domestic Product (GDP) data from the U.S. will be key to watch.

Daily Support and Resistance

  • S1 1.0531
  • S2 1.0673
  • S3 1.0742

Pivot Point 1.0815

  • R1 1.0885
  • R2 1.0957
  • R3 1.11

EUR/USD– Trading Tips

On Thursday, the EUR/USD is trading bullish at 1.0935, having an immediate support level of around 1.0890. The bullish channel that you can see in the chart above is also supporting the bullish bias in the EUR/USD pair, and it’s supporting the direct currency pair at 1.0890. 

Closing of the bullish engulfing candle and three bearish two-hourly candles above 1.0890 support is signifying a bullish breakout, which can lead the pair towards 1.0959 resistance level. While the bearish breakout of 1.0890 can lead the EUR/USD prices towards 1.0780. Let’s consider staying bullish above 1.0890 today with an initial target of 1.0950. 

GBP/USD– Daily Analysis

The GBP/USD climbed 0.6% to 1.1833. Official data showed that U.K. CPI grew 1.7% on year in February as expected, compared with a 1.8% growth in January. Later today, the Bank of England will hold its monetary policy meeting, after a rate cut and additional bonds purchase announced last Thursday. Also, U.K. retail sales data for February will be released (+0.2% on month estimated).

The policymakers could be called with the 24-hour prior notice to vote on the coronavirus support package on Friday. On the U.S. front, the coronavirus fears in the U.S. also increased with the death losses crossed 1,000 figures and an increase of 12,000 cases recorded in the single day on Wednesday.

Later in the day, the Bank of England will hold its monetary policy meeting, after a rate cut and additional bonds purchase announced last Thursday (March 19). While the U.K. Retail Sales are expected to remain unchanged at 0.80% YoY but any major chances likely offer a new direction to the GBP/USD prices. The U.K. Office for National Statistics will report February retail sales (+0.2% on month expected).

Daily Support and Resistance

  • S1 1.1339
  • S2 1.1535
  • S3 1.1662

Pivot Point 1.1731

  • R1 1.1858
  • R2 1.1927
  • R3 1.2122

GBP/USD– Trading Tip

The GBP/USD has violated a broad trading range of 1.1400 – 1.1885, and the pair now trades around 1.1930, the level which is marked as a triple top. The Bank of England’s rate decision today will play a major role in determining it’s a trend. Today, the bullish breakout of the 1.1930 level can open the buying trend until the next resistance level of 1.2185 (38.2% Fibo level) and 1.2300 level, which accounts for a 50% retracement. On the lower side, the Cable can find support around 1.1665 and 1.1445. Let’s look for buying trades over the 1.1945 resistance level and selling below the same today. 

USD/JPY – Daily Analysis

During Thursday’s early Asian session, the USD/JPY dropped to a session low of 110.45 from the high of 111.30 after the market sentiment shifts, mainly due to the United States Congress, which failed to come together and agree on relief package plan after facing recent hurdles. While the broad-based USD weakness also undermines the currency pair. 

At the moment, the USD/JPY is trading at 110.52 and consolidates in the range between the 110.38 – 111.31. However, the safe-haven Japanese yen is continuing its bullish move, which seen in early Asia sessions due to fresh losses in the U.S. stock futures.

The risk-off market sentiment strengthened, pushing the futures tied to the S&P 500 futures lower. At press time, the index futures are reporting a 1% decline. On the other hand, the coronavirus outbreak is not showing any sign of slowing down in the U.S., Japan, and European countries. 

There was a sharp rise in cases in Tokyo and gave a warning about the lockdown, which eventually strengthing the risk-off market sentiment and boosting the safe-haven Japanese yen.

Daily Support and Resistance    

  • S1 107.85
  • S2 109.43
  • S3 110.32

Pivot Point 111.02

  • R1 111.91
  • R2 112.6
  • R3 114.19

USD/JPY – Trading Tips

The intensified safe-haven demand has started driving the bearish trend in the USD/JPY currency pair as it trades at 110.350, down from 111 level. On the 4 hour chart, the USD/JPY was trading in a bullish channel, which supported the USD/JPY prices around 110.650. Since this level has already been violated, now it’s going to work as a resistance for the USD/JPY. 

 

As forecasted earlier, a bearish breakout of 110.600 can lead its prices toward 109.600 level, and that’s what the market is trying to do now. The USD/JPY prices are heading towards the next support level of 109.850, and around this level, we can expect USD/JPY to bounce off a bit. However, in case of a bearish breakout of 109.850 level, the pair may drop further until 108.450. 

All the best for today!  

Categories
Crypto Market Analysis

Daily Crypto Review, Mar 26 – The calm before the storm? Cryptocurrency price analysis

The cryptocurrency market had a pretty steady day when it comes to price movements. Most cryptos remained at their levels of 1 day ago. Bitcoin is currently trading for $6,652, which represents a decrease of 0.78% on the day. Meanwhile, Ethereum lost 2.75% on the day, while XRP lost 1.17%.

The cryptocurrency market had a pretty steady day when it comes to price movements. Most cryptos remained at their levels of 1 day ago. Bitcoin is currently trading for $6,652, which represents a decrease of 0.78% on the day. Meanwhile, Ethereum lost 2.75% on the day, while XRP lost 1.17%.

The cryptocurrency market had a pretty steady day when it comes to price movements. Most cryptos remained at their levels of 1 day ago. Bitcoin is currently trading for $6,652, which represents a decrease of 0.78% on the day. Meanwhile, Ethereum lost 2.75% on the day, while XRP lost 1.17%.

EDC Blockchain took the position of today’s most prominent daily gainer, with gains of 871.81%. On the other side, Swipe lost 12.67% on the day, making it the most prominent daily loser.

Bitcoin’s dominance has increased over the past 24 hours. Its value is now 67.04%, which represents a 0.39% difference to the upside when compared to yesterday’s value.

The cryptocurrency market capitalization did not move much in the past 24 hours. Its current value is $184.21 billion. This value represents a decrease of $0.14 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Bitcoin mining difficulty dropped by 15.95% in the past 24 hours. This is the second-largest decline in its history. Bitcoin price plummeted more than 50% percent last time a decline like this happened.

Though this is not a surefire way to determine the price direction, it is very much possible that Bitcoin will go down some more in the short-term.

Honorable mention

GRAM

Cardano launched Ouroboros Hydra, its off-chain scalability protocol on Mar 25. This protocol has gone live after five years of development.

The protocol increased scalability greatly for the Cardano blockchain. On top of that, it is using very little storage on the network’s nodes. Hydra could theoretically scale to 1,000,000 transactions per second.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin had a pretty stale day price-wise, as it did not move almost at all from yesterday. The largest digital currency by market cap is still trading just below the $6,850 resistance level without much fluctuation. While its price is above the weekly 200-period moving average, if the price doesn’t move to the upsidein the next couple of days, we can expect a leg down towards lower $6,000’s, or even lower.


Bitcoin’s volume drastically reduced from yesterday, while its RSI level dropped slightly towards the middle of the value range, currently being at the value of 56.

Key levels to the upside                    Key levels to the downside

1: $6,850                                           1: $6,640

2: $7,085                                           2: $5,960

3: $7,420                                            3: $5,000

Ethereum

Ethereum has almost mirrored the movements of Bitcoin for the past 24 hours. The second-largest cryptocurrency had close to no movement on the day, with its price being right below the $139 resistance line. However, the only change from yesterday is exactly the $139 level. While it was undecided whether the price will end up below or above it yesterday, it is quite clear that Ethereum will trade below this level for the time being.


Ethereum’s volume also dropped severely from yesterday, while its RSI level is currently at the value of 51.

Key levels to the upside                    Key levels to the downside

1: $168                                                1: $128

2: $178.6                                            2: $122.5 

3: $185                                                3: $100

Ripple

XRP had a bit more movement than Bitcoin and Ethereum in the past 24 hours. Namely, its price moved down to $0.157 but quickly recovered to its previous level of around $0.16. XRP is trading between the resistance of $0.165 and support of $0.147 for five days now, without any signs of going up or down.


XRP’s volume decreased slightly over the past 24 hours, while its RSI level dropped to 53.

Key levels to the upside                    Key levels to the downside

1: $0.165                                            1: $0.147

2: $0.19                                              2: $0.1

3: $0.2                                              

Categories
Forex Elliott Wave

How to Analyze the Zigzag Pattern – Intermediate Level

The zigzag pattern is a three-wave structure that has a limited number of variations. In this educational post, we’ll present how to analyze the zigzag pattern under an intermediate level perspective,

The zigzag pattern is a three-wave structure that has a limited number of variations. In this educational post, we’ll present how to analyze the zigzag pattern under an intermediate level perspective,

The zigzag pattern is a three-wave structure that has a limited number of variations. In this educational post, we’ll present how to analyze the zigzag pattern under an intermediate level perspective,

The Elliott’s Zigzag Pattern

R.N. Elliott, in his work The Wave Principle, described the zigzag as a corrective formation that follows an internal sequence defined by 5-3-5.

The wave analysis analyst should consider that corrective patterns are not easy to recognize while the structure is not complete; however, it results revealing and useful to make forecasts once the formation is complete.

Zigzag Construction

Glenn Neely, in his work Mastering Elliott Wave, describes the zigzag construction as follows:

  1. Wave A shouldn’t retrace beyond 61.8% of the impulsive wave.
  2. Wave B should retrace at least 1% of wave A, but shouldn’t exceed 61.8% of wave A.
  3. Wave C must finish at least slightly beyond the end of wave A.
  4. If wave B retraces more than 61.8% of wave A, thus the movement developed doesn’t correspond to the end of wave B. In this case, the move realized correspond to a segment of a complex wave B.

The following figure illustrates the steps of the zigzag pattern construction previously described.

Types of Zigzag

According to the extension of wave C, the zigzag pattern would be classified as normal, extended, or truncated.

Normal zigzag: In this case, wave C can reach between 61.8% to 161.8% extension of wave A. Concerning wave B, this segment doesn’t retrace more than 61.8% of wave A, and wave C shouldn’t extend beyond 161.8% of wave A.

Truncated zigzag: This formation is less frequent than the other two zigzag pattern variations. Further, wave C shouldn’t be lower than 38.2% of wave A, but not greater than 61.8% of wave A. 

Once wave C ends, the next path should retrace at least 81% of the entire zigzag formation. According to Neely, this pattern it is likely that appears in a triangle structure.

Extended zigzag: This variation is characterized by having a more prolonged wave C than the other two models, which surpasses the 161.8% of wave A, being similar to an impulsive sequence. 

Once completed the wave C, the next path tends to retrace at least 61.8% of wave C.

Canalization Process

To canalize a zigzag formation, the wave analyst should pay attention to wave A and the end of wave B. 

The canalization process begins with the trace of a base-line linking the origin of wave A with the end of wave B, then using this line, a parallel line is projected at the end of wave A.

If the wave analyst encounters a zigzag pattern, then the corrective formation could move inside the channel, violate it, but never move in a tangent way to the channel. If it occurs, then the corrective sequence may correspond to a complex correction.

Finally, once the price violates the base-line O-B, we can conclude that the zigzag pattern ended.

NASDAQ e-mini and its Zigzag Pattern

The following figure represents to NASDAQ in its 12-hour timeframe. The chart reveals the upward process that the technologic index developed in the Christmas rally of 2018 at 5,820.50 pts.

The impulsive bullish sequence completed its internal five-wave moves at 7,879.50 pts on April 24th, 2019, from where the price began to develop a corrective zigzag pattern.

As illustrated in the last figure, the wave (a) in blue looks as a five-wave structure that ended at 7,290 pts on May 13th, 2019. The second leg of the zigzag pattern advanced close to 61.8% of the wave (a), which accomplishes the requirement of zigzag construction.

The next bearish path, corresponding to wave (c) produced a second decline in five waves and dropped beyond the 61.8% and below 161.8% of (a) which lead us to conclude that the type of zigzag pattern is normal.

At the same time, we observe that the price didn’t violate the lower line of the descending channel. However, once NASDAQ soared above the upper line of the descending channel, the corrective structure ended, giving way to the next upward motive wave.

Conclusion

In this educational article, we reviewed the characteristics of the zigzag pattern and how the wave analysts can differentiate from another kind of corrective formation. 

At the same time, the Fibonacci tools represent a useful way to validate what structure develops the market. In this context, this knowledge will allow the wave analyst to identify potential zones of reaction, which would enable us to incorporate into the trend.

In the next article, we will review the triangle pattern and how to recognize its variations.

Suggested Readings

  • Neely, G.; Mastering Elliott Wave: Presenting the Neely Method; Windsor Books; 2nd Edition (1990).
  • Prechter, R.; The Major Works of R. N. Elliott; New Classics Library; 2nd Edition (1990).
Categories
Forex Videos

How To Use A Hedging Strategy To Trade Double Tops and Bottoms

https://youtu.be/jwAY5ZSUwB0

https://youtu.be/jwAY5ZSUwB0

How To Use A Hedging Strategy To Trade Double Tops and Bottoms

In this video, we are going to show you how to set up a hedging strategy to trade double tops and bottoms. The idea is to set up two trades simultaneously where one trade will act as an immediate execution trade, and where all the technicals are telling us that price action will go in a certain direction. And the second trade will act as an insurance policy should price action ignore our technical analysis setup, and in which case, we will then capture price action as it moves in the opposite direction.
In the following examples, we are looking for price action reversals, which will form the basis of our technical analysis; and therefore our belief is that we will be looking for price action to have peaked, or bottomed out, and then reverse. Our secondary trade, which will act as an insurance policy, will be set up on the basis that price action has simply pulled back and then continues in the direction of the original trend.
Before we move ahead with our setups, let’s quickly remind her selves of the kind of setup we are looking for a double top scenario.

Example A


Example A, shows us that for a double top formation we need a peak, followed by a pullback to what is referred to as a neckline which acts as a line of support, followed by a second peak which must be at the same exchange rate as the previous peak, and then confirmation of the double top pattern occurs once price action breaches the neckline for a second time.

Example B

Example B, The reverse is true for the double bottom scenario. We have a bottoming out of a pear followed by a reversal to a neckline, which acts as an area of resistance and where price action forms a second bottom at or around the same exchange rate as the previous bottom and then a reversal back to the neckline, which previously acted as an area of resistance and where price action punches through and this line which then acts as an area of support before we see a continuation in the reversal of price action, which confirms the double bottom pattern.

Example C


Example C, the following is how we set up the double top hedge. First of foremost, we need to wait for price action to pull away slightly from our second peak and go short at this point with a stop loss a couple of pips above whichever peak was the highest of the move. Should price action continue lower than our neckline, the double top formation will be confirmed, and we can ride the downward move. If price action reverses from the support line, this will confirm an area of consolidation in which case we can bring into play a protective stop out in front of our entry, and at least we will not have lost any money on this trade.

Example D


Example D, The hedging strategy set up is where we place a buy limit order a couple of pics above the stop loss from the first trade, with a slightly larger stop loss which must be a couple of pics below show the previous support or neckline, and in this case, we expect that price action will continue with the original upwards trend. For this trade, we must have a minimum target equal to the amount of pips that were lost in trade one in order to keep our profit and loss in check. However, naturally, we want to let the trade run on as much as possible.

Example E


Example E, In the double bottom hedging strategy, we will simply need to reverse the trade setup for the double top. In which case, we would go long as soon as price action reverses from our second bottom line. With a tight stop loss a few pips below the lowest point of both bottoms. If price action then goes on to reverse back from the neckline to form a third bottom, we can close the trade out with a small profit. But the double bottom confirmation pattern will be confirmed once the neckline is preached, and price action continues in an upward trend.

The hedging strategy consists of a sell limit order just below the stop loss of the first trade and where the stop loss for hedging strategy must be a couple of pics below the neckline.
This hedging strategy should be reserved for timeframes or 15-minutes, and above this is where we will find the most amount of pips to be made. This is not to be considered as a scalping strategy.

Categories
Crypto Videos

Make Huge Profits Market Pattern Trading In Crypto (Head and Shoulders, Triangles, Wedges) Part 1/2

Market pattern trading in cryptocurrencies (Head and Shoulders, Triangles, Wedges) – part 1/2

Finding ways to predict the future price movement of an asset has always been incredibly hard, no matter what asset you are trading. Cryptocurrency trading differs slightly from trading other assets, as it is more volatile, much younger, and susceptible to fear of missing out as well as fear, uncertainty, and doubt.
Although the number of factors that influence the price of a cryptocurrency is almost immeasurable (reaching milestones, partnerships, security breaches, new regulations, etc.), combining this knowledge with the usage of other methods, such as trend detection can be quite profitable.

No matter how volatile the prices of cryptocurrencies may be, at times, experienced traders can spot distinct movement patterns that allow them to predict the direction of the price movement. This guide will explain the fundamentals of three patterns that traders look for when trading crypto on various exchanges.

Head and shoulders pattern

The head and shoulders pattern is a price formation that, to an inexperienced trader, look like a baseline with three peaks and nothing more.
However, if we spot that the middle peak is higher than the other two, which are similar in size, we can deduce that it is, in fact, the head and shoulders pattern.

In technical analysis, a head and shoulders pattern is a sign of bullish-to-bearish trend reversal. It is regarded as one of the most reliable, if not the most reliable trend reversal patterns.
As the cryptocurrency market is extremely volatile and bulls and bears constantly switch in terms of market dominance, the head and shoulders pattern would appear after the market has been dominated by bulls.

After the first price stagnation (which is the Shoulder 1), and the price reaches a new high (which is the head), it still may be possible that the pattern will not form and that the bulls will push the price even higher. However, after the price goes down for the second time, bulls often try to push it up again (which is the Shoulder 2). If they don’t succeed and the price stops at the price level similar to the one of Shoulder 1, it becomes evident that bears are taking over the market.

The target price in this reversal is equal to the distance from the neckline to the peak of the head but in the opposite direction.
When deciding whether to trade the head and shoulders pattern, traders should not just assume that the pattern is going to play out. Instead, they should be patient and wait for the decline after the right peak to reach the neckline. Only then can they think of taking a position.
Reversed head and shoulders
Traders should also look for the reversed head and shoulders pattern, which plays out the same way a regular one does, but in the opposite direction. This pattern marks the end of the bear season.

Check out part 2 of our pattern trading guide, where we will cover various triangle formations as well as wedges.

Categories
Forex Course

88. Trading The Forex Market Using The Amazing ‘Parabolic SAR’ Indicator

Introduction

Introduction

Introduction

Parabolic SAR is a trend following indicator that was developed by ‘Welles Welder.’ The SAR in the name stands for the ‘Stop and Reverse.’ Welder introduced this indicator in his 1978 book “New Concepts in Technical Trading System.” In this book, he also introduced many of the revolutionary indicators like RSI, ATR, and Directional Movement Concept.

As the trend of the currency pair extends over time, this indicator trails the price action. If the indicator is below the price action, it means that the price of the currency is rising, and when it goes above the price, it indicates that the market is in a downtrend. In this regard, the Parabolic SAR stops and reverses when the trend of the instrument changes its direction.

During the volatile market, the gap between the price action and the indicator widens. In a choppy or consolidation market, the indicator interacts with the price quite frequently. Most of the technical indicators represent the overbought and oversold market conditions, whereas the Parabolic SAR visually provides us an insight on where to exit our position.

Parabolic SAR – Trading Strategy

The basic strategy while trading with this indicator is to go long when the dots move below the candlestick and go short when the dots go above the candlestick. It is advisable to use this way only in a strong trending market. If the trend is choppy or if the price action is continuously being pulled back, this indicator will continuously give us the buy-sell signal. All of these trading signals won’t be genuine and can produce many losses if we trade all of those signals generated.

As we can see in the below EUR/NZD price chart, the market was in an uptrend. But the momentum of the buying trend was quite weak. That’s the reason why this pair gives a lot of buying and selling opportunities in this pair. If we trade every opportunity, we will end up on the losing side. This is the reason always we must always find the pair which is in a strong uptrend or downtrend.

Buy Example

First of all, find a currency pair that is in a strong uptrend. While the price is in an uptrend wait for the indicator to go below the price action when the price pulls back. If this happens, we can take buy entry. We can expect a ~ 50+ pip movement if the market is trending. Place the stop-loss just below the dots of the Parabolic SAR.

As we can see in the above image of the EUR/USD Forex pair, the market was in a strong uptrend. We have identified two trading opportunities, and both the trades gave us 150+ pip profit. One crucial thing to remember is, in an uptrend, only go for the buying trades and ignore all the sell signals. Place the stop-loss just below the parabolic dots and book the profit when the market gives an opposite signal.

Sell Example

For identifying sell opportunities, we must first find out a strong downtrend. When the indicator goes above the price action, we can activate our sell trades.

In the below chart, we have identified a couple of selling opportunities in the EUR/USD Forex pair. We can see that each trade travels a significant amount of time before we see the next trading opportunity. This is because the sellers were super strong. Parabolic SAR provides amazing trading opportunities in strong trending markets only. This is the only way to use this indicator for buying and selling.

That’s about the Parabolic SAR indicator and how to use it to trade the markets. This indicator can be combined with others to find the accuracy of the trading signals generated. Try using this indicator and let us know if you have any questions in the comments below. Cheers.

[wp_quiz id=”67826″]
Categories
Forex Market Analysis

Daily F.X. Analysis, March 25 – Top Trade Setups In Forex – Brace for U.K. Inflation Figures! 

The U.S. stocks soared on news of Congress is close to passing a substantial coronavirus relief bill. The sentiment was further boosted by President Donald Trump’s comments that he would like the U.S. economy to reopen by Easter in mid-April. The Dow Jones Industrial Average surged 2113 points (+11.4%) to 20,704, its biggest one-day percentage gain since 1933. The S&P 500 jumped 209 points (+9.4%) to 2,447, and the Nasdaq 100 rose 546 points (+7.8%) to 7,553. 

The U.S. stocks soared on news of Congress is close to passing a substantial coronavirus relief bill. The sentiment was further boosted by President Donald Trump’s comments that he would like the U.S. economy to reopen by Easter in mid-April. The Dow Jones Industrial Average surged 2113 points (+11.4%) to 20,704, its biggest one-day percentage gain since 1933. The S&P 500 jumped 209 points (+9.4%) to 2,447, and the Nasdaq 100 rose 546 points (+7.8%) to 7,553. 

The U.S. stocks soared on news of Congress is close to passing a substantial coronavirus relief bill. The sentiment was further boosted by President Donald Trump’s comments that he would like the U.S. economy to reopen by Easter in mid-April. The Dow Jones Industrial Average surged 2113 points (+11.4%) to 20,704, its biggest one-day percentage gain since 1933. The S&P 500 jumped 209 points (+9.4%) to 2,447, and the Nasdaq 100 rose 546 points (+7.8%) to 7,553. 

Later today, February durable goods orders (preliminary reading, -1.0% on month expected) will be reported. 

Economic Events to Watch Today    

 

 

EUR/USD – Daily Analysis

The EUR/USD advanced 0.8% to 1.0809. The Markit Eurozone Manufacturing PMI slid to 44.8 in March (39.0 expected) from 49.2 in February and Services PMI sank to 28.4 (39.5 expected) from 52.6. 

The EUR/USD currency could drop below the 1.08 if the coming German IFO Expectations Index for March disappoints expectation of 82, strengthening recession fears. Apart from this, U.S. Durable Goods data for February is also scheduled to release. 

The traders need progress soon in the global market; otherwise, the risk assets may suffer another selloff, boosting haven demand for the U.S. dollar. At press time, the S&P 500 futures are reporting a 1.4% drop. 

The U.S. dollar continues trading in the red territory against majors, as shown by the 0.3% drop in the dollar index. Federal Reserve’s unlimited quantitative easing plan has decreased pressure in funding markets and bought time for the politicians. 

The headlines regarding coronavirus and stimulus package by the Federal Reserve will be key to watch. Eyes will be on the German IFO Expectations Index for taking new directions.

Daily Support and Resistance 

  • S1 1.0531
  • S2 1.0673
  • S3 1.0742

Pivot Point 1.0815

  • R1 1.0885
  • R2 1.0957
  • R3 1.11

EUR/USD– Trading Tips

On Wednesday, the EUR/USD is trading sideways, forming higher’s high and higher’s a low pattern, which indicates stronger chances of a bullish bias in the market. The EUR/USD is trading around 1.0815, and it’s forming neutral candles while trading in an upward channel, which may support the pair around 1.0775. 

On the higher side, the EUR/USD pair may face resistance around 1.0880, and above this, the pair has the potential to target the next resistance level of 1.0930 while the EUR/USD has odds of staying bearish below 1.0920 to target 1.0805.

GBP/USD– Daily Analysis

The GBP/USD surged 2.1% to 1.1789 after the U.K. government ordered lockdown measures to stop coronavirus spreading. On the other hand, the Markit U.K. Manufacturing PMI fell to 48.0 in March (45.0 expected) from 51.7 in February, and Services PMI dipped to 35.7 (45.0 estimated) from 53.2.

The GBP/USD currency pair may drop to their lowest level if the UK CPI data releases sluggish while a surprise positive figures could help the pair extend its fresh recovery rally from the multi-year low.

The Consumer Price Index published by the Office for National Statistics is a gauge of price moves by the comparison among the retail prices goods and services. The purchasing power of GBP is slowed down by inflation.

The CPI is a leading indicator to measure inflation and show changes in purchasing trends. Usually, a high figure is understood as positive (or bullish) for the GBP, while a sluggish figure is seen as negative (or Bearish). Let’s look at the technical side of the market. 

Daily Support and Resistance

  • S1 1.1339
  • S2 1.1535
  • S3 1.1662

Pivot Point 1.1731

  • R1 1.1858
  • R2 1.1927
  • R3 1.2122

GBP/USD– Trading Tip

The direct currency pair GBP/USD maintains a broad trading range of 1.1400 – 1.1885 for another day as traders seem to wait for the U.K. Inflation today and Bank of England’s rate decision tomorrow. Today, the bullish breakout of the 1.1889 level can open the buying trend until the next resistance level of 1.2185 (38.2% Fibo level) and 1.2300 level, which accounts for a 50% retracement. On the lower side, the Cable can find support around 1.1665 and 1.1445.

A bearish breakout of 1.1425 level can lead the Cable towards the next support area of 1.1050. The MACD is tossing above and below zero as investors are unable to determine the trend of the market. 

USD/JPY – Daily Analysis

During the Wednesday early Asian session, the USD/JPY currency pair found on the bullish track and hit the session high near 111.58, mainly due to the recovery in the market risk sentiment because the United States policymakers agreed on COVID-19 bill. The USD/JPY is trading at 111.48 and consolidates in the range between the 110.75 – 111.56. 

After the two-days of disappointment, the Senate Democrats and Republicans ultimately agreed on the Trump administration-backed stimulus package plan. However, the raised expectations of the expected $2 trillion package to control the deadly virus impact and fresh strategy of reducing coronavirus (COVID-19) cases from Italy also improved the market risk sentiment.

Whereas, the United States 10-year treasury yields rose 4-basis points (bps) to 0.853% while the U.S. stock futures also decreased earlier losses. The Asian stocks flashing green and marked slight gains by the press time, which show’s drop in demand for safe-haven assets such as gold and Japanese yen.

For the time being, the traders are keenly awaiting the details of the voting as well as the times of the package for taking additional direction. However, the U.S. Durable Goods Orders for January and additional coronavirus headlines will be key to watch.


Daily Support and Resistance    

  • S1 107.85
  • S2 109.43
  • S3 110.32

Pivot Point 111.02

  • R1 111.91
  • R2 112.6
  • R3 114.19

USD/JPY – Trading Tips

Technically, the safe-haven currency pair USD/JPY hasn’t changed a lot as it continues to consolidate around 111.300. On the 4 hour chart, the USD/JPY has formed a bullish channel that is still intact, and it’s pretty much likely to support the USD/JPY prices around 110.650. 

A bearish breakout of 110.600 can lead its prices toward 109.600 level. The USD/JPY prices towards the next support level of 108.350, and around this level, we can expect USD/JPY to bounce off again. Conversely, the pair faces resistance around 111 and 112.190 today. Let’s stay bullish above 109.650 and bearish below the same level today. 

All the best for today!  

Categories
Crypto Market Analysis

Daily Crypto Review, Mar 25 – BTC failing to break above $7,000; What to expect next?

The cryptocurrency market attempted to go up and reach new highs but failed to do so as Bitcoin couldn’t break above the $6850 resistance successfully. Bitcoin is currently trading for $6,682, which represents a decrease of 0.63% on the day. Meanwhile, Ethereum lost 1.48% on the day, while XRP lost 0.02%.

The cryptocurrency market attempted to go up and reach new highs but failed to do so as Bitcoin couldn’t break above the $6850 resistance successfully. Bitcoin is currently trading for $6,682, which represents a decrease of 0.63% on the day. Meanwhile, Ethereum lost 1.48% on the day, while XRP lost 0.02%.

The cryptocurrency market attempted to go up and reach new highs but failed to do so as Bitcoin couldn’t break above the $6850 resistance successfully. Bitcoin is currently trading for $6,682, which represents a decrease of 0.63% on the day. Meanwhile, Ethereum lost 1.48% on the day, while XRP lost 0.02%.

ZEON took the position of today’s most prominent daily gainer, with gains of 272.17%. On the other side, Molecular Future lost 11.20% on the day, making it the most prominent daily loser.

Bitcoin’s dominance has increased over the past 24 hours. Its value is now 66.65%, which represents a 0.26% difference to the upside when compared to yesterday’s value.

The cryptocurrency market capitalization increased over the past 24 hours, with a current value of $184.35 billion. This value represents an increase of $4.7 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Blockchain analysis firm Coin Metrics found out that even though Bitcoin was experiencing tough times (especially the one when its price had the biggest daily loss in the last seven years), stablecoins bloomed.

This company released its State of the Network report on Mar 23. Stablecoins gained a lot of the market share, which everyone could see. However, spreads on spot and futures markets widened, while transfer fees went up as people rushed to deposit coins.

Honorable mention

GRAM

A United States District Court has ruled against Telegram for the issue of using GRAM tokens without declaring that they are securities prior to the ICO.

Prior to that, the Securities and Exchange Commission’s requested a preliminary injunction, to which the Court answered that it finds that the SEC has shown great likelihood of success in proving the contracts and understandings at issue. This would be including the sale of 2.9 billion Grams to 175 purchasers which netted Telegram $1.7 billion.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin had somewhat a turbulent day, with its price going from all the way to $7,000 and then back down to $6500, only to stabilize at just sligtly higher levels than yesterday. The largest cryptocurrency did not manage to break the $6,850 resistance successfuly, so the bears stepped in and brought the price back down. BTC is now holding below $6,850 and above $6,640. This move might be percieved as a fakeout above $6,850 and the market might look for a leg down towards the low $6,000’s or lower.


Bitcoin’s volume did not increase during the spike, which is quite interesting. Its RSI level is currently at the level of 62.

Key levels to the upside                    Key levels to the downside

1: $6,850                                           1: $6,640

2: $7,085                                           2: $5,960

3: $7,420                                            3: $5,000

Ethereum

Ethereum is currently fighting for where it will go next. Its price is stuck right at the $139 level, not knowing whether it will go up or down. However, a break to any side will not be as significant as the moves that Bitcoin makes, and could only bring the price up or down so far.


Ethereum’s volume is still at extremely low levels, while its RSI level is currently just above the mid-point of the value range, sitting at the value of 57.

Key levels to the upside                    Key levels to the downside

1: $168                                                1: $128

2: $178.6                                            2: $122.5 

3: $185                                                3: $100

Ripple

XRP had a day of virtually no movement. However, this is not quite due to its price, not wanting to move. The third-largest cryptocurrency was trading right below the $0.165 level, constantly failing to break it. This exact thing happened in the past 24 hours as well, as the price kept trying to go above the resistance, failing, and then going back to its previous levels.


XRP’s volume saw no increase or decrease on the day, while its RSI level is currently at 57.

Key levels to the upside                    Key levels to the downside

1: $0.165                                            1: $0.147

2: $0.19                                              2: $0.1

3: $0.2                                              

Categories
Forex Signals

USDCAD SHORT

This is a classic head and shoulders pattern where the neckline has been breached and we expect price to fall to our target line which is a previous line of support.

This is a classic head and shoulders pattern where the neckline has been breached and we expect price to fall to our target line which is a previous line of support.

This is a classic head and shoulders pattern where the neckline has been breached, and we expect the price to fall to our target line, which is a previous line of support.

Risk:

Standard Lot = £800

Mini Lot: $80

Micro Lot: $8

1 Hour Chart is used In This Trade.

The head and shoulders formation is a classic technical analysis pattern that professional Traders use in order to determine future price action.

In our setup, we have multi-year highs for this pair,  followed by a decline in price action to an area of support around the 1.4150  the key level, which will become our profit target.

Since pulled back from the original multi-year high around the one 1.4700 level, the price has consolidated into our head and shoulders formation, which consists of a left-hand peak and a pullback followed by a higher peak and a pullback and the third peak which again is lower than the second and similar to the first, where price action on each occasion pulls back to an area of support which is called a neckline.

When the neckline is breached, it confirms the setup, and that is where we have gone short. This offers a strong signal to traders that price action will continue down, at least to the previous area of support. And this is the hypothesis for our trade setup, where we have set in place a tight stop loss, just above the neckline, and where we have a generous win to lose ratio.

Categories
Forex Market Analysis

Daily F.X. Analysis, March 24 – Top Trade Setups In Forex – Eyes on Manufacturing PMI Figures! 

The U.S. Dollar Index regained bullish bias at 102.81, while U.S. stock scored daily downside limits. Federal Reserve Bank of St. Louis President James Bullard said U.S. jobless rate might soar to 30% in the second quarter, and the Fed can provide more support if necessary. The U.S. official data showed that existing home sales amounted to an annualized rate of 5.77 million units in February, higher than expected.

The U.S. Dollar Index regained bullish bias at 102.81, while U.S. stock scored daily downside limits. Federal Reserve Bank of St. Louis President James Bullard said U.S. jobless rate might soar to 30% in the second quarter, and the Fed can provide more support if necessary. The U.S. official data showed that existing home sales amounted to an annualized rate of 5.77 million units in February, higher than expected.

The U.S. Dollar Index regained bullish bias at 102.81, while U.S. stock scored daily downside limits. Federal Reserve Bank of St. Louis President James Bullard said U.S. jobless rate might soar to 30% in the second quarter, and the Fed can provide more support if necessary. The U.S. official data showed that existing home sales amounted to an annualized rate of 5.77 million units in February, higher than expected.

Later today, eyes will be on the U.K. and U.S. manufacturing figures, which have the potential to price action…

Economic Events to Watch Today    

 

 

EUR/USD – Daily Analysis

This morning, EUR/USD fell 0.2% to 1.0673, following a 0.4% gain on Friday. Later today, the eurozone’s March Consumer Confidence Index (-14.0 expected) will be released. The EUR/USD pair may cross the strong resistance level if the risk-off market sentiment gets more worsens ahead. Eventually, it will likely fuel deeper losses in the greenback and may increase demand for the common currency.

The EUR/USD currency pair may come under pressure in the coming European session if the Eurozone and German preliminary Manufacturing PMIs for March ignore expectations. The data is expected to surprise on the lower side, in the wake of the coronavirus outbreak and may show investors how much economy is affected by the COVID-19 impact.

Looking forward, the traders will keep their eye on the Eurozone and German preliminary Manufacturing PMIs for taking fresh direction, and it will likely leave the impact on the pair movement ahead. As well as, the United States and Federal Reserve incomplete deal-related headlines also will be key to watch.

Daily Support and Resistance

  • S1 1.043
  • S2 1.0592
  • S3 1.0678

Pivot Point 1.0753

  • R1 1.0839
  • R2 1.0914
  • R3 1.1075

EUR/USD– Trading Tips

The EUR/USD traded bearishly as it as violated and closed below horizontal support becomes a resistance level of 1.0990. The EUR/USD is trading around 1.0750, and it’s forming a lower-lows pattern on the 4-hour chart, which mostly drives a continuation of a selling trend. 

Right now, the EUR/USD is trading at 1.0720, consolidating in a narrow trading range of 1.0817 – 1.0660. The EUR/USD is facing hurdles around 1.0817, and above this, the pair has the potential to target the next resistance level of 1.0930. While the EUR/USD has odds of staying bearish below 1.0920 to target 1.0805. On the daily chart, a violation of 1.0605 can extend the selling trend until 1.0550.

GBP/USD– Daily Analysis

The GBP/USD retreated 0.7% to 1.1557, after a 1.4% rally in the prior session. The GBP/USD pair slipped due to a stronger dollar after the U.S. official data showed that housing starts posted at an annualized rate of 1.599 million units in February (1.500 million units expected). The U.K.’s emergency coronavirus legislation will also reach the House of Lords for additional discussion before turning into the law some time by the end of the week.

However, the risk-sentiment continues to flash green with the U.S. ten-year treasury yields, S&P 500 Futures, and Asian stocks are all on their ways to recover the latest losses; while the headline Manufacturing and Services PMIs from the U.K. and the U.S. are likely to move into the contraction phase, with readings below 50.00. 

Looking forward, the traders will keep their eye on the Flash Manufacturing PMI and FPC Meeting Minutes for taking fresh direction. As well as, the United States and Federal Reserve incomplete deal-related headlines also will be key to watch.


Daily Support and Resistance

  • S1 1.105
  • S2 1.1318
  • S3 1.1456

Pivot Point 1.1586

  • R1 1.1724
  • R2 1.1853
  • R3 1.2121

GBP/USD– Trading Tip

On Tuesday, the GBP/USD continues to consolidate in a broad trading range of 1.1400 – 1.1885 as the trend of the market isn’t clear. On the higher side, the bullish breakout of the 1.1885 level can open the buying trend until the next resistance level of 1.2185 (38.2% Fibo level) and 1.2300 level, which markets 50% retracement while the pair has solid chances of bouncing off over 1.1450 level. 

A bearish breakout of 1.1425 level can lead the Cable towards the next support area of 1.1050. The MACD is tossing above and below zero as investors are unable to determine the trend of the market. 

USD/JPY – Daily Analysis

At the starting of Tuesday’s Asian session, the USD/JPY currency pair hit the bearish track. They dropped to an intra-day low of 110.10, representing 0.69% losses mainly due to broad-based greenback weakness after rising expectations of further delays in the US COVID-19 bill. The USD/JPY is trading at 110.53 and consolidates in the range between the 110.09 – 111.30. Moreover, the currency pair gave little attention to the preliminary readings of Japan’s Jibun Bank PMIs and continued its declining streak.

At the data front, the preliminary readings of March month Jibun Bank Manufacturing PMI dropped below 47.6 to 44.8 in March. Moreover, the Services index dropped from 46.8 before 32.7, the lowest since September 2007. After the U.S. Senators’ failure to receive the much-awaited coronavirus (COVID-19) package bill, U.S. President, Vice President and Treasury Secretary tried to confirm traders that the stimulus package will be agreed soon. Still, he did not succeed in hiding fears of further delays in the relief package. 

However, the report came that the Senate is not expected to vote on the Bill today too, and indicated further delays in President Trump’s ‘major’ response to the coronavirus.

On the positive side, the U.S. inflation expectations recovered slightly from the record low after the latest Federal Reserve statement that there is no limit to their Quantitative Easing program. 

Daily Support and Resistance    

  • S1 105.08
  • S2 107.59
  • S3 109.24

Pivot Point 110.1

  • R1 111.75
  • R2 112.61
  • R3 115.13

USD/JPY – Trading Tips

The USD/JPY pair has shown a slight bearish movement, falling from 110.65 level to 109.580. On the 4 hour chart, the USD/JPY has formed a bullish channel that is still intact, and it’s pretty much likely to support the USD/JPY prices around 109.650. 

A bearish breakout of 109.600 level can lead the USD/JPY prices towards the next support level of 108.350, and around this level, we can expect USD/JPY to bounce off again. Conversely, the pair faces resistance around 111 and 112.190 today. Let’s stay bullish above 109.650 and bearish below the same level today. 

All the best for today!  

Categories
Crypto Market Analysis

Daily Crypto Review, Mar 24 – Bitcoin recording double-digit gains as it reaches $6,500

The cryptocurrency market managed to pull its weight to the upside as Bitcoin surged and recorded double-digit gains in the past 24 hours. Bitcoin is currently trading for $6,488, which represents an increase of 10.73% on the day. Meanwhile, Ethereum gained 8.91% on the day, while XRP gained 6.27%.

The cryptocurrency market managed to pull its weight to the upside as Bitcoin surged and recorded double-digit gains in the past 24 hours. Bitcoin is currently trading for $6,488, which represents an increase of 10.73% on the day. Meanwhile, Ethereum gained 8.91% on the day, while XRP gained 6.27%.

The cryptocurrency market managed to pull its weight to the upside as Bitcoin surged and recorded double-digit gains in the past 24 hours. Bitcoin is currently trading for $6,488, which represents an increase of 10.73% on the day. Meanwhile, Ethereum gained 8.91% on the day, while XRP gained 6.27%.

Bytecoin took the position of today’s most prominent daily gainer, with gains of 17.64%. On the other side, Steem lost 1.82% on the day, making it the most prominent daily loser. At the moment, it seems that the market moves as a whole (or at least in the same direction) and that not many cryptos differ from this rule.

Bitcoin’s dominance has increased over the past 24 hours. Its value is now 66.39%, which represents a 0.41% difference to the upside when compared to yesterday’s value.

The cryptocurrency market capitalization increased over the past 24 hours, with a current value of $180.28 billion. This value represents an increase of $3.5 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Democrats in the US House of Representatives are looking to implement the US-made digital dollar in order to streamline payments to its citizens outside of the traditional financial system. This idea has come up as many people were in need of some form of a stimulus package as a response to the economic crisis caused by the COVID-19 outbreak.

Honorable mention

MakerDAO

The MakerDAO (MKR) has recently announced an auction to recover the DAI collateral debt. This auction is almost complete, even with the procedure suffering some technical setbacks. The MakerDAO community largely remains optimistic as they think that Maker is handling the situation quite well.

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Technical analysis

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Bitcoin

Bitcoin managed to pull itself out of the falling price by creating lower lows pattern. The largest cryptocurrency soared above $6,000 once it broke the $5,960 resistance. The price was, however, stopped by the $6,640 resistance. Bitcoin is now consolidating right below this key level, trading at around $6,500 at the time of writing.


Bitcoin’s volume increased slightly during the price surge, while its RSI reached above 60 values on the 4-hour timeframe.

Key levels to the upside                    Key levels to the downside

1: $6,640                                           1: $5,960

2: $6,850                                           2: $5,000

3: $7,085                                            3: $4,300

Ethereum

Ethereum followed Bitcoin price-wise and increased in value as well, though not quite as much. The second-largest cryptocurrency has broken its $128 resistance quite quickly and moved towards future resistances. However, a new key resistance level has formed at the $139 level, which stopped the price from increasing twice in the past 24 hours.


Ethereum’s volume increased only during the duration of the candle, which brought its price over $128, while the rest of the day went by with regular volume. Its RSI level increased and is now at a value of 55.5.

Key levels to the upside                    Key levels to the downside

1: $168                                                1: $128

2: $178.6                                            2: $122.5 

3: $185                                                3: $100

Ripple

XRP increased in price as well over the past 24 hours. However, a pattern that is present for a couple of runs (to the upside as well as the downside) is that XRP did not break any support or resistance levels. XRP couldn’t get past the $165 level and is now trading at the $158.5 level, performing consolidation.


XRP’s volume increased only slightly when compared to the past couple of days. Its RSI level increased to the value of 55.

Key levels to the upside                    Key levels to the downside

1: $0.165                                            1: $0.147

2: $0.19                                              2: $0.1

3: $0.2                                              

Categories
Forex Videos

How To Profit From Double Top Formations In Forex

https://youtu.be/jG5AZIsp72o

https://youtu.be/jG5AZIsp72o

How To Profit From Double Top Formations In Forex

In this presentation, we will be looking at the technical analysis chart pattern known as a double top. Being able to recognize this formation or pattern and the information it provides us with will help to trade more effectively.

Double top patterns one of the many pillars of technical trading structures and should be incorporated into your trading knowledge base. Double top identification and understanding can further enhance your technical analysis when trading the forex market,y helping us see more than just support and resistance levels.

Example A

So what exactly is a double top? It will include two high points within the market, which generally signify an impending bearish reversal. There will usually be a decline in price between two high points. After the first peak has formed, there will be a retracement to a certain degree, before another rally to the upside. The second peak usually forms at the same level or slightly below the first peak, although occasionally it might breach the level of the first peak before price action reverses.

Example B (OR EXAMPLE C)

Here we can see that after a rally to the upside to peak one, price action reverses to our line of support line, often called a neckline between the two peaks, before the second push higher to peak number 2, and where price action reverses from this area, suggesting unsustainable buying pressure and that we should expect a reversal. And where price action goes on to breach the previous level of support, with a strong bearish candlestick, this is confirmed as a double top formation. And where price action subsequently comes back after some brief consolidation, with mixed small shaped candlesticks suggesting a lack of direction and where the previous level of support becomes an area of resistance and hence the continuation downwards which adds to our belief and support for this technical setup.

Example D

On the flip side, we have the double

bottom formation. This setup is identical to the double top in its theory and execution of trading. However, it is simply in reverse, In which case the exact same rules apply, But it is simply the mirror image of the double top. In this case, we would expect a bullish signal once the neckline is broken.

Example E

So here, for example, we can see a push down in price action to our first bottom, before price reverses to the neckline, which acts as an area of resistance, and where price subsequently comes down again to our second bottom, and where price action again returns to the neckline and breaches it and where this prior area of resistance becomes an area of support, and where price action continues to the upside from.
So to sum up, we are looking for two peaks at a similar height and where price action reverses between them to a neckline or area of support, which subsequently becomes breached after reversing from the second peak.
Secondly, we should make sure that the peaks are not too small because we prefer them on larger time frames of 15 minutes or higher because that is where we would expect larger amounts of pips to be made from this successful trade setup. This type of setup should be used in conjunction with a stochastic or ma CD to support double top or double or bottom formation.

One of the biggest problems with technical trading is that sometimes these patterns appear obvious in hindsight and that quite often we will miss opportunities and of course this can be very frustrating when you are always missing the mark. These patterns appear on our chats and often can be difficult to decipher when the market is moving, and with the pressure of placing trades sometimes, we simply miss these setups. There are two ways of going about solving this problem, and both have their pros and cons. We can either anticipate the formation before it occurs or wait for confirmation to trade the potential reversal. This will always be down to your appetite for risk, your personality as a trader, and your competence at understanding the nature of the forex market. Reactive traders who are playing the safer game have the advantage of simply seeing the pattern occur and trading it accordingly with the downside to this, which is that part of the trade has already been missed. This can equate to larger potential stop losses and less pips being made as the move continues.

Traders who have gotten into the sell or buy during the second peak or bottom phase of the setup will enjoy the comfort of having tighter stop losses, which should be placed a few pips above or below the first peak or first bottom. And of course, they will be able to claim more pips.

As with anything in forex trading, these things are a matter of trial and error and consistency, and therefore practice and observation will pay dividends in the long run.

Categories
Forex Course

86. Learning To Trade Using The Dependable ‘Stochastic Oscillator’

Introduction

Introduction

Introduction

Stochastic is a momentum indicator that was developed in the late 1950s by ‘George Lane.’ This indicator does not follow the volume or price of the underlying instrument; instead, it measures the speed and momentum of the price action. As a result, the indicator changes its direction before the price itself. This makes the Stochastic a leading indicator in the market.
We can change the sensitivity of this indicator to the market movement by adjusting the settings. Stochastic is a bounded indicator which oscillates between the 0 to 100 level. When the indicator reaches the 70-level, it indicates the overbought markets, and when it goes below the 30-level, we can assume that the market is in an oversold condition. The bullish and bearish divergences on the Stochastic indicator help us in anticipating the upcoming price reversals.

Trading Strategies Using The Stochastic Oscillator

Oversold & Oversold Areas

This is the basic yet powerful Stochastic strategy that is widely used by most of the traders. The idea is to go long when the indicator reverses at the oversold area and go short when it reverses at the overbought area. Let’s understand this with an example.

The image below is an NZD/CAD Forex price chart. It represents two buying and one selling opportunity in an uptrend. These trades are solely taken based on the strategy that we discussed above.

We have placed the stop-loss just below the recent candle and close our position when the market gave an opposite signal. The market circumstances don’t matter as this indicator can be used in any situation. The crucial thing is to follow the rules of the indicator very well.

If the indicator generates a buy signal, only take buy entries, and when it says sell, only consider selling opportunities. If we are in a buy trade and if the indicator represents a sell trade, that is the time to close our position. Never be rigid and ignore the indicator signals to hold the position for extended targets. If that happens, we will be on the losing side.

Stochastic Indicator + Bollinger Bands

Bollinger band is a leading indicator, and it consists of two bands, which are above and below the price action. This indicator also has the centerline, which is a Moving Average. The bands of the indicator expand and contracts according to market volatility. They expand if the volatility is more and contract when the volatility is less.

Buy Example

First of all, find an uptrend in any Forex pair. When the price action hits the lower Bollinger Band, see if the Stochastic indicates the oversold market condition. If it does, it means that the sellers now have a hard time to go lower and taking buy entries from here will be a good idea.

As you can see in the below image, the EUR/AUD was in an uptrend. During the pullback phase, the Stochastic reaches the oversold area, and the price action hits the lower Bollinger Band. This is an indication to go long in this pair. As we have activated our trade, the price action blasts to the north. We can close our position when the Stochastic indicator reaches the overbought area. If you want to ride longer moves in the trending market, exit your position at the major resistance area.

Sell Example

First of all, find a downtrend in any Forex pair. When the price action hits the upper Bollinger Band, see if the Stochastic is indicating overbought market conditions. If it does, it means that the buyers now have a hard time to go higher and taking sell entries from here will be a good idea.

The image below is the EUR/CHF Forex pair, and the pair was in an overall downtrend. During the pullback phase, the price action turned sideways. But when the price action hits the upper Bollinger Band and the Stochastic indicator reverses at the overbought area, it is a sign to go short in this pair.

We can place the stop-loss just above the upper Bollinger band, and the take-profit must be at the higher timeframe’s support area. If you are an intraday trader, close your positions when both the indicators give an opposite signal.

That’s about Stochastic indicator and related trading strategies. If you have any doubts, let us know in the comments below. Cheers.

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