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TopstepTrader

Never Catch a Falling Knife

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I don't believe ValueCharts are supposed to make you trade against the trend... They say in almost all of their webinars to trade WITH the trend and that you can use ValueCharts to find strategic entry points in weakness etc. They are not designed to be used as a stand alone indicator, they are made to compliment your current trading strategy to help you lower risk exposure.... That is how I have been using them and it works really well. You are not supposed to arbitrarily buy or sell as soon as a value range is reached...

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@ZDO you have to smell it to work out it is simply a detrended price series? HUH? Every oscillator is a detrended price series. That's why they oscillate in a range and don't have trends.Hardly anything earth shattering there.

 

@Swingtrader Agree. And that was the exact light with which I looked at the indicator. Just like any indicator it is of no use by itself. If one uses oscillators, they need to be used in a larger context. The most obvious being with a trend. But even when doing that I found the Value Charts had just way too many flaws. Studying this indicator will highlight some of the floors to using detrended type indicators. Sound great in theory, but in practice not so good.

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@ZDO you have to smell it to work out it is simply a detrended price series? HUH? Every oscillator is a detrended price series. That's why they oscillate in a range and don't have trends.Hardly anything earth shattering there.

 

You prefer disagreeing AND being disagreed with ?

 

re: “Every oscillator is a detrended price series”

How do you spell detrend?

"VC is a detrend"

"Oscillators are detrends."

Neither of these statements are earth shakers… but they may clear some haze for someone... said it just in case...

 

Further, while every oscillator may mathematically be a detrended price series, only ‘quality’ detrends (of which VC can be configured to be a pretty good instance) should be included in the ‘class’ of detrends for practical use as detrends.

Many other oscillators should not to be included in the ‘class’. While they do keep their underlying mathematical / technical detrend worth, they are otherwise sufficiently distended - enough to produce info beyond what is available in a quality detrend… and to even “have” trends, etc, etc, etc…

 

... pitying the OP now... it has gone so off topic we've almost circled back around to on topic :)

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OP = Original Post

 

C = Coach (hold your cursor over the icon to see)

 

Hi Colonel,

"C" stands for Vendor

And if the moderator place a big C below your name, you are in trouble.

Everybody attacks you. Dont ask me why? We all have to make a living.And often the vendors info is useful.

regards

bobc

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The subject of ValueCharts kind of sidetracked this topic but if others can bear with me one more time - for those of us TradeStation users, if you didn't see/get the message center pop-up today that on Sept 19th 400pm ET they will have a free live webcast:

 

Mark Helweg is the founder of MicroQuantSM, a producer of market analysis tools. He has developed numerous quantitative financial models, authored the book Dynamic Trading Indicators and frequently lectures on trading technology and technical analysis as applied to the stock, futures and forex markets.

 

Learn about new precision entry and exit strategies using the next generation of technical analysis tools: the ValueCharts® indicator suite, the first algorithm to model price in terms of objective value. ValueCharts was awarded a patent by the U.S. Patent and Trademark Office in December 2008.

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Personally, I love absolute statements. Especially when it comes to things in the markets. I'm firmly in the camp that says "the only thing certain in the markets is change". Well, that and patterns. And range expansion days. and high volatility preceedinglow volatility. And orders congregating at daily/weekly highs. sometimes.... I think.

 

Well anyway, in the spirit of absolutes, I wanted to post up a few choice knifes I was happy to catch in my lap over the past few weeks....

 

These are jsut a couple that I had handy to upload. Actually, I do this on a regular basis (daily? weekly for sure) primarily because it pays pretty well. And i'm kinda sorta the "in your face market!" type guy. I like going against the crowd, and I like getting in 3 pips from the bottom, or 4 pips off the top.

 

Makes for some really sweet risk reward ratios. That's part of the reason I'm up about 10% for the month while my average risk per trade is about 0.10%-0.20% of my account size. I also like to jump in and out of trades a lot. Again.... I'm just a Contrarian kind of guy.

 

feel free to click on my signature, and you'll see myfxbook page, which I trade using real money (no demo nonsense), so anyone who may be skeptical can see for themselves.

 

So there. Proof (well, ok, not proof at all. But, some evidence no doubt) that falling knives can and often are wrapped in $100 bills! you just want to make sure you catch the ones wrapped in money, and not the ones that are just big and sharp and painful.

 

FTX

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AU-30min-pinbarss.thumb.jpg.72572baf48471ab8024eb21f33103e99.jpg

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Personally, I love absolute statements. Especially when it comes to things in the markets. I'm firmly in the camp that says "the only thing certain in the markets is change". Well, that and patterns. And range expansion days. and high volatility preceedinglow volatility. And orders congregating at daily/weekly highs. sometimes.... I think.

 

Well anyway, in the spirit of absolutes, I wanted to post up a few choice knifes I was happy to catch in my lap over the past few weeks....

 

These are jsut a couple that I had handy to upload. Actually, I do this on a regular basis (daily? weekly for sure) primarily because it pays pretty well. And i'm kinda sorta the "in your face market!" type guy. I like going against the crowd, and I like getting in 3 pips from the bottom, or 4 pips off the top.

 

Makes for some really sweet risk reward ratios. That's part of the reason I'm up about 10% for the month while my average risk per trade is about 0.10%-0.20% of my account size. I also like to jump in and out of trades a lot. Again.... I'm just a Contrarian kind of guy.

 

feel free to click on my signature, and you'll see myfxbook page, which I trade using real money (no demo nonsense), so anyone who may be skeptical can see for themselves.

 

So there. Proof (well, ok, not proof at all. But, some evidence no doubt) that falling knives can and often are wrapped in $100 bills! you just want to make sure you catch the ones wrapped in money, and not the ones that are just big and sharp and painful.

 

FTX

 

The areas you outline look like better places to exit than to enter.

 

Certainly you can capture hundreds, but from the looks of those charts, it seems like you may have left 1000's on the table to capture the hundred if you are only catching the knife. But, If it a skill you have developed, then so be it. I am not the fool to condemn someone for taking money from the market. My comments mainly reflect my inability to catch the knife.

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Im going to try posting a few chars.... Hope it comes out ok and you can see it

 

 

You cant see it so ill have to try another method of taking a screen capture

Edited by Colonel B
pic was too small

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Im going to try posting a few chars.... Hope it comes out ok and you can see it

 

 

You cant see it so ill have to try another method of taking a screen capture

 

Hi Colonel

Have you tried JING for screen capture?

I can even use it and I am BBC.......born before computers

Just Google it and download the software.... Its free

regards

bobc

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The areas you outline look like better places to exit than to enter.

 

Certainly you can capture hundreds, but from the looks of those charts, it seems like you may have left 1000's on the table to capture the hundred if you are only catching the knife. But, If it a skill you have developed, then so be it. I am not the fool to condemn someone for taking money from the market. My comments mainly reflect my inability to catch the knife.

 

Well Mighty, like everything else in trading... it's always a work in progress. I'm a kung fu ninja killa when it comes to turning knives into paychecks... but i'm a goldfish trying to run in cowboy boots when it comes to holding on for any significant swing or trend.

 

Actually, because I think you can understand "the secret"... I'll take a moment to explain the basics of it.

 

It's easier for me to use a real example that I've recently done than to try to explain in the abstract... so I'm gonna go into catching knives in the USD/CAD earlier this week....

 

 

The first step for me in being able to identify which knives are actually made of money is I usually need to have strong conviction in a longer term directional bias.

 

I can (and do) derive this from several different tools... most commonly the weekly and monthly candlestick charts. But in this case, it was a combination of a historical extreme in the COT report (large spec net long CAD at crazy record levels)...combined with recent price action, and also some upcoming news catalysts, and overall market sentiment regarding the CAD.

 

Lets start with the foundation of this bias: the COT and recent price action... I have included a picture that shows the COT imbalance under the CAD futures chart... it also has an in depth breakdown of my thought process and logic that helps me determine both direcational bias, as well as probable limitations to a falling knife (or in this case, a rising rocket. Whatever)

 

CHeck out that first picture, read the notes, and then continue reading down below, where my analysis continues after you've seen that first pic:

 

But this isn't all that I'm considering. One of the biggest supporting factors isn't even on the charts at all. I'm talking about market sentiment, and/or market tone. For many weeks this year, the mood of any news release or article relating to Canada and the CAD had a tone of "well, the canadian economy is one of the few brightspots of the G8 currencies!" However, over the last 2-3 months, the tone has shifted, even including the chairman of their central bank stating in a press conference that he is concerned about Canadas over priced housing and Canadas under qualified home buyer.... and that he would persue an "accomodating fiscal policy" to make sure it doesn't unravel too quickly.

 

Appearantly Canada housing and chinese public companies dodged the initial meltdown, but whatever. Anyway....

 

this change in tone has set the stage to make this week a very important week for CAD traders... because this week the bank of Canada was scheduled to announce their interest rate changes (if any)

 

Now, as it turns out the announcement was "no change"... but that didn't matter much to me last week. What DID matter last week was that CAD traders around the world had only 1 question "Is Bank of C going to lower their rate???" With that being the guiding sentiment.... I knew for a fact that the days leading up to the announcement would very likely be fraught with crazy jolting impulse moves down... because while it was possible that the Bank of C would not lower interest rates... Not even the craziest fool seriously was considering that the Bank of C would RAISE interest rates.

 

So last week, upcoming fundamental announcements would influence market participants in one of two ways: Either you did nothing, because you wanted to see what the announcement was... OR... you REDUCED YOUR LONG POSITION... just in case they lowered rates, and now your too big, without the needed liquidity to get out.

 

So I KNEW there was going to be MASSIVE pressure for a variety of reasons for the CAD to sell off. And with so many already holding long positions... there would be almost no pressure or catalyst that would work to kick off a buying spree.

 

I also knew about how far to expect such a sell off to go.... lets say...I could reasonably determine that 100 pips down in the USD/CAD spot would be about 1 standard deviation of my expecation for what a falling knife "would likely do"... Because heck, the world is too long already, and we are only about 200 pips from the recent high, and no big trader worth their salt isn't going to use any and every pullback they can get to reduce their long exposure.

 

OK. Now we have COT analysis that essentially gives us perspective on the global supply/demand liquidity imbalance.... we also have knowledge of how large institutions operate, and what we can reasonably expect from them in terms of where they will get involved to reposition their trades...etc. We also know what fundamental factors are likely to influence decision making... and more importantly, we can make a pretty good determination of how Large speculators will FEEL regarding the upcoming fundamental factors!! (ie: very worried that they will be too long, in a market that has no liquidity for longs to exit)

 

I'll tell you one thing for certain. Coming into this weeks Bank of Canada rate announcement... NO ONE was talking "lets get long the CAD, because we could see an increase of interest rates!!"

 

So... with all this in our favor that we can reasonably deduce from our observations of price, market tone, upcoming possible catalysts, a knowledge of how large speculators like to get into and out of positions, and the clear imbalance of longs/shorts in a market that really won't have the liquidity for longs to cover...

 

It's really not that risky catching a falling knife. I mean... come on. Yes, the USD/CAD spot market COULD fall 500 pips in 3 days. Because every hedge fund manager is about to wake up tomorrow thinking "Gee... I have the largest long position in the CAD that I've ever had in the history of my trading. I know what I'll do... I'm gonna go ahead and DOUBLE DOWN on that long position baby!!!"

 

C'mon. It's not realistic, and it' not likley. And besides, that what bet sizing, and stops are for.

 

But, The very important thing to understand is that a falling knife in say, the USD/CAD spot market last week, and also Sunday/Monday of this week... would have been unlike ANY OTHER FALLING KNIFE in any other market at this moment in time.

 

And it's this type of thinking, using logical deductive and inductive reasoning that allow me to see the forces behind the markets... and therefore, I could recognize a falling knife in the USD/CAD spot was not something I needed to fear, but rather a special, high probability opportunity to get long the USD, short the CAD, and hold on for a ripping ride as the "Great USD/CAD short squeeze of 2012" kicked off.

 

Now you see how I develop my bias, and how I have the conviction to stick with it. At least in this example. (rarely the patience, but often the conviction... ironic, yes)

 

Now, if you want to see how I look at charts to determine how I will enter, how I will exit, and what I look for, and what I factor in to determine the optimal entry and exit points, I suggest you check out the 3 pictures, and the notes, that I included in the following post:

 

http://www.traderslaboratory.com/forums/market-analysis/13737-watch-typical-day-real-day-trader-47.html#post164343

 

So, in summary, this post here should give you an idea of how I determine if a falling knife is actually a super sale on the next best thing, or whether it's just a dog with too many fleas and is best left for someone else to grab. Think of this post as my "macro/bigger picture" approach and determination.

 

The link I just gave will give you a better idea of how exactly I pinpoint the "micro level / execution / triggering the trade" aspect.

 

Put the "macro" view with the "micro" view and you have the two fundamental components to my own personal trading methodology. It may be a lot of work and variables to consider, but hey, it beats the snot out of a moving average cross over system any day!

 

Phew... that was a lot of thought for me Mighty... I hope you find it at least interesting!

 

The revelation that I hope to impart here is that catching a falling knife is NOT a skill worth spending time developing. What IS worth spending time developing is the ability to know if a falling knife is actually a rare fire sale on something of significant value... or if it's just a basic, run-of-the-mill falling knife. Just a knife? follow the trend, or stay out. Actually something more than meets the eye? Worth an F'ing fortune, because it can provide 5:1, 10:1, even 20:1 reward to risk ratios, if you develop the skill fully. (best I ever did was a 320 pip target with an initial stop of 25 pips, risking 0.40% on the trade)

 

Anyway, would love to hear your feedback or thoughts on this process of mine... and most of all, hope you have a slightly different perspective on the red waterfall we traders like to call "a falling knife"

 

FTX

how-to-catch-a-knive-of-money-USD-CAD-part1.thumb.jpg.ec425f7bf7858637322db3782f7298e3.jpg

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As a follow up the my post above... I've done a fairly detailed analysis on a few different counter trend trading opportunities... and I believe all but one pretty much worked out...

 

Anyway, here is a post I made in my thread that gives the "cliff notes" version, for anyone who is interested in seeing other examples besides the USD/CAD I discussed already...

 

http://www.traderslaboratory.com/forums/market-analysis/13737-watch-typical-day-real-day-trader-50.html#post164600

 

FTX

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FTX,

 

Your post was certainly lengthy.

 

I appreciate your effort.

 

I would be just as likely to add to a losing position as I would to attempting to catch the knife.

 

Again, I can't comment on something that I won't do and I do not think that just because I won't do it, that it can't be done.

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FTX,

 

Your post was certainly lengthy.

 

I appreciate your effort.

 

I would be just as likely to add to a losing position as I would to attempting to catch the knife.

 

Again, I can't comment on something that I won't do and I do not think that just because I won't do it, that it can't be done.

 

Ahh well, fair enough. I understand where your coming from. Well, maybe someone else can benefit from the explanation then.... if only by learning what NOT to do...lol.

 

FTX

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The areas you outline look like better places to exit than to enter.

 

Certainly you can capture hundreds, but from the looks of those charts, it seems like you may have left 1000's on the table to capture the hundred if you are only catching the knife. But, If it a skill you have developed, then so be it. I am not the fool to condemn someone for taking money from the market. My comments mainly reflect my inability to catch the knife.

 

Hi MM,

 

Your recent short position described in the Euro thread was interesting for me because your exit looked like a short entry to me. The market looked short term overbought in a long term downtrend. In this instance I was wrong, or would have been stpped out as the market continued to rally. Over the long-run, however, my approach would turn a profit. I expect yours would also. Which approach is best?

 

In the future, who knows?

 

In the past, it's market dependent, in my opinion.

 

In the Euro you can find a good risk:reward ratio entry, minimize risk, and let profits run. But letting profits run in a market that doesn't run is unlikely to be successful. In the Euro you're more likely to get a decent entry trading in the direction of a thrust in the market because a continuation is highly likely; in the ES, which is mean-reverting, price will probably go in the opposite direction to the one in which it is currently going, so buying when price is falling is often a better entry than buying after an up-thrust.

 

In summary then, I think it's all market dependent. In some markets catching a falling knife is a good idea, in others you want to see the knife blunt and bounce from the table-top before entering.

 

BlueHorseshoe

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Hi MM,

 

Your recent short position described in the Euro thread was interesting for me because your exit looked like a short entry to me. The market looked short term overbought in a long term downtrend. In this instance I was wrong, or would have been stopped out as the market continued to rally. Over the long-run, however, my approach would turn a profit. I expect yours would also. Which approach is best?

 

I would guess that you were probably right that it was a short entry on multiple time frames, even though it continued to rise into the 30's. Just because it didn't work that time doesn't mean it won't work.

 

Price hit my hard stop so I had no choice. In the long run, my action on that particular trade salvaged profits since it would have continued higher to my BE and worse. Other times when I have engaged in such an exit I have wasted profits.

 

If it were always crystal clear, I would probably find something else to do.

 

 

In the future, who knows?

 

In the past, it's market dependent, in my opinion.

 

In the Euro you can find a good risk:reward ratio entry, minimize risk, and let profits run. But letting profits run in a market that doesn't run is unlikely to be successful. In the Euro you're more likely to get a decent entry trading in the direction of a thrust in the market because a continuation is highly likely; in the ES, which is mean-reverting, price will probably go in the opposite direction to the one in which it is currently going, so buying when price is falling is often a better entry than buying after an up-thrust.

 

In summary then, I think it's all market dependent. In some markets catching a falling knife is a good idea, in others you want to see the knife blunt and bounce from the table-top before entering.

 

BlueHorseshoe

 

I agree that it is market dependent and will add that it is also timeframe dependent. Es exhibits trends/moves in higher/wider time frames. The shorter time frames and certainly during the RTH, ES is chronically mean reverting.

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This was an easy trade even for a dipstick like me. I have marked up the OP's chart. Why make it hard? Price nearing end of day been in a range for quite some time. Odds donot favor a breakout before close. Range behaviour is race to the top..reverse race back down and race to the bottom..repeat.....ad nauseum until a B.O. succeeds. The idea is go long at bottom of range. Short at top. 70% to 80% of B.O. fail. They may break above or below the lines but usually price get pulled right back into the range. This was few years back so i have no idea what actually happened but i would guess price went up to at least or near my x on the chart and maybe to the top of the range before reversing again. The tactic is go long somewhere in the circle area on the chart. Also, any dipstick can see that the red bar in the circle showed buying pressure coming in at the close. Unless, the dipstick has chicken sh$t in his/her eyes. What else does one need? Price in a range..Buying pressure at the bottom. Nearing end of day.

IMG_3153.thumb.jpg.5a56eef9f0bddbdaeeee16dd82b5dee9.jpg

Edited by Patuca

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    • Date : 18th January 2022. Market Update – January 18 – BOJ Stands Pat.Asian markets weaker as BOJ stays put (-0.1% interest rate) with stimulus package intact, raises inflation target to 1.1% and growth to 3.8% for 2022. Kuroda: “Will ease monetary policy without hesitation as needed, there has been a notable improvement in the economy.” USD firmer, Yields moved up with US 2-yr over key 1.0%, 10-yr over 1.8%. Oil higher – Saudi’s retaliate, attacking Yemen and Gold holds at $1815.   USD (USDIndex 95.25) holds on to gains from Friday, pushing to 953.8 earlier. US Yields 10-yr moved higher again and trades at 1.818%. Equities – US closed yesterday. Nikkei -0.27% – USA500 FUTS lower again at 4633. USOil – Spiked over $84.70 as very tight supply, Saudi’s retaliation on Sanaa and NK continued firing of missiles unsettles sentiment. Gold – holds at $1815 from a test of $1823. Bitcoin another down day, tested to $41,600, back to 42,200 now. FX markets – EURUSD back to 1.1400, USDJPY now 114.80 tested 115.00 earlier, Cable back to test 200hr MA 1.3620, +20 pips after UK jobs data. Overnight – UK Earnings in line at 4.2%, Unemployment (4.1%) and Claims better than expected. PBOC deputy governor says will keep yuan exchange rate basically stable.European Open – The March 10-year Bund future is down -19 ticks, Treasury futures are underperforming. Stocks across Asia struggled with the renewed rise in yields and DAX and FTSE 100 futures are also down -0.3% and -0.2% respectively. Inflation risks and central bank outlook will be dominating the discussion in coming months.Today – German ZEW, Empire State Manu. Index & Earnings from Goldman Sachs. Day 2 of DAVOS (on-line).Biggest FX Mover @ (07:30 GMT) CADJPY (again) (+0.34% again) Rallied all day over 91.73 (Thursdays high) and onto test 92.00. MAs aligned higher, MACD signal line & histogram higher & above 0 line. RSI 68 rising, H1 ATR 0.131 Daily ATR 0.804.Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Stuart Cowell Head Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date : 17th January 2022. Market Update – January 17 – USD Holds onto gains.Big bank Earnings disappointed on Friday, the USD recovered from 8-week lows and Fedspeakers continued to worry about inflation as hawkish tones increased. Stocks recovered early losses, Yields moved up to close the week as Oil moved up and Gold moved down. China’s PBOC delivered the first rate cut in a while as signs of slow down persist and Covid cases once again spread.   USD (USDIndex 95.20) holds on to gains from Friday. Bouncing from 8-week lows under 94.60. US Yields 10-yr moved higher again to close at 1.772%. Equities – USA500 +3.82 (+0.08%) at 4662 as Financials weighed following Earnings from JPM (-6.15%) Blackrock (-2.19%) and WFC (+3.68) Tech & Energies lead recovery into long weekend. USA500 FUTS lower at 4652. USOil – Spiked over $84.00 as markets look beyond Covid spikes with very tight supply. Gold – settled at $1816 from a test of 1830 again. Now at $1822. Bitcoin support once again at $42,000, Friday, back to 42,800 now. FX markets – EURUSD back to 1.1465, USDJPY now 114.40 at 115.85, Cable back to 1.33680. Overnight – Chinese GDP and industrial production exceeded expectations, whilst retail sales disappointed. UK house price data from the Nationwide was strong. The Chairman of Credit Suisse has resigned due to Covid breaches.Week Ahead A Bank of Japan meeting which concludes on Tuesday, UK inflation data on Wednesday and Australian jobs figures on Thursday. Earnings from GS, BAC, MS, P&G, NetflixEuropean Open – The March 10-year Bund future is down -36 ticks, alongside broad losses in US futures, which points to a further rise in yields across Europe. Stock market futures are trading mixed, with DAX and FTSE 100 futures posting gains of 0.4% and 0.2% respectively, while an 0.4% decline in the NASDAQ is leading US futures lower. Central bank outlooks and inflation expectations remain in focus, the Fed is gearing up for a round of central bank hikes this year that will also impact the outlook for BoE and ECB amid hopes that the pandemic phase of Covid-19 will start to fade.Today – Little data from Europe & All US markets closed for MLK Day.Biggest FX Mover @ (07:30 GMT) CADJPY (+0.34%) Rallied from 90.50 lows on Friday to 91.37 (Fridays high) now. MAs aligned higher, MACD signal line & histogram higher & above 0 line. RSI 64 & rising, H1 ATR 0.121 Daily ATR 0.794.Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Stuart Cowell Head Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • GOLD FLUCTUATES BELOW $1,830 OVERHEAD RESISTANCE, MAY SLUMP TO $1,800 LO Key Resistance Levels: $1,900, $1,950, $2000 Key Support Levels: $1,750, $1, 700,$1,650 Gold (XAUUSD) Long-term Trend: Bullish Gold (XAUUSD) is in a sideways move but may slump to $1,800 low. Gold is retracing as it faces rejection at the high of $1,830. However, if price breaks the resistance level, the market will rise and retest the previous high of $1,860. Meanwhile, on January 14 uptrend; a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement suggests that Gold will rise but reverse at level 1.272 Fibonacci extension or $1,840.86. XAUUSD – Daily Chart Daily Chart Indicators Reading: Gold is at level 55 of the Relative Strength Index for period 14. The market has reached the uptrend zone and further upside is likely. The 21-day SMA and the 50-day SMA are sloping upward indicating an uptrend. Gold (XAUUSD) Medium-term bias: Ranging On the 4 hour chart, the Gold price is in a sideways trend. The gold price fluctuates below the $1,828 overhead resistance. The sideways trend has been ongoing since December 21. Each time the market retest the overhead resistance, the selling pressure will resume. The current downtrend is likely to extend to the low of $1,804 before upward. XAUUSD – 4 Hour Chart 4-hour Chart Indicators Reading XAUUSD is below the 80% range of the daily stochastic. The market is in the bearish momentum. The 21-day SMA and the 50-day SMA are sloping upward indicating the uptrend. General Outlook for Gold (XAUUSD) Gold’s (XAUUSD) price is declining as it may slump to $1,800 low. The market is fluctuating below the $1,828 resistance zone. The Gold price is falling to the downside. The upward move will resume if price finds support above the $1,800.   Source: https://learn2.trade 
    • USOIL REACHES AN OVERBOUGHT REGION, MAY FACE REJECTION AT $85.39 Key Resistance Levels: $80.00, $84.00, $88.00 Key Support Levels: $66.00,$62.200,$58.00 USOIL (WTI) Long-term Trend: Bullish USOIL has been in an uptrend but it may face rejection at $85.39. The index is retesting the previous high of $85.39. In previous price action in October and November, the bulls failed to break above the overhead resistance. Meanwhile, on December 9 uptrend; a retraced candle body tested the 50% Fibonacci retracement level. The retracement indicates that WTI will rise to level 2.0 Fibonacci extension or $81.61. From the price action, buyers have broken above the Fibonacci extension and have reached a high of $84. USOIL – Daily Chart Daily Chart Indicators Reading: USOIL is at level 70 of the Relative Strength Index period 14. It indicates that the index is in the overbought region of the market. The current uptrend is likely to face rejection at the recent high. Besides, sellers will emerge to push prices down. The index price is above the 21-day SMA and 50 –day SMA which indicates a further upward move. USOIL (WTI) Medium-term bias: Bullish On the 4-hour chart, the index is in an uptrend. WTI price has broken above the resistance at level 83.00. Meanwhile, on December 12 uptrend; a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement indicates that WTI will rise but reverse at level 1.278 Fibonacci extension or $84.22. USOIL – 4 Hour Chart 4-hour Chart Indicators Reading The index is above the 80% range of the daily stochastic. The market has reached the overbought region. Sellers are likely to emerge to push prices down. The 21-day and 50-day SMAs are sloping upward indicating the uptrend. The uptrend will continue to the upside as long as price bars are above the moving averages. General Outlook for USOIL (WTI) USDOL has reached the overbought region of the market but may face rejection at $85.39. The current uptrend is likely to terminate at the previous price level of the market. WTI is trading at $84.39 at press time. Source: https://learn2.trade 
    • ANNUAL FORECAST FOR EURJPY (2022) EURJPY Annual Forecast – Price Is Set to Scale New Heights With a Bullish Flag Formation The annual forecast for EURJPY is for it to scale new heights, having conformed to a bullish flag formation. The bullish flag formation, an offshoot of the triangle pattern, began towards the tail end of 2020 as bulls began to exercise dominance in the market. The market began to recover from the 116.910 support level in May 2020. It pulled back when it first hit the upper border of its triangle pattern and surged through it at the second time of asking, thereby leading to the creation of the flag pattern. EURJPYJPY Significant Zones Supply Zones: 134.150, 140.650, 149.010 Demand Zones: 113.920, 116.910, 127.630 EURJPY Long Term Plan: Bullish A bearish impact is visible annually in the market, notably since 2013. Every time EURJPY makes a bullish move, the move is cut off prematurely and it always leads to a plunge back around the 113.920 demand level. This happened from 2013 to 2016, and then from 2017 to 2020. The result is a triangle-tapered market structure. By June 2020, the price hit the 116.910 demand level and began another ascent, but this time, it eventually broke the triangle pattern on 2021 New Year’s Day. The flag pole was formed as the price surged from 120.920 and was stopped abruptly at 134.150. Subsequently, EURJPY began cranking through a downward channel. This continued into the year 2022. The market forecast is for an upward liquidity flow. The upward signal of the MA Cross is still very valid. Meanwhile, the Moving Average Convergence Divergence indicator is showing dwindling bullish bars. This is due to the downward ranging in the market. Its signal lines remain above the zero level. EURJPY Medium Term Plan: Bearish In early 2022, prices are set to drop after hitting the upper border of the ranging channel. The MA Cross is directed down-sideways to show the undulating nature of the current market. The same can be said for the MACD indicator. The annual forecast is towards the end of the year 2022 into early 2023 when the bullish flag pattern is anticipated to drive the market upward towards 140.650. Source: https://learn2.trade 
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