Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Recommended Posts

When I began learning about the trading using technical analysis over 20-years ago I filtered through much of the same information you are. I examined the use of trendlines, moving averages, countless indicators and other types of technical measures. All of which were supposed to define a trend, signal changes of a trend or turning points within those trends. What I found is that nothing worked with any consistently and there were too many variables. Especially flawed are the concepts of overbought and oversold, which I will convince you of.

 

Whether you are a stock, commodity or currency trader, at some point you have been lead to believe that by using price oscillators like Stochastic, RSI, Williams %r or the many others you will be able to determine turning points in those tradable instruments. The idea with these is that they can measure the price action and determine when those prices have become overbought (moved too high) or oversold (moved too low). When a signal is given prices will then reverse.

 

Once you've learned this and their ability to signal turns has been instilled in your beliefs of what is possible, you have been setup to fail. It's not your fault since those that teach the use of these indicators in trading courses will show you how well they worked in the past. Of course, real-time experience will show you how often it doesn't work. Let's look at a couple of examples

 

Before we do that, if you have not read the article I wrote called Bringing Common Sense to Trading. In it you will learn how to trade prices action that has moved too far too fast.

 

GetChart.aspx?PlayID=65839

 

In the above chart of Google (GOOG), once prices began their move higher there weren't any pullbacks of significance. While conventional thinking would suggest that prices would or should pullback it didn't happen. You see, overbought is a flawed concept that does work and it will limit what you believe is possible. There is a meaning to the word of course, but it has no real existence in the markets. When buyers are in control and there is little to no price resistance to the left prices can move higher and higher regardless of the overbought belief. It is obvious from the chart above, what is overbought can become more overbought and then move even higher.

 

GetChart.aspx?PlayID=65840

 

If you still have any doubt that the idea of overbought or oversold is flawed, this chart should take care of it. As Research in Motion (RIMM) started its decline there was never a point where it was overbought within the decline, which is still intact. I know that we can make some oscillator with some setting show an overbought signal at the Pristine Sell Setup (PSS). However, that would setup another limiting belief that it may work in the future or on another stock or currency. FA Get About It.

 

At this point, RIMM could be oversold at zero, but look at this chart. From the high, it fell 20 points and no bounce and then another 20 and nothing. It fell about 50 points before being able to move up and form that PSS! Is that when some oscillator read oversold? There is no oversold or that it has moved too far lower when big money institutions are overloaded and caught. In addition, when there is no significant price support to the left (a Pristine Price Void), the odds are extremely high that the decline is going to continue until the Void is closed.

 

If you are reading this you are passionate to learn about trading and failure is not an option. You are in search of the truth in technical analysis; same as I was. I found it and it isn't in the accepted, over-taught indicator based methods. The truth is in keeping it simple and understanding the messages within the price action. This is the same for day-trading, swing-trading or long-term investing and the same for FOREX, Stocks or E-minis.

 

If you have a trading screen full of indicators I am sure that you have been affected by the plague that infects everyone wanting to learn trading based on chart reading. Consider what I've shown you and remove them, read my other article Bringing Common Sense to Trading and the light will start to come on.

 

All the best,

 

 

Greg Capra

President & CEO

Pristine Capital Holdings, Inc.

pristine-logo-small.jpg

Share this post


Link to post
Share on other sites

It is easy to show big trends in the PAST, where OB/OS indicators seemingly fail, but the reality is that it simply isn't true. The FACTS are that despite what you might hear from a firm that heavily markets trading courses at fairly high prices, and teaching incredibly basic stuff, the FACTS are that the two trends above can be perfectly defined by the use of OB/OS oscillators if one uses some lateral thinking. And one can quite easily get on board also via the same OB/OS indicators and ride the tend quite nicely. The big difference is that when, in the vast majority of cases, these big trends don't take place for most markets, the use of OB/OS oscillators will absolutely kill any traditional basic trend following approach.

 

So the lesson is, don't always believe what you read, and especially so when coming from a person who also happens to sell trading courses.

 

I don't market anything, but simply make comments based on 30 years experience. Is 30 > 20? Does it mean anything? Who knows. LOL

Share this post


Link to post
Share on other sites

The intent and outline of the brief article is sound enough. It's just that his English is unclear. Depending on spell checkers is no help for errors of context or simply saying the opposite of what is meant. A copy reader would probably pick up the errors and a kindly reader would ignore them. A sloppy reader, unfortunately, would assume the writer means what the text states. And that would be unfortunate.

From the context the author appears to be an English native speaker. If he's not, then I would not like to be harsh, though even then the text should go past a sense checker.

Examples:

"When I began learning about the trading using technical analysis over 20-years ago I filtered through much of the same information you are."

"Before we do that, if you have not read the article I wrote called Bringing Common Sense to Trading. In it you will learn how to trade prices action that has moved too far too fast."

"In the above chart of Google (GOOG), once prices began their move higher there weren't any pullbacks of significance. While conventional thinking would suggest that prices would or should pullback it didn't happen. You see, overbought is a flawed concept that does work and it will limit what you believe is possible."

By sloppy writing, the intent is lost. Omitting a "not" is no help on the road to enlightenment.

And just as an aside, the "overbought" and "oversold" indicators are not usually assumed to be trustworthy on their own, needing confirmation. A stock can be oversold achingly long and overbought seemingly forever. The slopes of hope stretch to infinity and the wall of worry has no limits...our cash and patience do.

Share this post


Link to post
Share on other sites

Where are the failed oscillators on the charts?

 

 

It is easy to show big trends in the PAST, where OB/OS indicators seemingly fail, but the reality is that it simply isn't true. The FACTS are that despite what you might hear from a firm that heavily markets trading courses at fairly high prices, and teaching incredibly basic stuff, the FACTS are that the two trends above can be perfectly defined by the use of OB/OS oscillators if one uses some lateral thinking. And one can quite easily get on board also via the same OB/OS indicators and ride the tend quite nicely. The big difference is that when, in the vast majority of cases, these big trends don't take place for most markets, the use of OB/OS oscillators will absolutely kill any traditional basic trend following approach.

 

So the lesson is, don't always believe what you read, and especially so when coming from a person who also happens to sell trading courses.

 

I don't market anything, but simply make comments based on 30 years experience. Is 30 > 20? Does it mean anything? Who knows. LOL

Share this post


Link to post
Share on other sites
Hi Greg

Would you include Volume as an indicator?

regards

bobc

 

Bobcollet, volume isn't an indicator like MACD and alike that attempts to intepert the direction or tuning points of the price action. Volume tells us the magnatude of interest at the time or the lack thereof.

 

So volume is a secondary piece of information in addition to price, not an indicator. Of course, there are volume indicators like On Balance Volume. Like price indicators, volume indicators are redundate. Looking at a simple chart with price and volume is enough.

 

Greg

Share this post


Link to post
Share on other sites
Bobcollet, volume isn't an indicator like MACD and alike that attempts to intepert the direction or tuning points of the price action. Volume tells us the magnatude of interest at the time or the lack thereof.

 

So volume is a secondary piece of information in addition to price, not an indicator. Of course, there are volume indicators like On Balance Volume. Like price indicators, volume indicators are redundate. Looking at a simple chart with price and volume is enough.

 

Greg

 

Volume isn't an indicator like MACD, but it is an indicator that can be used nonetheless, as can price and time.

Share this post


Link to post
Share on other sites
Especially flawed are the concepts of overbought and oversold, which I will convince you of.

 

Greg, all your article has suceeded in doing here is demonstrating that you have little idea of what you're talking about . . .

 

On the chart you show GOOG is clearly in an uptrend (whether you use MAs, trendlines, swing charting - nobody would really argue with this), so why on earth would you try and use an OB reading to short it, hmm?

 

What you need to do is use an OS reading to BUY THE PULLBACKS. I've marked these on a chart below, along with failed rallies in a downtrend, which is where you short on OB. You'll also need an oscillator with a responsive setting - a 2-Period RSI or a 6-Period CCI, for instance.

 

There you go - you just learned how to use oscillators to trade with the trend - and I didn't charge you a thing!

 

Regards,

 

BlueHorseshoe

5aa7114c8f7af_GOOGRe-Visited.gif.99ea63300113709255a6596816acd4db.gif

Share this post


Link to post
Share on other sites

It's very difficult to determine when price will turn in the opposite direction. If if were easy, everyone would get into trading, and everyone would make money. It's like a casino; if everyone made money at the casino, they would be open for one day, then go out of business, or quickly find a way to put the odds overwhelmingly in their favor.

 

Price moves very quickly to new levels, making it difficult to react in time. This leaves the trader with two basic choices:

 

  • Enter an order at a target price in advance, and hope for the best.
  • Try to time the order point, and hope you can react fast enough.

 

Both choices have serious flaws, putting the trader at a severe disadvantage no matter what you do. If price always moved very slowly, that could be seen as a lack of opportunity to the trader. In order to make money, there needs to be price movement. So either way, there are disadvantages. If price moves fast, it poses challenges. If price moves very slow, there is less opportunity within that time frame.

 

So what's the better choice? Try to enter orders very quickly, or guess at target levels and enter the order in advance?

 

It was pointed out that the price pauses after each price level, and at that point a decision needs to be made. During that price pause, there is plenty of time to exit, lock in profit, and try to decide if the trend will continue or not.

 

If you exit, and re-enter in the same direction, then the trade goes against you, at least you've locked in some profit. You may loose money on the next trade, but hopefully, overall you won't loose. If you can somehow break even on the bad trades, or not loose to much, that's half the battle.

 

If you react too fast, and get a bad entry, then a fast reaction time is not an advantage. A fast reaction can be either bad or good. If you try to act very fast, but fail to analyze the situation because you didn't have enough time, it's basically just trading randomly. You might get lucky, you might not.

 

No matter what perspective you take in your strategy, there are advantages and disadvantages. Good decisions need to be made that put the odds in your favor. I'm not saying that I do that. I'm speaking from experiencing and knowing how stupid I can be.

 

One mistake I make, is that I take profit, then immediately get back in a position at a better price without having time to analyze whether it was a good decision or not. Locking in the profit, and getting back in at a better price isn't the mistake, that's fine. The problem is that I'm just 'Rolling the Dice', acting on a hunch, and taking a chance. Later, I can look at my charts and see what I should have done, but I have the luxury of time 'after the fact'.

 

I need to take advantage of those sideways price pauses as a way to have enough time to make a good decision.

Share this post


Link to post
Share on other sites

I've been hoping that someone would post one of these oscillators and explain how it/they would tell you what to do or not do in real time. Absent that, there's no advantage over a simple diagonal line, so why bother?

 

Db

Share this post


Link to post
Share on other sites
Volume isn't an indicator like MACD, but it is an indicator that can be used nonetheless, as can price and time.

 

Neither volume nor price are indicators in the traditionally-accepted technical analysis definition of "indicator". Volume and price exist outside the trader. They require no settings. They require no calculations. They do not owe their existence to a formula. Price "indicates" that a transaction has taken place. Volume "indicates" how many. This does not make them "indicators" as the term is normally used by a trader.

 

Db

Share this post


Link to post
Share on other sites
I've been hoping that someone would post one of these oscillators and explain how it/they would tell you what to do or not do in real time. Absent that, there's no advantage over a simple diagonal line, so why bother?

 

Db

 

Hi Db,

 

My post above explains one way in which oscillators can be helpful. I suspect that the reason you don't pull up a chart and look at this yourself is that you've already decided that this sort of thing doesn't work . . .

 

As for realtime - when I traded like this and tried to discuss a position with you in real time earlier this year, you didn't seem too interested.

 

The chart below shows what happens when something like this works out well. If the trend is up buy OS pullbacks, if the trend is down sell OB rallies. If you can do this without an oscillator to define OB/OS or an indicator to define trend, then that's all good too.

 

BlueHorseshoe

Osc.thumb.gif.a1464ab6d349845f4f9d3e827f6e331c.gif

Share this post


Link to post
Share on other sites
Hi Db,

 

My post above explains one way in which oscillators can be helpful. I suspect that the reason you don't pull up a chart and look at this yourself is that you've already decided that this sort of thing doesn't work . . .

 

I don't pull up a chart and look at this myself because I'm interested in how those who claim that oscillators work so well in RT use them. It's one thing to say OSCILLATORS WORK and another to apply one to a chart and show how it would work.

 

As for realtime - when I traded like this and tried to discuss a position with you in real time earlier this year, you didn't seem too interested.

 

I wasn't uninterested, but it wasn't RT, nor was it a Wyckoff trade, so I saw no reason to pursue it.

 

The chart below shows what happens when something like this works out well. If the trend is up buy OS pullbacks, if the trend is down sell OB rallies. If you can do this without an oscillator to define OB/OS or an indicator to define trend, then that's all good too.

 

BlueHorseshoe

 

Or one could simply apply a demand line and make one entry at the beginning and one exit at the end. Without knowing the exact entries and exits using the oscillator, and the commission schedule, it's impossible to say which would the more profitable. But the once in-once out (without considering pyramiding) would be close to being as profitable and would carry only one commission. So what's the point of all that trading?

 

I don't see indicators as being the work of the devil. I just don't see the value of them.

 

Db

Share this post


Link to post
Share on other sites

Since I've asked for chart examples, I ought to provide one.

 

The black area encircles the timeframe used in BH's chart. Limiting oneself to that, a suggested entry is provided (the hinge is noted for those who know what it is; it is similar to a coil). There is no exit or further entry until the trend "ends", at the break of the demand line. The one earlier break of the demand line in March could be a prompt for an exit, but one could re-enter immediately thereafter and continue riding the trend.

 

Db

 

 

 

attachment.php?attachmentid=31687&stc=1&d=1349135251

5aa7114e88eaf_NQ100(Daily)20121001172930.thumb.png.775adda19b701856848ce9a019d7067c.png

Share this post


Link to post
Share on other sites
Neither volume nor price are indicators in the traditionally-accepted technical analysis definition of "indicator". Volume and price exist outside the trader. They require no settings. They require no calculations. They do not owe their existence to a formula. Price "indicates" that a transaction has taken place. Volume "indicates" how many. This does not make them "indicators" as the term is normally used by a trader.

 

Db

 

Wow! Deep! I will twist one up and read it again. Thanks.

Share this post


Link to post
Share on other sites

Hi Db,

 

Thanks for your reply.

 

I don't pull up a chart and look at this myself because I'm interested in how those who claim that oscillators work so well in RT use them. It's one thing to say OSCILLATORS WORK and another to apply one to a chart and show how it would work.

 

I would argue that if one is trading completely mechanically then these two things are essentially the same. What's more, if I could show that something rule-based worked very consistently it wouldn't really matter whether I personally was able to trade it effectively (I could be a complete psychological wreck who screws everything up).

 

If you're really interested then surely you can follow what I describe in realtime on a chart - all you need to do is have a glance at the end of each day and note any entries or exits.

 

Since I've asked for chart examples, I ought to provide one.

 

The black area encircles the timeframe used in BH's chart. Limiting oneself to that, a suggested entry is provided (the hinge is noted for those who know what it is; it is similar to a coil). There is no exit or further entry until the trend "ends", at the break of the demand line. The one earlier break of the demand line in March could be a prompt for an exit, but one could re-enter immediately thereafter and continue riding the trend.

 

This is very effective here when the market trends clearer (exactly the same could be said for what my chart shows), and is obviously a much cleaner and more cost efficient way to trade. But what happens when the trend is less obvious and the market becomes "choppy"? The mean reverting tendency of the ES is very well documented, and easily test-able. My experience is that what you show (a form of breakout/trend following) breaks down more significantly in trendless markets than does trading pullbacks. This is because the OB/OS part is more forgiving when one judges the trend incorrectly. See the chart.

 

A good example of this is the trade we discussed in the Wykoff thread. With the benefit of hindsight, you called the trend correctly, I called it incorrectly (so much for MAs!). However, whether I took the long or the short signals during those couple of months didn't really matter - I would have made money either way. Times of trend change are when this approach most notably fails.

 

I'm not trying to encourage/discourage anyone from whatever works for them, and personally I would trade without any indicators to support trading decisions if I thought that I could; what I don't like is when people get up on a pedestal (like the OP) and condemn something as useless just because they don't understand how to use it.

 

BlueHorseshoe

5aa7114ea9425_OscChoppy.thumb.gif.1ee03bc3cda614ce987cfb347bfe3733.gif

Edited by BlueHorseshoe

Share this post


Link to post
Share on other sites
I would argue that if one is trading completely mechanically then these two things are essentially the same. What's more, if I could show that something rule-based worked very consistently it wouldn't really matter whether I personally was able to trade it effectively (I could be a complete psychological wreck who screws everything up).

 

This position, however, is one of the chief criticisms of vendors, that they claim something is true without backing it up. Critics should be held to the same standard.

 

This is very effective here when the market trends clearer (exactly the same could be said for what my chart shows), and is obviously a much cleaner and more cost efficient way to trade. But what happens when the trend is less obvious and the market becomes "choppy"

 

None of this, however, is pertinent to the subject of the thread. The OP is addressing the usefulness/necessity of oscillators in trending markets, particularly with regard to the notions of overbought and oversold. You're the only participant to post a chart showing their potential usefulness. Whether or not they are in fact useful in real time, much less necessary, is another matter, and there are dozens of other threads that address this issue.

 

Db

Share this post


Link to post
Share on other sites
The OP is addressing the usefulness/necessity of oscillators in trending markets, particularly with regard to the notions of overbought and oversold.

 

I disagree with this actually. I think the OP "cherry picks" trending markets to try and demonstrate the uselessness of such indicators when they are employed to try and pick tops and bottoms in longer term trends. I regard this as a mis-use of such indicators (or certainly one that defies common sense).

 

BlueHorseshoe

Share this post


Link to post
Share on other sites
I think the OP "cherry picks" trending markets to try and demonstrate the uselessness of such indicators when they are employed to try and pick tops and bottoms in longer term trends. I regard this as a mis-use of such indicators (or certainly one that defies common sense).

 

So does the OP. Re-read his second and third paragraphs.

 

Db

Share this post


Link to post
Share on other sites
Since I've asked for chart examples, I ought to provide one.

 

The black area encircles the timeframe used in BH's chart. Limiting oneself to that, a suggested entry is provided (the hinge is noted for those who know what it is; it is similar to a coil). There is no exit or further entry until the trend "ends", at the break of the demand line. The one earlier break of the demand line in March could be a prompt for an exit, but one could re-enter immediately thereafter and continue riding the trend.

 

Db

 

 

 

attachment.php?attachmentid=31687&stc=1&d=1349135251

 

Hi Mr Horseshoes

Every morning I pray to Charty.He's the God of the trader.

And I ask for a nice trending chart like the second part of this chart.

And every day I get the first part , the choppy part.

You are correct..... cherry picking

kind regards

bobc

Share this post


Link to post
Share on other sites

why is everyone against picking the best cherries? they taste the best..why would a trader pick a half green cherry just to be statistically correct? all you have to do is have a mechanism that identifies the best cherries....:)

Share this post


Link to post
Share on other sites
Guest OILFXPRO
why is everyone against picking the best cherries? they taste the best..why would a trader pick a half green cherry just to be statistically correct? all you have to do is have a mechanism that identifies the best cherries....:)

 

They give certainty to their beliefs , and believe it even more.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • BITCOIN PRICE ANALYSIS: COULD CBDCS BE THE END OF BITCOIN? Ever since Facebook publicized its plans to develop a digital currency called Libra, central banks across the globe have tried to counter it with their cryptocurrency. While Facebook’s Libra has come under heavy scrutiny and regulatory obstacles, more than 80% of the world’s central banks are working assiduously to develop a central bank digital currency (CBDC). Meanwhile, the foundational basis of a CBDC is fundamentally disparate to what Bitcoin (BTC) is about. That said, the cryptocurrency community has begun speculating what the effect of a government-issued digital currency would have on the benchmark cryptocurrency. Below are some of the possible outcomes of CBDCs on Bitcoin: Plot A The common expectation is that CBDCs will be bad for Bitcoin and the crypto industry at large, considering that world governments will place their weight behind CBDCs giving it a higher adoption rate compared to BTC. Plot B The next popular opinion is that CBDCs could give Bitcoin better widespread use and adoption, as it could spark heightened interest in digital currencies. Plot C Assuming that Plot A comes into fruition, there would be no use for Bitcoin as a peer-to-peer payment system. However, this doesn’t mean BTC becomes useless, instead, it becomes an excellent store of value. BTCUSD -4-Hour Chart Key BTC Levels to Watch in the Near-Term Bitcoin, against popular belief, doesn’t seem to be slowing down any time soon. The cryptocurrency just recorded a new YTD high at $13,357 in the past 24 hours. BTC has been trading within a consolidation range between $13,300 and $12,895 for the past four days, as traders expect a fresh bull wave. That said, as long as Bitcoin maintains its stance above the $12,895 support, we could see a fresh bull wave in the coming days. A sustained fall below the aforementioned support could trigger an extended retracement for the cryptocurrency. Total market capital: $395.4 billion Bitcoin market capital: $241 billion Bitcoin dominance: 61% Source: https://learn2.trade 
    • ETHEREUM (ETH) PRICE ANALYSIS: ETH FACES REJECTION AT $420, FLUCTUATES BETWEEN LEVELS $400 AND $420 Key Highlights Ethereum battles resistance at level $420 high The coin is likely to reach another high of $434 Ethereum (ETH) Current Statistics The current price: $415.57 Market Capitalization: $47,020,287,242 Trading Volume: $12,506,980,622 Major supply zones: $280, $320, $360 Major demand zones: $160, $140, $100 Ethereum (ETH) Price Analysis October 25, 2020 Following the breaking of the $395 overhead resistance, Ethereum resumed upside momentum. However, the coin rallied to a high of $420 and was resisted. Since October 22, the upward move has been resisted as the coin resumed a sideways trend below the resistance. On the upside, if the price breaks the current resistance, the coin will resume the uptrend. However, Ether will face another resistance at $440. The coin will rally to $480 if the current resistance is broken. ETH/USD – Daily Chart ETH Technical Indicators Reading The 21-day and 50-day SMAs are sloping upward indicating the uptrend. Ether has risen to level 65 of the Relative Strength Index period 14. It indicates that the market is in the bullish trend zone. The coin is approaching the resistance line of the ascending channel. A break above it will push the coin upward. ETH/USD – Daily Chart Conclusion Ethereum will rise after breaking the resistance at $420. The Fibonacci tool analysis has indicated an upward move to level 1.618 Fibonacci extensions. The market will reach another high of $434.55. Source: https://learn2.trade 
    • Date : 23rd October 2020.Dollar Dips as Equities escalate.EURUSD, H1 The Dollar fell back concomitantly with rallying European stock markets and US index futures, which was likely a repositioning dynamic after declining over the last two weeks.EURUSD rebounded quite strongly, rising back above 1.1850 from a three-day low at 1.1787. Preliminary October PMI data in the services and composite readings out of the Eurozone and UK undershot the median forecast of economists, but didn’t impact the Euro or Sterling. Technically, the H1 chart has moved over the 50-hour moving average (1.1835) to test R1 at 1.1852; above here is Wednesday’s high and R2 at 1.1885. Today’s pivot point is next support at 1.1830, below the 50-hour moving average. The MACD histogram has broken the zero line and the signal is starting to rise, although still south of the zero line, RSI is positive and trades at 64.50, Stochastics are moving into the OB zone.Cable settled at near net unchanged levels around 1.3090-95 after dropping back from a high at 1.3124. The UK currency remains comfortably up on week-ago and month-ago levels against the Dollar and Euro, and others, with market participants anticipating a limited trade deal between the EU and UK. The two sides are amid intensive face-to-face discussions. The UK and Japan today signed the trade deal that was agreed in principle a month ago.USDJPY is modestly softer after upside forays over the last day stalled at 104.93-95. At levels around 104.70, the pair remains down by 1% on the high seen on Wednesday. AUDUSD rallied to an eight-day high at 0.7158, floated by higher stock markets in Europe and an above-forecast composite PMI reading out of Australia. Global asset markets are likely to remain skittish, notwithstanding the rally today, with investors pondering the uncertainties presented by the surge in Covid cases in Europe and elsewhere, including now in many US states and in Canada, and which are leading to ever more restrictive countermeasures. The ongoing delay in new US fiscal stimulus and the event risk posed by the upcoming US elections are also in the mix. Regarding the elections, polls point to a Biden presidency, but it is less clear if his Democratic party can take control of the Senate. If not, then Congress will remain split at least until the mid-term elections in two years, which will limit the scope for policy changes and crimp Democrat ambitions for expansive fiscal policy.US data later is topped by flash PMI data, Manufacturing numbers are expected to show a slight rise to 53.5 from 53.2 last time, whilst the more important and significant Services numbers are expected to increase by a single tick from 54.6 to 54.7. The data is due at 13:45 GMT.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.
    • Good examples, near the top, for those who are time and attn. challenged https://www.thedailybell.com/all-articles/news-analysis/how-the-elite-use-attila-and-the-witch-doctor-to-keep-power/ Grasp alternatives https://tomluongo.me/2020/10/20/about-two-years-anarchy-capitalism/  
    • Date : 22nd October 2020.Volatility and US elections.US Elections had been and always expected to be an event historically extremely volatile globally. Elections similar to other political or banking sector events are notably treated by market participants with anticipation and speculation. As discussed in our HF Markets Q4 Outlook, markets look to have already pricing in the possibility of Biden’s victory even though they overall maintain an increasing cautious optimism, holding US Dollar basket to 2018 low territory.Election-year fund flows, 1993-2020Historically, it has been noticed that during election years, market participants due to the heightened uncertainty, shift their investments into Money market funds instead from the safety of stock and bond funds, AS THEY waiting out. The 2020 is not any different but it’s been a unique one as we have seen an extreme money flow into currency assets in comparison with past election years, due the sluggish US and worldwide economic activity as the Covid-19 crisis resumes, the truce with China again which is under scrutiny, the lockdowns in several areas, the lack of additional fiscal stimulus from central bankers, Brexit frictions and the fear of double dip recession in Europe.Year-to-date fund flows, through June 30Source: BlackRock, with data from Morningstar as of June 30, 2020. Money market funds, stock funds and bond funds are represented by their respective US fund categories as defined by Morningstar.That said, cash balance into money funds spike to $980 in 2020 as of June 30, given the large risk premia. However as soon as uncertainty recedes we might see equity market’s volatility and volume to spike again since they consider to be attractive and more stable assets in period which there are historically low interest rates. If we emphasize on the medium term thought it is expected that if current conditions sustained, market volatility will extend beyond Election days with any potential outcome, i.e. a Biden win and Democrat majority in Congress, a Biden win but split Congress, or a Trump victory with split Congress.Meanwhile, a very chart from Wells Fargo Investment Institute, shows the USA500 implied Volatility index along with USA500 index performance prior and post the Election Day based on the election since 1988 with 2008 recession year excluded. This chart interestingly suggest that typically the USA500 tends to eased/consolidate a bit a month prior elections despite a extremely high volatility, while USA500 price continue their upwards move after the election day even though volatility declines significantly.WELLS FARGO INVESTMENT INSTITUTEAlways 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. Andria Pichidi 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.  
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.