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bornebybees

Pivot Points Question

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Hello traders, this is my first post on the forum. I'm getting started with some paper trading using pivot point strategy and I have a question about how to approach this situation from a purely strategic position and make a decision:

 

Thursday (yesterday) I bought PM just below the pivot, at $73.26, with the intent of selling when the stock hit R1. R1 for PM on Thursday was $75.10. However the stock didn't make it that far, and topped out at $74.50, and then closed at $73.78.

 

I decided to hang onto it overnight and see what was on tap for Friday.

 

Calculating Friday's pivots of course yielded different numbers for R1 than Thursday's. Friday's R1 is $74.49.

 

Question 1: Which day's R1 should I use w/rt selling this position? What is the best way to approach this situation from a strategy based on pivot points?

 

As it turns out, PM surpassed Friday's R1 and topped out at $74.59. It was on a roll so I held onto it, hoping it might nudge up a little closer to Thursday's R1. But it didn't get that far, and ended up closing at $74.52 - above Friday's R1 but below Thursday's R1.

 

Once again I decided to hang on, though thinking it might have been wise to sell off right at the end of the day.

 

Question 2: Should I just sell it now or wait till Monday? Will there be a potential intra-week volatility that would be better simply avoided?

 

Insight from seasoned experts would be appreciated. As I paper trade I see and learn from my mistakes on a daily basis and would like to base my future instincts on sound strategy.

 

Thanks!

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Thanks a lot for your response, Mr. 10% I.Q.

 

I'm looking to eliminate the guesswork in order to make quick, accurate decisions. I could sell for a profit no problem. Am interested in knowing how "seasoned experts" would approach the situation w/in the context of pivot trading strategy.

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Ok, where to start? I guess by saying I'm also new here although not to trading... do I consider myself "seasoned expert"? Not really. I would say "consistent profitable trader". Khamore1 is right, nobody shouldn't start trading without a basic understanding of what it's doing, with clear goal in mind and a detailed plan of how to do it. Contrary of what most people believe, trading is a dog eat dog business where a 10% feed on the rest 90% of the participants, especially the gullible-naive-easy-to-impress newbies.

 

Having said that, your trading approach is very similar of one of the trades I do every day (only when the window of opportunity it's present) - emphasis on every day as in daytrading not holding open positions overnight. One obvious thing, your trading strategy its seriously lacking some important steps: Why to take a trade? What's the acceptable associated risk? What the target would be? When to exit AND why? What money management approach and so on. I think you're starting to see where I'm going with this ([lease refer to paragraph above). Anything less would be considered as gambling by most traders. The 'hoping and praying" approach don't last very long in this business.

 

There are other things that comes to mind but answering your initial question, I would have exited the long position on Thursday with a profit and then moved on to the next trading opportunity. Another approach could be get the stop to breakeven, plus commissions, targeting new R1 if your trade was already above PP on Friday. At the very least I would moved the initial stop loss above the entry price, protecting the trading capital (first rule of trading) and then trailing the stop if you will.

 

Hope it helps.

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Question 1: Which day's R1 should I use w/rt selling this position? What is the best way to approach this situation from a strategy based on pivot points?

 

Since an emotional response by traders at various pivot levels hinges on the current days pivot points (which are based on the previous days price action), it is advisable to execute orders at or near today's levels only. This assumes of course that you have some reason to believe that today's price action has an underlying impetus for reaching the level you have chosen as your target (R1 in this example). Realize that the existence of a PP does not in itself have any value with regard to price move prediction. Each day thousands of stocks trade without ever reaching any of their respective pivot points. In general it is best to trade stocks that are trending on an intra-day basis. For example, if you had executed a short trade in PM at FTP S2 and covered at or near FTP S3 on Wednesday, you would of experienced a much more predictable and favorable outcome.

 

Question 2: Should I just sell it now or wait till Monday? Will there be a potential intra-week volatility that would be better simply avoided?

 

Since you know what is happening with the market and your stock today and cannot predict what will happen tomorrow, you are advised to close all trades by the end of each trading day. There are ample opportunities everyday to earn money on an intra-day basis. Holding positions overnight exposes you to substantial and unnecessary risk.

 

Hope this helped.

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This is a common dilemma you have when you are trading just based on pivot points. You also need to consider the earlier support/ resistance around and look at pivots to capture partial profits at various levels.

 

What you seem to focus is on the breakout strategy. I would recommend to take partial profits at support levels and focus on capturing the breakouts for the rest.

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A few things...

 

1) If you are trading daily pivot points they are intended to be used for that days trading only. Now some people keep older pivot points for reference but if you wanted to position trade I would suggest using weekly or monthly pivots.

 

Which leads right into

 

2) You should know before entering the trade what type of trader you are. If you went into the trade with the intention of it being a day trade - then get out at the end of the day. If you went into it knowing you want to let it run, fine, but know before you enter and don't change your mind mid way thru the trade.

 

If you keep switching during live trades it indicates you either didn't have a plan or you are not following your plan. You might get away with this in the short term but in the long run you will get smashed! Trust me. I used to always get in a good day trade and immediately start thinking this is the trade of the century!!! It's gonna run forever! Only to wake up the next morning to see all that green looking quite red.

 

Pick your poison and live with it.

 

Wishing You Good Trading!

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I appreciate the responses, and it's interesting to see the various opinions.

 

1) If you are trading daily pivot points they are intended to be used for that days trading only. Now some people keep older pivot points for reference but if you wanted to position trade I would suggest using weekly or monthly pivots.

 

So, if I hang onto a stock overnight, it would be more accurate to recalculate based on a two-day range:

 

PM - THU [73.78] H: 74.52 L: 73.13

PM - FRI [74.52] H: 74.62 L: 73.65

PM - THU+FRI [74.52] H: 74.62 L: 73.13

 

based on Friday only:

R1: 74.88

PP: 74.26

S1: 73.91

 

based on Thurs + Fri:

R1: 75.05

PP: 74.09

S1: 73.56

 

Even more risky, especially going from Friday -> Monday. From looking at moving averages it appears that PM is at or near the top for the short-term. I should just sell and move on. What do you think?

 

2) You should know before entering the trade what type of trader you are. If you went into the trade with the intention of it being a day trade - then get out at the end of the day. If you went into it knowing you want to let it run, fine, but know before you enter and don't change your mind mid way thru the trade.

 

Point taken. But I don't know yet, thus the paper trading. Will learn my way through that before I start using real money.

 

When I start trading with money, necessity will dictate that my trading is inter-day as I will be starting with less than 25K. Realistically, I think I'd like to take 2-3 day positions. with a few (5/mo max) day trades.

 

This is a common dilemma you have when you are trading just based on pivot points. You also need to consider the earlier support/ resistance around and look at pivots to capture partial profits at various levels.

 

What you seem to focus is on the breakout strategy. I would recommend to take partial profits at support levels and focus on capturing the breakouts for the rest.

 

If a price goes through R1 and it looks like it's going to keep on, it seems logical to hang on as long as it remains above R1. The problem with that, of course is the price may take a quick dive below R1, and then you're back to where you were before (or worse). What I have to answer for myself is, what's the value of the additional time and uncertainty when I could simply sell immediately at R1 and be done with it?

 

 

Question 1: Which day's R1 should I use w/rt selling this position? What is the best way to approach this situation from a strategy based on pivot points?

 

Since an emotional response by traders at various pivot levels hinges on the current days pivot points (which are based on the previous days price action), it is advisable to execute orders at or near today's levels only. This assumes of course that you have some reason to believe that today's price action has an underlying impetus for reaching the level you have chosen as your target (R1 in this example). Realize that the existence of a PP does not in itself have any value with regard to price move prediction. Each day thousands of stocks trade without ever reaching any of their respective pivot points. In general it is best to trade stocks that are trending on an intra-day basis. For example, if you had executed a short trade in PM at FTP S2 and covered at or near FTP S3 on Wednesday, you would of experienced a much more predictable and favorable outcome.

 

Question 2: Should I just sell it now or wait till Monday? Will there be a potential intra-week volatility that would be better simply avoided?

 

Since you know what is happening with the market and your stock today and cannot predict what will happen tomorrow, you are advised to close all trades by the end of each trading day. There are ample opportunities everyday to earn money on an intra-day basis. Holding positions overnight exposes you to substantial and unnecessary risk.

 

Hope this helped.

 

Thank you for this. I appreciate the way you put it - totally logical to use pivots, but choose which stocks based on intra-day analysis. I will try to keep it in mind moving forward.

 

 

One obvious thing, your trading strategy its seriously lacking some important steps: Why to take a trade? What's the acceptable associated risk? What the target would be? When to exit AND why?

 

There are other things that comes to mind but answering your initial question, I would have exited the long position on Thursday with a profit and then moved on to the next trading opportunity. Another approach could be get the stop to breakeven, plus commissions, targeting new R1 if your trade was already above PP on Friday. At the very least I would moved the initial stop loss above the entry price, protecting the trading capital (first rule of trading) and then trailing the stop if you will.

 

I tend to agree: the price fluctuation and energy spent watching it like a hawk, AFTER it had already satisfied my original plan of Thursday's R1, would have been better spent on another stock. Based on your and KLTrader's comments, I think I should have taken the sell.

 

W/RT a clearly defined set of objectives: I'm just beginning, and with that in mind, am trying to really narrow down my decision process to this one technique for starters.

 

 

The gist of these responses for me:

 

Develop a plan and stick to it. Know thyself, etc. That's why I am paper trading and will continue to do so for a few months before jumping in with real money. I'm writing my own software as I go to help me test my intuitions and make decisions based on what I experience.

 

Even though I do have a plan, based on pivot points, I still catch myself making decisions outside of that plan. These poor decisions come back to haunt me pretty quickly. So that's a good thing; it's possible to learn very quickly from mistakes.

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"I'm just beginning, and with that in mind, am trying to really narrow down my decision process to this one technique for starters."

 

That's a good start. Just keep in mind to be successful in this business one must come up with a strategy that fits our personality, one that makes sense to you and proves to makes money in back-testing and sim-trading. We only need a trading strategy work most of the time and good money management to make a nice living out of this business. Remember as in life, nothing in here is guarantee. Stick with what works for you.

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If a price goes through R1 and it looks like it's going to keep on, it seems logical to hang on as long as it remains above R1. The problem with that, of course is the price may take a quick dive below R1, and then you're back to where you were before (or worse). What I have to answer for myself is, what's the value of the additional time and uncertainty when I could simply sell immediately at R1 and be done with it?

 

Exactly, and this is the dilemma of maxing out your winners. How much are you willing to potentially give back? and does your testing/observations give you probabilities that favour doing one over the other?

 

This also might vary between markets.

 

It may be possible with multiple lots to create a strategy that trades intraday but leaves a percentage of the trade on to build a much more long term view trade in trending price. Let this percentage run as far as you can or at least have another target area in mind.

 

You may find this provides no advantages at all, or you may find it's to difficult to implement for other reasons, but all this you'll have to find out, as you say, by yourself.

 

Interesting way your going about this, if you don't mind me asking what made you choose Pivots?

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Exactly, and this is the dilemma of maxing out your winners. It may be possible with multiple lots to create a strategy that trades intraday but leaves a percentage of the trade on to build a much more long term view trade in trending price. Let this percentage run as far as you can or at least have another target area in mind.

 

You may find this provides no advantages at all, or you may find it's to difficult to implement for other reasons, but all this you'll have to find out, as you say, by yourself.

 

Interesting way your going about this, if you don't mind me asking what made you choose Pivots?

 

I chose pivots because it's an easy to understand set of formulas that can be extrapolated over any time frame. I've found that, so long as I actually stick to the plan, it has been profitable, at least in the short term that I've been paper trading. Will definitely give it a few months, but it's nice to have the chance to spend entire days doing this - getting up before the market and making some decisions, and rolling with them through the business day, to really understand what happens, and then analyzing those decisions after the bell. I'm finding it easily consumes my attention span and keeps me wired up, which is a good thing!

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I find in many forums, traders talk about Floor Pivot , Camarilla , Woodies and Fib Pivot.

 

Is there any other method of calculating Pivot other than the above.

 

Kindly enlighten me with new methods of calculating pivots and from thereon support and resistance levels.

 

Thanks

 

C T RAMESH RAJA

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Its a good start but there are some basic conceptual issues:

You have started with a Trading Strategy and not a Trading Plan which incorporates a Trading Strategy. Pivot Points are really Support_Resistance lines based on a self fulfilling prophesy and will generally give you the direction of the trend and will only work on days for Trading it when there is a sideways market.

There is a huge study by JT Jackson: Detecting High Profit Day Trades in the Futures Markets: Using Zone Pattern Probability Analysis - Amazon.com: Detecting High Profit Day Trades in the Futures Markets: Using Zone Pattern Probability Analysis (9780930233556): J Jackson: Books - the Zones are the spaces between the pivot point, R1, R2, R3, S1, S2, S3 etc. He explains how to get in and how to get out e.g. if you are trading the e-mini, you get out 0.75 of a point before the line. If you wait for the line to be touched, its doubtful that you will get there.

I do not use this guy's strategies, but there is an incredibly succinct and short summary of what the difference is of a Trading Plan and a Trading Strategy here which will answer some of your questions, https://rockwell.infusionsoft.com/app/hostedEmail/32454278/dec9309308acb4e2

with a really good laid out outline of a Trading plan here to use as an outline for developing your own - http://www.rockwelltrading.com/files/Markus-Trading-Plan.pdf

[i think that you might want to also look at the combination use of the Bollinger Bands, the MACD and the RSI - don't register for anything! but in <60min you will have a stable entry Plan for your Pivot Point charts and then you use a Profit based exit plan e.g. Let's say you also use Fibonacci entrances - it goes through the 100% or 0% line and comes back in, then you exit at the 50% line. In pivots, if it went through the S / R line and came back through in the opposite direction, more than a defined number of ticks or pips, then you enter and get out at the 50% line (rule - everything retraces to 50% at some point)].

Staying overnight - not a good idea - if a monarch butterfly lands on the wrong plant in Mexico it upsets the exchange in Mongolia - no professional that I know trades overnight. Get out MOC.

Another thing is that you give the impression that you are trading without stops (I might have misinterpreted the description). I remember a T-Shirt that said "Only Real Men Trade Without Stops". It's for T-Shirts, not real life. I have traded since 1994 - not many of us left. The reason I am here is because of stops. This is me without a stop - http://cdn.traderslaboratory.com/forums/images/FH_Sahm/smilies/custom2/crap.gif

Your techniques is also a variation also of another method called the Camarilla method. Good description of how to get in and out - remember that there is no magic in the formulas - they are all variants of the same thing - theoretical S / R, and the ONLY reason that they may work, is that they are used by many people, so they are self-fulfilling: Camarilla Equation - Free!

Best wishes.

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Its a good start but there are some basic conceptual issues:

You have started with a Trading Strategy and not a Trading Plan which incorporates a Trading Strategy. Pivot Points are really Support_Resistance lines based on a self fulfilling prophesy and will generally give you the direction of the trend and will only work on days for Trading it when there is a sideways market.

There is a huge study by JT Jackson: Detecting High Profit Day Trades in the Futures Markets: Using Zone Pattern Probability Analysis - Amazon.com: Detecting High Profit Day Trades in the Futures Markets: Using Zone Pattern Probability Analysis (9780930233556): J Jackson: Books - the Zones are the spaces between the pivot point, R1, R2, R3, S1, S2, S3 etc. He explains how to get in and how to get out e.g. if you are trading the e-mini, you get out 0.75 of a point before the line. If you wait for the line to be touched, its doubtful that you will get there.

I do not use this guy's strategies, but there is an incredibly succinct and short summary of what the difference is of a Trading Plan and a Trading Strategy here which will answer some of your questions, https://rockwell.infusionsoft.com/app/hostedEmail/32454278/dec9309308acb4e2

with a really good laid out outline of a Trading plan here to use as an outline for developing your own - http://www.rockwelltrading.com/files/Markus-Trading-Plan.pdf

[i think that you might want to also look at the combination use of the Bollinger Bands, the MACD and the RSI - don't register for anything! but in <60min you will have a stable entry Plan for your Pivot Point charts and then you use a Profit based exit plan e.g. Let's say you also use Fibonacci entrances - it goes through the 100% or 0% line and comes back in, then you exit at the 50% line. In pivots, if it went through the S / R line and came back through in the opposite direction, more than a defined number of ticks or pips, then you enter and get out at the 50% line (rule - everything retraces to 50% at some point)].

Staying overnight - not a good idea - if a monarch butterfly lands on the wrong plant in Mexico it upsets the exchange in Mongolia - no professional that I know trades overnight. Get out MOC.

Another thing is that you give the impression that you are trading without stops (I might have misinterpreted the description). I remember a T-Shirt that said "Only Real Men Trade Without Stops". It's for T-Shirts, not real life. I have traded since 1994 - not many of us left. The reason I am here is because of stops. This is me without a stop - http://cdn.traderslaboratory.com/forums/images/FH_Sahm/smilies/custom2/crap.gif

Your techniques is also a variation also of another method called the Camarilla method. Good description of how to get in and out - remember that there is no magic in the formulas - they are all variants of the same thing - theoretical S / R, and the ONLY reason that they may work, is that they are used by many people, so they are self-fulfilling: Camarilla Equation - Free!

Best wishes.

 

Dear Iris

Wowowee!!!!

A new voice

Great post.

Kind regards

bobc

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Thanks a lot Iris. Your post contains just what I was looking for - a collection of relevant concepts and buzzwords which I need to learn inside out. You are correct - I don't have a plan, other than to make a profit - and that's why I'm paper trading. Taking a day here and there and running with one idea from market open to close has been highly educational. I'll check out each of the elements you referenced in greater detail.

 

What do you think of penny stocks? There is one stock, ATVAM, I have been observing, that vacillates regularly between 3 and 4 cents, several times w/in the course of a day. It's been doing this for a month! Seems too good to be true, too easy..?

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There is a huge study by JT Jackson: Detecting High Profit Day Trades in the Futures Markets: Using Zone Pattern Probability Analysis - Amazon.com: Detecting High Profit Day Trades in the Futures Markets: Using Zone Pattern Probability Analysis (9780930233556): J Jackson: Books

 

Your techniques is also a variation also of another method called the Camarilla method. Good description of how to get in and out - remember that there is no magic in the formulas - they are all variants of the same thing - theoretical S / R, and the ONLY reason that they may work, is that they are used by many people, so they are self-fulfilling: Camarilla Equation - Free!

Best wishes.

 

A very helpful post - thanks for the links!

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I chose pivots because it's an easy to understand set of formulas that can be extrapolated over any time frame. I've found that, so long as I actually stick to the plan, it has been profitable, at least in the short term that I've been paper trading. Will definitely give it a few months, but it's nice to have the chance to spend entire days doing this - getting up before the market and making some decisions, and rolling with them through the business day, to really understand what happens, and then analyzing those decisions after the bell. I'm finding it easily consumes my attention span and keeps me wired up, which is a good thing!

 

Yes it certainly demands attention. It's probably one of the most demanding things I've ever attempted. I hadn't a clue at the beginning as to the enormity of the task involved in trading these markets.

 

The premise is pure sparkling simplicity....... the trading of that premise is often the exemplification of hell.

 

I play chess, and I equate trading to being like playing chess.

 

Certainly at the start we trade like our first games of chess. We've understood, and just about memorised how the different pieces move, but beyond that we have some vague notion about protecting the king or something and the rest is totally stumbling in the dark.

 

An experienced chess player has a totally different perspective of the game, as do experienced professional traders.

 

I believe if we persist and give it our utmost attention we can become experienced, and we can consistently extract money from this game. I am aware however that I may be chasing a mirage.

 

I feel sometimes that I'm just getting the pieces out of the box..... :roll eyes:

 

All the best.

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A very helpful post - thanks for the links!

 

Your're welcome. Please note that I do not post these as recommendations to use or buy the Strategies. It is merely a guide to look at a logical approach.

The Jackson book however is the most thorough analysis of the Zones and what can happen at the different levels with statistical probabilities of what might occur. For example, if the price goes through R3 / S3 the likelihood is that they will keep on going. Another example is that if the price is between the Pivot and R1 / S1 the the statistics for that set of circumstances says that there is an 80% chance of going to S2 / R2 (>60%) - it almost certainly will. In everything with Trading, the caveat is that there is no 100% guarantee.

 

PS - I also have Price Pivots (set at length 8) - they are set to a value above or below that Pivot price depending on the Adaptive Moving Average of the length. These are the Buy / Sell points above or below the Floor Traders Pivots.

5aa710c63551f_tradingpivotsjpeg.jpg.9f459fbf50cee1249223a966987085a1.jpg

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I think that you might read this blog on the misuse of the trailing stop (it is not a regular stop) and know that a regular stop order needs to be in place as well. Also, if the market opens in the next trading session limit up or down, the regular stop loss may not be triggered.

 

Why Use a Trailing Stop in Forex | Alan's Forex Blog

 

Trends do sometimes stay in place overnight. But the markets in Germany, Japan UK etc all start at different times and respond to news that may be unexpected - then the direction changes and the training stop may not get you the profit that you expected.Volume is very light at night. There may not be enough positions in play to close you out on your price.

 

Also, I like to sleep at night. Walking away from a trade that unattended makes me lose sleep and eats away my stomach lining.

 

I am not saying that you MUST not do it - I suggest that the professionals usually do not and there are good reasons for their choices.Also try to find out how often a trend stays in place overnight in the product you are in, and if statistically it will pay you to do so based on the history. For example if you have 3 months of data, go back and see how often the trend would have made you money overnight.

Best wishes. Sincerely.

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Statistics is definitely a better way of tackling the issue (issue: to stay in the trend overnight or not).

 

Agree, although very topic has been one promoting heated debates among day traders, swing and position traders in the past. In reality its all boils down to each individual personality. There are traders that can't sleep at night (myself included) with open positions in the market while other can't spend the required time "staring at the computer monitor" (as they put it) daytrading the markets. To each its own, I guess.

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[...] There are traders that can't sleep at night (myself included) with open positions in the market while other can't spend the required time "staring at the computer monitor" (as they put it) daytrading the markets. [...}

 

"mechanical trading" or "set and forget" (probably the same) allows one to sleep at night while scoring pips. To cover market 24 hours needs a coop of at least 3 people on 3 continents, each staring at PC 8 hours (8h x 3 = 24 hours) and waking one another for resetting the trades when market direction change. 3 separate accounts while observing charts with same indicators. [...?..]

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Since the FX markets are open 24hrs what period should be used to determine the high low and close. For example if you were trading the New York market would you take the close of that market and then ignore what had happened in Asia or London or would you take the previous 24 hrs to select high low and close?

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    • Date: 8th April 2025.   Markets Rebound Cautiously as US-China Tariff Tensions Deepen     Global markets staged a tentative recovery on Tuesday following a wave of volatility sparked by escalating trade tensions between the United States and China. The Asia-Pacific region showed signs of stability after a chaotic start to the week—though some pockets remained under pressure. Taiwan’s Taiex dropped 4.4%, dragged lower by losses in tech heavyweight TSMC. The world’s largest chipmaker fell another 4% on Tuesday and has now slumped 13.5% since April 2, when US President Donald Trump first unveiled what he called ‘Liberation Day’ tariffs.   However, broader sentiment across the region turned more positive, with several markets rebounding sharply after Monday’s dramatic sell-offs. Japan’s Nikkei 225 surged over 6% in early trading, rebounding from an 18-month low. South Korea’s Kospi rose marginally, and Australia’s ASX 200 gained 1.9%, driven by strength in mining stocks. Hong Kong’s Hang Seng rose 1.6%, though still far from recovering from Monday’s 13.2% crash—its worst day since the 1997 Asian financial crisis. China’s Shanghai Composite added 0.9%.   In Europe, DAX and FTSE 100 are up more than 1% in opening trade. EU Commission President von der Leyen repeated yesterday that the EU had offered reciprocal zero tariffs on manufactured goods previously and continues to stand by that offer. Others are also trying again to talk to Trump to get some sort of agreement that limits the impact.   Much of the rally appeared to be driven by dip-buying, as well as hopes that the intensifying trade war could still be defused through negotiations.   China Strikes Back: ‘We Will Fight to the End’   Tensions reached a boiling point after Trump threatened to impose an additional 50% tariff on all Chinese imports unless Beijing rolled back its retaliatory measures by April 8. ‘If China does not withdraw its 34% increase above their already long-term trading abuses by tomorrow... the United States will impose additional tariffs on China of 50%,’ Trump declared on social media.   If implemented, the new tariffs would bring total US duties on Chinese goods to a staggering 124%, factoring in the existing 20%, the 34% recently announced, and the proposed 50%.   In response, China’s Ministry of Commerce issued a stern warning, stating: ‘The US threat to escalate tariffs is a mistake on top of a mistake... If the US insists on its own way, China will fight to the end.’ The ministry also called for equal and respectful dialogue, though signs of compromise on either side remain scarce.   Beijing acted quickly to contain a market fallout. State funds intervened to support equities, and the People’s Bank of China set the yuan fixing at its weakest level since September 2023 to boost export competitiveness. Additionally, five-year interest rate swaps in China fell to their lowest levels since 2020, indicating potential for further monetary easing.   Trump Talks Tough on EU Too   Trump’s hardline approach extended beyond China. Speaking at a press conference, he rejected the European Union’s offer to eliminate tariffs on cars and industrial goods, accusing the bloc of ‘being very bad to us.’ He insisted that Europe would need to source its energy from the US, claiming the US could ‘knock off $350 billion in one week.’   The EU, meanwhile, backed away from a proposed 50% retaliatory tariff on American whiskey, opting instead for 25% duties on selected US goods in response to Trump’s steel and aluminium tariffs.     Volatile Wall Street Adds to the Drama   Wall Street experienced wild swings on Monday as investors processed the rapidly evolving trade conflict. The S&P 500 briefly fell 4.7% before rebounding 3.4%, nearly erasing its losses in what could have been its biggest one-day jump in years—if it had held. The Dow Jones Industrial Average sank by as much as 1,700 points early in the day but later climbed nearly 900 points before closing 349 points lower, down 0.9%. The Nasdaq ended up 0.1%.   The brief rally was fueled by a false rumour that Trump was considering a 90-day pause on tariffs—rumours that the White House quickly labelled ‘fake news.’ The market's sharp reaction underscored how desperate investors are for any sign that tensions might ease.   Oil Markets in Focus: Goldman Sachs Revises Forecasts   Crude prices also reflected the uncertainty, with US crude briefly dipping below $60 per barrel for the first time since 2021. As of early Tuesday, Brent crude was trading at $64.72, while WTI hovered around $61.26.   Goldman Sachs, in a note dated April 7, lowered its average price forecasts for Brent and WTI through 2025 and 2026, citing mounting recession risks and the potential for higher-than-expected supply from OPEC+.       Under a base-case scenario where the US avoids a recession and tariffs are reduced significantly before the April 9 implementation date, Goldman sees Brent at $62 per barrel and WTI at $58 by December 2025. These figures fall further to $55 and $51, respectively, by the end of 2026. This outlook also assumes moderate output increases from eight OPEC+ countries, with incremental boosts of 130,000–140,000 barrels per day in June and July.   However, should the US slip into a typical recession and OPEC production aligns with the bank’s baseline assumptions, Brent could retreat to $58 by the end of this year and to $50 by December 2026.   In a more bearish scenario involving a global GDP slowdown and no change to OPEC+ output levels, Brent prices might fall to $54 by year-end and $45 by late 2026. The most extreme projection—based on a simultaneous economic downturn and a full reversal of OPEC+ production cuts—would see Brent plunge to below $40 per barrel by the end of 2026.   Goldman noted that oil prices could outperform forecasts significantly if there was a dramatic shift in tariff policy and a surprise in global demand recovery.   Cautious Optimism, But Warnings Persist   With both Washington and Beijing showing no signs of backing down, markets are likely to remain volatile in the days ahead. Investors now turn their attention to upcoming trade meetings and policy decisions, hoping for clarity in what has become one of the most unpredictable trading environments in recent years.   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 HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   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 Leveraged 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.
    • CVNA Carvana stock watch, rebound to 166.56 support area at https://stockconsultant.com/?CVNA
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