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.

Obsidian

Words of Wisdom

Recommended Posts

Any market, be it real estate market or forex market, is all about transferring money from the masses to a few lucky ones in the long run. In most real property speculation cases, the masses make money ,a lot of money, but the money stays as paper profit and evaporate before they realize their paper profit into real hard cash. In most forex speculation cases, the masses barely survive a few years thanks to lack of knowledge of the market and the deadly leverage. But both types of speculators all serve their useful purposes in investment food chain contributing their hard earned money to the market in exchange for a dream.

 

For any prospective traders, hope this is not in anyway a discouragement. Trading is a hard mind game and not everyone is suitable to be engaged in such a hard game. Most have neither frame of mind nor mental fortitude to survive in this hard game. Mastering TAs or numbers or options business are at best a first tentative step into the right direction with no guarantee to any success. Training a right frame of mind is the most difficult but absolutely necessary part for success and most are simply not ready to go through that hard stage of the learning process because it is a very painful process. Trading is essentially about pain-taking-process in the end although most do not realize it. The process of overcoming fear, greed and mastering tranquility of mind in this hard school of speculation. Fwiw.

 

Every trader should find his/her method/system which suits his/her own situation and personality. And that system/method must be the one that has proven to be able to make some money through trials. So, if Tom, the medium-term trader, revealed his money making method of last three decades, it may not have the same effect for Dick and Harry, the day traders, and vice versa. Agree that most fail for lack of system/method and/or lack of discipline to follow through.

 

Trading success is all about making as much as one can when one is right and losing as little as possible when one is wrong. That is the essence of this business. So, any theory or system which looks after the above is a good one.

 

System is a weapon of a soldier in this market. You must have one as soon as possible. Otherwise, it will be like fighting well-armed Forex robbers with a handbag. Best one is a self-made one because you can never feel comfy in borrowed shoes although borrowing good ideas from others is a good idea. Good luck.

 

One cannot make a dime unless follow the herd or trend most of the time. It is just that one has to be cautious when overbought/oversold region is approaching and know how to turn at inflection point for the opposite trend. Following herd needs average intelligence and courage but identifying inflection points and taking a necessary action needs not only intelligence but also a lot of courage. Again, fortune favors the brave.

 

Money management is where most traders go wrong in almost all cases leaving only a few as the winner at the end of the day. Money management and discipline of mind is what makes or brakes a trader at the end of the day, not the elementary entry and exit method.

 

Forex/Currency Trading: It is a sentiment game w/ a crowd mentality where even the best players w/ the best forecasts are tricked out of good positions by the magic of price action.

Share this post


Link to post
Share on other sites

TREND TRADING: Accumulation and Distribution

 

Forex market like any other market works in a very simple way. It accumulates in a certain area for awhile, and once the accumulation is over, it advances to a certain distance until distribution starts, and accumulation happens again and advances to a certain distance again, and repeat and repeat. Day trading may not yield the best results while the accumulation and distribution work out itself, being double-murdered by zig-zag moves, while the market starts advancing out of accumulation area, day trading is a sure way of cutting profit short. In general, day trading is not the best form of yielding the most profits in my experience contrary to what some writers who never made real money in this game try to say.

 

The safe and better way in making some money must be wait for "accumulation" to be over and ride the whole length of advance until "distribution" starts and reverse as the market dictates as a short-term trade for 2-10 days, as the case may be.

 

Please study 8 hour or 4 hour line charts or candle charts, especially the patterns and 20 MA inside the charts for a few months everyday, and you will discover what I mean by accumulation and distribution for short-term trades in Forex market. Forex market always needs this process, so you can decide what tactics you will use at a given stage.

Share this post


Link to post
Share on other sites
TREND TRADING: Accumulation and Distribution

 

Forex market like any other market works in a very simple way. It accumulates in a certain area for awhile, and once the accumulation is over, it advances to a certain distance until distribution starts, and accumulation happens again and advances to a certain distance again, and repeat and repeat. Day trading may not yield the best results while the accumulation and distribution work out itself, being double-murdered by zig-zag moves, while the market starts advancing out of accumulation area, day trading is a sure way of cutting profit short. In general, day trading is not the best form of yielding the most profits in my experience contrary to what some writers who never made real money in this game try to say.

 

The safe and better way in making some money must be wait for "accumulation" to be over and ride the whole length of advance until "distribution" starts and reverse as the market dictates as a short-term trade for 2-10 days, as the case may be.

 

Please study 8 hour or 4 hour line charts or candle charts, especially the patterns and 20 MA inside the charts for a few months everyday, and you will discover what I mean by accumulation and distribution for short-term trades in Forex market. Forex market always needs this process, so you can decide what tactics you will use at a given stage.

 

Trying to trade a range as if it is a trend will kill a trader and trying to trade a trend as if it is a range will also kill a trader. I will bet anything that every blown account can be narrowed to either the former or latter or both.

 

I call A or D a range or bracket.

Share this post


Link to post
Share on other sites

On technical side of the trading, the first thing to do is to find out the trend in one's trading time frame and the proper trading strategy for that trend. Some ride positions for months, while some ride positions for less than an hour or a day and their views of the trend obviously differ. For a trader who is running a position for months, a daily fluctuation may be just a meaningless noise while for a day trader or an hour trader, a daily fluctuation could be a monstrous tsunami. Having a precise definition and a technique of identifying a trend and the turn of a trend in a trader's time frame, and adopting the right strategies for that trend is the first elementary step in a hard school of trading.

 

Chart reading is not to predict the tops or bottoms of any move, but to confirm the change of trend as soon as they are made and adopt right strategies in that new trend.

Share this post


Link to post
Share on other sites

Each cycle is different from the last one and that is the beauty of the market. It is extremely important to look at the big picture from the distance rather than studying the minute and hourly charts with a microscope. And repeat the whole show again and again until it shows the sign of turning in daily or weekly chart. As a rule of thumb, 20 MAs in 8 hour, day, week and month are useful for its directional tendency and as a resistance and support point.

 

EUR/GBP and GBP/CHF are leading indicators for EUR/USD and USD/CHF

GBP/JPY, EUR/JPY and CHF/JPY are leading indicators for USD/JPY

 

Generally speaking, if EUR/USD does not move but EUR/GBP moves first, it is a good indicator that someone is maneuvering in EUR/USD front in the same direction later, and when EUR/USD moves but EUR/GBP does not move first or in tandem, then it is highly likely EUR/USD move is countered by its opponent and the opposite move is highly likely soon.

Share this post


Link to post
Share on other sites
Each cycle is different from the last one and that is the beauty of the market. It is extremely important to look at the big picture from the distance rather than studying the minute and hourly charts with a microscope. And repeat the whole show again and again until it shows the sign of turning in daily or weekly chart. As a rule of thumb, 20 MAs in 8 hour, day, week and month are useful for its directional tendency and as a resistance and support point.

 

EUR/GBP and GBP/CHF are leading indicators for EUR/USD and USD/CHF

GBP/JPY, EUR/JPY and CHF/JPY are leading indicators for USD/JPY

 

Generally speaking, if EUR/USD does not move but EUR/GBP moves first, it is a good indicator that someone is maneuvering in EUR/USD front in the same direction later, and when EUR/USD moves but EUR/GBP does not move first or in tandem, then it is highly likely EUR/USD move is countered by its opponent and the opposite move is highly likely soon.

 

Not to nit pick, but if each cycle is different from the last, then it really doesn't have the nature of being cyclical.

Share this post


Link to post
Share on other sites
Not to nit pick, but if each cycle is different from the last, then it really doesn't have the nature of being cyclical.

 

only consecutive ones :rofl:

 

anyway...

 

 

Markets' reaction to economic news

 

News or data are always read by the market along the prevailing market bias. Data can provide a good reading for the state of the market. If the data is bad but the price is still rising or not affected, it must be a bull market which means buy on dip strategy is a better one. Conversely, if the data is good but the price is not rising or even falling, it must be a bear market which means sell on bounce strategy is a better one. The inflexion point must be when bad news or good news. no longer affect the prices as they have done before. Medium/long-term bias changes are usually accompanied by such reactions to the news.

 

It is not the numbers that counts but how the market reacts to the numbers that counts. That gives some comfort to those who are not privy to the numbers already.

Share this post


Link to post
Share on other sites
only consecutive ones :rofl:

 

anyway...

 

 

Markets' reaction to economic news

 

News or data are always read by the market along the prevailing market bias. Data can provide a good reading for the state of the market. If the data is bad but the price is still rising or not affected, it must be a bull market which means buy on dip strategy is a better one. Conversely, if the data is good but the price is not rising or even falling, it must be a bear market which means sell on bounce strategy is a better one. The inflexion point must be when bad news or good news. no longer affect the prices as they have done before. Medium/long-term bias changes are usually accompanied by such reactions to the news.

 

It is not the numbers that counts but how the market reacts to the numbers that counts. That gives some comfort to those who are not privy to the numbers already.

 

First I just Want to say that this is very cool and Nice article Dear Obsidian!

 

Well...In my opinion it is not possible to make sustainable profits trading economic Data releases simply because any subsequent movements after the announcements are often highly volatile and highly unpredictable. They are basically open to interpretation, and any subsequent movements are based on traders initial reactions to the news, Which is itself can be unpredictable.

Sometimes you will find that straight after a news announcement, The market will move strongly in one direction or the other. This can either continue, or completely retrace and head in the opposite direction, making it impossible to trade. This is because there is often a knee-jerk reaction to the news, and hen a subsequent move a few minutes later once traders have fully digested the figures. You will find sometimes that seemingly good news for the dollar, for example, will see a surprise sell-off and vice versa. It's all about traders perception of the news and is basically too unpredictable to trade with any confidence so my advice would be to stay away from the economic data releases, because there are plenty of easier ways to profit from the forex markets.

Share this post


Link to post
Share on other sites
First I just Want to say that this is very cool and Nice article Dear Obsidian!

 

Well...In my opinion it is not possible to make sustainable profits trading economic Data releases simply because any subsequent movements after the announcements are often highly volatile and highly unpredictable. They are basically open to interpretation, and any subsequent movements are based on traders initial reactions to the news, Which is itself can be unpredictable.

 

I have a friend with 19 years experience trading commodities in the Chicago Pits. He holds degrees in economics and agriculture. He taught me to trade economic release's in 2006, into 2007. It took 6 - 7 month's to get the hang of it. We continued for another 5 months or so.

I made a little money, more significant, I didn't loose money. Speaking only for myself, I found it Waaayyyyyy Too Stressful to justify the money I had made. I think Bull Fighting would be less stressful.

Share this post


Link to post
Share on other sites
I have a friend with 19 years experience trading commodities in the Chicago Pits. He holds degrees in economics and agriculture. He taught me to trade economic release's in 2006, into 2007. It took 6 - 7 month's to get the hang of it. We continued for another 5 months or so.

I made a little money, more significant, I didn't loose money. Speaking only for myself, I found it Waaayyyyyy Too Stressful to justify the money I had made. I think Bull Fighting would be less stressful.

 

Thats the Reason i Start my Comment With "In My Opinion" just mention it because Technical Studies are much Profitable In my case.

Share this post


Link to post
Share on other sites
Thats the Reason i Start my Comment With "In My Opinion" just mention it because Technical Studies are much Profitable In my case.

 

 

Agree, I am a technical trader. I have found that if you have say, a short bias, and a news release sends price in the opposite direction, it is just delaying your analysis from playing out.

Share this post


Link to post
Share on other sites
Trying to trade a range as if it is a trend will kill a trader and trying to trade a trend as if it is a range will also kill...

but … but…

:haha: All too often, when you’re looking at a chart to get in, it’s “trending”… as soon as you’re in, that same chart is suddenly just “ranging”. What just happened? ;)

 

 

Each cycle is different from the last one and that is the beauty of the market.

and

Not to nit pick, but if each cycle is different from the last, then it really doesn't have the nature of being cyclical.

Not to nit pick the nit picking but to clarify for beginners…

It might be more accurate to say each ‘rulership’ is different from the last instead of “Each cycle is different from the last one”

(The alternation between rulerships is cyclical ... not as linear as we would like of course - but still ‘cyclical’)

A ‘rulership’ is a weighted combination of distinct ‘crowds’ - with sufficient extremes in individual weighting to allow them to be Typed into a limited number of general categories.

 

re

and that is the beauty of the market
There are many ways of coping with that “not as linear as we would like” issue.

Many, if not most, traders note / observe / perceive this phenomenon (actually it’s these phenomena) to varying levels, but on the first few thousand attempts at understanding it, experience increasing, even more unpredictable, chaotic morass – and do not find the ”beauty” at all.

:crap:

So they settle, declare it unnecessary, and try to find methods that discount / go around / do not incorporate these ‘cycles’ at all…

Share this post


Link to post
Share on other sites
It might be more accurate to say each ‘rulership’ is different from the last instead of “Each cycle is different from the last one”

(The alternation between rulerships is cyclical ... not as linear as we would like of course - but still ‘cyclical’)

A ‘rulership’ is a weighted combination of distinct ‘crowds’ - with sufficient extremes in individual weighting to allow them to be Typed into a limited number of general categories.

 

Cycles are non-linear on a time axis. Events are non-linear on an event axis because event order is unrestricted. Indvidual observable events are linear along the logic axis that opens and closes the gates to a specific observable action reponse, keyed to a specific combination of events. Machines have a limited number of logic gates which follow a linear logic axis.

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

    • TDUP ThredUp stock, watch for a top of range breakout above 2.94 at https://stockconsultant.com/?TDUP
    • TDUP ThredUp stock, watch for a top of range breakout above 2.94 at https://stockconsultant.com/?TDUP
    • NFLX Netflix stock watch, local support and resistance areas at 838.12 and 880.5 at https://stockconsultant.com/?NFLX
    • 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
×
×
  • Create New...

Important Information

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