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I want to start a thread for discussion on why some traders go down the path of complicating trading, when there is so many possibilities that require only some experience and a bit of risk/trade management.

 

I don't necessarily want to talk about actual trading setups, just in general.

 

There are many ways to trade, the most common boil down to S/R bounces, breakouts of S/R.

 

Now to trade these just requires some charts a few line tools and practice.

 

There are others who want to understand how/why/who/where/when/color of socks etc.... price moves, suggesting once they know this they will trade risk free, or with high rate of wins.

 

They will study all sorts of theoretical stuff on order flow trying to understand complex maths and other complex material

 

I am suggesting that people keep it simple, stupid.

 

Would a poker player learn how cards are made, in which factory, who made them etc. It might be nice to know, but pointless to his performance

 

Discuss...

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  GlassOnion said:

 

Would a poker player learn how cards are made, in which factory, who made them etc. It might be nice to know, but pointless to his performance

 

Discuss...

 

He would want to know how well, say, A9s holds up preflop when there are 5 players seeing the flop and he called and was raised.

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  GlassOnion said:
I want to start a thread for discussion on why some traders go down the path of complicating trading, when there is so many possibilities that require only some experience and a bit of risk/trade management.

 

In KISS --- Why.....why not? :)

 

...........................

First I would like to quote from a book I just read, and a point I wholly agree with - Attacking currency trends - Greg Michalowski (not a bad read - keeps it simple, has some good points)

 

KISS stands for "Keep is Simple to be Successful" ---- a simple but good recommendation IMHO

 

'''''''''''''''

as to why people complicate things?

 

I have seen people answer with responses such as - we over think things, we dont understand the basics, we think complicated works better etc;

 

my personal theory (I this can be applied to many aspects of live and is just a personal idea I have) is that we have primal urge to control - or at least feel the need that we are in control.

 

When it comes to trading this manifests itself in many ways and comes out in expressions such as 'masters of the markets', the "truth" in how markets work/move etc, 'tame the markets', 'control your emotions', 'discipline', 'rules based', even when we hope and pray - we think we might have some influence on the outcome etc; etc;

 

So when we cant accept that most things are out of our control, or we often cant even control ourselves (impulse trading, anger, adrenaline etc) we believe that by adding more complications it is a way to improve the control we think we have.

Edited by SIUYA

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A large part of the problem revolves around this:

Rarely do any of us grow up learning how to operate in an arena that allows for complete
freedom of creative expression, with no external structure to restrict it in any way. In the trading environment, you will have to make up your own rules and then have the discipline to abide by them.

 

The problem is, price movement is fluid, always in motion, quite unlike the highly structured events that most of us are accustomed to. In the market environment, the decisions that confront you are as endless as the price movements you intend to take advantage of. You don't just have to decide to participate, you also have to decide when to enter, how long to stay in, and under what conditions to get out.

 

There is no beginning, middle, or end - only what you create in your own mind.

Beginners feel as though they're being dropped off in the middle of the woods without a map or compass. If they don't read, indicators represent a rope, or at least bread crumbs. And everybody seems to be using them. Never mind that they are the antithesis of KISS. And then there all the elaborate schemes to create structure and make sense out of what seems chaotic and senseless. Few beginners, however, ever bother to address the question of why people buy and sell. If they did, perhaps the clouds would part and they could at least see the sun.

 

I read something here yesterday posted by somebody who'd been at this for twelve years and the trader's progress was "slim". Twelve years. That's pitiful.

 

Db

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KISS is relative.

 

An analysis or trade signal strategy that is simple to you will be complex to someone else. Just the same, an analysis or trade signal strategy that is complex to you is simple to someone else.

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  SIUYA said:
....as to why people complicate things?

 

I have seen people answer with responses such as - we over think things, we dont understand the basics, we think complicated works better etc;

 

my personal theory (I this can be applied to many aspects of live and is just a personal idea I have) is that we have primal urge to control - or at least feel the need that we are in control.

 

When it comes to trading this manifests itself in many ways and comes out in expressions such as 'masters of the markets', the "truth" in how markets work/move etc, 'tame the markets', 'control your emotions', 'discipline', 'rules based', even when we hope and pray - we think we might have some influence on the outcome etc; etc;

 

So when we cant accept that most things are out of our control, or we often cant even control ourselves (impulse trading, anger, adrenaline etc) we believe that by adding more complications it is a way to improve the control we think we have.

 

couldn't say it better myself :)

 

there are things that became common belief, expensive is better, beautiful is better, complicated works better...you can hear people saying ooohh it is so shiny! or come on trading can't be so simple, lets fill our chart with tons of indicators!

 

everything is hard and complicated at the beginning, practice makes things easy although they are simple or complex...

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  wrbtrader said:
KISS is relative.

 

An analysis or trade signal strategy that is simple to you will be complex to someone else. Just the same, an analysis or trade signal strategy that is complex to you is simple to someone else.

 

 

I cannot agree with you wrbtrader ... KISS is KISS, it is not relative

 

SIUYA and DbP have a far more realistic approach to the problem of Trading

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  johnw said:
I cannot agree with you wrbtrader ... KISS is KISS, it is not relative

 

SIUYA and DbP have a far more realistic approach to the problem of Trading

 

That's exactly my point...what is KISS to me and you...I've seen others say its "too complicated". Just the same, I've seen some complicated stuff and others say to me "its very simple".

 

Yet, I don't debate with someone when they say something is simple or complicated. I know that as traders we have a different perspective via your education background, trading experience, communication skill of educator and so on. Therefore, if one person say its simple and someone else say just the opposite (complicated) about the same analysis or trade signal strategy...what matters is the perspective of the user because its his/her money on the line.

Edited by wrbtrader

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  GlassOnion said:
I want to start a thread for discussion on why some traders go down the path of complicating trading,

 

Because of their personality.

 

  GlassOnion said:

when there is so many possibilities that require only some experience and a bit of risk/trade management.

 

I don't necessarily want to talk about actual trading setups, just in general.

 

There are many ways to trade, the most common boil down to S/R bounces, breakouts of S/R.

 

Now to trade these just requires some charts a few line tools and practice.

 

 

Maybe price changes for some of these basic reasons:

 

  • The actual value changed and enough people know that to change the price.
  • The perceived value changed for the majority of people for some fundamental reason.
  • People are entering orders on speculation or short term technical reasons. There might not be any real concept or method being used concerning valuation.

 

NOTE: I'm not saying that I can correctly value the market. I don't know that anyone has a perfect way to do that.

 

  GlassOnion said:

There are others who want to understand how/why/who/where/when/color of socks etc.... price moves, suggesting once they know this they will trade risk free, or with high rate of wins.

 

I'm sort of like that. Is this thread for people like me?

 

  GlassOnion said:

They will study all sorts of theoretical stuff on order flow trying to understand complex maths and other complex material

 

I don't study order flow, or do any complicated math or employe statistical analysis. Maybe this thread isn't for me after all.

 

  GlassOnion said:

I am suggesting that people keep it simple, stupid.

 

Would a poker player learn how cards are made, in which factory, who made them etc. It might be nice to know, but pointless to his performance

 

Discuss...

 

Is the thread about trying to convince people to Keep It Simple, Stupid, or why people make it complicated? I'm not exactly sure where this is going?

Ultimately I'd like to match cause and effect. I want to see reliable correlations between something and what price does.

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I believe that new traders add and complicate trading the markets because they are not used to operating in a field filed with uncertainty - and they crave confirmation. The inevitable result is hesitation which leads to either missed trades or worse, getting in the trade at a worse price and higher risk.

 

Then the answer seems to be to increase the stop size and accept larger losses as a part of doing business rather than deal the with uncertainty and enter the trade with a smaller risk and increased uncertainty.

 

Simplifying ones approach takes screen time, and for me years or it.

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The formula E = MC^2 seems simple. What it took to for Einstein to get to that simplicity was not simple. There is a difference between the simplicity of the end result, and the amount of work to achieve that simplicity.

It would be interesting to see the results of a study comparing a trader's profitability to the simplicity of their strategy. But unless that study gets done, I don't know how to verify whether simplicity equals better success.

How much work will it take to find a strategy that is simple and profitable? I don't see any way around:

 

  • TIME - it takes to learn.
  • VERIFICATION - of the profitability.
  • DISCIPLINE - To execute the rules.

 

The verification process can filter out what works for someone and what doesn't. As you discard what doesn't work, maybe get simpler.

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To make something simple is very difficult to do. It is a complicated thing to design something simple. Especially, in the trading world where there are so many variables. Every event you can conceive of has probabilities. Even events you have not yet thought of or conceived. Just a few years ago how many of us would have conceived the role algos would play and in fact do play now in trading?

 

It seems to me one has to go back to basics and answer questions such as "why do people or algos buy and sell?" Other than to make money, that is. Designs system around the basic questions for whatever time frame you looking at trading. Reduce things as much as possible to a lowest common denominator.

 

Simple systems are easily reproduced. Easily duplicated. Easily understood. They can be implemented easier. They can be multiplied and repeated easier and faster.

 

To make things simple and keep them simple can be complicated but the end result is that they are usually more profitable. At least for me. And I am one who likes to jump on my motorcyle and feel the wind in my face and smell the freshly cut grass....

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Reminds me of the following Zen Buddhist story that applies to trading equally well:

 

A martial arts student went to his teacher and said earnestly, "I'm devoted to studying your martial system. How long will it take me to master it?" The teacher's replay was casual, "Ten years." Impatiently, the student answered, "But I want to master it faster than that. I'll work very hard. I'll practise every day, ten or more hours a day if I have to. How long will it take then?" The teacher thought for a moment and replied, "Twenty years."

 

This story version from 'Mindfulness for Dummies' book. The moral - hard work and attaining a goal do not necessarily go together. Let things unfold in their own time. If you are anxious you may just block your understanding. KISS for sure.

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A new trader opens up their exciting new trading platform which their new broker has so 'kindly' provided for 'free' and furnished with 'useful' indicators and the trader inevitably looks through various indicators and visually assesses their efficacy. The trader's mind is drawn to those clear cases where the market generates a 'signal' based off some 'indicator' and they think they've nailed it. However, the market does not concur when they attempt to apply it to trading. "I must have missed something" the trader thinks, without even a second thought to the relevance of the indicator at all. After all, it was included in the charting platform so it has to be good, right? "So lemme see what happens if I cross indi A with indi B" is the next thought. "Eureka! Jackpot! I'm gonna be rich!" says the trader possibly even out load, actually counting the soon-to-be-in-their-account money before it's been made. And it continues. Time spent acts as shackles too as the trader can't face the possibility that they've wasted their time and just move on. Then when they do finally move on, they're in danger of repeating the same mistake again. :doh:

 

Anyway, my point is that I disagree with the idea that traders want to use lots of different indicators to 'complicate' things because they think complicated = better, personality, lack of understanding, need to be right or anything else in particular. It's because a new trader sees something and thinks it works and gets stuck in a mindset. Lots of problems imho originate from far, far simpler beginnings than most would have you believe.

 

Overall I probably would say the brokers play a big part in this. Step up I'd say to any responsible broker reading this and take action. Provide simple basic education on auctions and a simple, basic, fast and reliable charting/trading platform with no indicators as such. Just some simple drawing tools and ability to read volume well in real time. It would be an interesting read to see the difference in new trader failure rate between this broker and usual brokers. Anyway. :2c:

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  TheNegotiator said:
A new trader opens up their exciting new trading platform which their new broker has so 'kindly' provided for 'free' and furnished with 'useful' indicators and the trader inevitably looks through various indicators and visually assesses their efficacy. The trader's mind is drawn to those clear cases where the market generates a 'signal' based off some 'indicator' and they think they've nailed it. However, the market does not concur when they attempt to apply it to trading. "I must have missed something" the trader thinks, without even a second thought to the relevance of the indicator at all. After all, it was included in the charting platform so it has to be good, right? "So lemme see what happens if I cross indi A with indi B" is the next thought. "Eureka! Jackpot! I'm gonna be rich!" says the trader possibly even out load, actually counting the soon-to-be-in-their-account money before it's been made. And it continues. Time spent acts as shackles too as the trader can't face the possibility that they've wasted their time and just move on. Then when they do finally move on, they're in danger of repeating the same mistake again. :doh:

 

Anyway, my point is that I disagree with the idea that traders want to use lots of different indicators to 'complicate' things because they think complicated = better, personality, lack of understanding, need to be right or anything else in particular. It's because a new trader sees something and thinks it works and gets stuck in a mindset. Lots of problems imho originate from far, far simpler beginnings than most would have you believe.

 

Overall I probably would say the brokers play a big part in this. Step up I'd say to any responsible broker reading this and take action. Provide simple basic education on auctions and a simple, basic, fast and reliable charting/trading platform with no indicators as such. Just some simple drawing tools and ability to read volume well in real time. It would be an interesting read to see the difference in new trader failure rate between this broker and usual brokers. Anyway. :2c:

 

Neg - problem with this idea is that if you go to the platform boards you will constantly see 'users' requesting more stuff - so what would happen is that a simple platform would then evolve into something more complicated.

A simple platform exists already - all of them have the ability to draw lines and watch a chart - yet people want more things. We are all free to throw off the shackles any time we want.....So while interesting - my guess is a reversion to the mean of wanting more complicated tools to simplify things would result.

 

Also based on the idea....."It's because a new trader sees something and thinks it works and gets stuck in a mindset", then surely if you showed all new traders a simple idea, that works reasonably well then everyone could be shown this and then they would be profitable and happy. If only imprinting was that easy........:)

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  SIUYA said:
Neg - problem with this idea is that if you go to the platform boards you will constantly see 'users' requesting more stuff - so what would happen is that a simple platform would then evolve into something more complicated.

A simple platform exists already - all of them have the ability to draw lines and watch a chart - yet people want more things. We are all free to throw off the shackles any time we want.....So while interesting - my guess is a reversion to the mean of wanting more complicated tools to simplify things would result.

 

True. On the other hand, if it were appropriately demonstrated to them why the platform was created this way and were given the knowledge of how to use it, there would be a good few who at the very least would give it a good go. The question is whether more proportionally would be successful or not. This isn't to say it would make lots of successful traders. A prospective retail trader with no knowledge of trading has no criteria to base their suitability and potential upon other than their ego (and greed).

 

  SIUYA said:
Also based on the idea....."It's because a new trader sees something and thinks it works and gets stuck in a mindset", then surely if you showed all new traders a simple idea, that works reasonably well then everyone could be shown this and then they would be profitable and happy. If only imprinting was that easy........:)

 

Back to the last point I made. A new retail trader decides they will be a good trader themself. So their would be plenty who still fail. Even if a firm experienced in picking good traders were to 'authorise' all new accounts retail or otherwise, there would surely be those who would fail, those who would be okay but make plenty of losing trades and those who would be great, but still take losing trades. The point is that simple ideas which work reasonably well are rarely presented to new traders and when they are they often miss out a critical aspect which people have an aversion of - hard work.

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  TheNegotiator said:
The point is that simple ideas which work reasonably well are rarely presented to new traders and when they are they often miss out a critical aspect which people have an aversion of - hard work.

 

That's largely it: the work. An extraordinarily small number of people want to do the work. They are not dissimilar from those who think they can become big winners at poker just by sitting down at the poker table, even though they know nothing about the game. They think that making trade after trade after trade constitutes "work", but it is no more so than playing hand after hand after hand. What is learned from the experience, if anything, is negligible.

 

There's nothing new about any of this, of course. Wyckoff and Livermore complained about the same thing a hundred years ago, only then it was wannabes who hung around brokers' offices and clubs and so forth looking for tips and inside information. Not much different than fiddling with stochastic settings.

 

Db

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  TheNegotiator said:
True. On the other hand, if it were appropriately demonstrated to them why the platform was created this way and were given the knowledge of how to use it, there would be a good few who at the very least would give it a good go. The question is whether more proportionally would be successful or not. This isn't to say it would make lots of successful traders. A prospective retail trader with no knowledge of trading has no criteria to base their suitability and potential upon other than their ego (and greed).

 

 

 

Back to the last point I made. A new retail trader decides they will be a good trader themself. So their would be plenty who still fail. Even if a firm experienced in picking good traders were to 'authorise' all new accounts retail or otherwise, there would surely be those who would fail, those who would be okay but make plenty of losing trades and those who would be great, but still take losing trades. The point is that simple ideas which work reasonably well are rarely presented to new traders and when they are they often miss out a critical aspect which people have an aversion of - hard work.

 

Aha - the critical thing - Db beat me to it. :)

its not about the platform, its about the desire/motivation/drive to actually put in the work, and so even if people were presented with simple things, a simple platform, etc; then they would still complicate it because they would rather have something that is complicated if it can avoid them doing the hard work.

In other words could it be suggested we want to make things more complicated because we dont want to actually do hard work.....makes sense some what for all manner of 'labour saving' devices.....but I dont think that really applies here.

The hard work is about thinking, time, analysis.....review, more thought...

 

I do agree that it would be interesting if brokers gave out more tools to help people with this.....eg; a series of practice trade journals, spreadsheets with trade statistics etc; etc....problem is most people would find out they are over trading - and dont the brokers love that :)

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I'm reminded of this because of the renovation I'm in the middle of, though it may not even apply. I'm truly astonished -- though I shouldn't be -- at how few people are willing to do the scraping and the sanding and the washing and the priming and the first and second coats. The vast majority would rather just slap on a topcoat, without even cleaning the surface, then bitch about how it doesn't cover in one coat.

 

How different is this from the whining about how whateveritis "doesn't work"?

 

Db

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  DbPhoenix said:
I'm reminded of this because of the renovation I'm in the middle of, though it may not even apply. I'm truly astonished -- though I shouldn't be -- at how few people are willing to do the scraping and the sanding and the washing and the priming and the first and second coats. The vast majority would rather just slap on a topcoat, without even cleaning the surface, then bitch about how it doesn't cover in one coat.

 

How different is this from the whining about how whateveritis "doesn't work"?

 

Db

 

LOL, renovations - always overbudget, over time and a pain....especially if not dont properly.

From my own renovation experiences ---Best labour saving device for those who don't want to do it.....pay someone else to do it for you.....otherwise, you are 100% correct prepare properly which is hard, and largely unseen and hidden work for a great job.

If you are just patching up and flogging it off to the next punter then ....buyer beware. :)

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  SIUYA said:
From my own renovation experiences ---Best labour saving device for those who don't want to do it.....pay someone else to do it for you.....

 

Likewise, if one isn't prepared to do the necessary work to manage his own money, hire someone else to do it, e.g., funds.

 

Db

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  DbPhoenix said:
Likewise, if one isn't prepared to do the necessary work to manage his own money, hire someone else to do it, e.g., funds. Db

 

Sure... I am one of the many that left hard-earned money with so-called financial 'experts', in big banks to manage. And like many others learnt about the conceited BS that the industry has been pushing for years after losing lots. Buy and hold, yeah sure. Biggest con ever. Sorry, but that's why so many of us 'Muppets' are taking their funds off these idiots/crooks.

 

You are right to say we do need to do the necessary work to manage our own money so please forgive the naive (Muppet) questions sometimes. We've all been there, right? :)

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  RichardHK said:
Sure... I am one of the many that left hard-earned money with so-called financial 'experts', in big banks to manage. And like many others learnt about the conceited BS that the industry has been pushing for years after losing lots. Buy and hold, yeah sure. Biggest con ever. Sorry, but that's why so many of us 'Muppets' are taking their funds off these idiots/crooks.

 

You are right to say we do need to do the necessary work to manage our own money so please forgive the naive (Muppet) questions sometimes. We've all been there, right? :)

 

There are a great many terrible professional money managers. Most of them can't even match the S&P. However, that doesn't necessarily mean that one is going to do better managing his own simply because it's his.

 

And there's nothing wrong with asking questions. But at some point, one has to move on to the plan, and in the nearly five months since I've returned, I've seen only one person post what even begins to look like a plan. Even if one discounts the alleged 78,000+ members number, there are well more than a hundred members logging into the site every day. How many of them have posted a plan*? As far as I know, none.

 

So when someone complains about how difficult and complicated it all is, ask about his plan. Odds will be high that he has none.

 

* And by "plan", I don't mean some computerized backtest that has only a marginal -- if that -- connection with reality. I mean a well-thought-out, thoroughly-tested, consistently profitable plan.

 

Db

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  TheNegotiator said:
A new trader opens up their exciting new trading platform which their new broker has so 'kindly' provided for 'free' and furnished with 'useful' indicators and the trader inevitably looks through various indicators and visually assesses their efficacy. The trader's mind is drawn to those clear cases where the market generates a 'signal' based off some 'indicator' and they think they've nailed it. However, the market does not concur when they attempt to apply it to trading. "I must have missed something" the trader thinks, without even a second thought to the relevance of the indicator at all. After all, it was included in the charting platform so it has to be good, right? "So lemme see what happens if I cross indi A with indi B" is the next thought. "Eureka! Jackpot! I'm gonna be rich!" says the trader possibly even out load, actually counting the soon-to-be-in-their-account money before it's been made. And it continues.....

 

for many years people have been creating trading systems by combining a couple of indicators...I guess it is how new traders see trading...that is why there are thousands of so called systems-strategies...they need more indicators to create more strategies...

 

without knowledge, experience and hard working, nobody can survice for a long time...keeping charts clean does not mean trading is simple...and trading is not simple for a beginner

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  Obsidian said:
keeping charts clean does not mean trading is simple...and trading is not simple for a beginner

 

Keeping charts clean makes trading simpler than cluttering them up. And, yes, trading can be simple even for a beginner, assuming he can tell up from down (not everyone can).

 

This is not to equate "simple" with "easy". It's still work. But it's not a root canal.

 

Db

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Treasury Secretary Mr Bessent and National Economic Council Director Mr Hassett suggested that the restrictions would primarily target 15 countries responsible for the bulk of the US trade deficit. However, yesterday, Trump contradicted these statements, asserting that additional duties would be imposed on any country that has implemented similar measures against US products. The day’s volatility will depend on which route the US administration takes. The harshness of the policy will influence both the Japanese Yen as well as the US Dollar.   USDJPY 5-Minute Chart   US Economic and Employment Data The JOLT Job Vacancies figure fell below expectations and is lower than the previous month’s figure. The JOLT Job Vacancies read 7.57 million whereas the average of the past 6 months is 7.78 million. The ISM Manufacturing Index also fell below the key level of 50.00 and was 5 points lower than what analysts were expecting. The data is negative for the US Dollar, particularly as the latest release applies more pressure on the Federal Reserve to cut interest rates. However, this is unlikely to happen if the trade policy ignites higher and stickier inflation. In the Bank of Japan’s Governor's latest speech, Mr Ueda said that the tariffs are likely to trigger higher inflation. USDJPY Technical Analysis Currently, the Japanese Yen Index is the worst performing of the day while the US Dollar Index is more or less unchanged. However, this is something traders will continue to monitor as the EU session starts. In the 2-hour timeframe, the USDJPY is trading at the neutral level below the 75-bar EMA and 100-bar SMA. The RSI and MACD is also at the neutral level meaning traders should be open to price movements in either direction. On the smaller timeframes, such as the 5-minute timeframe, there is a slight bias towards a bullish outcome. However, this is only likely if the latest bearish swing does not drop below the 200-Bar SMA.     The key resistant level can be seen at 150.262 and the support level at 149.115. Breakout levels are at 149.988 and 149.674. Key Takeaway Points: Job vacancies hit a five-month low, and the ISM Manufacturing PMI missed expectations, adding pressure on the Federal Reserve regarding interest rate decisions. Traders await confirmation on Trump’s tariff policy, which is expected to impact the EU, chips, pharmaceuticals, and foreign car industries. The severity of the tariffs will influence both the JPY and the USD, with traders waiting for final policy details. The Japanese Yen Index is the worst index of the day while the US Dollar Index is unchanged. 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.   Michalis Efthymiou 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.
    • HLF Herbalife stock, watch for a bull flag breakout above 9.02 at https://stockconsultant.com/?HLF
    • Date: 1st April 2025.   Will Gold’s Rally Hold Strong as New Trade Tariffs Take Effect Tomorrow?   Gold continues to increase in value for a sixth consecutive day and is trading more than 17% higher in 2025. Amid fear of higher inflation, a recession and the tariffs war escalating investors continue to invest into Gold pushing demand higher. The trade policy from April 2nd onwards continues to be a key factor for the whole market. Can Gold maintain its upward trend? Trade Policy From Tomorrow Onwards Starting as soon as tomorrow, a 25% tariff will be imposed on all passenger cars imported into the United States. While this White House policy is anticipated to negatively affect European industrial performance, it will also lead to higher transportation and maintenance costs for everyday American taxpayers. The negative impact expected on both the EU and US is one of the reasons investors continue to buy Gold. Additionally, last month, President Donald Trump announced reciprocal sanctions against any trade partners that impose import restrictions on US goods. Furthermore, tariffs on products from Canada and the EU could increase even more if they attempt to coordinate a response. Overall, investors continue to worry that new trade barriers will prompt retaliatory measures, particularly from China, the Eurozone, and Japan. Any retaliation is likely to escalate the trade conflict and prompt another reaction from the US. Experts at Goldman Sachs and other investment banks warn that this will lead to rising inflation and unemployment. They also caution that it could effectively halt economic growth in the US.   XAUUSD 1-Hour Chart   The Weakness In The US Dollar Another factor which is allowing the price of XAUUSD to increase in value is the US Dollar which has been unable to maintain any bullish momentum. Despite last week’s Core PCE Price Index rising to its highest level since February 2024, the US Dollar has been unable to see any significant rise in value. Due to the US Dollar and Gold's inverse correlation, the price of Gold is benefiting from the Dollar weakness. Investors worry that new trade barriers will prompt retaliatory measures from China, the Eurozone, and Japan, potentially escalating the conflict. Experts at The Goldman Sachs Group Inc. believe that such actions by the US administration will drive rising inflation and unemployment while effectively halting economic growth in the country. Can Gold Maintain Momentum? When it comes to technical analysis, the price of Gold is not trading at a price where oscillators are indicating the instrument is overbought. The Relative Strength Index currently trades at 68.88, outside of the overbought area, since Gold’s price fell 0.65% during this morning’s session. However, even with this decline, the price still remains 0.40% higher than the day’s open price. In terms of fundamental analysis, there continues to be plenty of factors indicating the price could continue to rise. However, the price movement of the week will also partially depend on the employment data from the US. The US is due to release the JOLTS Job Vacancies for February this afternoon, the ADP Non-Farm Employment Change tomorrow, and the NFP Change and Unemployment Rate on Friday. If all data reads higher than expectations, investors may look to sell to lock in profits at the high price. Key Takeaway Points: Gold’s Rally Continues – Up 17% in 2025 as investors seek safety from inflation, recession fears, and trade tensions. Trade War Impact – New US tariffs and potential retaliation from China, the EU, and Japan drive uncertainty, boosting Gold demand. Weak US Dollar – The Dollar’s struggle supports Gold’s rise due to their inverse correlation. Gold’s Outlook – Uptrend may continue, but US jobs data could trigger profit-taking. 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.   Michalis Efthymiou 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.
    • Date: 31st March 2025.   Trump Confirms Tariffs on All Countries, Sending Stocks Lower.   The NASDAQ continues to trade lower due to the US confirming the latest tariffs will be on all countries. In addition to this, bearish volatility also is largely due to the higher inflation data from Friday. The NASDAQ declines to its lowest price since September 11th 2024. Core PCE Price Index - Inflation Increases Again! The PCE Price Index read 2.5% aligning with expert forecasts not triggering any alarm bells. However, the Core PCE Price Index rose from 0.3% to 0.4% MoM and from 2.7% to 2.8% YoY, signalling growing inflationary pressure. This increases the likelihood that the Federal Reserve will maintain elevated interest rates for an extended period. The NASDAQ fell 2.60% due to the higher inflation reading which is known to pressure the stock market due to pressure on consumer demand and a more hawkish Federal Reserve. Boston Fed President Susan Collins recently commented that tariffs could drive up inflation, though the long-term impact remains uncertain. She told journalists that a short-term spike is the most probable outcome but believes the current pause in monetary policy adjustments is appropriate given the prevailing uncertainties. Although, certain investment banks such as JP Morgan actually believe the Federal Reserve will be forced into cutting rates. This is due to expectations that the economy will struggle under the new trade policy. For example, JP Morgan expects the Federal Reserve to delay rate cuts but will quickly cut towards the end of 2025. Market Risk Appetite Takes a Hit! A big factor for the day is the drop in the risk appetite of investors. This can be seen from the VIX which is up almost 6%, Gold which is trading 1.30% higher and the Japanese Yen which is the day’s best performing currency. Most safe haven assets, bar the US Dollar, increase in value. It is also worth noting that all indices are decreasing in value during this morning's Asian session with the Nikkei225 and NASDAQ witnessing the strongest decline. Previously the stock market rose in value as investors heard rumours that tariffs would only be on certain countries. This bullish swing occurred between March 14th and 25th. Over the weekend, President Donald Trump indicated that the upcoming tariffs would apply to all countries, not just those with the largest trade imbalances with the US. NASDAQ - Technical Analysis In terms of technical analysis, the NASDAQ continues to obtain indications that sellers control the price action. The price opens on a bearish price gap measuring 0.30% and trades below all Moving Averages on all timeframes. The NASDAQ also trades below the VWAP and almost 100% of the most influential components (stocks) are declining in value.     The next significant support level is at $18,313, and the resistance level stands at $20,367.95. Key Takeaway Points: NASDAQ falls to its lowest since September 2024 as the US confirms tariffs on all countries, adding to inflation concerns. Core PCE inflation rises to 0.4% MoM and 2.8% YoY, increasing the likelihood of prolonged high interest rates. Investor risk appetite drops as VIX jumps 6%, gold gains 1.3%, and safe-haven assets outperform. NASDAQ shows strong bearish momentum, trading below key technical levels with support at $18,313 and resistance at $20,367.95. 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.   Michalis Efthymiou 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.
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