Forex Technical Analysis & Forecast 27.02.2019 (EURUSD, GBPUSD, USDCHF, USDJPY, AUDUSD, USDRUB, GOLD, BRENT)

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD has reached 1.1400 and completed the ascending wave. Possibly, today the pair may form the first descending impulse towards 1.1374 and then start a new correction to reach 1.1388. Later, the market may resume moving downwards to break 1.1374 and then continue falling with the first target at 1.1322.

EURUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

GBPUSD, “Great Britain Pound vs US Dollar”



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GBPUSD has finished the ascending structure. Today, the pair may form the first descending impulse towards 1.3210. After that, the instrument may start a new correction to reach 1.3245 and then resume trading downwards with the target at 1.3130.

GBPUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCHF, “US Dollar vs Swiss Franc”

USDCHF is still consolidating near the lows. Possibly, today the pair may form a new ascending structure to break 1.0022 and then continue growing with the first target at 1.0058.

USDCHF
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDJPY, “US Dollar vs Japanese Yen”

USDJPY is moving downwards. Today, the pair may reach 110.34 and then start a new correction towards 110.60. Later, the market may resume trading inside the downtrend with the first target at 109.97.

USDJPY
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD is trading upwards; it has tested 0.7194 once again. Possibly, the pair may resume trading inside the downtrend with the first target at 0.7030.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDRUB, “US Dollar vs Russian Ruble”

USDRUB has expanded its consolidation range upwards and almost formed the Divergent Triangle pattern to reach 65.85. Possibly, today the pair may form one more descending structure towards 65.45. If later the price breaks 65.85 to the upside, the instrument may be corrected to reach 66.20; if 65.45 to the downside – resume trading inside the downtrend with the target at 64.80.

USDRUB
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

XAUUSD, “Gold vs US Dollar”

Gold is trading upwards. Possibly, the pair may reach 1333.84 and then resume moving downwards to break 1320.70 and then continue falling with the short-term target at 1310.83.

GOLD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

BRENT

Brent has returned to 65.55. Today, the pair may start a new decline towards 63.80 and then form a new ascending structure to test 65.55 from below. Later, the market may continue falling with the target at 63.50.

BRENT

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The $32 Trillion Push To Disrupt The Entire Oil Industry

By OilPrice.com

Global oil and gas companies are increasingly facing an uphill battle as global warming policies are taking their toll. Most analysts and market watchers are focusing on peak oil demand scenarios, but the reality could be much darker. International oil companies (IOCs) are likely to face a Black Swan scenario, which could end up being a boon for state-owned oil companies (NOCs).

Increased shareholder activism, combined with global warming policies of institutional investors and NGOs, are pushing IOCs in a corner, constricting financing options for oil companies.

The first signs of a green revolution in the shareholder-investors universe are there, as investors have forced Dutch oil and gas major Shell to officially change its strategy, investing in more renewable energy and energy storage. The Dutch IOC wasn’t forced by to do so because of mismanagement or a lack of reserves but due to a well-orchestrated investor/stakeholder offensive. Several other peers, such as BP, ENI or Total, are expected to experience comparable situations.

And it has become clear that not only oil and gas giants are being targeted, after one of the world’s largest mining and commodity trading companies, Glencore, decided to put a limit on its thermal coal investment. The group stated that this was done after it was confronted by a largely unknown shareholder network called Climate Action 100+, which claims to be backed by more than 300 investors, managing assets of around $32 trillion. The group was founded a little over a year ago but has already forced oil majors’ boardrooms to take radical decisions.



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The above shows that international hydrocarbon and mining sectors are facing a new obstacle, being confronted by large groups of socially and environmentally engaged shareholders, which are no longer looking at commercial value only. A combination of activist institutional investors, international pension funds and NGOs, is a new force to be dealt with. Stock-exchanged listed companies will need to address the will of their shareholders, especially with regards to climate change policies or decarbonization of the economy. After decades of having focused on creating maximum shareholder returns, things have changed dramatically, but maybe not for the better.

For Climate Action 100+, which includes investors such as Calpers, Allianz SE, and HSBC Global Asset Management, making profitable investments remains a top priority, but they will no longer look accept a passive stance towards climate change. Without complying with the demands of NGOs and socially engaged investors, access to new capital for new oil and gas upstream projects will be reduced. Some even expect that the role of Western IOCs could decline in the next couple of years, due to political shareholder engagement policies. To force IOCs, such as Shell or BP, to comply with policies that would halve their “net carbon footprint” by 2050 could result in a death-wish for these companies in the long-run.

The demise of IOCs, as we know them right now, could come sooner than many may expect. This will, of course, come at a cost for energy-hungry regions or consumers. With a net demand growth for oil and gas in the coming years, the world will need all hands on deck to support upstream investments to bring the hard-needed oil and gas reserves and volumes to the market. With less financing options for IOCs, and also oilfield services, the already existing investment gap in upstream investment worldwide will only grow wider. In contrast to what some media sources are suggesting, oil and gas demand will not diminish, on the contrary, oil and gas prices will rise due to a lack of supply.

That this picture is not a future nightmare scenario but is already the reality, is shown by the fact that a growing amount of smaller oil and gas companies have become insolvent. The latter is partly caused by “global warming constraints” and lower oil prices in general. The first casualties are falling in Europe, mainly the UK, where 16 companies went bankrupt in 2018, in comparison to zero in 2012. British accountancy firm Moore Stephenson stated that lower prices were the main cause. At the same time, increased costs (North Sea decommissioning) and lower oil price expectations are doing the rest. If the international financial markets are going to take over the doomsday scenarios presented by pressure groups and NGOs, independent oil and gas companies are going to be hit extremely hard. No investor is willing to invest in a sector or company that looks to hit rock-bottom in the next decade. Stranded reserves reports, as presented by the Bank of England and others, are not helping at all to change perceptions.

Western consumers and politicians, however, should not already start to cheer a green revolution and the end of the oil era. The future is different and could be even less positive than currently is assessed. Financial pressure on IOCs is opening up a Pandora’s Box. By removing market-oriented oil and gas giants from global markets, the only way to gain access to oil and gas will be the national oil companies (NOCs). Not only are they the real owners of the overwhelming majority of hydrocarbon reserves in the world, but NOCs are also not constrained by shareholder activism or NGO pressure.

The main driver for NOCs is to support the sustainable economic growth of their home country or government. In stark contrast to IOCs, which are fully focused on shareholder value and profits, NOCs have a long-term national approach, in which other factors are playing a role. Saudi Aramco and its peers are not only the sole owner of the reserves but also of most of the value chain. The ongoing downstream focus of NOCs can be seen as a push to gain control of the entire value chain, from exploration to sales.

This position is still of value to institutional investors and national financial institutions, as the combination of long-term access, ownership and extensive value chain control, is very attractive. The Fitch AA+ rating of Abu Dhabi’s ADNOC shows that NOCs have become very attractive, even more than IOCs at present.

Mainstream investors, hedge- and pension funds, are and will be interested in financing NOCs, as long as demand and profits are there. Western consumers and the industry should however also realize that a transformation of power to NOCs will also mean that market fundamentals will change, and possible unexpected hiccups in supply will occur at the will of governments, not due to market fundamentals. NOCs are still controlled and owned by national governments.

Supply risks will increase if IOCs see their influence in the hydrocarbon sector diminish. Destruction of knowledge, technical capabilities and additional financing, could constrain the hard-needed push for new oil and gas production.

 

Political and environmental pressure groups should realize that pushing too hard for change could produce a boomerang effect of unwanted-order. To force IOCs to change their investment strategies, and abandon highly profitable upstream projects, while investing in renewables, could be more destabilizing than anticipated. Between 2014 and 2018, upstream oil and gas investments have been hit hard, leaving a $1 trillion investment gap. This development will impact the market within the next 24 months. Lower oil supply will push up prices if demand continues to grow.

Link to article: https://oilprice.com/Energy/Energy-General/The-32-Trillion-Fund-Transforming-The-Oil-Industry.html

By Cyril Widdershoven for Oilprice.com

 

 

Fibonacci Retracements Analysis 27.02.2019 (GBPUSD, EURJPY)

Article By RoboForex.com

GBPUSD, “Great Britain Pound vs US Dollar”

As we can see in the H4 chart, GBPUSD has updated the previous high and may continue growing towards the post-correctional extension area between the retracements of 138.2% and 161.8% at 1.3385 and 1.3488 respectively. In the short-term, the instrument may be corrected to reach the local support level at 1.3216.

GBPUSD1
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

In the H1 chart, there is a divergence on MACD, which may indicate a new correctional downtrend. The possible targets may be the retracements of 23.6% and 38.2% at 1.3167 and 1.3090 respectively. However, this decline won’t last long and later the instrument may start a new rising wave.



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GBPUSD2
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

EURJPY, “Euro vs. Japanese Yen”

As we can see in the H4 chart, EURJPY is still trading upwards; the price is trying to fix above the retracement of 50.0% and reach the one of 61.8% at 127.34. The current support is at 123.76.

EURJPY1
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

In the H1 chart, the divergence made the instrument start falling. It has already reached the retracement of 23.6%. The next possible targets are the retracements of 38.2% and 50.0% at 125.50 and 125.27 respectively. However, if the price breaks the high at 126.30, the pair will continue growing.

EURJPY2
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Analytical Overview of the Main Currency Pairs on 2019.02.27

Analytics by JustForex

The EUR/USD currency pair

  • Prev Open: 1.13583
  • Open: 1.13892
  • % chg. over the last day: +0.28
  • Day’s range: 1.13725 – 1.13956
  • 52 wk range: 1.1214 – 1.2557

Yesterday, USD kept losing positions against the basket of major currencies. The US index (#DX) updated the local minimums after the dowish comments by Jerome Powell. The official is sure in the economic growth of the country. At the same time, the Central Bank will not increase the key interest rates. Right now the EUR/USD is moving in a flat. The key support and resistance levels are 1.13700 and 1.14000. Keep an eye on the Washington/Beijing trading negotiations. You should open positions from the key levels.

At 17:00 (GMT+2:00) the US will publish the index of opened sales on the real estate market.

EUR/USD

The indicators point to the power of the buyers, the price fixed above 50 MA and 200 MA.

The MACD histogram is in the positive zone but below the signal line, which gives a weak signal to buy EUR/USD.



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The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which points to the bullish mood.

  • Support levels: 1.13700, 1.13500, 1.13200
  • Resistance levels: 1.14000, 1.14500

If the price fixes above the round 1.14000, expect the quotes to rise toward 1.14300-1.14500.

Alternatively, the quotes can descend toward 1.13500-1.13300.

The GBP/USD currency pair

  • Prev Open: 1.31083
  • Open: 1.32519
  • % chg. over the last day: +1.23
  • Day’s range: 1.32336 – 1.32837
  • 52 wk range: 1.2438 – 1.4378

GBP/USD is in a steady rising trend. Yesterday the quotes grew by 150 points and updated the annual maximums. The PM of the UK, Theresa May, offered the British Parliament to vote for post-poning Brexit in order to manage the process better and make it less chaotic. Right now the quotes are testing the 1.32800 mark, with 1.32150 acting as the near support. There are further growth prospects.

The Economic News Feed for 27.02.2019 is calm.

GBP/USD

The indicators point to the power of the buyers, the price fixed above 50 MA and 200 MA

The MACD histogram is in the positive zone but below the signal line, which gives a weak signal to sell GBP/USD.

The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line which also points to the bullish mood.

  • Support levels: 1.32150, 1.31500, 1.31000
  • Resistance levels: 1.32800, 1.33500

If the price fixes above 1.32800, expect the quotes to grow toward 1.33400-1.33600.

Alternatively, the quotes can correct toward 1.31700-1.31300.

The USD/CAD currency pair

  • Prev Open: 1.31863
  • Open: 1.31657
  • % chg. over the last day: -0.20
  • Day’s range: 1.31530 – 1.31763
  • 52 wk range: 1.2248 – 1.3664

Yesterday USD/CAD held the local resistance at 1.32400 and started to descend once more. The CAD is recovering due to the positive oil quotes dynamics. Right now the currency pair is consolidating aroun 1.31500-1.31850. It can descend further, but so far you should open positions from the key levels.

The Economic News Feed for 27.02.2019:

  • – Economic Event (CAD) – 00:00 (GMT+2:00);
  • – Economic Event (CAD) – 00:00 (GMT+2:00);
  • – Economic Event (CAD) – 00:00 (GMT+2:00);
USD/CAD

The indicators point to the power of the buyers, the price fixed below 50 MA and 200 MA.

The MACD histogram is in the negative zone and keeps lowering, which gives a weak signal to sell USD/CAD.

The Stochastic Oscillator is in the neutral zone, the %K line is below the %D line which points to the bearish mood.

  • Support levels: 1.31500, 1.31150, 1.31000
  • Resistance levels: 1.31850, 1.32150, 1.32400

If the price lowers below 1.31500, expect the quotes to fall toward 1.31000.

Alternatively, the quotes can correct toward 1.32150-1.32400.

The USD/JPY currency pair

  • Prev Open: 111.029
  • Open: 110.568
  • % chg. over the last day: -0.45
  • Day’s range: 110.354 – 110.628
  • 52 wk range: 104.56 – 114.56

USD/JPY is showing a bearish mood. During the last two days, yen recovered by more than 60 points. The quotes updated the local minimums. Right now the price is testing the support at 110.250-110.350 with 110.500 acting as a mirror resistance. The quotes have a tendency to descend. The US currency is under pressure after the dowish comments by Powell. You should open positions from the key levels.

The Economic News Feed for 27.02.2019 is calm.

USD/JPY

The price fixed below 50 MA and 200 MA which points to the power of the sellers.

The MACD histogram is in the negative zone and keeps lowering, which points to the bearish mood.

The Stochastic Oscillator is in the oversold zone, the %K line is crossing the %D line. There are no signals.

  • Support levels: 110.350, 110.000
  • Resistance levels: 110.500, 110.650, 110.800

If the price fixes below 110.350, expect the quotes to fall toward 110.000.

Alternatively, the quotes can grow toward 110.700-110.900.

Analytics by JustForex

The US Dollar Index Has Updated Local Lows

by JustForex

The US dollar weakened against a basket of major currencies during yesterday’s trading session. Dovish comments by Fed Chairman, Jerome Powell, put pressure on the US currency. The official said yesterday that the country’s economy is in good condition. At the same time, the Central Bank will not rush to tighten monetary policy in the current year. The regulator will carefully evaluate future economic releases. The dollar index (#DX) updated local lows and closed the trading session in the red (-0.42%).

The political uncertainty concerning Brexit remains. UK Prime Minister, Theresa May, promised the lawmakers that if they did not approve the revised Brexit agreement by March 12, a vote on the no-deal Brexit would be taken. If parliamentarians reject this option, a vote on the Brexit delay will be held on March 14. These statements have supported the pound.

The “black gold” prices have been recovering after a sharp collapse at the beginning of this week. At the moment, futures for the WTI crude oil are testing the mark of $55.85 per barrel. At 17:30 (GMT+2:00), a report on crude oil inventories will be published in the US.

Market Indicators

Yesterday, there was a variety of trends in the US stock market: #SPY (-0.07%), #DIA (-0.13%), #QQQ (+0.10%).



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The 10-year US government bonds yield is at the level of 2.63-2.64%.

– Core consumer price index in Canada at 15:30 (GMT+2:00);
– Pending home sales index in the US at 17:00 (GMT+2:00).

We also recommend paying attention to the speech by Fed Chairman Powell.

by JustForex

EURUSD: testing the previous resistance as a support

Previous:

On Tuesday the 26th of February, trading on the EURUSD pair closed up. The British pound had a positive influence on the majors during the European session.

The pair was trading below the 1.1370 resistance up until Federal Reserve Chair Jerome Powell’s address to the Senate Committee on Banking. Powell spelled out the regulator’s wait-and-see stance, stating that the Fed has a generally positive economic outlook, and that the main risk posed to the US economy is slowed economic growth overseas. The Fed’s top management will continue to be patient in making decisions with regard to raising interest rates.

Before closing the day, the EURUSD pair tested 1.14.



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Day’s news (GMT+3):

  • 11:30 Eurozone: ECB’s Cœuré speech.
  • 12:00 Switzerland: ZEW survey – expectations (Feb).
  • 12:00 Eurozone: M3 money supply (Jan), private loans (Jan).
  • 13:00 Eurozone: consumer confidence (Feb), economic sentiment indicator (Feb), industrial confidence (Feb), business climate (Feb).
  • 13:00 Germany: German Buba President Weidmann speech.
  • 16:30 Canada: CPI (Jan).
  • 18:00 US: pending home sales (Jan), factory orders (Dec).
  • 18:30 US: EIA crude oil stocks change (18 Feb).

EURUSD H1Current situation:

The pound, the euro crosses, and Powell prevented the bears from reaching the support zone at 1.1315/20. We got a drop to 1.1345 in the US session, but buyers then quickly recovered those losses. The 45th degree and the 1.1370 mark were broken through by the bulls. The euro reached the 1.1403 mark. The pair started a correction from the 67th degree, which extended to 1.1373 in the Asian session.

The pair is currently trading around the 1.1370 support, which was a resistance during yesterday’s trading. Considering that trading robots are providing volume across all markets, there’s a high likelihood that the pair will test the LB balance line before starting to rise again. Take a look at previous tests; the rate has descended to the line before rebounding sharply upwards.

The trend line runs through 1.1360. This should bolster the support zone. The stochastic has reversed upwards. All that’s left is for the crosses to reverse and we can set our sights on 1.1416.

How To Choose The Right Indicators

Many traders, especially when starting out find themselves in a constant state of trading inertia. This is predominantly due to not knowing what to do next, or more specifically which technique or technical indicator to choose from and to apply as their preferred style or method of trading.

The results of a quick Google search on the internet will literally scare the pants off anyone starting out, as the sheer number of different indicators and strategies to use under different market conditions are mind boggling.

In another post of mine, I addressed the fundamental issues behind which technical indicators to use, and in this post, I wish to get down to the nuts and bolts of how to make the choice, .. in other words, how to short list the right indicators that fits your unique style of trading.

Indicators vs Chart Patterns

There exists an age old debate as to whether using actual chart patterns are more beneficial to using indicators.

The debate tries to establish if observing a particular chart formation, established as a result of certain price movements, is a better tool to use than looking at other indicators in trying to identify a possible trade set up.

Indicators in this sense could be trying to determine the current market’s conditions or state relative to that of a prior period, and from this trying to determine the possibility of a trade.

Let me clarify..

When prices are graphed day after day, traders tend to look at these charts trying to identify possible patterns or trading signals which they will use to somewhat and to a certain extent, try to pre-empt what they think will be the most likely next move the market will make.

For many traders, trying to get into a position before a big move is what they determine to be their “edge”. For other traders though, the allure of being the first one to spot a new trend is far less attractive than just catching the ride overall, or to trade with a given comfort level that at least they are trading in the same direction as the overall trend.

Clearly, the above indicates that traders can look at the very same chart pattern yet react differently.

This in its most fundamental form explains why certain types of traders prefer certain types of patterns over indicators or vice versa.

Truth is that there really is no golden rule here,…. no magic ticket that shows you the clear winner.

Your choice should match your trading style and personality

In real life you’ll find that in the end, the bulk of trading styles uses the same generic principals, however the most likely change or tweak would be the time frame over which they measure these movements.

Scalpers for example will typically look for price action to reveal patterns or breakouts over a short time frame or period, by using “1-minute” charts, where swing traders will in all likelihood use “daily” charts.

What this simply means is a scalper needs to see every single minute’s price action. Did this minute’s price move up or down, relative to the minute before that or not?

The reality is that the charts does not necessarily look any different

The fact remains that your trading style ultimately dictates the time frame over which you will observe the market. Some strategies do not require you to be glued to the screens the entire day, so daily charts will do for those, and even more specifically, some may even require end-of-day charts only and don’t even require you to be updated with live price movements as the market moves.

Anticipating the market or Following it?

The next step is to establish if your trading style requires you to pre-empt the market or not.

By pre-empting I mean that you are trying to be the first on to move, and then hopefully the market catches up.

An example of this would be via the use of Chart Patterns.

Chart patterns are interpreted from visual observations by the one analyzing the charts. The general idea being that if a ton of traders are observing the exact same action unfolding, one may be able to “predict” the upcoming trade direction to some extent.

The problem with this statement relies on other observers to view and interpret the same exact same outcome. You will see later on that this perception can wreak havoc depending on the difference in observation points used.

Furthermore, and possibly more for a different post, but analyzing a security with little other followers (i.e. low liquidity) can also produce false or unreliable signals.

Double Bottom - my-dad-the-traderDouble Bottom - my-dad-the-trader

The aim of using chart patterns are that by observing the price action one aims to establish what the charts are telling you depending on the “picture” it is busy painting in the charts.

Using triangles or wedges as an example is an indication of prices being squeezed in one way or another and that a possible break-out is expected to occur. Such a break-out usually is expected to have some significant momentum behind it as the market gets rid of all that pressure of being squeezed into one place.

Reminder – don’t ever lose sight of the fact that market prices are ultimately just a reflection of whether there are more buyers than sellers at a particular time or vice versa. So in an upward shaping wedge for example, the sellers are trying their best to push the market lower, yet the bulls (buyers) are constantly there to stop the size of their downwards efforts. This tug-of-war continues to exist until the sellers finally give up and the price roars higher as the bulls celebrate their price victory.

Keeping this simple image in mind, its easy to see why scalpers would keep a keen eye on these type of patterns, ever so ready to pull the trigger at the breakout of a wedge to catch the momentary spike as pressure is released.

But would a trend trader react in the same way?

Not necessarily……

A trader looking to catch a big overall momentum move and ride the wave, is far less likely to try and pin point the exact minute the market turned. In fact, most of the strategies used in these cases would rely on indicators rather than patterns.

Moving Average Cross Overs my-dad-the-traderMoving Average Cross Overs my-dad-the-trader

A trend trader is far more interested in the strength of a trend than whether they caught the bottom or the top.

The graph below shows how “late” a trend trader can be to the party, not catching an exact bottom nor top.

One can easily argue that there clearly would have been a better price to enter (and exit) had the trend trader been watching the market more closely. However, by giving the market time to unfold and for the trend to properly take shape though late to the party, the trend trader still stand to make a nice profit from following the change in the trend once indentified and confirmed.

Price Crossing Moving Average my-dad-the-traderPrice Crossing Moving Average my-dad-the-trader

Avoid complex interpretation

Though the main aim of this post was to conclude the basic steps to follow in order to assist you in your decision-making process to determine which optimal patterns or indicators to use, I also wanted to include the ones I will be using most. It does not for one second imply these are the golden rules to follow, all I am to do is to remove some of the noise and point you to ones I have used a thousand times over, and the ones I know works perfectly well for what I intend to teach you here.

I am a firm believer in the fact that the most appropriate strategies to use (especially when starting out) are those where not a lot of individual interpretation is required.

Using chart patterns requires quite a bit of interpretation and drawing a support line at the wrong place, could imply completely different entry or exit prices than those of someone else observing the exact same price action unfolding.

Interpretation-my-dad-the-traderInterpretation-my-dad-the-trader

Choosing the incorrect point to start from, or to connect to, can cause materially different observations and trade decisions.

Why risk it?

There are numerous indicators as an example which leaves far less room for interpretation. Yes, I know this is an understatement of the decision-making process but in general, and as an example, once a 50-day moving average crosses upwards over a downward sloping 200-day moving average, on the whole, chances are that a change in the trend is on the cards.

Similarly, a break of a 55-day high is a clear signal of a possible movement higher without having to interpret the exact point at which to enter, one can now rather spend time looking for a confirmation of this break.

55-day high my-dad-the-trader55-day high my-dad-the-trader

You will no doubt agree that not a lot of interpretation is required to get us to this basic point of departure.

From here of course one can now compound other signals/indicators to measure the relative strength of the trend, the condition of the market (being over sold or over bought), all to support the confirmation of a possible trend change, or alternatively to identify if this is a possible fake-out that requires more time to observe.

What you’ll see when we start talking about options is that certain strategies already have the statistics compounded in your favour. The very same fact that determines pricing of options requires the market makers to estimate that particular instrument’s probability of  exercise. So let them do the work and calculate all the variables and we just come in and use all that to our advantage, structuring suitable trades with the stats in our favor.

Which will we be looking at?

As highlighted on numerous occasions, depending on the type of trader you are, your ability to move between indicators, chart patterns and across various types of markets may be more prominent in some cases than others.

For what I am teaching you though, the truth is that you can afford to take a breather and relax.

A reminder that my ideal trading style covers the following broad areas:

OUR IDEAL TRADING STYLE = LONG TERM POSITIONING + MEDIUM TERM OPPORTUNISIC TRADES + BANKING
REGULAR “SHORT-TERM” SETUPS + OVERLAYED WITH SOME YIELD ENHANCED STRUCTURING

None of these require you to be at the tip of the knives’ edge. You don’t need to be there the minute the market makes a move to jump on
it.

For the most part all the various possible trade setups we will engage in are enough to position you to:

  • Catch Major Trends
  • Monetize interim break-out movements within this
    Major Trend
  • Trade very specific and narrowly defined trade
    set-ups
  • Bank some yield-enhancement trades skewed in favour
    of the trend

Stacking your edges

The golden rule in trading is to protect your capital. It naturally follows then that the most conservative way in which to evaluate a signal to trade is to always maintain a position where that decision is only actioned (i.e. a trade is taken) if it can be confirmed or supported by two other indicators (at minimum one in certain circumstances).

Without the ability to “stack these edges” in our favour we would much rather pass on the opportunity or wait for all to be aligned before
moving.

As an example, ideally, we would want :

  • The market to be in an existing trend
  • Our proposed trade to be skewed in the same direction of this trend (or opposite when it comes to selling options)
  • That the strength of the trend is still strong
  • That the markets momentum still anticipates movement in the same direction
  • The price action supports the view based on where the market is trading at that point, relative to the immediate period preceding
    this possible entry point.

Our tools of choice

For each of the various components of our ideal trading strategy we shall be using different indicators. I am not going to go into detail of each here, but will do so once we physically get trading. For now, my aim is just for you to see the relative few indicators required to get going!

Just to clarify, the below list only summarizes the indicators, and not the instruments we will use to trade once we have identified a possible trade.

As a quick example, for stock trades in particular, we may want to use a “stock replacement strategy” (structured via the use of option) instead of the actual outright purchasing of the stocks. In other words, we simulate the economics of the trade without actually physically having to enter the trade with the underlying physical stocks.

Our goal in this case may be improving (amplify) the return on the expected movement of the stock by committing less capital to the trade and in doing so greatly increasing the expected return on capital used to enter the trade.

Or for currencies, we may even decide to overlay a trade with a hedge structured via the use of zero premium option structures, in which we pre-determine the maximum best and worst case the trade can turn out, irrespective of where the actual underlying price movement goes.

Don’t worry if this does not make sense now, it all will – I promise.

The only reason I mentioned this point is for you as a reminder that trading is not a one-sided coin, in fact it probably closer resembles a coin with 10 sides (if that was even possible).

So here’s our “go-to” list of core indicators.

LONG TERM POSITIONING

  1. Moving Average Cross Overs
  2. Price Crossing Moving Averages
  3. Seasonality indicators

MEDIUM TERM OPPORTUNISIC TRADES

  1. Donchian Channels
  2. Swing Days
  3. Seasonality indicators

BANKING REGULAR “SHORT-TERM” SETUPS

  1. Inside Days

OVERLAYED WITH SOME YIELD ENHANCED STRUCTURING

  1. Deep ITM covered calls or puts
  2. Getting “paid while you wait” entry and exit
    strategies
  3. Selling low delta strangles

A surprisingly short list right?

A reminder that this list only covers the basics, but those basics are by far enough to get you started. The plus side of all this of course is that by only having to master a few indicators you can see how much easier the decision to trade can possible be.

Happy trading!

The post How To Choose The Right Indicators appeared first on My Dad The Trader.

Source:: How To Choose The Right Indicators




US Goods Trade Balance Widens in December

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OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and provides and is the issuer of the products and/or services on this website. It’s important for you to consider the current Financial Service Guide (FSG), Product Disclosure Statement (‘PDS’), Account Terms and any other relevant OANDA documents before making any financial investment decisions. These documents can be found here.

OANDA Japan Co., Ltd. First Type I Financial Instruments Business Director of the Kanto Local Financial Bureau (Kin-sho) No. 2137 Institute Financial Futures Association subscriber number 1571.

US Trade Representative Says US-China Issues Won’t Be Resolved Through Just Negotiation

OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. No: 0325821. Please refer to the NFA’s FOREX INVESTOR ALERT where appropriate.

OANDA (Canada) Corporation ULC accounts are available to anyone with a Canadian bank account. OANDA (Canada) Corporation ULC is regulated by the Investment Industry Regulatory Organization of Canada (IIROC), which includes IIROC’s online advisor check database (IIROC AdvisorReport), and customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.

OANDA Europe Limited is a company registered in England number 7110087 limited by shares with its registered office at Tower 42, Floor 9a, 25 Old Broad St, London EC2N 1HQ and is authorised and regulated by the Financial Conduct Authority, No: 542574.

OANDA Asia Pacific Pte Ltd (Co. Reg. No 200704926K) holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore and is also licenced by the International Enterprise Singapore.

OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and provides and is the issuer of the products and/or services on this website. It’s important for you to consider the current Financial Service Guide (FSG), Product Disclosure Statement (‘PDS’), Account Terms and any other relevant OANDA documents before making any financial investment decisions. These documents can be found here.

OANDA Japan Co., Ltd. First Type I Financial Instruments Business Director of the Kanto Local Financial Bureau (Kin-sho) No. 2137 Institute Financial Futures Association subscriber number 1571.

EIA Weekly Crude Oil Inventories fell 8.6M barrels v an expected build of 2.8M barrels

Summary of Weekly Petroleum Data for the week ending February 22, 2019
U.S. crude oil refinery inputs averaged 15.9 million barrels per day during the week ending February 22, 2019, which was 179,000 barrels per day more than the previous week’s average. Refineries operated at 87.1% of their operable capacity last week. Gasoline production increased last week, averaging 9.6 million barrels per day. Distillate fuel production increased last week, averaging 4.8 million barrels per day.

U.S. crude oil imports averaged 5.9 million barrels per day last week, down by 1,605,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.7 million barrels per day, 10.9% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 473,000 barrels per day, and distillate fuel imports averaged 331,000 barrels per day.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 8.6 million barrels from the previous week. At 445.9 million barrels, U.S. crude oil inventories are about 3% above the five year average for this time of year. Total motor gasoline inventories decreased by 1.9 million barrels last week and are about 3% above the five year average for this time of year. Finished gasoline and blending components inventories both decreased last week. Distillate fuel inventories decreased by 0.3 million barrels last week and are about 2% below the five year average for this time of year. Propane/propylene inventories decreased by 1.2 million barrels last
week and are about 11% above the five year average for this time of year. Total commercial petroleum inventories decreased last week by 17.9 million barrels last week.

Total products supplied over the last four-week period averaged 20.8 million barrels per day, up by 2.1% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.9 million barrels per day, down by 1.5% from the same period last year. Distillate fuel product supplied averaged 4.2 million barrels per day over the past four weeks, up by 4.5% from the same period last year. Jet fuel product supplied was up 2.5% compared with the same four-week period last year.

Ed Moya

With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏

Ed Moya

Ed Moya