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Trading Tactics to Add to Your Risk Management Knowledge

by with No Comment Behavioral SentimentFeatured HighlightsRisk Analysis

Trading Tactics to Add to Your Risk Management Knowledge

Retail traders seeking quick speculative positions are not the masters of the financial world. Institutions which day traders are hoping to reflect are the real shakers of the markets. Understanding your actual place in the world of trading is crucial, accepting this point and putting ego to the side will create a better grasp of behavioral sentiment as you interpret combinations of fundamentals and technical perceptions and merge them into your risk taking.

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Making your decisions with the acknowledgement of your place in the trading world is important. Your 10,000.00, 50,000.00 and 100,000.00 USD value based positions are very small fish in a large ocean. Your trades are very unlikely to affect market direction in any meaningful manner. The more leverage you use makes your available ‘margin’ prone to failure.

Risk analysis is vital for day traders, guarding you money should be a fundamental aspect of your tactical decisions. Deep pockets are not luxuries most day traders have.

If you happen to have a solid amount of money to speculate with it will assist you, but you will still need to practice solid risk taking strategies.

Plenty of rich folks have lost all of their money trading, that isn’t written to make you feel better, it is written as a warning and highlights that speculating is dangerous when not done with a solid plan of action. Once a trade is placed your work than immediately doubles via responsibility, because you have ‘skin in the game’ and need to manage your emotions and thinking as the markets move.

Metallgesellschaft and Barings Bank are two prime examples of two institutional traders who made vital mistakes with risk management and lost everything in the 1990’s. Protecting cash reserves are vital for all. Metallgesellschaft and Barings did not supervise their traders and ‘hoped’ that all things would work out in the end, because they had the false notion institutionally that their capacity to hold onto positions that were not profitable would eventually turn into positive results. Their losing trades caused the destruction of their enterprises.

Most speculators by nature are optimists. After all day traders are gambling on the movement of assets they believe they have a correct perspective regarding future direction of value. In order to wager a trader needs to feel confident regarding their outlook, otherwise they would not pursue currency trading. The same can be said for equities and indices, commodities and all other financial assets. False hope can destroy the efforts of all traders and they must be alert to perspectives which can lead to detrimental results as they trade.

Too much leverage, no real insights about direction, and trading based on ‘noise’ that influences and causes you to make unwise decisions are dangers. It might be boring to constantly be told to be careful, a bit like a parent warning you when you were little to act in a certain way. Good risk management while day trading is vital for surviving and finding success.

Do not be stubborn. In trading no matter if it is Forex, CFDs with equities, indices, commodities or cryptocurrencies you should not ‘marry’ your position blindly. If your trading position begins to show signs of potentially failing and you have concluded you are wrong – end the trade asap.

However, at the same time do not make your decisions based on emotions which may create whipsaw reactions regarding your choices. Having solid goals before going into a trade will help you eliminate emotional stress.

Have price targets and a strategy for getting in and out of trades. If the trade is going in your direction, then protect your profits by either cashing out of the trade, or raising your stop loss to a place that you are actually still going to make money. Some trading platforms may allow you to raise your stop losses – this is called a ‘trailing stop’. If you are lucky enough to catch a trend at the correct time and it is being sustained, using a ‘trailing stop’ is a solid risk management tactic and can protect your profits.

If the trend in your position starts to reverse against you, do not cancel your ‘trailing stop’ because you think the reversal is a momentary cycle. Trading floors are littered by people who had substantial gains and then watched them vanish, all because they thought the market would reverse in their chosen direction again. Folks dream about owning a castle when all they need is a comfortable home. Cancelling stop loss orders is a sure way to the poor house.

Immodest ambitions can ruin your trades when you become stubborn, unrealistic and emotional. Make sure you stay ‘grounded’ and are pursuing trades because you believe in them, and not because you are looking for price action to fill up a boring day with wagers than make no sense.

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AMT Top Ten Miscellaneous Considerations for this Friday

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Considerations for this Friday

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AMT Top Ten Miscellaneous Considerations 1st September 2023

10. Travel Alert: Surprise visit to Jeddah, Saudi Arabia for Israeli bound passenger jet.

9. Book: Machiavelli A Biography by Miles J. Unger.

8. Coup d’Etat: Gabon added to the growing African list.

7. Bitcoin: Rollercoaster prices in BTC/USD past 48 hours. Up 2,000.00, down 2,000.00.

6. China: Weakness in Yuan is concerning governments and financial institutions.

5. Market Shifts: U.S Treasury yields have decreased the past week.

4. USD and Gold: Greenback stubborn with slight weakness emerging, Gold steady.

3. U.S Data: Jobs numbers may rattle markets today and expose underlying outlooks.

2. Labor Day: Volumes could be light today with long U.S holiday weekend coming.

1. Trading Tip: Cautious trading likely today, expect volatility to increase next week.

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Plenty of Data from the U.S and China Should be Anticipated

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Plenty of Data from the U.S and China Should be Anticipated

As the last week of August trading gets ready to begin, day traders may be glad to put the past month behind. The BRICS Summit and Jackson Hole Symposium delivered soundbites as promised last week, but there were few surprises. Forex, equities and commodities have been supplying a bumpy road for a while and may continue to do so.

Behavioral sentiment in the broad markets remains fragile, this as short-term U.S Treasuries continue to allure institutional players looking for solid returns. Some well known market players continue to issue cautious words regarding U.S equities, but the three major indices are still near mid-term highs. We have yet to experience a blood curdling selloff in the U.S equity markets. This maybe producing choppy results for some day traders pursuing CFDs while betting against higher moves.

Which brings up the question, which quantified analysis do you want to act upon? While the major U.S indices are up, a lot of the market action in these indices are driven by the ‘top performers’ which have ‘floated the boat’ while many other stocks have not performed handsomely.

Retail traders who are wagering on daily fluctuations need to understand there is a vast difference between short-term speculative positions and long-term investments. Hence the reason day traders are reminded to only bet money on what can be lost without a great deal of discomfort. Speculation should only be done with a very limited amount of cash, because day trading never offers guaranteed profits.

The next handful of days will deliver plenty of important data. The question is how financial institutions will react as they weigh the coming results against their own sentiment and outlooks regarding mid-term interest rates via the U.S Federal Reserve’s rhetoric. Market nervousness remains on edge as more tranquil days are certainly sought via risk adverse financial decisions.

The cryptocurrency market should be watched carefully by participants within its volatile assets. Bitcoin continues to trade near the 26,000.00 level and this is considered important support by many. And Binance coin has failed to inspire a sustained upwards reversal as Binance exchange remains under legal and regulatory shadows.

Traders are also advised to note the U.S will be on holiday on the 4th of September, the coming long holiday weekend could spark rather dynamic market action Thursday and Friday as financial institutions trade in advance of Labor Day.

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AUD/USD One Year Chart as of 27th August 2023

Monday, 28th of August, Australia Retail Sales – the numbers will cause a reaction in the AUD/USD and the result is expected to be slightly better than last month’s outcome. The AUD/USD is near important long-term lows.

Tuesday, 29th of August, U.S Consumer Confidence via The Conference Board – the anticipated result is lower than last month’s reading. However, the past three months have done better than expected, which may put some analysts on edge before the publication.

Wednesday, 30th of August, Germany Preliminary Consumer Price Index – the inflation numbers are expected to match last month’s gain of 0.3%. The EUR/USD will react to the outcome with momentary volatility. German economic data has been a concern in the European Union for a handful of months.

Wednesday, 30th of August, U.S Preliminary Gross Domestic Product and GDP Price Index – the numbers from the GDP reports will be watched by most financial institutions. Last month’s numbers surprised traders, this as growth remained quietly stubborn and inflation crept higher. The USD has been a powerhouse against the GBP and EUR recently. If these GDP reports surprise to the upside again, this could spark more buying of U.S Treasuries which could create additional strength in the USD.

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USD/CNY One Year Chart as of 27th August 2023

Thursday, 31st of August, China Manufacturing PMI – the results from the Purchasing Managers Index from China since April have been lackluster and showed weak export demand globally. Economic data from China has sparked concerns from international investors, and the USD/CNY has certainly received attention as it has risen steadily and is now challenging highs from late October and early November 2022.

Thursday, 31st of August, U.S Core PCE Price Index – the Personal Consumption Expenditures data is expected to match last month’s gain. This inflation data, and the GDP Price Index numbers from the day before will certainly get a reaction from financial institutions which would prefer to see no surprises higher.

Friday, 1st of September, U.S Non-Farm Employment Change and Average Hourly Earnings – as always these reports could shake market sentiment instantly. However it is the wages data which will likely be a focal point for investors. If wages can come under last month’s gain of 0.4%, this would be welcomed by investors and they may go into the long U.S holiday weekend a bit more calm regarding the Federal Reserve.

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AMT Top Ten Miscellaneous Considerations for this Friday

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Considerations for this Friday

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AMT Top Ten Miscellaneous Considerations 25th August 2023

10. Behavioral Sentiment: Risk adverse conditions heightened again.

9. Book: Pioneering Portfolio Management by David F. Swenson.

8. Rugby: All Blacks vs. Springboks tonight at Twickenham.

7. Federal Reserve: Jackson Hole Symposium and Speeches.

6. Travel Tips: Stay away from Russian corporate jets with Wagner members flying aboard.

5. South Africa: What’s next after BRICS Summit, an end to loadshedding?

4. Cryptocurrencies: Bitcoin, Binance coin remain under pressure.

3. Germany data: Coming ifo Business Climate and GDP data.

2. U.S data: Yesterday’s mixed Durable Goods numbers.

1. USD: Another burst of strength yesterday.

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Dog Days of Summer and a Return of Calm as Storms Threaten

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Dog Days of Summer and a Return of Calm as Storms Threaten

With essentially two full weeks of trading until the end of August and the unofficial end of summer in sight, perhaps this week may be a good time for retail traders to be observers if they do not have the stomach for potentially noisy speeches and markets.

However, speculators who can block out media hyperbole and microphone soundbites from folks standing on podiums may find conditions rather attractive. As always outlook depends on perspective, time frames and managing risk. Behavioral sentiment has been rather chaotic the past month and some traders may suspect we are approaching the end of the loud spectacles of nervous drama in the markets.

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USD/ZAR One Year Chart as of 20th August 2023

The economic data this coming week should prove to be a rather mild schedule, but outside influences will certainly get publicity and get fanfare from talking heads who want 15 minutes of your attention. The BRICS Summit will get underway in Johannesburg, South Africa officially on the 22nd. Another big conference later this week will be the U.S Federal Reserve’s Jackson Hole Symposium. Both events will produce plenty of conversations about inflation, economic stability and a more cohesive global cooperation monetarily. This will also create many raised eyebrows among traders who are skeptical about these type of events.

While leaders of China, Russia, India, Brasil and South Africa get together in Johannesburg, it is likely we will hear talk about potential BRICS expansion and the pursuit of a new unified currency which doesn’t rely upon the USD. However, in the background there is likely to be plenty of distraction because of China’s faltering economic data and Russia’s Ruble which has been impacted severely in the past month. Plenty of large rugs will be needed to hide the dust which threatens to make this BRICS event rather memorable.

Add the ongoing saga of Niger and the absence of a political solution for the world’s fourth largest producer of uranium as a potential flash point standing on the side of the stage waiting to make an appearance regarding Africa news. Perhaps it is too cynical to wonder if coordinated military action within Niger will await the end of the BRICS Summit. This so China and Russia are not given an opportunity on the ‘world stage’ as a united voice to offer their opinions regarding an intervention.

The Jackson Hole get together of global central bankers from the Fed, BoE, ECB, BoJ and others will certainly grab headlines late this week, but the script is mostly known regarding the rhetoric to come from the Federal Reserve’s annual event. Forex may move based on comments from the central bank chiefs as they speak towards the end of this week, but it is unlikely anything surprising is going to be heard. U.S Treasuries will remain a topic because of the ability to lock in a solid return over the mid-term compared to betting on the outcomes of the stock market, but this scenario has been playing out the past month. Investors should prepare for a long line of speeches regarding economic outlooks from central bank officials all week. Day traders should also remember that the chatter starts to be ‘tuned out’ as the speeches grow longer.

Traders looking for other outside influences may want to look at the cryptocurrency market where major assets have shown signs of struggling. Bitcoin and Binance coin could remain in the headlines for all the wrong reasons, if their prices continue to challenge important support levels and become more vulnerable.

Monday, 21st August, China Prime Rates – economic data from the nation has caused concerns that real estate problems are spilling over into the domestic consumer market. The interest rates China lends money to consumers is expected to be lowered to try and spark spending. Recent economic reports from China have been bad, and readers who believe this is merely ‘Western’ bias being reported should be careful to look for other sources to confirm data. Investment within the second biggest economy of the world has become tentative, because there is a fear the ‘official’ China numbers may be worse than those being reported.

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USD/JPY Six Months Chart as of 20th August 2023

Tuesday, 22nd August, Japan Consumer Price Index – the Bank of Japan report is expected to show a slight decline to the inflation numbers. Last month’s outcome of 3.0% is expected to lower and produce a 2.9% result. The USD/JPY could react momentarily to the outcome, the currency pair is near highs it hasn’t touched since November 2022.

Tuesday, 22nd August, U.S Existing Home Sales – the data is expected to show a slight decline of purchases. Mortgage prices continue to climb in the U.S and homeowners are less likely to desire taking on a new higher mortgage, this if they already have a lower mortgage locked in from a few years ago within a dwelling they already live.

Wednesday, 23rd August, Flash European Manufacturing and Services PMI – the reports will come from the E.U and U.K. The German and British outcomes will stir the Forex markets. The manufacturing data from Germany and Britain are forecast to be slightly negative.

Wednesday, 23rd of August, U.S Flash Manufacturing and Services PMI – the U.S reports are expected to show a decline in the manufacturing sector. If a negative result materializes, this could actually spark a selloff of the USD – if the financial markets have returned to calm waters by the middle of this week. Weaker numbers might be interpreted as another reason for the U.S Federal Reserve to remain neutral and why they should consider becoming dovish over the mid-term.

Thursday, 24th of August, U.S Durable Goods Orders – the core and broad numbers are anticipated to show declines. If the Durable Goods Orders numbers are worse than expected this could spark more USD selling, particularly if financial institutions are already calm and feel the data is another step to ‘lowering’ the Fed’s hawkish interest rate rhetoric. However, for the USD to weaken the markets will likely have needed to be tranquil beforehand, without major surprises having happened earlier in the week that may have escalated nervous behavioral sentiment in the broad markets.

Friday, 25th of August, Germany Business Climate and GDP – the ifo Business Climate report comes from a composite of manufacturers, wholesalers, and other enterprises and is expected to be lower than last month’s outcome. The Gross Domestic Product results are anticipated to show no changes, which would mean Germany’s economy remains in the doldrums and is flirting with recessionary pressures.

Friday, 25th of August, U.S University of Michigan Consumer Sentiment – this revised reading is expected to show U.S consumers remain steady without significant changes compared to the previous outcome.

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Alert: Important Support in View for Binance Coin Traders

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Alert: Important Support in View for Binance Coin Traders

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BNB/USD One Year Chart as of 17th August 2023

Important support for BNB/USD is now being battled. The price of Binance coin is near a key inflection value of 230.00 USD. The digital asset world including Bitcoin and other cryptocurrencies has taken on stronger selling recently. Legal issues surrounding Binance have not gone away, nor will they. If Binance starts to show stronger price velocity lower it could spook the broad cryptocurrency market in a large manner. Binance is still the biggest crypto exchange in the world, even as it has come under the investigative pressures of the U.S and some European nations.

Traders should pay attention to ‘stablecoins’ as a barometer of behavioral sentiment in the cryptocurrency landscape. Tether should be watched closely. If USDT sustains value below the 1.00000 USD level for more than a couple of days this would be a negative signal that ‘players’ in the cryptocurrency world are getting more nervous.

Bitcoin is also seeing steady selling early this morning and the price of BTC/USD is near 28,550.00 as of this writing. If BTC/USD were to break below the 28,000.00 this could also add to fear and noise in the cryptocurrency world.

The next seemingly important level for BNB/USD below is around the 225.00 USD mark if tested, if this level proved vulnerable and trading momentum continued downward stronger selling could develop if panic erupts surrounding Binance coin. Traders should be very careful in the cryptocurrency trading environment right now. Legal shadows hovering over Binance have existed for a long-time, and if selling pressure were to mount and values are suddenly tested from June of last year when the 200.00 BNB/USD level was last tested (this as FTX collapsed) this would clearly not be a good signal.

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Day and Institutional Traders Suffering Nervous Conditions

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Day and Institutional Traders Suffering Nervous Conditions

Market price action has caused quite a few interesting interpretations of the prices being demonstrated in Forex, gold and equity markets recently. The USD/INR is now at record heights, the USD/ZAR is back above 19.00000 and the USD/BRL is again near the 5.0000 ratio.

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USD/INR One Month Chart as of 16th August 2023

While Forex traders around the world look for clues as to why their local currencies are suffering and are likely blaming domestic policy from their own governments and central banks, they should remember the larger global financial markets tend to move in a unified sphere. Domestic concerns are a real cause for market action often, but when global sentiment becomes nervous the larger force of institutional financial houses shake the ground.

Correlations exists worldwide because of behavioral sentiment ruling outlooks over the near, mid and long-term in the marketplace. While we like to put our faith in the financial markets as an all knowing entity, this is far from the truth. Humans who react to nervous conditions and also have bias are the ones still making decisions in financial houses, they are the ones giving orders to their programmers via their trading software which is largely geared to follow perceived trends these institutions deem important.

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USD/ZAR One Month Chart as of 16th August 2023

Most financial institutions are not speculative in nature, day and even longer term retail traders should remember this point. Most institutions are trying very hard not to ‘speculate’, they are simply positioning per their outlooks based on their understanding of the trading landscape. Whispers of potential downgrades from U.S rating agencies on larger corporate banks yesterday sent a shudder through the broad markets, economic data and rumors swirling about China are not helping either. The current volatility in the broad markets is not welcomed warmly by financial institutions.

When price velocity accelerates and volatility flourishes in highly charged trading situations, this suggests financial institutions are nervous and not able to find comfortable positions. Conflicting ‘opposite’ positions from other larger players are causing market chaos in Forex, equities and other financial assets. There is a herd mentality in trading and when the herd doesn’t march in an unified direction chaos happens.

Most institutional players want calm, they want tranquil trading conditions so they can manage their clients’ money quietly. Bonds, equities and indices, real estate holdings via REITs, and gold make up a large part of their holdings.

Most U.S pension funds for instance have mandates to be positioned into a large amount of quiet investment vehicles which do not trade with wild price ranges. They seek steady returns from their institutional investors that can be counted on in a quantitative manner to demonstrate to their clients.

Large financial institutions are allowed sometimes to trade 2 to 4% of their holdings in different categories of speculative investments – such as start-ups, allocate cash to hedge funds they trust, small cap stocks they might know about, etc., depending on the exact mandates agreed upon.

Yes, hedge fund managers like Bill Ackman and investor Michael Burry get a lot of attention when they bet against the markets, but believe it or not they are small fish in a large ocean a lot of the time. They are good at what they do, but their speculative positions cannot be mirrored by most financial institutions or small day traders.

Ackman and Burry may be trading billions, but remember institutional financial companies including pension funds when combined total approximately 80% of market cap. Institutional trading decisions can cause massive waves in the financial world, but they actually seek calm seas.

When markets become volatile this often means institutional traders are not comfortable and their behavioral sentiment is fragile. Forex for example is often affected by financial institutions moving money as they handle export and import transactions for companies, but transactions are often done to buy and sell equities too. The Bank of International Settlements estimated an average around 7.5 trillion USD in value was traded in Forex everyday in 2022.

Day traders should not take it personally when the markets move against them, instead they should look to try and mirror the sentiment of larger financial movers. However, knowing and timing financial institution decisions is elusive because short term compared to long term considerations are often different.

Most traders are merely betting on the price action the large institutional funds are undertaking via the direction of the marketplace. Day trading for most retail speculators remains dangerous. A solid fundamental understanding of market ‘forces’ can allow smaller traders to feel more comfortable.

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Nervous Trading Results End of Last Week Serve as Caution

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Nervous Trading Results End of Last Week Serve as Caution

The end of last week saw mixed U.S inflation data and lingering nervous sentiment regarding outlooks about U.S Treasuries, create rather choppy conditions for day traders. Economic data this week should be more calm because there appears to be less significant risk events on the horizon. Financial institutions finished Friday within a USD buying mode, a bearish gold trend, and U.S stock indices declining – highlighting fragile conditions remain evident among larger market players.

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NZD/USD Six Months Chart as of 13th August 2023

Monday, 14th of August, New Zealand Business Services Index – this report may turn out to be the highlight of the day for some traders. The NZD/USD which will start tomorrow near values last seen in the middle of November of 2022, may find interested speculators glancing at the report. But the NZD is moving largely under a USD centric driven market, like most of the broad Forex market. Mid and long-term technical support levels are certainly in focus, and they have proven vulnerable recently as the NZD/USD trends lower.

Tuesday, 15th of August, China Industrial Production – economic data from the nation has been troubling regarding deflation. However, traders who lean towards a ‘Western’ bias should remember to keep their perspectives realistic, because weaker China economic results mean the global economy is struggling too. A slight decline in Industrial Production is expected. Weaker than expected numbers from China could indicate ‘soft’ demand via export partners.

As an aside financial institutions will keep their eyes on the China real estate market too, this as whispers about ‘Country Garden Services Holdings’ funding problems remain a talking point and potentially escalate. Values of properties are suffering from declines too in China and this is hurting the domestic economy.

Tuesday, 15th of August, U.S Retail Sales – a slight gain in spending by U.S consumers is expected to be seen. If the number can meet the anticipated gain of 0.4% the result may not spark too much volatility. If for some reason a higher outcome is produced, this could spark some concerns about U.S Federal Reserve rhetoric. Although it may seem counter-intuitive to some traders, a weaker number could help ignite some bearish selling of the USD.

Wednesday, 16th of August, New Zealand Official Bank Rate – the interest rate policy from the RBNZ is expected to remain in place. Although it should be noted both New Zealand and Australia have almost made it a habit to surprise investors over the past few months.

Wednesday, 16th of August, U.S FOMC Meeting Minutes – the report will be studied for clues regarding outlook. However, the Fed has a well-practiced ability to maintain tight lips and not disclose too much internal thinking, particularly when it comes to disagreement regarding policy – which is seemingly escalating in the Federal Reserve.

Thursday, 17th of August, U.S Weekly Unemployment Claims and Philly Fed Manufacturing PMI – in what has likely been a quiet week of data leading up to these reports, some analysts may try to get the attention of their clients regarding these results to create ‘noise’, but unless there is a strong miss the data is likely to simply be digested quietly into the broad marketplace.

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GBP/USD One Week Chart as of 13th August 2023

Friday, 18th of August, U.K Retail Sales – last week’s better than expected GDP numbers from Britain will make the outcome of this consumer data rather intriguing. The GBP/USD could find some impetus from the results. The estimate is calling for a decline of minus -0.4% compared to last month’s gain of 0.7%. The GBP/USD which went into last weekend near lows will likely find plenty of attentive traders as this new week comes to a close.

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Trading Tips: Perspectives and Gaining Behavioral Sentiment

by with No Comment Behavioral SentimentFeatured HighlightsFintasio

Trading Tips: Perspectives and Gaining Behavioral Sentiment

Data is everywhere. AI has helped increase the level of information accessible to day traders. However, the quality of the information and its insights remains questionable – suspect. Systems relying on technical, fundamentals, algos, and the magic word ‘quants’ are tools which can help a person make their decisions. Unfortunately they do not guarantee you are going to make money.

Profitable results in trading remain difficult to attain. Day traders – speculators – continue to look for a golden goose. Something or someone who can deliver profits on a steady basis remains hard to find. This article is to help you gain perspective, it is a trading tip. There are no secrets of the temple coming, but it may be time you stop looking for secrets which do not exist.

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Nasdaq Composite Six Months Chart as of 12th August 2023

Trying to look forward and gaining genuine insights remains tough. Technical charts, fundamentals, opinions from experts all remain problematic to actually use in real time. The markets in a sense are alive, the environment is constantly changing. The moment information is shared it becomes old. Time and price action move fast. You can slow down the ‘game of trading’ by using different perspectives and practicing new ways to consider the dynamic values that are in flux that you are witnessing.

Behavioral sentiment – insights – regarding what the largest traders are going to do in the short, mid and long-term would be relevant. Understanding the asset you want to trade is important, understanding the inclination of the marketplace, price action – velocity – and timeframes of potential volatility is crucial. A key component would be to find a way to time a trade knowing what direction an asset is going to move.

This remains elusive for nearly all traders.

Again, this particular article is not going to solve this problem for you. It is to acknowledge the problem exists. We can have all the data in the world, past performances statistics, know what the markets are predicted to do, but the ‘game’ still needs to be played. Over 90% of day traders loss their money and eventually give up. Traders wagering on the markets need a way to put the odds of success in their favor. Folks may wonder why angrymetatraders.com writes about fantasy sports within its culture/ sports topics, it is because there is a correlation to sports and financial markets for speculators.

Day traders in many ways are not really participating in the marketplace, they are betting on the outcome of the results. The tiny trades of the majority of retail speculators are not affecting price action, sometimes the trades aren’t even being put into the real market – they are being traded virtually. Read about the topic B book trading within our articles if you have time.

Like sports gamblers who are not playing in the game, speculators are using their perceived knowledge of financial assets and past results to bet on future outcomes. A key ingredient to having successful trades that work in the financial markets is to have solid knowledge and a sense of what can develop as assets trade on a particular day. There are complexities within each sector, like every game being played in a variety of sports.

Gamblers not only bet on the outcome of the game, they also bet on the outcome of different components within the ‘contest’ – player stats, halftime scores, turnovers. Traders can do the same thing by speculating on an asset over different timeframes, and they can sometimes trade what are known as ‘options’ too, this to hedge on their positions or sometimes simply wager on their belief that a Forex pair or a share (stock) price is going to move in different ways during a certain period of time.

Understanding behavioral sentiment is important. The meshing of technical interpretation with fundamental data, and the way it affects perception and the tendencies of potential decisions to be made regarding outcomes is not easy. However, grasping the outlook of other financial market participants can improve a day traders results, if they put effort into perspectives and apply this to their risk taking tactics.

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Anxiety and Surprising U.S Data for Day Traders to Consider

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Anxiety and Surprising U.S Data for Day Traders to Consider

Global central banks stayed in their anticipated lanes last week as the Fed and ECB raised their key lending rates. The BoJ has admitted it is allowing its yield curve to increase, meaning the Japan government is cutting back on purchases of Japanese bonds. Forex produced anxiety and choppy results for day traders.

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Gold 6 Months Chart as of 30 July 2023

Economic data from the U.S last week provided a strong Gross Domestic Product result on Thursday, and followed with weaker than expected Personal Consumption Expenditures and Personal Income statistics before going into the weekend. Meaning the U.S economy appears to be surprisingly solid, while inflation pressures do indicate they are in decline. The Forex market turned volatile on Thursday and Friday, gold which traded at nearly 1980.00 USD on Thursday went into the weekend near 1959.00.

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VIX Index 1 Year Chart as of 30 July 2023

Stock markets in the U.S via the major indices continue to incrementally rise and folks waiting for a big sustained selloff are having their patience tested. Perceived volatility in U.S markets is very low and the VIX (Volatility Index) indicates many investors are not taking the time to hedge with options because their confidence is remarkably high. A cautious reminder for traders, one bad day could change all of the optimistic sentiment.

In the cryptocurrency world, folks should continue to keep their eyes on the Binance exchange and its Binance coin. Many digital assets seem to be suspiciously close to important support levels as this week begins and appear vulnerable.

Monday, 31st of July, China Manufacturing PMI – while U.S data surprisingly improves, China has not begun to show signs of a positive turnaround quite yet, and this reading is expected to be below last month’s outcome. China data is a solid barometer of global economic health and traders should give these results proper attention.

Monday, 31st of July, E.U Consumer Price Index Flash Estimates – the European CPI numbers are expected to come in slightly below the previous month’s reading. If for some reason these inflation numbers are higher than expected, this could cause some chaos briefly for the EUR/USD. A weaker number however offers no sound wagering basis for short-term day traders either. Behavioral sentiment appears to be ruling the EUR/USD landscape for the time being, and technical levels should be watched.

Tuesday, 1st of August, Australia Reserve Bank Cash Rate – the RBA is expected to follow in the footsteps of the Fed and ECB and raise its lending rate by 0.25%.

Tuesday, 1st of August, E.U Manufacturing PMI – Germany and France are anticipated to produce similar results to last month’s outcomes. Recessionary pressures are a concern in the E.U and better than expected numbers would be welcomed, but this may prove difficult to demonstrate as economic conditions remain challenging.

Tuesday, 1st of August, U.S ISM Manufacturing PMI – the results from the manufacturing sector in the States should be watched. A slight improvement is expected, but the reading is not expected to produce a wildly optimistic result. An outcome which slightly beats expectations, but is not too strong might make the USD slightly weaker. Global investment institutions are likely hoping for any signs that the Federal Reserve will have to become less aggressive. A lackluster to ‘fair’ ISM Manufacturing PMI result could be evidence larger Forex traders want to see if they are aiming for bearish momentum in the USD.

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NZD/USD 3 Months Chart as of 30 July 2023

Wednesday, 2nd of August, New Zealand Employment Change – the jobs statistics are expected to show slightly weaker results from the nation. The NZD/USD remains within the lower elements of its long-term price range. There are many NZD/USD bullish traders waiting for a sustained reversal higher, but it is unlikely to be produced from these New Zealand jobs numbers.

Thursday, 3rd of August, U.K BoE Monetary Policy Summary and Official Bank Rate – the Bank of England remains in a difficult spot and it will likely raise interest rates by another 0.25%. Criticism of the Bank of England has been loud in Britain, but the BoE likely feels it has to remain in line with the Fed and ECB. Recessionary pressures continue in the U.K and inflation remains problematic. Concerns will be heard regarding property mortgages for home owners if the BoE hikes. The GBP/USD will certainly move depending on the rhetoric from the Monetary Policy Summary and talking points delivered by BoE Governor Andrew Bailey.

Friday, 4th of August, U.S Non-Farm Employment Change and Average Hourly Earnings – the jobs data parade will climax at the end of the week, this after starting on Wednesday via the ADP jobs numbers. Investors will watch the Non-Farm Employment Change data carefully and correlate them to the better than expected GDP results from the 27th of July. The wages data from the Average Hourly Earnings is expected to come in with a slight decrease. A weaker inflation result from the wages statistics could cause additional softness in the USD. However, recent data from the U.S has been hard to predict correctly, and day traders may want to sit on the sidelines until all the jobs numbers are digested.

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USD/INR: Consolidation Might Come to an Abrupt Conclusion

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

USD/INR: Consolidation Might Come to an Abrupt Conclusion

The USD/INR is trading near the 81.9750 ratio as of this writing and its price action since the 13th of July has produced a tight price range. On the 12th of July the USD/INR was trading around the 82.3000 region, this after being able to incrementally decline when a high of nearly 82.7900 was reached on the 6th of July.

Prior to the apex value of July, the USD/INR had traded in a rather consolidated mode from the middle of June until the first few days of July, essentially within a price realm the currency pair now lingers. Speculators must constantly fight the slightest of reversals if they are using too much leverage, but the USD/INR over the mid-term has produced interesting behavioral sentiment and this can be seen on technical charts.

While day traders may believe the current price ratios will hold and the potential interest rate hike from the U.S Federal Reserve has been digested into the USD/INR for this coming Wednesday, they might want to reconsider their thinking. No, the world is not coming to an end, Forex has dealt with U.S central bank decisions before and experienced traders understand the sudden potential of the USD/INR changing direction. The rather tight price range of the USD/INR could vanish in the coming days if the Federal Reserve begins to change their tone within the FOMC Statements.

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USD/INR One Month Chart as of 24th July 2023

U.S Federal Reserve is Likely to Raise the Federal Funds Rate but Perhaps Shouldn’t

The USD/INR may not get hit too hard when the U.S Federal Reserve delivers the anticipated 0.25% addition to the Federal Funds Rate. However, the FOMC Statement which talks about the Fed’s outlook might cause a change to what have been calm seas recently in the USD/INR. Recent U.S economic data has been rather troubling, but inflation does actually seem to be creeping lower. The Fed has been pretty adamant in their recent ‘whispering’ about raising interest rates in July, and the potential of raising again later this year.

Time for the U.S Federal Reserve to Start Sounding Dovish

Yet, recent data suggests the Fed should likely not even raise rates on the 26th of July and continue its pause. But having expressed plenty of verbiage on the subject, the Fed may not want to surprise financial institutions and may have to raise, even if they do not really have to this week. And here is where it gets interesting – the FOMC Statement may have to express this notion of becoming more dovish. Think of this potential hike to the Federal Funds Rate this week as the last dose of medicine for a patient who already feels better, the doctor (the Fed) is insisting that to make sure the ‘sick’ is cured another teaspoon consisting of an interest rate hike is necessary.

If the FOMC Statement sounds more dovish than expected the USD/INR might start to see selling ignite and a downturn generate. There are no guarantees and certainly the Fed’s actions this coming Wednesday are not known. Yet, if the Fed hints that it will not raise interest rates over the mid-term and wants to see if inflation continues to lower that it may consider the potential of no more hikes, the USD will start to get weaker across the board. In other words, this last dose of medicine from the Fed may give them the feeling to tell the patient (U.S economy) that they no longer need to visit the doctor’s office for a while.

Other central banks are watching too. Inflation in Europe and elsewhere remains high. The complications of weaker domestic currencies against the USD have hit many economies including India where inflation has been rather strong. If the Fed can now start to become less aggressive, the effect will be quick and start helping the USD/INR trade lower if healthy economic mechanics allow this to happen.

Support levels for the USD/INR near 81.8000 to 81.7500 should be watched, if these levels begin to see challenges and sustained prices remain nearby, the USD/INR may be signaling that another downturn is about to happen. If the U.S Fed delivers a cautious, but more optimistic FOMC Statement this coming Wednesday, the USD/INR may deliver a new cycle of selling.

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China and U.S Data Early and Important as Central Banks Fret

by with No Comment Behavioral SentimentCentral BanksFeatured Highlights

China and U.S Data Early and Important as Central Banks Fret

Monday, 17th July 2023, China GDP and Industrial Production – the economic numbers coming from China have shown steady signs of a downturn. Gross Domestic Product figures however are expected to increase this month, but some analysts may question transparency issues regarding the reported statistics. Industrial Production numbers are expected to fall, which on the surface may cause people to question any positive results from the GDP. Retail Sales will also be published on Monday. The housing market in China remains critically important in the nation and some borrowers appear to be suffering financial stress. While many global retail traders might not be invested in China, the nation serves as a good barometer for the world’s economy, particularly regarding consumer demand.

Monday, 17th July 2023, U.S Empire State Manufacturing Index – the New York based report is expected to have a negative reading. It should be noted June’s data came in stronger than expected. Another positive surprise outcome would continue to show economists are finding it difficult to gauge the U.S economy. Last Friday’s solid Consumer Sentiment reading from the University of Michigan highlighted the rather complex results from the U.S, weaker than expected inflation numbers are also factoring into a muddled sentiment. However, the Federal Reserve is still believed to be leaning towards another interest rate hike on the 26th of July. Day traders should remain alert.

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USD/CAD 3 Month Chart as of 17th July 2023

Tuesday, 18th July 2023, Canada Consumer Price Index – the inflation numbers from Canada are expected to show a slight decrease in the velocity of rising prices. The numbers are likely to affect the USD/CAD which is trading near lows last challenged in September of 2022.

Tuesday, 18th July 2023, U.S Retail Sales – considering last week’s improved Consumer Sentiment numbers recently from the States, demonstrating better retail results compared to last month will not be a surprise. Earnings season on Wall Street gets underway this coming week and solid Retail Sales numbers may help mid-term outlook regarding equities. However, behavioral sentiment is fragile.

Wednesday, 19th July 2023, U.K CPI – the inflation numbers from Britain are expected to show a slight decrease in the rate of price expansion, but any result above 8% via the broad data will not make many folks feel better. GBP/USD speculators should monitor the reports.

Thursday, 20th July 2023, U.S Existing Home Sales – the rising costs of mortgages in the States is having an effect on the marketplace. Signs of stress in housing is an intriguing barometer regarding the outlook for the American economy. Better Consumer Sentiment and Retail Sales mixed with less than glowing numbers from the housing sector could make for a troubling diet for traders to consider and act upon.

Friday, 21st July 2023, U.K Retail Sales – recessionary results are shadowing Britain. Poor results from the retail sector would not help behavioral sentiment, particularly if inflation numbers have continued to show they are unrelenting two days before. The Bank of England is in an uncomfortable spot, this as the GBP/USD trades near highs it last saw in April of 2022.