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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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Risk Friday: Fear is a Terrible Thing to Waste

by with No Comment AMT MarketsCryptocurrenciesFeatured Highlights

Risk Friday: Fear is a Terrible Thing to Waste

Behavioral sentiment in the broad markets took a turn for the worse yesterday among many major equity indices. This as financial institutions seemingly came to the short-term conclusion the Federal Reserve may actually have to raise interest rates again on the 26th of July, and possibly beyond. Meaning, the Fed might actually back up what it has been saying.

Yes, investors have been warned many times already by some analysts that the handwriting was on the wall regarding additional increases to the Federal Funds Rate, but it seems a fear of losing out has kept many market participants actively running forward with blinders on not cognizant of the Fed’s rhetoric.

Day traders should always be mindful of their emotions. While it is not good to trade based on emotions when involved in an active position, intuition and gut instinct sometimes can save you money when you decide to simply sit on the sidelines and watch the market action instead of participating. In other words, if you are nervous and your instinct is bothering you – do not attempt to enter the trade.

U.S Data Remains Rather Strong even as Inflation Boils

Yesterday’s better than expected jobs report via ADP helped create sparks early regarding U.S economic data continuing to show it is robust, but the ISM Services PMI threw gasoline onto the fire with a much better result of 53.9 compared to the estimated reading of only 51.3. While inflation simmers in the U.S, signs of limited growth abound too making stagflation a real danger.

Investors can now attain a yield around 4.995% on 2-year U.S government Treasuries. A gain of nearly 5% that is almost assured with very little costs regarding commission rates needing to be spent, looks like a solid short-term investment to many. Equity markets have a reason to feel spooked. If the U.S Fed raises the Federal Funds Rate which is now 5.25% to 5.50% at the end of July, and at the same time continues to speak in an aggressive manner about other potential hikes later this year, summer may lose its sense of tranquility for financial institutions.

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Gold Five Day Chart as of 7th July 2023

Gold which was trading at nearly 1925.00 USD yesterday, suddenly fell to around the 1900.00 briefly in the wake of the better U.S economic data, showing investors are worried the USD has some additional strength to display potentially. Again, the results of intraday gyrations may not mean a lot to mid and long-term investors, but day traders speculating on the outcome of quick hitting results frequently get hurt by the bursts of volatile storms.

U.S Official Jobs Numbers Today and Anticipation

Adding another dose of intrigue to the day are the upcoming official jobs numbers from the U.S, including the Non-Farm Employment Change and the Average Hourly Earnings reports. The inflation data via the earnings statistics are anticipated to show a gain of 0.3%, if for some reason it comes in stronger than expected this could create more fireworks. Having said that, the Wall Street Journal reported yesterday that Americans appear to have stopped quitting their jobs in order to switch to similar competitive positions as much as they had been the past couple of years. Perhaps this signals wages are starting to cool or least will in the near-term.

Let’s also remember that yesterday’s selloff in equities may have been anticipating better Non-Farm Employment Change results today based on the ADP outcome Thursday, and other solid U.S data before like last week’s GDP gains. Day traders betting on quick hitting CFDs via their brokerage platforms should be careful today and listen to news regarding the U.S bonds market. Inexperienced speculators should try to understand the adage – buy the rumor and sell the fact. Meaning ‘smart money’ often acts before others and takes advantage of their outlooks regarding data.

Quick Warning on Binance and Cryptocurrencies for Gamblers

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BNB/USD Three Month Chart as of 7th July 202

In a non-related subject, cryptocurrency traders seem to remain rather steady but should be nervous – if anyone is actually really trying to speculate in this endeavor besides Larry Fink of BlackRock currently, news regarding Binance remains troubling on the surface as legal clouds grow. Folks involved with the BNB coin should be careful. As one of the most ‘important’ crypto exchanges Binance’s legal problems moving forward could affect the prices of cryptocurrencies significantly. As of this writing BNB/USD is at nearly 233.00, and it should be noted Tether’s USDT appears to remain rather solid for the moment at 1.00. A look at the current three month chart of BNB/USD highlights its latest value struggles.