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Showing content with the highest reputation since 13/11/18 in all areas

  1. 4 points
    What is the EOM indicator? An indicator that highlights the relationship between price and volume and is particularly useful when assessing the strength of a trend. As implied by its name, it is used to measure the ease of movement in price. It is a volume-based oscillator that fluctuates above and below the zero line. In general, when the oscillator is above zero, the price is advancing with relative ease. When the indicator is below zero, the prices are declining with relative ease. A wide range (difference between highs and lows) on low volume implies that price movement was relatively easy, as it did not take much volume to move prices. Alternatively, a small range and large volume indicates that price movement was difficult as there was a relatively small price movement on high volumes. Other important things to remember with EOM The closer the EMV line is to zero, the less ease of movement on that specific period. The bigger the spike in the EMV line, the more ease of price movement, either positive (if above the zero line) or negative (if below the zero line). The ease of movement indicator can also be used as an average, by adding together various single-period ease of movements and dividing them by the number of periods being considered. By smoothing out the indicator over time it can be used to identify trends and areas of convergence/divergence. A graphic example Let’s review the EOM indicator by using it in a real-life example which took place at the beginning of Dec ‘18. Using the Wall Street 30 min chart we can see a correlation between the EOM indicator and subsequent market movements at the opening of the session on Monday. Looking at the chart below you can see there is a positive spike in the EOM line which holds for a few periods before it starts declining. The cause for the spike is likely to have been the bullish (but cautious) reaction to a ceasefire between the US and China on trade tariffs. This could have meant that traders were holding Wall Street pushing the price higher, however maybe not as many people bought into the rally, therefore creating a big range on low volume. To summarise: After the initial positive reaction from the markets, traders could have become more sceptic about the viability of the ceasefire, and therefore a more bearish reaction comes in to play. This increases the range as lower lows appear maintaining the EOM at a high level. As more and more traders become sceptic, highs become lower, decreasing the range, which paired with a stable volume results in a declining EOM line. As you can see from the graph, the EOM line reacts before the actual price does, as a tightening range indicates that investors are becoming more bearish, which can eventually lead to a decline in price if it sustained over a period.
  2. 2 points
    Hi @hart, it looks like you will need to switch to the new platform to see that particular function. It looks like an added update to the new platform and may not be added the old.
  3. 2 points
    reading a very interesting part of the FT which I thought I would share. Possibly behind a pay wall so will add points. May be worth having a watch list "FEAR / DANGER ZONE" Archer style... https://www.ft.com/content/02b493d0-e77c-11e8-8a85-04b8afea6ea3 Watch the VIX: everyone knows this one right? Interestingly something I didn't know is that "The index is structured so that if investors expect S&P 500 fluctuations to average 1 per cent a day for the next month, the Vix level is about 20 — roughly its long-run average." SKEW: based on price of options but the curve skew. Range typically from 100 to 150 where 100 shows stock market gains are roughly normal Yield curve: a well known contender and relates to the yield curve of bonds. "...most of the time the yield curve slopes upwards. But when it “inverts” — when short-term bond yields are actually higher than longer-term ones — it has been typically presaged an economic recession." The dollar: "Dollars are the lubricant that oils the global economic system, and spikes in demand for dollars can be a good sign of financial distress. One way of measuring this is through the “cross-currency basis”. Simplified, the basis is, in effect, the additional cost banks charge for swapping one currency for another in the derivatives market." 5. Financial conditions (https://www.ft.com/content/28d0ff38-d956-11e8-a854-33d6f82e62f8) are a set of indices which benchmark the broader market. They are typically designed to gain when markets are distressed. Most famous is Goldmans Financial Conditions Index. https://www.goldmansachs.com/insights/pages/case-for-financial-conditions-index.html
  4. 2 points
  5. 1 point
    Nice! I'm not a massive one for tech analysis and indicators etc, but its an interesting read to see how its used by putting in that real life example. Thanks.
  6. 1 point
    Which commodities in the overall Base Metal Markets do you think will do better in 2019? Which commodities will be hardest hit if China and the USA cannot agree trading terms?
  7. 1 point
    @sanjayish, look in notifications and scroll down to the IG Video link to start IGTV on the platform.
  8. 1 point
    It's ok, Trump has decided oil is about the right price now. 🙂
  9. 1 point
    @Nelsy-Boy, Having had several discussions with @Mercury, I can recommend that he would be a good person to offer opinions on Elliot Wave theory for your chart.
  10. 1 point
    I use matlab with IG's API and run several strategies fully automated. Works great for me. I also have an account and run automated strategies with Interactive Brokers (since you mention TWS). If you are used to work with the IB API through the TWS you will find working with IG's web API a piece of cake.
  11. 1 point
    @Mercury, I knew the 1970's inflation rate was in the double digits but couldn't remember what so didn't include it for my previous reply so I just looked it up now - still gave me a bit of a shock.
  12. 1 point
    I do not see such option on my platform,...kindly advise.
  13. 1 point
    @VS1992, A carry trade is when one borrows money at a cheaper rate to invest in another asset to try and provide them with a greater return. I know many traders that use this strategy in FX trading. First of all what asset are you looking to spread bet? When one adopts a carry trade strategy it is to try and profit from the difference in the interest rates between two currencies. So I can appreciate its use in FX trading. One assumes you are thinking of spread betting currencies? You have not clarified this in your post. Normally when one would adopt a 'carry trade' strategy' it would involve borrowing and then selling a low interest rate currency to fund the purchase of a currency which yielded a higher interest rate. Now I do not trade FX. However, if I am correct in assuming what I think you are then I think it could work with spread betting. I think it could even be more profitable should you execute such a strategy extremely well using leverage. However, these are just my thoughts. I wonder if anyone who trades FX using spread betting could expand and elaborate on this?
  14. 1 point
    I trade only automated and can tell you that this is a lot of work. I spend countless hours programming, developing, testing and constantly debugging my robots. If you think you can just download a robot, press RUN and earn a lot of money you will most likely end up losing it.
  15. 1 point
    @rachelbarnes, I personally only use IG for spread betting Commodities and Cryptocurrencies. My funds are held with Fidelity. My shares are held with Hargreaves Lansdown. My ETF's and ETN's are held with Equiniti (formerly Selftrade). I keep them all separate as I simply do not want all my capital with one institution. Also the capital protection plays a part in this decision making too. On top of this different brokers specialise in different things. So Fidelity are weak when it comes to shares, ETF's and ETN's. IG are better at offering CFD's and Spreadbetting and so on. Your decision will be a personal one. An important factor will be what asset you intend to invest in. So if you are looking at investing in equities will it be via funds, investment trusts or individual shares? Is your strategy to invest for capital growth or income? (This decision will be dependent on your age profile of course and risk tolerance). What services do get with different brokers and what the costs/charges.
  16. 1 point
    Very interesting interview with Stanley F. Druckenmiller discusses the next big downturn, the signals he is watching and what the final trigger will be (what but not when). Reveals how he started shorting too early (July), got a **** nose but still waiting. Stanley F. Druckenmiller partnered George Soros through the 80's and 90's but rarely gives interviews himself. In this (one and a half hour) interview he talks about the economy, his trading and how he trades and what he is looking for. Down to earth style and easy to follow also talks fundamental and technical analysis. Many other topics including the affect on the markets of algos, (interesting side point, the really big bear algos are set to go off on a 2% drop). Very insightful interview throughout. https://www.realvision.com/stanley-druckenmiller-interview
  17. 1 point
    I am going to take this opportunity to start a new post on 'Trend Following'. I am going to try to keep it as simple as possible for any new investors / traders who may be interested in trend following principles and adopting them within their trading / investing strategy. Even existing or experienced traders / investors may find this useful. If the more experienced traders / investors would like to enrich this thread then I would encourage them to do so, thus enhancing the overall discussion on trend following. I will start off by stating, "Failing to plan is a plan to fail." So always make sure you have a trading / investment plan that you can both execute and using discipline stick to. Have strict rules that you can follow. This is crucial as without a clear plan with rules one simply cannot trade effectively using trend following principles. One must understand that trend following has its flaws and it simply cannot predict future market movements. You will make losses. The key is to ensure that your profits cover your losses even if that means that out of ten trades you profit on three and make losses on seven. That is fine as long as the profit on the three winning trades is greater than the losses on the seven losing trades. Accepting this may mean a total change in mindset which may prove to be difficult for some. This is where an individual's personality comes in. One must assess which markets it is going to trade and have a system in place to help identify trends both upwards and downwards. Trend following aims to capture the middle of the trend so you never get in at the bottom or sell at the top. Volatility must be embraced and seen as an opportunity. Reacting to market trends as they happen is key. For those who are familiar with my posts then you will see that demonstrated on commodities such as Orange Juice, Cotton ,Wheat, Lumber, etc. No one can predict the future but using trend following principles based on historical and current price behaviour one can make assumptions. These assumptions can only be tested and presented as evidence based on the price action. It is ok to be wrong and one must not be scared or worried about what others may think. I am sure I have made many incorrect assumptions based on historical and current price action in the past and I am sure I will continue to do so. Making assumptions and then testing those assumptions is a key part of learning and gaining valuable experience. One can learn a lot more from their losses than they can from their winners. This can assist in coming up with sound risk management principles within the trading / investing plan. Be ruthless and trade both long and short depending on price movements. For those that are familiar with my posts will appreciate that I am an advocate of Cryptocurrencies and Blockchain. I have a long term long position in Bitcoin and Ether using XBT Provider One products and opened a long position when Bitcoin was around $2000.00. That is a long term trade. Now using spread betting on IG's platform I recently shorted Bitcoin even though at the same time I had the long position. The price action for Bitcoin merited a short position which using basic technical analysis one could not argue against. The trend had reversed to short. Now some of you may be wondering why I did not close my XBT Bitcoin trade. I am human and though one must try and eliminate emotion from the trade my flaw is that I believe in the long term story of Cryptocurrencies and Blockchain. This is only a flaw if they all come crashing down but I cannot predict the future so I simply do not know. Due to my convictions and beliefs which could be wrong all I can do is ensure that if any shorting opportunities come on Cryptocurrencies then I take them as I have two long positions in Bitcoin and Ether. This is where IG's Spread Betting platform works really well for me. It allows me to short both Bitcoin and Ether with leverage. Trends can change very quickly and this is where risk management comes in. One must have entry and exit rules which they stick to. It is fine to adapt these rules over time as experience may dictate a change in entry and exit points. Something I always think about when placing a trade is, 'Knowing your exit price before you enter the trade'. Stop losses and proper use of leverage are fundamental. One must let their winners run and not take profits too early. Only when there are indicators of a trend reversal must one exit and this should be done by the stop loss let. TrendFollower Tip: Trailing Stop Losses are great on winning positions so if you are not using them then you may want to consider them. I have kept this opening post very basic and simple. The detail will follow depending on the engagement this thread receives. I am out of the country from 31.07.18 to 26.08.18 so I am not available but on my return normal service will resume!
  18. 1 point
    I agree @FGJB, it is important not to get too hung up on a single factor but take the information in the context of your overall assessments. A high volume move away from a congestion zone in the direction expected would support that breakout. A low volume move might in the same direction might suggest a fake breakout (all too common these days). Similarly if the breakout was in a direct you did not expect a high volume move would make you reconsider your overall assessment, whereas a low volume would most likely turn out to be a fakeout. Context is king!
  19. 1 point
    I totally agree that volume is very important but it can also be very confusing. Increasing volume with a trend that go up/down indicates good strength but sometimes that increasing volume is the volume that stops the move upward or downward. Uninformed traders rush in not to miss the move while the real informed traders are the ones selling/buying from them. Volume can therefor indicate the continuation or reversal of a move. One only know afterwards when it is too late.
  20. 1 point
    Nice contributions. As we get nearer, let's take some guesses for FTSE 100 Close on last day of trading ? For me.. it's a bit early to get stuck in and predict or take a position yet... Monitoring for that 'right time'!
  21. 1 point
    @202925, No problem. That is ok. You may be right it may well be range bound but I cannot predict the future so I do not know that for sure based on current and more recent price action. Yes, I could do as you suggest but I will not be. I want to stay in this position as long as I can. No time limits. I will exit when the trend reverses. Until then I will remain in the position. One of the key principles of trend following is not to take profits too early and to let your winners run. If my trade was incurring losses then I would like to cut these losses quickly and move on. So then I would be looking to exit as early as possible. With Cryptocurrencies there can be extreme volatility so setting initial stop losses is extremely challenging as the risk is being stopped out and then the trend resuming in its direction of travel.
  22. 1 point
    Oh come on Scrooge, you'll be saying there's no Santa next. Look, the Santa rally is real, the Harriman Almanac says so. I want to believe. http://stockmarketalmanac.co.uk/category/month-effects/december/
  23. 1 point
    Thanks for both suggestions. I especially like the second one (as above). I'll pass these feedback items onto our front end dev team.
  24. 1 point
    And this might be against forum rules of something, but any recommendations for US trading accounts for infrequent traders (e.g., once or twice a year) who are just planning to buy and hold for 10+ years?
  25. 1 point
    Hi guys. I have a question regarding The signals and market sentiment tool. I find it a little strange that when markets are on the up, the signal is a cell. The market sentiment tool also reflects a cell? How is this as the fact of the matter is that markets are on the climb.