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TrendFollower

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Everything posted by TrendFollower

  1. I saw the following article which I thought some of you may be interested in. Starlight – The Instant Payment Channel Unveiled By Stellar Interstellar https://smartereum.com/39382/stellar-blockchain-update-starlight-the-instant-payment-channel-unveiled-by-stellar-interstellar-xlm-news-today/
  2. @Mercury, I do like and appreciate how you combine charts and explanations to support your charts in your posts. I understand that it requires time and effort along with knowledge and experience of course. It will be interesting to see if there is a strong 'equities' rally phase coming up. To offer a balanced view on this one needs to understand the Copper prices have dropped around 17% from June 2018 highs. As you will appreciate, a strong US dollar, will hurt Copper prices as they become far too expensive for other countries around the world to purchase them. Just like the stock market is a future discounting mechanism say around six months into the future in relation to share prices, Copper prices reflect something similar for the world economy. To me lower or declining Copper prices could reflect negative sentiment for the world economies. One must also appreciate that Copper is heading for its first yearly decline in prices since 2015. There are plenty of economic concerns around the world at the moment. The US imposed tariffs have not helped. It is stated that Copper has predictive powers and reported that investors are not very optimistic about the outlook for equities. I personally will let the price action of Copper tell me the 'story' and it will tell us all a story.
  3. @Mercury, First of all a very informative post. Thank you for spending the time writing your response. If Gold were to hit or surpass around the $1261 level it would go through its 200 day moving average. This would be extremely positive when considering a long term trade in Gold from a 'Trend Following' perspective. If one were to enter a long position around this point and had a long term view to participate in a potential Gold rally then one may look at initially using a stop loss around the 100 day moving average figure. Some may wish to use the 50 day moving average figure. This would would allow volatility not to kill the trade too early. It would also allow the trend and price action to dictate when to enter and exit taking 'emotion' out of the decision making. Again this method would not be for any short term or day trades on Gold. Also a trailing stop could be used once in profit to ensure that the trade ends up being a winning trade. Using such a strategy would mean the stop loss would be around the 3% to 5% mark of the initial price one goes long. if they were to go long at around the $1261 mark and the 50 and 100 day moving averages were as now. Obviously this changes as the days go on but gives a rough idea.
  4. I think both Gold and Silver will be volatile during the next few months. There is a lot of economic uncertainty. The markets are jittery to say the least. Decision making in setting effective stop losses for any Gold and Silver trades will be crucial. They must not be so tight that one gets stopped out on the volatility. However they must not be so wide that if the trade goes against you and Gold and Silver do not behave as one thinks then it creates larger losses for you. A difficult one but the stop loss levels will be key. @Mercury, what would you suggest for stop losses on any long Gold and Silver positions. From a risk management perspective one should not risk more than 1% on any individual trade and around the 5% figure on all open trades. In terms of setting stop losses on the two do you have anything in mind? If one thinks that Gold and Silver are going to seriously rally to the long side on balance of probability then would a more generous stop loss be applied?
  5. @JamesIG, Ok this will be my last post on this thread for Bitcoin Gold. If Bitcoin Gold miraculously succeeds and climbs back into the the top ten Cryptocurrencies, which is extremely doubtful, then this can always be revisited. If there are any changes to Bitcoin Gold from IG's perspective then please do post here and let us know. Thanks @TrendFollower
  6. @JamesIG, Thanks for such a quick and detailed response. Much appreciated.
  7. Yes you could do that @Caseynotes but it all depends on what your risk tolerance is. That trade could be viewed as taking on more risk. I have known aggressive traders to take such positions. I have done it myself on Cryptos during the last big rally last year. I went long Bitcoin, Ether and Ripple together. A good point.
  8. @Mercury, there have been many instances when there has been a trend for cryptos which IG customers have been unable to trade due to unavailability from IG. I do state that Bitcoin / Bitcoin Gold is trying to become 'digital gold'. Whether it will or not time and price action will tell us. From your previous posts you have anticipated the rally in Gold and Silver well. I would certainly consider a long position on Gold and Silver were they to surpass the 200 day moving average. However my view is that should cryptos rally then they will rally far harder and quicker than the likes of Gold. They will also fall harder and quicker too so there will be opportunities to both go long and then go short on cryptos on the next rally which I am looking forward too. If it does not come then it could either be that cryptos are failing or from a positive perspective the volatility is reducing. You make valid points and I do agree with most of them. I am keeping a look out on Gold and Silver. Another strategy could be going long on the dips using 'oscillators' if one thinks that the trend upwards has started for Gold and Silver.
  9. @JamesIG, Bitcoin Gold seems to have the most positive looking chart yet it is so frustrating that one cannot open a long position on this offering from IG. I keep on getting the message below which has been constant for many weeks if not months now. Closing only: Market unavailable to open It is also trading above its 20, 50 and 100 day moving averages as shown by the chart below which I have attached. I know that I have suggested in the past that Bitcoin is trying to become 'digital gold' and is looking at acting like a safe haven. I have an assumption that needs to be tested. What if Bitcoin Gold is finally trying to become this 'digital gold'? I doubt this very much but the price action is certainly interesting me. Another example of IG not allowing its customers to take advantage of a crypto trend!
  10. @Caseynotes, yes you are right. For commodities trading I use 'hedging' techniques and pair trades. So if Coffee prices were appreciating. I may go long Coffee New York Arabica and Short Coffee London Robusta. The way I would decide which to go long and which to short would be down to which of the two I felt was appreciating more quicker in price than the other based on price action. From a risk management perspective they can be effective. However there is 'model risk' where any pair trade may not go as one expects. It could be that my research was not effective or my thought process was flawed when looking to open such a pair trade. There is also execution risk as well. I may not have factored in all the daily interest charges, I may have leveraged too high, etc. They can go very wrong if the market moves strongly against your strongest position of the pair trade whether it be your long trade or short trade.
  11. If one thinks there is going to be a global sell off and this is merely the beginning then long term investors should embrace such an opportunity as they normally come once in a while and most investors only experience two to three major world equity crashes in their lifetime. As Warren Buffet says, "Be fearful when others are greedy and greedy when others are fearful." One strategy could be to wait patiently on the sidelines and see how things play out. Should there be a major crash the one could pounce. Another strategy could be to buy as the price keeps dropping especially if one is unable to time the market as they do not have time to monitor the price action. For me if one is going to consider emerging markets then those with higher risk thresholds may want to consider 'Frontier Markets'. They get even more hammered than emerging markets but in a bull market when risk appetite returns to its full then they really do provide excellent returns. However a note of caution, they will fall the hardest should there be any sort of world equity stock market major correction.
  12. Have you guys considered Bullion Vault? https://www.bullionvault.com I used them during the last major gold bull run well over 10 years ago.
  13. The 'Golden Cross' and 'Death Cross' are opposites. They both are important indicators should they materialise on whether to consider a long or short position.
  14. @Caseynotes, WOW! One important thing about moving averages is that they do not predict the future price behaviour. They merely show us how the price is behaving on average over a period of time. Crossovers can be vital for trend followers. So for example when the 50 day moving average line crossed the 200 day moving average line this could be a signal to go long. Now if the opposite happens it could be a signal to go short or to close a long trade. If you combine moving averages (price action - behaviour) with volume then it becomes even more important. In theory a rising trend upwards should be supported by increase in trading volume and downward trend should be supported by declining volume. This does not always occur as simple as I have explained.
  15. @Caseynotes, sound advice. 200 MA is very important as it can really give you a good indication of the long term trend. Also when the price joins the 200 MA then it does show support when the price is above the 200 MA and resistance when the price is below the 200 MA.
  16. Lumber is playing out exactly how I had envisaged. I attach a chart below to nicely illustrate this. Lumber (Timber) is what I would deem as a more 'defensive asset' which tends to hold its price well during market turmoils. Of course it is not as defensive as cash and fixed interest! Therefore once this downwards pressure is over and it will then I can easily see another couple of years of Lumber prices slowly rising. This is when one must think about a long term trade in Lumber and just 'letting it ride'. However, one must wait for the downward move to conclude and then wait for a clear trend reversal to enter. For now the only trade is short on Lumber so for those of you holding well done.
  17. I am not sure why my chart is not showing anymore from my previous post.
  18. Sometimes just noticing a pattern however simple can really help to hone into the habit of following the price action and observing how it behaves. For Coffee (Arabica) I have attached the chart and as you can when you zoom in to October we are really beginning to see a pattern emerge. One of the major premises of technical analysis is that history repeats itself. For me there is no guarantee of this. Spotting such patterns can increase the probability of something happening but nothing more. In my experience the bigger the move upwards the greater the chance of a trend reversal. Without such a big move there is no trend to reverse! An interesting test here will be to see what happens next? One must test their assumptions and not be worried about being wrong. Being wrong is fine as long as one understands why they were wrong and the reasons behind it. Also important lessons and experience can be gained from being wrong when making such assumptions.
  19. @Caseynotes, I must admit I did not know this. I had been using other software for my 200 day moving averages. Sometimes I do wonder if you either work for IG as you certainly seem to know so much. IG should really be employing you or at least certainly paying you for the sheer time you spend helping everyone.I doubt IG staff in customer services do as much as you! Thank you very much for this. Though it was not my question, it was certainly helpful to me and I am sure others.
  20. Good question. Yes 200 MA is very useful for trend followers.
  21. I am not a fan of Bitcoin Gold. However, out of all the Cryptocurrencies that IG offer on its platform, Bitcoin Gold, seems to have the better looking chart over the past three month period.
  22. I found a potential pattern on the charts of Ripple which could lead to another move downwards. I have highlighted it using arrows in the chart below. Now it may be that the next move downwards is less than after the first arrow or it is a mere coincidence and Ripple continues moving upwards. It will be interesting to see.
  23. Those that know me will appreciate that I am more 'words' than charts. The charts are there for all of us to see. Some of us will interpret the charts differently depending on our timeframes. To me the long term trend upwards is still in tact for now. I think a good discussion to support and supplement the charts would be on whether anyone would enter a long position on Crude WTI right now? It is trading below its 20, 50 and 100 day moving averages - well just about! I will stick my head out and say no as the trend is appearing to get weaker compared to the June 2017 to May 2018 time period. So from a long term perspective I would not enter this trade. From a short to medium term perspective there may still be another leg upwards after this drop so there could be an opportunity of a short term trend reversal, so a short term trade to take advantage of the volatility in WTI may be a possible trade. Buying on dips during a long term trend can be quite an effective strategy. Even adding to existing positions during such dips can really ramp up profits when the asset is trending upwards. If you look at the chart then WTI has been trending upwards over a year now so it would have been an effective and possibly still is an effective long term trade.
  24. Oh I forgot to mention an IG Analyst will now publish a story on the price action of Coffee - New York (Arabica). ? If one wanted to trade this from a hedging perspective then could consider going long Coffee - New York (Arabica) and then go short Coffee - London (Robusta) which is also trending upwards but at a slower pace than Arabica. The above is just a potential trade idea and is by no means the correct trade and nor is there any guarantee of any success in such a trade. I am just putting this out there as IG Community is there to encourage the 'sharing of trading ideas'.
  25. @Pottsypotts, that is excellent. @cryptotrader, you may be interested in today's price action where Arabica Coffee is up 450 points and 3.8% at the time of writing. It was slightly higher earlier. This is an extremely strong trend we are witnessing. It may be short term but it does not matter. It is a trading opportunity to make some profits on the long trade. Leverage will increase the profitability of the trade but one must use caution and sound risk management in case there is a vicious trend reversal which is quick and deadly. I have never flown to space but I imagine a rocket taking off would look like the chart above! ?
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