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UNUSUAL MARKETS | EDUCATION FROM BROKERS Thu 26 Mar

When to buy stocks? The falling market and your actions

Where to find value in stocks as the market falls The crisis provoked by the coronavirus devaluated the stocks of many companies, and now investors have a unique opportunity to buy stocks at distress prices. In this article, we will find out what companies are attracting investors' attention. 90% of stocks on the market are now trading in a downtrend; i.e. the market is bearish, and many are making money on short positions. Hence, it is very important to tell the difference between the growth provoked by closing short positions and the growth based on new purchases of the stock. To do it, we need to analyze the price chart. Making up long positions As an example, let us discuss the papers of Boeing Company (NYSE: BA). When large investors, most often hedge funds, start buying the stock, they never do it by one trade in a session. They set a range inside which they will buy the stock; otherwise, if they by the whole volume at once, the stock price may grow steeply. This will attract other market participants who will either support the growth or consider it groundless which in the end will lead them to opening short positions. Then volatility will grow in the paper, which might hinder all plans of the hedge fund to make a profit on this paper. Large investors buy the stock, remaining unnoticed by other market players. In other words, they keep the volume of trades at the medium level or just above it, and the stock price moves in the framework of daily fluctuations. However, they cannot hide their activity completely, and quite often, we may notice the level on which they buy the stock. Pay attention to the chart of Boeing Company. Before the stock price grew by more than 50 USD, for 15 days the stock had been trading inside a narrow range, never declining below 280 USD. I.e. some very large investor was buying the stock, and then the price, being at its all-time high already, started growing steeply. In 8 days, the stock price grew by 20%, then the volume of traded stocks also sky-rocketed, which could be interpreted as that investor closing the positions. This is the simplest way of finding a large investor in a stock to work in the same direction with them. Closing short positions And now I will show you how investors trading on a decline close their short positions. Trading declines differs from trading growth. These are just two different ways of making a profit on the market. First of all, the trade volume of a short position is much smaller than that of a buy. Making up of a position is very hard to detect, while an open trade may be held for no more than a day (it seems like that is why such positions are called short). Trading declines is very risky because your profit is limited by the zero level of the price, while a loss may amount to the largest deposit in the world. Hence, investors are very cautious here and ready to leave their positions at any moment; this behavior is characterized by sharp increases and decreases in the stock price. In other words, an investor having a short position is ready to close it at any moment at the market price. For them, the most important thing is to escape the position, no matter if this will lead to steep growth of the market price. A delay may cost too much. Have a look at the chart of Sunnova Energy International Inc. (NYSE: NOVA). In 9 days, the stock price declined from 21 USD to 7 USD per stock and then in two days it grew from 7 USD to 12.50 USD, i.e. by almost 80%, out of which, 60% were covered in one trading session. This was closing of short positions, additionally confirmed by a sharp increase in the volume. Let us draw a conclusion. Closing of short positions do not signal long-term growth o the stock price. Hence, such situations on the chart do not indicate an increase in the interest towards the company; thus, such stocks cannot be regarded as having a potential for growth. The levels of support and consolidation in a certain range indicate the interest of large investors towards the company. This signals possible further growth of the stock, hence such a stock are of interest to us. Trade American stocks with RoboForex on favorable terms! Real shares can be traded on the R Trader platform from $ 0.0045 per share, with a minimum trading fee of $ 0.25. You can also try your trading skills in the R Trader platform on a demo account, just register on RoboForex.com and open a trading account. The Boeing Company Now, let us have a look at the companies that attract investors. I would like to start with air carriers, but, unfortunately, the situation here is drastic, and there is no interest to the stocks of this sector. However, the stocks of the largest aircraft producer do attract investors. The Boeing Company's problems began before the crisis, and now its stocks are trading three times cheaper then they used to several months ago, and it must be the rice that attracted so much attention. Currently, the stocks are trading in a narrow range at about 100 USD per stock; the volume also seems to be growing, which means large investors are making up their positions. In this situation, a decline below 90 USD per stock will be used as an additional entry point at a lower price. Oil and gas sector In the oil sector, the things are becoming lively. The oil price has dropped under 30 USD per barrel, which threatens small US companies by bankruptcy, especially those of them that produce shale oil. However, they are hoping for another portion of US sanctions against Saudi Arabia, which may entail an increase in the barrel price. That is why some stocks in the sector are already trading at the support levels. Archrock Inc Archrock Inc (NYSE: AROC) works in the energy infrastructure and offers its services to gas and oil companies. Its stocks are trading at the price of 3.60 USD. A drop under 3 USD was used by investors for additional buys. Something similar may happen to the Boeing stocks, i.e. the price will go down from the previously formed range and then restore abruptly. Exterran Corporation Exterran Corporation (NYSE: EXTN) also serves gas and oil companies, providing them with equipment. Since December 2019, the stocks have not declined below 5 USD, even the coronavirus situation failed to influence their position. The support formed at 5 USD demonstrates that investors are buying the stock at this price. Halliburton Company The last but not least is Halliburton Company (NYSE: HAL). This company offers a wide range of services to oil and gas companies all over the world. The falling of the stock price stopped slightly under 5 USD per stock. Currently, the price is trading in a narrow range, which might mean that a large investor is buying the stock for their portfolio. Stay tuned to the RoboForex Blog for exclusive financial forecasts, professional expert analysis, how-to articles and more. Banking sector Now, let us switch to the banking sector. The European and American government has decided to support business by low rates and go on pouring billions of dollars into the economy. Naturally, this money will pass through the banking sector, and a part of them will "sink" there as a profit. Bank of America Corporation The stocks of the largest US banks the Bank of America Corporation (NYSE: BAC) are already trading at the support level of 20 USD. In the last 10 days, the price has bounced off this level several times, which indicates buys; growth of the volume is also present. Renasant Corporation The second bank to attract investors' attention is Renasant Corporation (NASDAQ: RNST). Here, at the level of 21 USD, a support has also formed, which the price has bounced off three times; same as with the stocks of the Bank of America Corp., the volume is also growing. Wells Fargo & Company The last but not least is Wells & Fargo Company (NYSE: WFC). The level here is not as strong because it formed 5 days ago, however, trade volumes are rather high. Since December 2019, the price per stock has become two times lower, thus the stocks of this bank are worth watching. In the stocks of other banks, there are no clear levels yet, unfortunately, so nothing signals possible buys of large investors. There are thousands of stocks trading on the market but investors always behave the same. This means you can scrutinize other sectors of the economy yourself and, as shown above, find indications of which stock might grow in price soon, helping you make a larger profit. Closing thoughts To my mind, we have not reached the peak of the coronavirus crisis yet. The epicenter of the disease is now moving to Europe. This will aggravate the economic problems in the region and will most probably lead to another wave of decline but a smaller one, with more modest volatility, because the stocks of many companies already cost very little. Speaking about the situation on the whole, worse times are yet to come, and to blame for it is not the virus but people. A singer never knows whether their song will become popular all over the globe. However, by the reason unknown, the simplest and most ordinary song becomes world-popular. Simultaneously, many masterpieces of extremely talented people are passing by unnoticed. With the coronavirus, the situation is the same. The death rate of this disease is about 2%; at the same time, radiation form mobile phones, TVs, NPPs, and hazardous waste provokes cancer, which killed 9.8 million people in 2018, according to the World Healthcare Organization. There is another version of the coronavirus called atypical pneumonia, which death rate reaches 40%. There is no vaccine yet. However, there is no global panic about it - as about nuclear plants that keep appearing, working, and exploding. The coronavirus, same as a piece of music, has become world-known, and the humanity will be fueling tension for as long as possible, and know one knows where the limit is. We have begun realizing the scale of the problem that we have created but it is too late. The economic consequences will be much graver for the humanity than the consequences of the virus. The current buys of stocks are merely an attempt of investors to close their eyes at the situation. Hence, I do not recommend looking for long-term investments now. The current situation may be used for speculations only. For some time, the market will keep receiving news about the support of the economy which will lead to a short-term increase in stock prices. This is the profit you may make on the papers being bought by investors now. The situation may only change after the coronavirus is taken under control. This article was submitted by Dmitriy Gurkovskiy, author at RoboForex Blog Disclaimer Any predictions contained herein are based on the authors' particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein. ForexLive

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MARKET WISDOM Tue 24 Mar

Josh Brown: The person you want to run away from is the person who KNOWS what will happen

Sound words of advice Josh Brown on CNBC said as he and Brad Gerstner of Altimeter Capital discussed the markets, (and I paraphrase): The person you want to run away from now is the person who KNOWS what will happen. Just before that Adam and I were chatting and shared these simple thoughts: The fact is we are grasping at straws and hoping. In fact, the first words I typed today were: The GBP is the strongest and the USD is the weakest as NA traders enter for the day as stocks (and yields) move back higher on hope.  Hope for a stimulus package passage, hope that the Fed's stimulus helps the economy, hope that the virus does not get too outta hand, and hope that the deficits being built will one day ease.  Yes... "Hope" is part of trading.   No one "knows" for sure, or even close to "knows", what will happen - especially now.   We will, and should have a "hard time believing". Now when the dust settles, there will be those that "knew all along".  Fine. Have your day on twitter or in a comment.  However, if you did not include a level of risk...you are just flipping a coin in my eyes.   For me, I would rather remain humble and listen to those that are humble who understand where they are wrong. I will also base my thoughts on what I see in the charts, because it tells a story to me.  That story has included in it, a lot of "IFs". In fact, in a post earlier today titled "The USDJPY remains in the middle of the 3 day range. Buyers keep more of the bias", I wrote: Intraday, the price action is up and down today.  The lows have stalled along a trend line. The price is trading around the 50% of the move down from yesterday's highs at 110.828. The price is above the 100 and 200 bar MAs at 110.543 and 110.63 currently. The price has been able to stay above the 200 bar MA since breaking about an hour or so ago. If the price can stay above the 200 bar MA (green line), that keeps the buyers in control intraday.  Move below the 200 and 100 bar MA (blue line) and the intraday sellers are back in firm control.  The last two sentences are my way of saying "I don't know" or "I hope". However, the "IF" is my way of also saying "That is my stop area. Things are good as long as that condition remains true." Some people don't like that. Some people are not like that. They feel that you have to have a "conviction". "Buy.... it is going up" or "Stop with all the "IFs.".  My response is "What makes me know more than "the market"? What makes my crystal ball so much clearer than all the others out there?"  Don't be silly.   What I know is what I see. If I see it in the chart, my feeling is others from all around the world can see it too.  In fact I try to make it simple to all (or those that read my posts).   I post what I see (post the chart(s)). I comment on what I see with arrows and words, but do "I know for sure?"  NOPE! It is contingent on the "IF the price stays above the.....blah, blah, blah". The point is traders, if you KNOW what will happen, run away from yourself.  Instead, find where the "IFs" are that will tell you where you are wrong, and you will have the right mindset for trading.   ForexLive

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FUNDAMENTAL STRATEGY Sat 21 Mar

Coronavirus driven sentiment case studies from last week

Volatile markets heavily drive sentiment What a few weeks we have had in the market in the recently. The human cost to the current coronavirus crisis is mounting and fresh deaths are sadly being reported day by day. Adam was well ahead of the curve of almost everyone when he flagged this concern to ForexLive readers before the virus gained current traction. Sadly, like many great insights, they went ignored until they were upon us and common knowledge. It is bitter sweet praise since Adam would have hoped that he was wrong when he saw the express train of the coronavirus coming towards us. And the content of this post is bitter sweet too. Bitter, because of the sad coronavirus outbreak which has driven so many sentiment shifts, and yet sweet because of the case studies it provides to demonstrate how traders can use sentiment to trade with. So, let us focus now on the markets.A sentiment recapIn case you have missed my previous posts on trading with fresh sentiment please check out these previous articles first, as they provide the foundation of understanding:The key to trading with fresh sentimentExamples of trading with fresh sentimentOnce you have read those, or have read them before, please read on below to see more examples of trading with fresh sentiment. The first off is the simplest trade of them all, vanilla USD longs via the US dollar Index on USD safe haven strength.Case study #1: DXY LongsOn March 18 I opened up three US dollar index longs with the following rationale:I am expecting USD strength for the foreseeable future as the liquidation of equity longs, commodity longs, and a number of other financial instruments is resulting in cash positions. The USD is, as the most traded FX currency, the most liquid and movable currency so I am expecting USD demand. There are also USD funding issues.Risks to the trade: Any positive coronavirus treatment or cure news might invalidate this outlook and potentially see USD safe haven flows reverse as equity markets recover.I have closed my longs on two positions and I am running a third at break even. I intend to hold that into next month.Case study #2: AUDUSD ShortsOn March 17 I opened an AUDUSD short position with the following rationale:It is widely expected that the RBA will be cutting interest rates this week (March 19) and launching a quantitative program. Furthermore, with equity markets falling that will result in flows out of the commodity driven AUD. The USD remains strong on increased demand and funding issues driving the USD higher.Risks to the trade: Any positive coronavirus treatment or cure news will invalidate this outlook and strengthen the AUDThis was a buy the rumour, sell the fact type trade. Once the RBA had done what they were expected to do, I closed the trade for a gain of +272 points.Case study #3: USDCAD LongsOn 17 March I entered a USDCAD long trade. The rationale was as follows:The Canadian dollar is weak as US oil hits lows from 2003 on multiple factors: high supply, falling demand, and Saudi planning on ramping up production to maximum levels are all keeping oil sold on retracements. With around 50% falls this month in the oil market, there is heavy selling pressure for oil which is also dragging down CAD. With considerable oil exports there is a clear link between CAD strength and Oil's strength. USDCAD and oil have around a 96% negative correlation, so when oil goes up USDCAD goes down and vice versa.Risks to the trade: Any positive coronavirus treatment or cure news will strengthen oil and the CAD. Also, any renewed co-operation between Russia and Saudi regardingproduction cuts will support oil and thereby weaken USDCADAll of these trades were taken without leverage, so hit the link to see more info on my view on using leverage. Developing a rationale for your trading is a very important topic. If you would like some more detailed help with trading sentiment shifts check out the excellent step by step guide from Forexsource which is the best I have come across.Finally, as we close, may I ask a favour? If you understand this concept, please could you help people reading it for the first time by outlining your last or next sentiment based trade that you have taken/or are in? It would help reinforce this concept to the uninitiated and I know how many savy traders we have in our ForexLive readership. Have a safe weekend one and all and my prayer is that this outbreak is soon behind us. ForexLive

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BASICS | EDUCATION FROM BROKERS Thu 19 Mar

Market Volatility Spells Trading Opportunity

These are certainly strange and uncertain times as of late COVID-19 has wreaked havoc across the globe with over 204,000 cases reported worldwide and over 8,000 deaths. The ongoing pandemic has seen many governments place its people in forced quarantine. This started in China, where the pandemic started in the city of Wuhan with a population of 10 million people. Then we saw countries such as Italy, the hardest-hit area in Europe, follow suit. There have been mass cancellations of sporting events and public events globally to reduce mass gatherings of people. Schools have been closed, transport links disrupted, flights cancelled and staff being sent home from work to either work from home or have time off. Whole regions such as the Lombardy region in Northern Itay have been completely isolated and completely locked down with more countries and regions expected to follow suit. These are all measures put in place to help slow down the rate of infection. GDP The province of Hubei, where the virus originated, has been cordoned off. It is said that China has now curbed the virus and are getting over the worst of it. President Xi Jinping visited Wuhan to show Beijing that the situation was under control and to show solidarity to the Chinese people. That being said, the impact on the global economy has been hammered in recent weeks. Massive companies such as Tesla, Apple, Microsoft and Samsung all have factories in China which have been closed. This could lead to a significant slowdown in Chinas overall GDP or even recession! The USA has dropped interest rates to 0% and the UK Government has put in place a 'Mortgage holiday' - freezing mortgage payments for the next 3 months in an effort to alleviate financial strains on families. Taking advantage of Market Volatility We have witnessed some of the biggest falls in stocks and shares valuations since the 2008 financial crisis.  But it's not all doom and gloom... A fantastic way to capitalize on market volatility is trading CFD's! Across the board we have seen stocks plummeting, Currencies weaken and even Bitcoin price down to around $5k from $10k only 2 weeks ago. This month the Dow is down -16.42% staying on track for its worst month since Oct 1987 when the Dow was down -23.22%. For the year, the Dow is down -25.58% which keeps it on pace for the worst year since 2008 when the Dow lost -33.84%. Just because the markets are crashing does not mean there is a lack of opportunity in the marketplace.  Award-winning broker, EagleFX offers its users one-click trading on over 200 assets. Traders can short over 60 Stocks and truly capitalise on the Billions of dollars that have been wiped off global markets. Enjoy leveraged trading on a range of stocks including Apple, Amazon, Tesla, Microsoft and much more! Don't miss out on market volatility and start trading today. Impact on currencies Recently we have seen that Oil Prices are down, Stocks are down and we are witnessing a decelerating economy.  A decelerating economy should, in theory, weaken the currency of that particular country. With that being said, a global crisis where the majority of the powerhouse economies are affected could mute the Forex market. There has been less volatility in the currency markets in recent days. Crypto markets have not been so steady. Bitcoin, the baseline digital asset, has had its value cut in half in recent weeks. There was a high of $10,000 in January and we saw a low of around $3,000 a few days ago. The valuation will most likely come back to highs as Bitcoin is a shrinkage market with a maximum supply of 21,000,000 with 18,276,075 in circulation. Only 13.87% of Bitcoin is left to be mined which many commentators suggesting a price hike before the mining reward is no more. The ongoing Coronavirus could impact certain currencies drastically however some countries which have felt little to no impact of the virus could see very little change in valuation. Traders may wish to revisit their trading strategies as countries that are making daily headlines with increased cases of infection, could see a spike in volatility. Research It is important to remain calm as a trader in unpredictable times such as these. Take a step back and do some research into what is happening globally and how markets could or will be affected.  In uncertain times it is paramount to keep up to date with the latest news releases as this will affect your trading decisions.  With no signs of the pandemic slowing, traders need to source their information diligently as to be as well informed as can be.   Keep up to date with all the big happenings around the world using the EagleFX Daily Analysis page and the Economic Calendar. Analyse latest markets with news clips and interactive charts to give you a firmer understanding of market volatility. The Economic Calendar serves to guide you on the latest Government announcements which will impact market movements. Sign up is free! Summary The deadly strain of flu virus currently circulating is wreaking havoc on markets globally. History has taught us that markets do recover. When we look at previous pandemics such as SARS, Swine Flu and Ebola, there is evidence of an initial market downturn yet markets fight back. While we are in the height of this global pandemic, traders must stay current to make the best decisions when trading Forex and other CFD's. Monitor global news and monitor which countries are making headline news whilst taking note of countries which are popping up more often in media posts. All this information will best equip you when deciding to long or short a currency. With volatility, comes opportunity! Trade over 200 assets including 55 currency pairs at EagleFX.  Join for free today and start trading with just $10.00 Good luck! This article was submitted by EagleFX. ForexLive

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UNUSUAL MARKETS | BASICS Tue 17 Mar

US emini S&P500 futures are trading below limit up

My previous post was:  S&P500 emini futures hit limit up What limit up means and what is happening now …. Limit up means the contract is not allowed to move up more than 5% in overnight  that is, there can be no trades higher until 9:30 am NY timetrade below the upper limit is permitted (this is what is now happening, ie the price has fallen back a little) that is price can trade down, just not any further up --- 5% up-and-down limitseffective 5:00 p.m. - 8:30 am CT, Sundays through Fridays ForexLive

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BASICS | EDUCATION FROM BROKERS Mon 16 Mar

What are forex signals, and do you need them?

A look at forex signals and what they are Forex trading can be overwhelming, especially for beginners. This is why trading signals are a valuable tool in your resource kit. Thanks to signals, you can make decisions about whether you should buy or sell a currency pair at a certain point in time. Signals can be generated by way of fundamental analysis or technical analysis. Many factors work in sync with one another to generate buy/sell signals for you to act upon. Various Forex brokerages offer signals to their traders for a nominal fee or for free. Entry and exit points can be determined when using Forex trading signals, and when done right you can successfully trade utilizing these signals. Forex signals are used by all kinds of traders, not just those playing the foreign exchange market. Importers and exporters in particular, also need to pay attention to exchange rates so that selling and buying products and services could be done at opportune moments when money could be saved and the cost of trading cut. Clearly, parties that have direct interests in the foreign exchange market also have it in their interests to closely monitor and otherwise make use of forex signals. Such parties obviously include currency traders, investment banks, central banks, and all varieties of institutions that have currency exchange interests. Professional or novice traders do not particularly need any specialized technology in order to be able to receive or make use of forex signals. However, for serious forex trading, there exists a wide variety of technology, most of its proprietary and some available online, that not only allows traders to receive forex signals, but also allows them to analyze better trends and movements so that more profitable decisions could be made more reliably. The power to make use of the said signals in such ways was once the domain of large institutions. Now it can be said that such capabilities to exploit forex signals are well within reach of anyone with reliable internet access. This article was submitted by LegacyFX. ForexLive

BASICS | EDUCATION FROM BROKERS Wed 11 Mar

Do’s and don’ts of trading forex

What are the basic trading strategies Forex Trading is the biggest market in the world in terms of activity. A mammoth $5 Trillion is traded each day. With the amount of volume traded comes great opportunity.  Traditionally it was only the wealthy who had access to trading high volumes on an exchange but now, thanks to leveraged trading, virtually anyone can compete and trade in the Forex market. There is a wealth of online brokers which facilitate trading with leverage, granting accessibility to traders with less capital who want to trade higher volumes.  New Broker EagleFX allows users to start trading with as little as $10 and lot sizes starting from 0.01 lots up to 1,000 lots - catering for beginners and professionals alike, in pristine trading conditions. It is important to consider some key fundamentals before entering the market with a 'buy' or 'sell' position.  This article will run through some of the key 'do's' and 'don'ts' which will help you, as a trader, be more successful by following a few simple rules. Do's Have a trading plan! It is massively important to have a game plan and hence why it makes it to the top of the list for this piece. Not only is this true in sport but is especially true in Forex. Traders need some sort of clear goal and objective when entering a market. Forex trading is considered an aggressive marketplace so having a plan is pivotal to success.  Without a plan, trading might as well be considered gambling. Do your own research Knowledge is power so make sure you are doing some reading of current market trends and political situations that might affect a particular countries currency. Politics is a good place to start when looking at how a currency may fluctuate as well as other factors such as war and natural disasters. In August 2005, Hurricane Katrina devastated New Orleans costing the US economy an estimated $45.15 Billion. Epidemics can have damaging effects not only on the populous but also on markets. The ongoing Coronavirus has hammered markets in recent days and weeks. Global Stock Markets have been gripped by fear and UK Stock Markets are seeing their biggest fall since the great financial collapse of 2008. In addition to the Footsie having its worst day in 12 years, the DOW had 2,000 points wiped off as many economists are concerned over a looming global recession. Be patient! Patience is a virtue and a vital ingredient when looking towards trading successfully. Being patient helps to keep any impulsive behavior patterns at bay. Goals Set yourself a target of how much you are willing to lose. Not only this, set yourself a target profit you would be happy with. Trading Platforms such as MT4 have tools where you can set a desired 'take profit' and a 'stop-loss' where you will be stopped out of a trade when the profit or loss amount is triggered. This is especially useful in long term positions and if you are unable to log into your trading account. Trade over 60 Stocks at EagleFX all backing into the award-winning MetaTrader4 platform. Sign up is free! So now we have seen the 'do's' let's explore the 'do nots'! Don'ts Don't overcomplicate strategy We know that having a strategy is crucial to trading success. Having a clear outlay of objectives helps maintain discipline but try and keep things simple. Having too much to think about may serve to cloud judgment. Don't let your emotions take over. Human beings are extremely emotional and even more so when under stress. Stress can be magnified when money is involved! What is vital in trading is to not let emotions cloud judgment when in an open position.  The big 2 emotions traders will experience at some point or other are: GREED FEAR Greed, one of the 7 deadly sins and a particularly dangerous attribute to have when trading. Greed makes humans behave differently and without clarity. It is a feeling of want rather than need. Greed can affect traders in several ways. Greed can make traders 'overtrade'. Overtrading in the sense of chasing losses or having multiple positions open to try and offset a losing trade. Traders can and will take unnecessary risks if greed starts to seep into the trading psyche. This is why having a strategy is essential and - sticking to that strategy even more so. Traders should have a particular profit in mind pre-execution. Maintaining discipline and taking that profit is the challenge to most. Fear can leave traders feeling like deer in the headlights and debilitate us - resulting in a fight or flight scenario. When a trade starts to creep into profit, fear can make traders close positions too early in fear that the price will begin to fall when in fact the market is moving on up. Equally, fear can make traders close positions too late when a target profit has already passed and the market starts to shift against us. New traders are particularly susceptible to FOMO - fear of missing out.  Traders open positions without thought or analysis, fearing that a chance might go when in reality, it wasn't there in the first place. Don't fall into the trap of revenge trading Once you have reached your target profit, take it. Make use of 'take profit' features to alleviate temptation. Don't use money you can not afford to lose! This goes without saying, only invest capital which you can afford to lose!  Trading should be taken seriously. With the right blend of analysis and research, trading Forex can be a profitable side earner. Don't turn trading into gambling and stay within budget parameters. Take advantage of a range of analysis pages at Award Winning ECN Broker, EagleFX. Traders can make use of daily market analysis features including charts which can be edited as well as economic calendars highlighting global events and press releases which will affect global market performance. Trade on over 55 currency pairs and much more. Join for free today. This article was submitted by EagleFX. ForexLive

WAR STORIES | BASICS Mon 9 Mar

There is no limit down in cash forex

Trade continues in forex despite the closing of futures tade due to limit locks  (its not actually closed, I explained here: US equity futures circuit break triggered - ES limit down)  FX has no such restriction, the chaos is expressed in wild swings (USD/JPY range today has been over 300 points, and others have been wider still) and wide spreads. No limit down. No limit up.  USD/JPY chart. daily candles: ForexLive

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MARKET WISDOM Wed 26 Feb

S&P500 Futures: To catch a falling knife or grab a bargain?

When can you catch a bounce?   I came across a thought provoking article on Market's Live Blog this am on the S&P500 futures chart. The piece was suggesting that some buyers might be buying S&P500 futures this am on the premise that after four big down days then a correction is due. Here was the chart:  Coronavirus is getting worse The spread of the virus is much worse now. We have new cases popping up everywhere and my gut instinct is that this is now definitely going to be a global pandemic. I can't see the olympics or the Euro's going ahead and we are in for a rough ride. One US CDC official was on the wires saying that it's not a question of 'if', but 'when' it becomes a pandemic. However, markets do not fall in a straight line. For those long term equity investors we are getting some low levels to load up on longer term longs. Nice. So, if you have a 10+ year framework, there are nice bargains ahead and set to get cheaper.  When to take a bounce? The thrust of my article is to ask the question, 'when do you take a bounce from a large fall?'  I was looking at the S&P500 yesterday tempted to take a long. I'm not now as the market mood is firmly down, but I was at least looking for some kind of reversal from the stochastics to indicate a turning point alongside some softer news.  Otherwise, it seems that you would just be trying to catch a knife. So, how about you? What will you need to potentially buy into these large equity falls? Do you have a rule of thumb that you go by?  ForexLive

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TRADING PSYCHOLOGY Tue 25 Feb

Sharks actually save the lives of swimmers (for real!). A piece on behavioural bias

This is an article on human reasoning fallibility as it pertains to trading/investing that is well worth a read. I found it earlier and though I'd share it: sharks actually save the lives of swimmersOn average, each swimmer killed by a shark saves the lives of ten others by keeping people out of the water: "Every time a swimmer is killed, the number of deaths by drowning goes down for a few years and then returns to the normal level. The effect occurs because reports of death by shark attack are remembered more vividly than reports of drownings." Check it out here, link  Stick your examples of how this works in markets in the comments if you like.  ForexLive

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