Trend trading is perhaps one of the most commonly used strategies in the forex world. In this article we will be sharing tips on how to determine the end of one forex trend and the potential start of a new one. We will share 3 specific clues that you should be looking for when trend trading that will help improve your entries and exits.
One of the first indicators that a forex trend is ending is a trend line break. Taking a look at the chart below, you can see that there are multiple points throughout this bullish trend where price was supported by the bulls. Throughout this trend, the pair continued to form higher highs and higher lows which proves price to be strong. However, at some point this forex market was ready to start heading south. At this point, circled in the image below, buyers were no longer able to buy this market higher. This was the first time throughout this trend we see a pullback which is not supported by the bulls, showing that the market is likely ready to reverse.
After a trend line break, the first sign that a forex trend is ending, we see a bullish push back that fails to meet higher highs. Throughout the bullish trend price continued to reach higher highs. However, after the initial trend line break we see lower highs beginning to form. Thus, indicating that bears are pushing the market back down.
Finally, we see this level of support, which has held for many weeks get violated and broken beneath. Price eventually dropped below a significant level of support showing that sellers have control of this market.
Looking back, we had 3 major clues that this trend may be headed to the downside. these clues are possible things you can look for to potentially find the start of new trends or the end of a trend. We had a bullish structure and when we saw this structure break it gave us a clear indication that sellers may have some room to run. Our second indication was the forming of a lower high. Finally, there was a break of structural support. With this information about trend trading, we could have identified the series of lower highs and potentially taken a short position.
Inflation saw a decent spike for the Sept -Oct period. Prices are up across the board but the majority of price increases are still in localized sectors. For the full report visit this link.
This could be as sign that inflation will get much worse. Keep in mind that the economy is sitting on a powder keg of newly printed dollars. We have not seen a demand spike that will kick inflation into high gear at this point.
Aside from food, energy has seen the largest consecutive increases over the last 1 month and 12 month periods. Energy is up 4.8% since September. In the last 12 months, energy is up 30%! This is the largest 12 month increase since the period ending in 2005. Last time this happened, Brent Crude Oil bunched through $100 a barrel almost a year later. In this current market, I think that supply shortages and increased demand will soon see oil jump in the next year or sooner.
I am working on an article talking directly about the future price of oil and that will be out in a few days. I will also be talking specific stocks that myself and professional analysts really like that will allow the average investor to take advantage of the increase in the price of oil.
Most likely. But I'm always skeptical.
The Beauru of labor statistics changed how it measured inflation several times since the 1980’s. Depending on how you measure the numbers the CPI will change. Sometimes this is necessary, but sometimes the changes can skew things in order to make things look better than they actually are. The CPI is a based off a “basket” of goods; that is to say a set of goods that the average consumer usually buys during a 1 month period. Since Iphones and other gadgets didn’t exist in the 80’s and 90’s, this type of tech spending changed the way CPI is measured.
Using 1980-Based measurements (courtesy of shadow-stats) we see that inflation is nearing 15%! Keep this in mind before accepting the current number at face value. Trust but verify.
For questions and comments, you can reach me at firstname.lastname@example.org or through the A1Trading discord at @smstreb97
Price has been in an overall pretty strong uptrend for the most part over the last year, we're only seeing some retracement now from the strong ascending channel. 0.70 is a key horizontal level that has been jumping between support or resistance since 2018. If we do see a change in trend, this is an important level to look out for where we could see price consolidate around.
0.756 is a key shorter-term horizontal level which was a clear level of support during the ascending channel, and now that price has broken out of this chart pattern, is seen as clear resistance in July and now last week.
Price has formed this intraday ascending channel, and we recently saw price reach the top, make a couple of rejections and is now on its way to continue the trend and head towards the next higher low and the channel's bottom around 0.727. I expect price to make this move and continue this trend.
Looking at retail sentiment, it's pretty mixed as there isn't a clear winner with one action being over 60%, however, most traders are somewhat bearish on this market. There isn't a huge difference in volume either so it's not very likely we'll see financial institutions manipulate this market. Most traders are looking to catch the trend continuation back down towards the bottom of the ascending channel it looks like.
We're seeing many macroeconomic data to look out for, a lot more affecting the USD rather than AUD, therefore the price of AUDUSD will most likely be affected by what's going on with the dollar, positive USD news will push AU lower and negative news will push AU higher.
The US central bank is going to have a monetary policy meeting on Wednesday. Back in September, chief Jerome Powell anticipated that they could begin a gradual tapering process at their next summit, with the Minutes of the meeting indicating the central bank would probably start by cutting $10B/month in Treasuries and $5B/month in mortgage-backed securities.
On Wednesday, the USD will publish the ADP survey on private job creation, while by the end of the week, the country will unveil the October NFP report. Following the terrible September headline number of 194K, the country is expected to have added 455k new job positions, dropping the unemployment rate by 0.1% to 4.7%.
RBA Governor Philip Lowe was somewhat vague on when the RBA would raise rates, saying that the bank would be “patient” and wait until economic conditions were suitable for a rate hike. Lowe has said on numerous occasions that the bank would not raise rates prior to 2024, but the markets have been much more hawkish, given the country’s strong recovery and high inflation. The markets have been aggressive in pricing in a series of rate hikes, with the cash rate projected to rise to around 1.5% by the end of next year. Unless growth and inflation drastically decrease, a strong case can be made for Lowe having to accelerate forward guidance to 2023. If Lowe insists on the 2024 timeline, the Australian dollar could face further headwinds.
Looking at the US economy overall, we're expecting to see a bullish USD as the Fed is expected for a rate hike as inflation is going to be higher for longer and the Fed will take advantage of this, to normalise rates by as many as 2 or 3 rate hikes in the next 15 months. This should be dollar supportive, especially considering conditions elsewhere and other central banks offering less clarity. Additionally, as mentioned earlier with the FOMC meeting on Wednesday, the Fed is closer to begin tapering, bond yields may finally start moving higher, along with US dollar strength.
Today I'll share some economic analysis on the CPI report and what to look for in order to tell if inflation will get worse. Lastly, I'll cover some ways that you can make an investment play on inflation.
The Consumer Price Index report for September 2021 was published on October 12, 2021. Prices increased for urban consumers by 0.4 percent in September on a seasonally adjusted basis. This is slightly higher than August which came in at 0.3 percent. On a 12 month basis, the CPI is up 5.4% from September 2020.
You have likely seen your gas prices so I don't need to tell you that prices are up, but it's worth noting how much. All major energy indexes are up this month. The entire energy index increased by 24.8% on a12 month seasonally adjusted basis. Gasoline is up 42.1% and Natural Gas is up 20.6% over the same period. Electricity also increased by 5.2%.
The index for food was up 4.5% over the past 12 months. The largest movers in the food index were meat products. Meat, fish, poultry, and eggs increased 10.5% and the index for beef is up 12.6% in the last year.
We've all heard someone in the last few months say something to the effect of : "40% of all dollars were printed in the last year" with an ominous reference to potential inflation. This is more or less correct as the US government has printed a ton of new dollars, but printing more money doesn't directly lead to inflation. If we look at the velocity theory of money we can understand why. The velocity of money is essentially a way of measuring how fast money changes hands, given the price level, GDP and money supply.
Rearranging this, we can see that the speed at which money changes hands is a function of the price of goods, the GDP and the Money supply. Price levels and GDP haven't shifted much, but the M money supply increased a lot. This means that the Velocity of money should be low. And velocity is very low.
This means that inflation hasn't hit us hard yet.. If inflation really starts to pick up, the velocity of money should see a noticeable increase as more dollars start to change hands to pay for the increased price of goods. This is demand inflation. Prices have increased in specific areas, but we have yet to see large scale inflation.
The Federal reserve has shown that it is hesitant to drastically increase interest rates from their near 0 levels, and are more than willing to increase the amount of assets on it's books. As a result the the amount of dollars in the system increases. Under normal circumstances, low interest rates and an increase in the money supply increases the demand for goods and services. But we haven't seen this. Why?
Individuals and businesses have thus far used PPE loans and government stimulus to pay off debts and cover their bases during the pandemic. Since these individuals and businesses can pay for the goods and services that they need, they don't demand more. There is no pressure for a demand shock at this time. The money generated by Fed is sitting idle in bank accounts, investments and institutions.
We are currently in a supply shock in the U.S., increasing in the price of select goods, but we haven't seen a drastic increase in demand or a change in velocity of money. This doesn't eliminate the possibility of future inflation though. That money is still in the system, and we could still be sitting on a powder keg.
Currently, I am looking at stocks and asset classes that I think will rise in the event of inflation. Ill share my methodology for my search and give some stocks that I think fit into this criteria. Ill try and explain why I think some industries will do well and why others will not. This is not advice, I am only sharing my opinion and observations.
Oil and Natural Gas Producers: Natural gas is up in price by 20.6% and Fuel Oil is up 41.7% since last year. Winter is coming in the United States and Europe and the prices for these commodities are already increasing. Couple this with inflation and supply problems, producers will benefit immensely from this. These guys find the material, and sell it. they only get more money if the price of the commodity goes up and people still need to full up their gas tanks and heat. their homes. The risk is that shipping problems could cause issues.
Coffee Producers and Futures : America has an addiction to coffee, this is no secret. An article from yahoo finance, described how Caribou Coffee is buying tons of Coffee beans in anticipation of supply shortages. This commodity shows robust demand despite price increases. One difficulty I see with this is finding the right way to invest in this commodity. I'm trying to avoid companies like Starbucks, Nestle and Keurig that sell coffee directly to consumers as they may not be able to pass on as the price increase. It seems like that is the only option aside from directly purchasing futures. One possibility is $JO, which is an ETF that tracks monthly coffee futures contracts.
Refiners and Pipelines: Avoid these like the plague if oil and gas prices go up. These companies take a hit when prices increase because they cannot pass prices onto their consumers quickly, yet they still have to meet the demand of consumers to stay in business.
Beef and Pork: If inflation hits this sector Americans will substitute out the expensive red meats for cheaper alternatives like chicken. This is due to the fact that most Americans have a predetermined budget for grocery shopping and will maximize the amount of food they get.
For questions and comments, you can reach me at email@example.com or through the A1Trading discord at smstreb97
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Inflation Concerns in the Market, GU Drops, Gold on Support
|GU sank after good news on both currencies reported today. Price could be experiencing a retracement on the 4H chart and setting up to hit support around 1.4000s.|
|Gold still struggles to break above the 200 DMA but seems to have found support in the $1820s. If price can sustain itself above this mark on the 4H chart, it would be a bullish sign that price will continue to retest the moving average and not come back down to additional support around the $1800 area.|
|SPX dips hard under support on the 4H chart as products are becoming more and more expensive due to inflation. This news has concerned most investors who are lessoning their stake in stocks. A close under this support zone could mean some more bearish movements will likely happen along with a dip to $3987.|
Yields Climb, USD/CAD Falls, SPX in the Red
|UC on the daily chart can't break above the falling trend line and retests lows in the 1.24000s. This is the lowest price has been since 2018 which shows how powerful this down trend has been. Employment data came out today for CAD which was better than expected, and most likely the reason why the pair fell again today.|
|Looking at bitcoin from a technical standpoint on the daily chart, price is now back up to all-time highs for its second test on the resistance. Traders are most likely looking for a breakout to the upside which would probably keep price running up into the 60ks. If not, the crypto has support at 52658 and the 42-43Ks zone.|
|SPX500 on the daily chart takes a breather near the highs after a few days of green fueled by the senate passing of the $1.9 trillion stimulus bill. Bond yields are rising again which could be the cause of today to be in the red, but it's the tech stocks that are dragging the market down for the most part. NASDAQ is sliding and the Dow made a new all time high today, so keeping an eye on treasury yields will be important going forward for sector-specific opportunities (tech, blue chip, etc.)|
I wanted to talk about rushing the trading journey because this was a significant challenge I had very early on in my journey, and it is one I see the majority of traders make often unknowingly. That is the danger of rushing, you have no idea you are even doing it.
Mid-2018 I made the decision that I wanted to leave my corporate graduate job and seriously pursue a career in trading. I was so tired of seeing YouTube advertise 2 day trading workshops that would magically turn me into a trader... you can just smell the bullshit on these guys. If you have even a smidge of common sense, you know that if you want to become successful in any industry it is going to take time. And I knew I would have to invest in my education (FYI I was super sceptical about this, and even though the trading platform I joined was one that had a coach I saw as genuine, I still only signed up to a month initially in case it was a scam.)
Anyway, once I had joined a reputable trading educator platform and began to work through their content, I still found myself rushing through learning how to read a price chart and backtesting, all because I was driven by a desire of wanting to live trade. Every day all I focused on was: WHEN AM I GOING TO GET TO LIVE TRADING? I just thought that I could figure out how to trade once I was on a live trading account.
And I genuinely thought my attitude was one of ambition and being driven rather than just rushing because I was impatient with the process.
Senior traders in the community I was in were telling me, “SLOW DOWN NAOMI. YOU ARE RUSHING. THIS WILL BITE YOU IN THE ASS LATER ON.”
I did not listen to them. And to be honest, I thought what the hell do they know? They aren’t sat here with me. Just because they took ages it doesn’t mean I will.
Oh how I was wrong! During an accountability session with my coach, he asked me what I wanted to achieve next year (2019). I could not answer the question. This was a major wakeup call for me. It was embarrassing. But feeling that embarrassment is what woke me up.
I knew I was going to have to start my learning from the beginning (after spending 3 months rushing). Below is what I did to rectify the situation and to ensure (to the best of my ability) that I would not rush through it again.
I spent half a day sat in my room thinking, ‘forget trading. what is your end goal? what do you even want to use trading for?’ Once I got clear on that I began reverse engineering my end goal back in stages to present day. I had my road map of every step I needed to follow.
This was a game changer for me because I finally had short term milestones to focus on. This meant I was no longer focusing solely on live trading, because there were several milestones that came prior to this.
1. Build a solid foundation: learn how to read a price chart, understand the different concepts of reading price individually.
2. Put it all together: put the different pieces of reading a price chart together so you can see the story that it is telling you.
3. Explore different strategies: review the strategies available.
4. Select a strategy: select a strategy depending on your lifestyle and time commitments.
5. Develop a strategy: get clear and write the rules out for your strategy, and purchase or create a backtesting spreadsheet.
6. Backtest that strategy: go through historic data and ensure your edge is profitable.
7. Execute that strategy: demo trade and then live trade!
I then broke down this broad plan into monthly and daily tasks. I also figured out ways to stop me from rushing. If I could devise some objective way to measure my progress then the chances of me unconsciously rushing again would be greatly reduced. What really forced me to follow a method that would actually have a high probability of working was:
Having clear and realistic deadlines that were realistic according to MY PERSONAL LIFESTYLE (we are all different, whilst I may have 10 hours a day to commit to my journey, someone else may have 1 hour. It is just reality...hence our target deadlines will be different.)
Clear methodical ways to test myself (I created objective ways to test myself so that I could see whether or not I had progresses rather than my subjective ‘wanting to live trade’ self was not the one making all the decisions.)
An overview of the trading journey. This was complete belief transference because I knew (and still know) that by following it I will reach my goals. I knew if I did not follow it then I could kiss bye bye to my big dreams of what I want to use trading for.
Did all these things completely abolish my results driven mindset?
But it was definitely the start of at least being on the right track.
The irony behind everything mentioned is that focusing on the process is actually the quickest way to get the result. Focusing on the result is the slowest way to achieve it.
Instagram and Twitter: @naomigslight
Podcast: The Trading Journey Podcast
Our team has unfortunately received many reports of scammers using our content and pretending to be us. While we will continue to report these accounts to the authorities as we receive reports, we may not always catch them in time. Below our a list of things to look out for before making a purchase to any platform.
We DO NOT direct message our customers on social media! While we will respond to messages we receive on our accounts, we DO NOT message followers first. If you receive a message from an account that you have not previously messaged, this may be a sign of a scammer. (See example of a message from a scammer below)
If you would like to get in contact with a member on our team and ensure that you are speaking with a legitimate member of our team, submit a question through our website. We have linked legitimate accounts to reach out to on our website. Contact our Support Team Here
A1 Trading does sell an online VIP community, however, we DO NOT ask you to send us money directly via direct message on social media platforms. Any payments for our VIP community are made on our website (a1trading.com).
Scammers also tend to be more pushy for a sale and unprofessional. A scammer may ask you multiple times to send them money or say they cannot help you until you send them money. We are not this desperate and quite honestly, we do not have the time to beg for a sale. If something feels off, go with your gut.
This goes for pretty much everything in life, If it's too good to be true, IT IS. Unfortunately, nothing in life is going to make you large amounts of money instantly. If it did, everyone else would already be doing it! Any successful person will tell you it took hard work and dedication to get where they are today. They won't tell you someone direct messaged them on social media and sold them a membership that made them thousands instantly. Use your gut! If someone is promising large amounts of money if you pay them, there is something wrong.
There are multiple telegram channels using our images that are particularly hard to get removed . If you see any messages that look similar to the one below this is a huge red flag. We DO NOT offer investment plans or account management. We will NEVER ask you to send us money with a guarantee that we will make huge returns. If anyone guarantees huge profits if you give them money avoid them. Although it sounds nice, no one can guarantee anything in the markets no matter how knowledgable they are.
There are a few things that you can look out for in a profile that is a red flag and is most likely a fake account.
First, check the date of their posts. Scammers, unfortunately, are creating thousands of these accounts. If the posts were all created on the same day, this is a red flag! Scammers often post lots of posts to fill up their profile to make them seem more legitimate.
Second, read the captions. Because these scammers are busy direct messaging people and creating lots of accounts, they usually do not put much time into their profile. Usually, their posts will have no captions, very short captions or captions with some emojis. Real accounts are more genuine and captions are more personal and thought out.
Third, look at their stories. Real accounts usually post live videos on their stories. Scammers post screenshots of other stories or videos that do not show them or their voice. When deciding if an account is a real, look in their stories for videos of them.
Lastly, weird fonts seem to be a signature for scammers. If you see a comment or caption that has a weird font, be skeptical.
Below are screenshots of a fake account with examples of the red flags:
Unfortunately, there are scammers everywhere. They are scamming people in every business, not just ours. Here is a checklist of things to ask yourself before sending anyone money.
1. Is it too good to be true? Are they promising me way more than I am paying?
2. Are they being too pushy for a sale or unprofessional?
3. Is their profile legitimate? Do they share real videos and genuine posts?
4. Are they sharing a legitimate website to make a payment or am I sending money to their personal money transfer account?
5. Does something seem off?
If you feel that something seems off and want to ensure your money is going to a legitimate person, reach out to our support team on our website. Contact our Support Team Here
Below are accounts that are associated with A1 Trading. Any other account is not associated with us and is a fake account:
A1 Trading Forex Analysis
Setting goals for yourself when it comes to your performance in the financial markets might not be as straightforward and simple as you may imagine.
It's essential to set a goal whenever you're working towards something in life, otherwise how will you ever know if you've achieved it? Goals can be motivating and are often really helpful in keeping you on the right track to achieving success.
However, it's just as important to spend time ensuring the goals are meaningful rather than purely inspirational and spur of the moment thoughts. Things that are actually going to help you reach a desired outcome and monitor your progress towards achieving it.
For example, when you set goals for your trading/investing progress, have you ever relied on statements along the lines of "I want to become more profitable" or "I want to open more great trades?".
I have to hold my hands up to that one, I've used goals like that in the past - most traders have! Unfortunately, these sort of blanket statements just fall into the category of 'easier said than done'.
We need to get more specific. We all set these blank goals in life. We set ourselves these vague goals often. Saying I want to be a profitable trader is just like saying I want to be able to run a marathon or I want to get all A’s in university.
To be able to truly achieve your trading and personal goals you need to get specific and consistent with your goal setting.
Each of us has different strengths, weaknesses, and past experiences that affect our trading. Some may be highly risky traders as they have not yet encountered a reality check by Mr. Market others may be risk averse. We all have different areas we need to work on in our trading approach if we want to progress and succeed in the markets to become profitable traders.
By using a blank statements about our overall trading, we're not really going to be measuring progress in the areas that really matter to us individually.
Rather than setting goals and measuring our success based on improvements only in our P&L, we should be identifying points that are holding us back and find an appropriate measure that shows progress in that specific area.
Many traders need to focus on their risk management (which I believe is the key to a long career in the markets) setting specific goals such as no more than 2% per trade or after 3 losing trades walking away from the screens. Stopping to trade when you feel that you will over trade or start revenge trading. If this is something you struggle with get some help! Invest in your education here with A1 Trading
Other traders may need to focus on not jumping the gun! Not entering into trades too fast, not checking macro-economic data or not looking at the economic calendar to see if there is high volatility news due, as we all know trading before major news releases is very risky.
By doing that, it will help us to focus our development plan in a way that's meaningful and encourage trading in a way that's more sustainable. Things that avoid us being tempted into risky approaches in an attempt to hit profit targets, without any improvements actually being made to our ability.
What's your ratio ?
To help put this in to practical terms, there's a quote from the book 'Good to Great' by Jim Collins that has always resonated with me. It's intended to apply to business, but I think it can also be adapted to apply to trading or any other area of your life you're hoping to improve.
"If you could pick one & only one ratio - profit per _____ - to systematically increase over time, what _____ would have the greatest and most sustainable impact on your economic engine?"
That's definitely something to really focus when making realistic goals regarding your trading. The word 'sustainable' is key here - we don't want to hit a profit target for the sake of it, but instead we want to see an improvement in our approach to the financial markets in a steady & sustainable way. Improvements that lead to dependable and repeatable returns in the market, not a one-hit wonder.
Have a think about you ratios as a trader - what would your ratio be that you want to improve? What would show that your performance as a trader / Investor is moving in the correct direction?
If you're an A1 member, let's discuss and share our specific trading goals in the discord server
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Get started at A1 trading!
1 Join A1 Trading and focus on learning the reality of trading the financial markets.
2 Start applying trading concepts learnt and focus on achieving consistency and discipled trading and learning the basics of risk management.
3 Take your consistency and get funded through . Trade on live account with consistent profit.
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