Using the Right Indicators

Lucy Pinflak

You can simplify your trading by using several different indicators. These indicators will give you a look at the market at the moment you plan to take a trade. No matter the timeframe these indicators can be used. Although the information in front you could be lagging, it will still give you more of an idea of where the instrument may go in the future.

Let’s look at several different indicators

The first indicator we’d like to discuss our moving averages. These the most common indicators used on charts for traders across the world. These moving averages will give you a price area where volume has come in at certain times. They will also give you support and resistance areas based on the movement of the instrument. These indicators are one of the highly used methods of trading no matter if it’s intraday or daily. We like to use more than two of these moving averages on our chart to give us an area of entries and exits.

You can use something like the VWAP, which is an indicator that gives you information about volume average price. It describes what is happening around the  area when price has been in that location. This indicator is becoming widely used by many of the institutions and algorithmic trading mechanisms across the world. If you plan to use the VWAP be sure to understand it in its entirety.

The most commonly used indicator is volume. You can determine to enter a trade based on volume. If you are watching a particular instrument that isn’t really moving, but has minimal volume this could tell you that when the volume picks up that you should enter the trade. When you have an instrument with very high volume you need to be careful of things like rug pulls and manipulation of the instrument. Volume can give you so much information on the most highly traded mechanisms in the markets right now.

If you decide to watch things like stochastics MacD and RSI, you will find yourself up against a big wall. There are a lot of people that use these indicators, but don’t fully understand how they work. Depending on the market conditions we are in, these indicators can be a great tool, but you need to be aware of what is happening in the overall market.

 

News

Trading based on news is a great way to get in and out of the trade with fast execution. As soon as a news event is announced, you can enter the trade or decide to wait for certain pullback before you enter. This will give you an opportunity to get on a big trade just before the magic happens.

No matter which method you plan to trade in the future, make sure you understand the indicators you plan to use. There are many different methods of trading of course, but indicators are one of the things you need to be aware of when looking at charts. There’s going to be a lot of information coming to you in the future so please be aware of this and come back shortly.

Bond Sales Begin to Surge

Lucy Pinflak

Bond rates showed that most major investors in the U.S. economy believe that the Federal Reserve will raise interest rates in December. In what one analyst described as a “bloodbath,” 10 year U.S. and euro zone bond yields were seen increasing to the highest point that they had seen since May of 2016. In England, British yields pointed to the biggest one month gain that’s been seen in more than seven years, and showed no signs of a quick reverse.

The shift to treasury bond purchases away from stocks will likely continue on a gradual basis until a final decision about rates is released in December, granted that the fundamental information keeps the same tone.

The corollary to this is that stock prices around the world have begun to drop sharply as a result of this. Read more “Bond Sales Begin to Surge”

Exxon Mobil Under Investigation

Lucy Pinflak

The SEC recently announced that they are beginning an investigation into Exxon Mobil, one of the largest oil companies in the world. The allegations say that Exxon has improperly valued their assets in the light of the drop in oil price, and that the company is not worth what the released documents say that it is. Specifically, the SEC believes that Exxon has not been properly valuing its oil reserves when prices decline, and that this has artificially boosted what the company is valued at on paper, but does not actually reflect the real value of the company as oil price swings occur. Read more “Exxon Mobil Under Investigation”

Chinese Banks on Edge

Lucy Pinflak

China’s economy has had a rough ride. The stock market has been in freefall at various points throughout the calendar year, and just as things look like they are starting to stabilize in one form or another, another calamity occurs. The latest issue coming from China is the fact that there are warnings of bank failures reverberating throughout the world. A global bank watchdog organization recently warned that certain Chinese banks were at a high risk of failing. Groups like the Bank for International Settlements review banks, and let the rest of the world know which banks are safe, and which are not. According to their most recent quarterly review, many Chinese banks are gauging at three times above the warning level when it comes to a risk of default. Read more “Chinese Banks on Edge”

Stocks Rocked After Fed Speculation

Lucy Pinflak

The United States stock market had its second worst day of the year on Friday, September 9th. This came after comments from the U.S. Federal Reserve that indicated that there was a chance that they would raise rates in September. This, along with actions by the European Central Bank just a few days beforehand, prompted panic in the U.S. markets as investors sold off their shares and try to protect earnings just in case the Fed actually does raise rates.

The worst day of the year was the day after the referendum where England decided to leave the European Union. This was a kneejerk reaction, and stocks were completely recovered within a few weeks. This is a very different situation, and the Fed does have quite a bit of influence over the stock market. When there is a rate hike, it almost always impacts stocks negatively. This impact can last for extended periods of time, or it can be a quick and painless drop in price where stock prices bounce back up very quickly. Read more “Stocks Rocked After Fed Speculation”

Trading the New President

Lucy Pinflak

Presidential elections tend to have a profound impact on U.S. stocks, if only because the impact on the stock market mostly occurs as a kneejerk reaction after the election, and not necessarily because of policies that the winning candidate puts into play during their time in office. As a rough example, a Republican winner of the presidency typically sends stock prices up on the first Wednesday of November, while a Democratic winner sends stocks downward. Republicans have long been seen as the party of big business while Democrats as the party of the disadvantaged because of their larger tax policies. Read more “Trading the New President”

Volume Versus Market Cap

Lucy Pinflak

Both volume and market cap are strong fundamental numbers that will help you to gain a better idea about the movement that a stock shows. As a binary options trader, these concepts will give you a better idea of the strength and momentum behind a particular stock as you start thinking about opening up either call or put options in relation to it. There are a few striking examples that have occurred in the last week or so that can give us a clear example of how this information impacts our ability to make profitable trades.

The first big example here is the Alibaba Group. Alibaba has a market cap of 260.23 billion, and saw an increase in price of 7.05 percent on Friday, August 12th. Much of this movement was because the company had recently been given a higher, revised price target for the next 12 months. Read more “Volume Versus Market Cap”

Euro Zone Showing Growth

Lucy Pinflak

The euro zone is showing signs of modest growth, but that economic momentum is not exactly what it seems. The growth rate for Q2 stood at 0.3 percent, or an annualized rate of 1.6 percent. This is almost exactly what the experts had predicted with the EU, but it is a number fraught with hidden problems.

Growth is definitely a good thing, but what we are seeing happen in the EU isn’t exactly uniform growth, but, in fact, it is a rather lopsided type of growth with a couple countries doing the bulk of the work. Italy performed especially poorly in the latest batch of data, for example. Germany was really the star of the data release, doubling economists’ predictions on how much growth would occur, settling in at an annualized rate of 3.1 percent growth. Germany is the largest economy in the euro zone, and even with this large amount of firepower, it was barely enough to give the economy as a whole a positive number. France, the euro zone’s second largest economy, remained virtually the same. Read more “Euro Zone Showing Growth”