Market condition

6 easy ways to lose money in stocks

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1. There’s always a bull market somewhere

There might be a bull market somewhere, but it won’t always be in stocks. And if there is a bull market somewhere, there must be a bear market somewhere, too. The problem with this comment is that it makes people believe the stock market always goes up. As many investors already know, that is most definitely not the case.

2. The ‘little guy’ is causing the market to fall
When the S&P 500 or some other market benchmark is falling, analysts always want to blame someone. The retail investor is an easy scapegoat. I heard a commentator make this ridiculous comment during a recent market selloff. Come on! The “little guy” (i.e. retail investors) do not have the power to move the markets (unless there is mass panic). In fact, the retail investor is usually the last to get out of the market, and often at the bottom.

3. Your stock will come back to even
The conventional wisdom is this: If your stock goes down, you should buy more because you are getting a bargain. If your stock goes up, you should buy more because you’ll be missing out on a great opportunity.
In reality, there are times when your stocks, even some of the best, do not come back to even or at all.

4. Buy on the dip
Buying on the dip during a bull market or when the market is in an uptrend can work, but if you buy on the dip during a downtrend or bear market, you could get slaughtered.
Even worse, some people buy on the dip while they are holding losing positions. Here’s a rule: Don’t ever buy additional shares of a losing stock, especially if it is still going down.

5. You can get rich quickly
There is nothing more ridiculous than books that promise to make you rich in the stock market. Yes, you can win, build wealth, and make profits, but to believe that after reading a book you will get rich is ridiculous, and is only designed to sell books.

6. Buy low, sell high

Similar to buy on the dip, the “buy low and sell high” mantra has been drilled into investors since the early days of the stock market.
Unfortunately, this cliché has caused many investors to lose big in the market. For starters, the terms “low” and “high” are difficult to define. No one knows what is low or high until after stocks have reached these points.

Forex Vs Other Markets

Attachment 5502

• Forex provides many advantages over traditional markets
• The Forex market estimates over $4 Trillion in daily volume
• Costs and market access make Forex accessible virtually around the clock

How to Direct Your Strategy based on Market Condition

• Traders should look to focus their strategies in appropriate market conditions.
• Multiple time frame analysis can offer a ‘bigger-picture’ view of a market.
• Traders can choose to trade trends, ranges, or breakouts based on their analysis.

Trends show a bias that has been displayed in the market place; and when a strong trend is available, the trader’s job is simple: To trade in the direction of that trend. If the trend is up, the trader should look to buy; and if the trend is down, the trader should look to sell.

Unfortunately trends don’t always exist; and when that often entails congested, range-bound price movements as bulls and bears both fight to take over control of the market in search of the next trend. These range-bound environs can be more dangerous, and given the limited upside that might be available, many traders will often eschew trading the range; instead waiting for the inevitable breakout that may end the range and lead into a new trend.

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The Benefit of Multiple Time Frames

The value of being able to get a ‘bigger picture’ view on a market cannot be understated. To think of the value of multiple time frame analysis, think of trading in a currency pair like buying a home.

If you’re going to buy a home, you’re likely going to want more of an overview than simply driving by and getting a quick glance. This is like trading a currency pair when only seeing one time frame.

When buying a home, you’ll likely want to get out of the car and walk around to ensure that the back yard isn’t in complete disarray. You want to check the foundation to make sure that you’re not going to have exorbitant repair expenses in your future. You want to get as much information as is feasibly possible to make the most intelligent purchasing decision that you can.

Trading in a market isn’t all that different, the more information you have the more of an informed decision that you can make.

Multiple Time Frame Intervals for Trend Diagnoses/Entry

Attachment 5863

And if the four-hour time frame is being used to enter positions, the daily chart can be used to gauge the trend (or lack thereof); so that the trader can ensure they are focusing the optimal approach on the prevailing market condition.

Or perhaps a longer-term trader wants to use the daily chart to enter trades. Well, then the weekly chart can be used as the longer time frame to guide the trader’s decision-making processes.

The benefit of using a longer time frame in the decision as to which strategy to utilize is that the trader can take more information into account, getting an idea of the ‘bigger picture’ before executing on their strategies.

Gauging Trend Strength (or lack thereof)

Once a trader has determined the time frame with which they want to look to grade the prevailing trend, focus can then be diverted to investigating the strength of that trend.

Price Action is a popular mechanism for doing so. Traders can simply look as to whether a market is in the process of making ‘higher-highs’ and ‘higher-lows.’ If this is taking place, then the trader is witnessing an up-trend, and can look to move down to the shorter time frame in an effort to buy as efficiently as possible.

Another popular way of grading trend strength on the longer-term chart incorporates the ADX indicator. ADX, or the Average Directional Index is an indicator created by J. Welles Wilder that was designed specifically to grade trend strength. The downside of this is that it doesn’t show which direction the trend might be moving, only whether the trend is ‘strong’ or ‘weak.’

Traders can use the ADX indicator on the longer-term chart to determine whether or not a trend is being seen in the market. If values are reading over 30 on ADX, then traders will often look to execute trend-based strategies.

Now that the Trend is determined, what’s next?

The shorter time frame is where the trader will often look to enter into the market based on the analysis on the longer time frame.

If a trend was found on the longer time frame, the trader’s job is to find a way to enter in the direction of that trend. On the lower time-frame, the trader can look to buy up-trends cheaply, or to sell down-trends expensively. This can be done with price action; or traders can look to incorporate indicators to offer a ‘trigger’ in the direction of the longer-term trend on the shorter time frame. Some common indicators for triggering positions on the shorter time frame are MACD, Stochastics, and the Commodity Channel Index (CCI).

If a Range-bound market condition was seen on the longer time frame, the trader has another decision to make before deciding how to enter: Does the trader want to trade continuation of the range, or the eventual breakout?

The logic of the range-bound entry and the breakout is directly opposite: Trading ranges entails selling highs, and buying lows (in anticipation of the range continuing), while trading breakouts involves buying new highs and selling new lows (with the expectation of the breakout bringing new highs or new lows into the market).

If trading for the break, traders can look to place entry orders slightly outside of support or resistance levels so that once a new high or low is printed, the trade is entered and the trader can look for new highs or lows.

If traders are looking to trade the range, an oscillator can be used similarly in the way that a trader would buy or sell in a trend (with the notable exception that up-side is limited). In both trends and ranges, traders want to look to ‘buy low’ and ‘sell high.’ The same types of tools can be used to determine when to buy and when to sell; MACD, Stochastics, and CCI are all popular mechanisms to trade in range-bound market conditions just as they are with trends.

Forex Open Position Ratios
A summary of open positions held by OANDA clients

These graphs show breakdowns from OANDA's books for recent open positions for the major currency pairs. This information is sampled every 20 minutes, and could be interpreted as an indicator of current trading activity.


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(Kitco News) - Gold prices ended the U.S. day session moderately higher Tuesday, on some more safe-haven demand that surfaced amid the simmering geopolitical situation in Ukraine. Chart-based buying was also seen as the near-term technical posture for gold remains bullish.

Gold prices are hovering not far below their recent four-month highs. April gold was last up $6.20 at $1,347.70 an ounce. Spot gold was last quoted up $7.80 at $1,348.00. May Comex silver last traded down $0.07 at $20.84 an ounce.



More...

China's net forex purchases slow in February

China's central bank and financial institutions bought a net 128.25 billion yuan ($20.75 billion) of foreign currency in February, compared with a net purchase of CNY437.37 billion in January, according to calculations by Dow Jones based on central bank data issued late Monday.

February was the seventh-straight month of net purchases, suggesting continuing capital inflows into the country.

The banking system's foreign-currency purchase position totaled CNY29.20 trillion at the end of February--slightly higher than CNY29.07 trillion at the end of January, People's Bank of China data showed.

The data include purchases and sales by commercial banks and other financial institutions, but mostly reflect transactions by the central bank.

Most analysts view the figures as a proxy for inflows and outflows of foreign capital as most foreign currency entering the country is generally sold to the central bank.

Forex Followup : March 24 - March 28, 2014
Key Fundamental Forex Events for the Week of March 24th through March 28th

The following table lists the key economic data and other events that came out during the week of March 24th through March 28th, with release times displayed for the GMT time zone.
The list also indicates how much each release deviated from the market consensus forecast upon release, as well as what the affected major currency pair or pairs did after each event or set of events.

Monday, March 24th

• 2:45am CNY HSBC Flash Manufacturing PMI 48.1 versus 48.1 expected. 9:00am EUR French Flash Manufacturing PMI 51.9 versus 49.8 expected. The currency rose.
• 9:00am EUR French Flash Services PMI 51.4 versus 47.9 expected. The currency rose.
• 9:30am EUR German Flash Manufacturing PMI 53.8 versus 54.7 expected. The currency rose.
• 9:30am EUR German Flash Services PMI 54.0 versus 55.8 expected. The currency rose.
• 10:00am EUR EZ Flash Manufacturing PMI 53.0 versus 53.2 expected. The currency rose.
• 10:00am EUR EZ Flash Services PMI 52.4 versus 52.6 expected. The currency rose.
• 12:00pm EUR German Buba Monthly Report noted that, "The global economy progressively improved during 2013 after getting off to a slow start. In the final quarter of 2013, the world economy probably just about maintained the moderate pace of growth it had generated up to then." The currency rose.
• 2:45pm USD Flash Manufacturing PMI 55.5 versus 56.6 expected. The currency fell.
• All Day ALL G7 Meetings: German Chancellor Angela Merkel said that, “As long as the political environment for the G8 is not at hand, as is the case at the moment, there is no G8 – neither as a concrete summit meeting or even as a format for meetings”.
• 5:30pm CAD Governing Council Member Lane said that, "Financial benchmarks are used in a variety of contracts to specify what, or how much money, is to be delivered on particular dates. One example is floating - rate debt, where the borrower pays the lender an amount of interest based on a benchmark that varies from one period to another according to a selected measure of interest rates." The currency rose.

Tuesday, March 25th

• 5:45am AUD RBA Deputy Governor Lowe said that, "In my own view, the internationalisation of the renminbi (RMB) – and the changes that accompany it – could ultimately prove to be as transformative for global capital markets as was the earlier opening up of China's borders for the global trading system. Even if this turns out to be only half correct, then we need to better understand the process of internationalisation of the RMB, including the pitfalls and the opportunities." The currency rose.
• 10:00am EUR German Ifo Business Climate 110.7 versus 110.9 expected. The currency fell.
• 10:30am GBP CPI 1.7% versus 1.7% expected. The currency rose.
• 10:30am GBP BBA Mortgage Approvals 47.6K versus 50.0K expected. The currency rose.
• 10:30am GBP PPI Input -0.4%versus 0.4% expected. The currency rose.
• 10:30am GBP RPI 2.7%versus 2.6% expected. The currency rose.
• 12:00pm GBP CBI Realized Sales 13 versus 30 expected. The currency rose.
• 2:00pm USD S&P/CS Composite-20 HPI 13.2%versus 13.3% expected. The currency rose.
• 3:00pm USD CB Consumer Confidence 82.3 versus 78.7 expected. The currency rose.
• 3:00pm USD New Home Sales 440K versus 447K expected. The currency rose.
• 11:30pm AUD RBA Deputy Governor Lowe said that, "The relatively high reliance of Australian issuers on the offshore market is evident in the data on the composition of corporate bonds outstanding. Currently, bonds that were issued offshore account for around 80 per cent of the outstanding value of bonds issued by Australian-based corporations. A decade ago, this figure was considerably lower at around 50 per cent. The offshore market is favoured by companies that want to raise foreign currency funding as a natural hedge against their foreign currency revenue." The currency rose.

Wednesday, March 26th

• 12:00am USD FOMC Member Plosser said that, "Tonight I would like to focus on a particular aspect of current monetary policy that has been a source of much discussion and debate — forward guidance — that is, the practice of providing information on the way monetary policy is likely to evolve in the future. Forward guidance has taken on greater significance since the FOMC lowered the target federal funds rate to essentially zero more than five years ago. Facing this zero lower bound constraint on its primary policy instrument, the FOMC has been attempting to implement monetary policy, in part, by influencing expectations of future policy." The currency rose.
• 1:30am AUD RBA Financial Stability Review noted that, "Indicators of distress in the business sector, such as failures and non-performing loans, generally continued to ease through 2013 and conditions appear to have improved. The period of deleveraging that took place following the financial crisis appear to have run its course, though the overall need for external funding by businesses, including demand for credit, remains modest." The currency rose.
• 7:00am AUD RBA Governor Stevens said that, "Overall, in 2014 economic global growth is thought likely by major forecasters to be a bit higher than in 2013, and at about average pace. More of the growth is coming from the advanced countries, and proportionately not quite so much from the emerging ones. That is probably a welcome re-balancing in some respects, after the weakness of the advanced countries in recent years." The currency rose.
• 8:00am EUR GfK German Consumer Climate 8.5 versus 8.5 expected. The currency fell.
• 1:30pm USD Core Durable Goods Orders 0.2%versus 0.3% expected. The currency rose.
• 1:30pm USD Durable Goods Orders 2.2%versus 1.1% expected. The currency rose.
• 3:30pm USD Crude Oil Inventories 6.6M versus last 5.9M expected. The currency rose.
• 10:45pm NZD Trade Balance 818M versus 600M expected. The currency rose.

Thursday, March 27th

• 10:00am EUR M3 Money Supply 1.3%versus 1.3% expected. The currency fell.
• 10:00am EUR Private Loans -2.2% versus -2.1% expected. The currency fell.
• 10:30am GBP Retail Sales 1.7%versus 0.5% expected. The currency rose.
• 1:30pm USD Weekly Initial Jobless Claims 311K versus 326K expected. The currency rose.
• 1:30pm USD FOMC Member Pianalto said that, "The Federal Reserve has a number of responsibilities, many of which you may not be familiar with. For example, the Federal Reserve serves as the lender of last resort. Federal Reserve Banks can make loans to address financial panics, and we certainly made use of that power during the financial crisis in 2008. We supervise the banking system. We work to ensure an accessible, efficient, and secure US payments system, and we serve as the federal government’s bank. Our community development efforts support the economic growth of low- and moderate-income neighborhoods across the country." The currency rose.
• 1:30pm USD Final GDP 2.6% versus 2.7% expected. The currency rose.
• 3:00pm USD Pending Home Sales -0.8% versus 0.2% expected. The currency rose.

Friday, March 28th

• 12:30am JPY Household Spending -2.5% versus 0.3% expected. The currency fell.
• 12:30pm JPY Tokyo Core CPI 1.0% versus 0.9% expected. The currency fell.
• 12:50am JPY Retail Sales 3.6% versus 3.6% expected. The currency fell.
• All Day EUR German Preliminary CPI 0.3% versus 0.4% expected. The currency rose.
• 8:45am EUR French Consumer Spending 0.1% versus 1.0% expected. The currency rose.
• 10:30am GBP Current Account -22.4B versus -13.5B expected. The currency rose.
• 10:30am GBP Final GDP 0.7% versus 0.7% expected. The currency rose.
• 11:21am EUR Italian 10-year Bond Auction 3.29 average yield with a 1.3 bid to cover ratio versus last 3.42 average yield with a 1.6 bid to cover ratio. The currency rose.
• 1:30pm USD Core PCE Price Index 0.1% versus 0.1% expected. The currency rose.
• 1:30pm USD Personal Spending 0.3% versus 0.3% expected. The currency rose.
• 2:55pm USD Revised University of Michigan Consumer Sentiment survey 80.0 versus 80.6 expected. The currency rose.

With Forex Volatility So Low, How Might we Trade?

• US Dollar trades at potentially important resistance, Euro at key support
• Forex volatility prices trade near record-lows, setting up for slow moves ahead
• We’re focusing on range trading opportunities in all except the JPY pairs

The US Dollar continues to stick to tight ranges versus the Euro, Japanese Yen, and other counterparts. How might we trade if forex volatility continues to drop?

Watch the video above and updated automated strategy outlook below. What happens when volatility inevitably surges?

http://youtu.be/Jw5rDaTWpo8


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Definitions

Volatility Percentile – The higher the number, the more likely we are to see strong movements in price. This number tells us where current implied volatility levels stand in relation to the past 90 days of trading. We have found that implied volatilities tend to remain very high or very low for extended periods of time. As such, it is helpful to know where the current implied volatility level stands in relation to its medium-term range.

Trend – This indicator measures trend intensity by telling us where price stands in relation to its 90 trading-day range. A very low number tells us that price is currently at or near 90-day lows, while a higher number tells us that we are near the highs. A value at or near 50 percent tells us that we are at the middle of the currency pair’s 90-day range.

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

You can look at this thread about Market condition.

For example - I am using Ichimoku indicator to estimate market condition, or AbsoluteStrength indicator.

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About AbsoluteStrength indicator :

bullish (Bull market) :

https://c.mql5.com/3/20/bullish.png

bearish (Bear market) :
https://c.mql5.com/3/20/bearish.png

ranging (choppy market - means: buy and sell on the same time) :
https://c.mql5.com/3/20/choppy.png


flat (sideways market - means: no buy and no sell) :
https://c.mql5.com/3/20/flat.png

correction :
https://c.mql5.com/3/20/correction.png

correction in a bear market (Bear Market Rally) :
https://c.mql5.com/3/20/rally.png

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- AllAbsoluteStrength_v2.1 600+ indicator is on this post. This version works with Metatrader 4 build 600 and above.
- AllAbsoluteStrength_V2.1 600+ Signals_V1 indicator is on this post. This version works with Metatrader 4 build 600 and above.

This is intersting situation for some pairs concerning the market condition. For example - AUDUSD. There is breakout is going on for W1 timeframe: Chinkou Span line crossed the price on close bar.

If the price will break 0.9425 resistance on close W1 bar so this price will become inside Ichimoku cloud by breaking one of the border of this cloud - Sinkou Span A. By the way, this border (Sinkou Span A) is the virtual border between bearish and bullish on the chart.

Anyway, if the price will come to Ichimoku cloud so we may see the ranging market condition within primary bullish.

Attachment 7897

The nearest resistance for D1 timeframe is 0.9437 :

Attachment 7898

As to the patterns so we see retracement developing pattern for uptrend (MN1) timeframe):

Attachment 7899

and developed/formed patterns for uptrend for H4:

Attachment 7900