Risk management is at the core of any good trading plan, without having a sound set of principles to follow a trader is doomed to fail. We outline rules and factors to consider when customizing a risk management game-plan right for you.

We understand the difficulties of trading, which is why we’ve put together a variety of guides designed to help traders of all experience levels.

Risk management is one of the most important aspects to successful trading, but far too often it’s overlooked. Job #1 for a trader is to always keep yourself in the game. A sound strategy and the discipline to follow it will go long way towards ensuring you stick around.

If you are in the learning stage, your objective is to keep losses very small until you figure out what you are doing from an analytical and strategy standpoint. Adhering to sound risk parameters early-on will go a long way towards building a foundation for later on.

For the more...

Trading bias is a predisposition or perspective of the financial markets whereby traders believe there is a higher probability of a certain outcome as opposed to any other alternate possibilities.

These trading biases are determined by technical and/or fundamental factors that support a specific outlook that explains market behaviour. This often relates to market trends being either bullish/bearish which signals appropriate trading strategy and style.

Technical analysis of charts aims to identify patterns and market trends by utilising differing forms of technical chart types and other chart functions. Interpreting charts can be intimidating for novice traders, so understanding basic technical analysis is essential. This article reveals popular types of technical analysis charts used in forex trading, outlining the foundations and uses of these chart types.

According to IG Client Sentiment (IGCS), retail investors continue to aggressively short US benchmark stock indices such as the Dow Jones and S&P 500. IGCS is usually a contrarian indicator, especially in a trending market. If traders continue selling into recent price action seen on Wall Street, then there may be room for further upside potential in equities. For a detailed analysis about how you can use IGCS in your own trading strategy, check out last week’s recording to my biweekly webinar about the tool.

The IGCS gauge implies that about 20% of retail investors are net-long the Dow Jones. Downside exposure has increased by 14.81% and 20.63% over a daily and weekly basis respectively. The fact that traders are net-short hints prices may continue rising. The combination of this and recent shifts in sentiment offers a stronger bullish contrarian trading bias.

Gold prices have rebounded after the flash crash on the weekly open saw prices plunge to the $1,680 swing low. After pricing in the brutal sell-off, price action turned positive, allowing Gold bulls the opportunity to drive price action back towards the key psychological level of $1,800 which remains critical to both the imminent and longer-term move.

With company earnings and better than expected US economic data (including last week’s NFP report) supporting optimism of an economic recovery and riskier assets, rising concerns over the spread of the Delta variant prevented bears from driving prices below the 2021 as US Dollar strength eased.

As prices continue to test critical levels of support and resistance, this week’s FOMC Meeting Minutes may further assist in the catalyzation of price action over the next few weeks as inflationary concerns continue to mount. For this reason, Federal Reserve Chair Jerome Powell remains a potential focal point for Gold...

Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview

Notes: In last month’s Canadian Dollar Weekly Price Outlook we noted that the, “USD/CAD rally exhausted into uptrend resistance at the yearly high-week close this week- bulls may be at risk near-term. From a trading standpoint, rallies should be limited to the yearly open at 1.2713IF the correction interpretation is correct.” Price plunged more than 3% off the highs in the following weeks with Loonie rebounding off slope support into the July close. The subsequent recovery is now testing major technical resistance here at the 2018 yearly open / 23.6% retracement of the 2020 decline at 1.2579-1.2634- looking for inflection off this pivot zone.

Initial support rests with the sliding parallel (red) extending off the January 2019 close low (currently near the 1.24-handle with bullish invalidation at the 2018 low / 61.8% Fibonacci retracement at 1.2247-1.2312- an are of interest for...

The environment for U.S. equities remains favorable despite recent QE taper talk. It is important to remember that tapering simply means “taking your foot off the pedal”, which will not halt asset purchases completely thus maintaining the conducive environment for the stock market.

August has traditionally been a relatively inactive month for financial markets which is revealed by incremental candles on the daily chart. This has not deterred the index from reaching historic levels throughout most of the past week, which is not surprising as the index tends to be largely inversely correlated to the Volatility Index (VIX) – see chart below.

*Note: correlation does not necessarily mean causation.

SPX VS VIX

Chart prepared by Warren Venketas, Refinitiv

Boost your stock market knowledge with our articles on the types of stocks available, how equities impact the economy, and getting started with stock trading.

S&P 500 INDEX (SPX) DAILY...

It hasn’t been the best week for Sterling overall and focus next week is likely to shift towards inflation data for the UK out on Wednesday. The yearly July CPI figure is expected to come in a little softer than last month at 2.3%, which would be the first drop since March this year, whilst the monthly reading is expected to come in at 0.3%, down from 0.5%, and it would be the second month with a weaker reading if confirmed. The core CPI reading is expected to come in at 2.2% year on year.

Economic calendar provided by dailyfx.com

The Producer Price index (PPI) for July will also be released on the same day, and I would expect investors to be keeping an eye out for this data to try and gauge how prices pressures are or aren’t flowing down the production line, which will then have an impact on consumer price inflation and company profits. So far in June we saw an unexpected drop in the monthly PPI input data, from 1.2% to -0.1%, meaning that the prices of...

The gold flash crash seen in Asia at the start of the week has now been fully retraced, leaving the precious metal just below a prior support level that now acts as resistance. Gold has been under pressure from a stronger US dollar, and higher US Treasury yields, as market thoughts now turn to the timing of taper talks, as the US looks to reduce its bond-buying program. There are growing expectations, fueled by some hawkish Fed talk of late, that Fed chair Jerome Powell may use the Jackson Hole Symposium – ‘Macroeconomic Policy in an Uneven Economy’ (August 26-28) as a springboard to suggest that the US QE program may soon begin to be wound down, with an official timetable announced by the Fed in November. These expectations have pushed the US dollar higher, weighing on the price of gold.

The spot gold price is now nearing $1,764/oz. the 50% Fibonacci retracement level of the mid-March/early-August 2020 rally that peaked at $2,075/oz. Price action around this level in...

Risk management is at the core of any good trading plan, without having a sound set of principles to follow a trader is doomed to fail. We outline rules and factors to consider when customizing a risk management game-plan right for you.

We understand the difficulties of trading, which is why we’ve put together a variety of guides designed to help traders of all experience levels.

Risk management is one of the most important aspects to successful trading, but far too often it’s overlooked. Job #1 for a trader is to always keep yourself in the game. A sound strategy and the discipline to follow it will go long way towards ensuring you stick around.

If you are in the learning stage, your objective is to keep losses very small until you figure out what you are doing from an analytical and strategy standpoint. Adhering to sound risk parameters early-on will go a long way towards building a foundation for later on.

For the more...

Our DNA FX quiz can tell you what type of forex trader is buried within your DNA. Simply answer the 14 questions honestly to learn which style of forex trading you are best suited for.

If you’re new to forex trading the results will help you develop your trading style and strategies, but even established traders might discover something about themselves they weren’t aware of…

Technical analysis of charts aims to identify patterns and market trends by utilising differing forms of technical chart types and other chart functions. Interpreting charts can be intimidating for novice traders, so understanding basic technical analysis is essential. This article reveals popular types of technical analysis charts used in forex trading, outlining the foundations and uses of these chart types.

Double top patterns are noteworthy technical trading structures to learn and integrate into a trader’s arsenal. Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature.

Double Top Pattern: Main Talking Points:

The bull flag pattern is a great pattern to add to a forex trader’s technical arsenal. Explosive moves are often associated with the bull flag. This article will look at the potentially higher probability forex trading opportunities of the bull flag pattern.

Learn to trade the bull flag pattern: Main talking points??

“Is there a best time frame to trade forex?” is a common question a lot of traders ask, especially those new to the forex market. The truth is, there is no single answer. It all depends on your preferred trading strategy and style.

Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Trend charts refer to longer-term time frame charts that assist traders in recognizing the trend, whilst trigger chart pick out possible trade entry points. This article will explore these forex trading time frames in depth, whilst offering tips on which can best serve your trading goals.

Talking points:

It’s not uncommon for forex traders to approach trading with the aim of collecting ‘x’ many pips a day from the market. Some may even consider adopting a strategy that only makes X amount of pips per day. However, there are complications that arise from this approach and setting such unrealistic goals.

This article will answer the question: “how many pips per day?” and explore the best approach to using pips – considering market fluctuations which affect daily pip movements and how to capitalise on this with a solid trading strategy.

Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. This article will cover the shooting star reversal pattern in depth?and how to use it to trade forex.

Our DNA FX quiz can tell you what type of forex trader is buried within your DNA. Simply answer the 14 questions honestly to learn which style of forex trading you are best suited for.

If you’re new to forex trading the results will help you develop your trading style and strategies, but even established traders might discover something about themselves they weren’t aware of…

Technical analysis of charts aims to identify patterns and market trends by utilising differing forms of technical chart types and other chart functions. Interpreting charts can be intimidating for novice traders, so understanding basic technical analysis is essential. This article reveals popular types of technical analysis charts used in forex trading, outlining the foundations and uses of these chart types.

Trading bias is a predisposition or perspective of the financial markets whereby traders believe there is a higher probability of a certain outcome as opposed to any other alternate possibilities.

These trading biases are determined by technical and/or fundamental factors that support a specific outlook that explains market behaviour. This often relates to market trends being either bullish/bearish which signals appropriate trading strategy and style.

Mounting worries over the quickly spreading Delta Covid variant’s impact on the global economy solidified further this week after Goldman Sachs and JP Morgan Chase downgraded economic outlooks on China. Goldman sees third-quarter growth slowing to 2.3% from 5.8%. A rebound in the fourth quarter may transpire, however, but the full-year projection remains worse off as restrictions are seen hampering consumption in the Chinese economy. Nearly 100 locally sourced cases were reported on Monday, according to China’s National Health Commission.

The downbeat outlook weighed on crude oil and iron ore prices, two major commodities that are particularly insightful to gauge demand in the world’s second-largest economy. Crude oil fell nearly 2% on Monday, while the global benchmark, Brent, sank just over half a percent. Meanwhile, iron ore prices added to recent losses, extending the monthly drop to almost 10%. Iron ore prices are highly reliant on Chinese demand, given it is...

The Canadian Dollar may be vulnerable against the US Dollar after USD/CAD formed a ‘Golden Cross’ between the 50- and 100-day Simple Moving Averages (SMAs). The pair was initially on its way lower after establishing the 1.2748 – 1.2808 resistance zone, but support seemed to be secured at 1.2423. Resuming the rise see the pair revisit the current 2021 peak at 1.2881. Otherwise, falling under the SMAs may open the door to aiming back at lows from earlier this year.