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Tag: Tomasz Wisniewski

  • On what instruments should you trade on?

    On what instruments should you trade on?

    Well, that depends what type of analysis are you using. In trading we can say that they are three type of analysis. Technical, Fundamental and mix of those two. Technical Analysis (TA) is based on the chart analysis. Trader looks at the price changes over time, can use various indicators and with that, he tries to estimate if the price will go up or down. Fundamental Analysis (FA) is focused on the macroeconomic data, geopolitics, finance analysis etc. Mix of those two can have many variations. For example you try to estimate the direction using fundamentals but for the exact entry point, you use technicals.

    When you want to use the fundamental analysis, it would be nice to have at least basic knowledge from the economy. From my experience I can tell that it would be also great if you knew the market a little bit better than the average. When you are a trader in New Zealand it would not be a good idea to use fundamental analysis to trade shares on Stock Exchange in Poland. Still possible but much harder than trading shares domestically. Answering the question from the topic: when you want to use FA it would be better to trade instruments that you are familiar with. Companies you know and currencies that are not totally exotic for you.

    When you want to use the technical analysis, the whole world of financial instruments is opened for you. Why is that? Well it is because the TA is totally universal and you can use it on the instruments that you did not even heard of, like contracts for the carbon dioxide emission or futures for the orange juice. The only thing that needs to be present is liquidity. The instrument that you want to trade, should be liquid. It means that it should be traded by a large number of investors and huge amount of money should be present there. This is the only condition. Other is done automatically. TA is based on human emotions and repeatable history and those two things are constant.

    Around 80% of the daily turnover on the FX market is done on EURUSD. To be honest with you, I do not understand that. I know where is that coming from but in the same time I can tell you that you can make money without even touching this pair. There are so many instruments, which are easier to trade and more rewarding than EURUSD. Do not lock yourself on that pair from the very beginning. Look for alternatives. Scan the market using your strategy and you will see that you can get much better results elsewhere.

    Tomasz Wisniewski
    Chief Analyst – Alpari Research & Analysis Limited

    Alpari Research & Analysis LTD (UK) is a company part of Alpari Brand, which aims to deliver superior market research, analysis and trading education for free both to Alpari’s clients and the general public.

    The Alpari brand
    Founded in 1998, Alpari is today one of the largest brands on the financial markets. The companies of the brand provide trading and investment services to over one million clients from tens of different countries.
    Visit us and learn how Alpari Nigeria can help you achieve more.

  • How to approach trading?

    This may look as an easy question but I bet that most of you will get that wrong. I have been trading for over 8 years and in that time I met thousands of investors and traders and unfortunately most of them had wrong perception about being a trader.

    First of all, trading should be emotionally free. If you see yourself jumping on the chair because of the nice movement on the EURUSD, you are wrong. Emotionally free trading is the key to constant profits. In this way, you will be able to focus on your strategy and you will be able to flawlessly apply money management rules and risk control to your trading. Those two are the key for successful trading! In order to be calm and composed, you need to trade with confidence and with a huge respect to your capital, which means trading with a low volume. Once you will start investing with a huge risk or you will take suspicious setups, your results will crash. There is no other way. No shortcuts and no magic tricks. It is not me speaking, it is the history of millions of traders around the world.

    Other thing is your expectations. How much do you want to make when trading? 10% a year? 40%? 100% a month? Too many guys pick the last number. It does not work like that. It is possible but not probable and trading is the game of probability. Set your expectations straight. You cannot start this business thinking, that from the very beginning you will do better than most of the banks and 90% of the trading community.

    Set realistic goals. First one should be learning how to trade on demo. Then you have to move to real account to learn the trading psychology, which is not touched when dealing with the virtual money. After that, you should spend at least 3 months on a real account trading around the initial balance. If you will manage to keep the same amount of money that you had on the day 1 you are good! Now it is time to take it to the next level and increase the volume a little bit and start the real trading. You see? I did not write anything about the Ferrari waiting for you after the first two days of trading on Forex. Trading requires patience and can be rewarding but you need to do your job first. There are no free dinners anymore and success here will require time and commitment. Luckily, we are here to support you in this journey. On our next articles we will focus on other important aspects of becoming a professional trader.

    Tomasz Wisniewski
    Chief Analyst – Alpari Research & Analysis Limited

    Alpari Research & Analysis LTD (UK) is a company part of Alpari Brand, which aims to deliver superior market research, analysis and trading education for free both to Alpari’s clients and the general public.

    The Alpari brand
    Founded in 1998, Alpari is today one of the largest brands on the financial markets. The companies of the brand provide trading and investment services to over one million clients from tens of different countries.
    Visit us and learn how Alpari Nigeria can help you achieve more.

  • USD versus save heavens

    Global stocks hit the all time highs again and it does not look like this sentiment is about to change. We have a full ‘risk on’ mode on the market and traders are rushing to buy riskier assets like shares or emerging markets currencies. In the same time, they are abandoning the save heaven assets like the precious metals or, from the currency market, CHF and JPY. This is happening in the same time as the bigger demand for the USD, caused by interest rates rises. So there should be no surprise that pairs like USDCHF or USDJPY are going higher, not to mention that additionally, USDJPY is usually positively correlated with American indexes. Today we would like to show you two interesting setups that may be good trading occasions for the next few weeks.

    On the USDJPY, 10 out of the last 12 trading days were positive. We managed to finish the bearish correction and start a new bullish wave. Buy signal is present and was triggered when the price broke the upper line of the flag formation (blue). The closest resistance now is 115.4 and with this momentum it should not take long to get there, even if we will experience a bearish correction first. Sentiment is positive and will stay this way as long as we will stay above the 111.8 support (upper green line).

    The next instrument with a precise trading signal is USDCHF. Here we also are bullish and we can see a clear depreciation of the save heaven currency against the USD. Price also broke the upper line of the flag but in this case, we are also supported by the inverse head and shoulder formation and by the fact that we bounced of the strong horizontal support 0.992 (yellow). It looks like there should be no other way now and all traders have longs in their portfolio. Situation is similar to this one on the USDJPY – the buy signal will stay even if we will experience a short term bearish correction. As long as we stay above the yellow support there is nothing to worry about.

    Tomasz Wisniewski
    Chief Analyst – Alpari Research & Analysis Limited

    Alpari Research & Analysis LTD (UK) is a company part of Alpari Brand, which aims to deliver superior market research, analysis and trading education for free both to Alpari’s clients and the general public.

    The Alpari brand

    Founded in 1998, Alpari is today one of the largest brands on the financial markets. The companies of the brand provide trading and investment services to over one million clients from tens of different countries.

    Alpari strives to provide its clients with services of the very highest quality. This is possible only thanks to our wealth of experience and knowledge, in addition to the high standards which we set for ourselves and for the quality of the services we provide.
    Visit us and learn how Alpari Nigeria can help you achieve more.

  • No Fears Over the Brexit Anymore?

    French Elections brought us some nice movements on the EUR this week but due to the interest rate decision and the ECB press conference it would be better to leave the EUR alone today. Well at least those traders who respect money management rules and try to limit the risk as much as possible.

    Behind the EUR we have more interesting stories on the market at the moment. For example GBP, which is in a very positive condition after the fundamental help from the last week, when UK PM announced the idea of the earlier elections. Speech from Theresa May was a strong bullish factor and helped the GBP on many crosses. Current environment on the pairs with the GBP goes along with our long-term view, which we are presenting for a long time – the drop on the GBP was too strong and exaggerated. There was no reason to discount the hard brexit scenario few months ago and there is no such a need now. First of all, we still do not know if the Brexit will happen. In addition to that, it will take at least two years of negotiations and at the end of the day, the UK can actually do better without the EU.

    At the end of the week, GBP is trying to add something more for the recent upswing. The sentiment is still positive and for example, on the GBPUSD we may be ahead of another bullish wave. On Cable, the price stopped on the important long-term resistance and created a flat correction – rectangle. From the price action point of view, such corrections below resistances are a sign that we should have a breakout. It looks like this scenario is happening at the beginning of the European session, so all aboard!

    Second instrument with the GBP that we would like to take a look at is GBPCAD where after breaking from the bullish wedge (black lines) the price made 800 pips upswing! What is important here is that the breakout itself (so a buy signal) was triggered by the technical analysis alone, Theresa May came later and only boosted this upswing. Currently we reached an important long-term resistance, which is a good place for a small reversal (take profit action) but with a possible surge on the GBPUSD mentioned above, we may add few pips here as well.

    To sum up, situation on the GBP across the market is positive and our base scenario for the next few weeks for the Sterling is bullish.

    Tomasz Wisniewski

    Chief Analyst – Alpari Research & Analysis Limited

    Alpari Research & Analysis LTD (UK) is a company part of Alpari Brand, which aims to deliver superior market research, analysis and trading education for free both to Alpari’s clients and the general public.

    The Alpari brand

    Founded in 1998, Alpari is today one of the largest brands on the financial markets. The companies of the brand provide trading and investment services to over one million clients from tens of different countries.

    Alpari strives to provide its clients with services of the very highest quality. This is possible only thanks to our wealth of experience and knowledge, in addition to the high standards which we set for ourselves and for the quality of the services we provide.

    Visit us and learn how Alpari Nigeria can help you achieve more.

     

     

     

  • Weekly Oil Update

    April looked very promising. The price of the black gold was advancing higher and we broke few major resistances. On Wednesday something snapped. The price fell sharply and in one day erased almost whole April upswing! What was the trigger and what was the general reason of that panic selling?

    First let us start with the trigger. For that we do have two factors, one major and one minor. Minor factor is that the USD is a bit stronger yesterday and the second one – major was the data about Crude Oil Inventories. This came as expected but looking a bit deeper, on US Gasoline Inventories, we could see a huge beat there. We were expecting approx 2mln decline and we got over 1.5mln rise. And again, that was just a trigger. The real sentiment behind this movement is in my opinion different.

    I think that the recent upswing was largely based on the false faith in the OPEC and the possible extension of their agreement. Even if that will happen, the lower supply from those countries will be covered by non OPEC producers! Simple is that. What is more, the global demand is still low.  No rocket science here, combination of those two means lower prices.

    Technically, the buy signal that was present not so long ago is erased. Bears are back on the market and are hitting with a large power. As long as we stay below the 52 USD/bbl, the sentiment stays negative. But that is the mid-term. Next few days most probably we will be able to experience a small bullish correction here but it should not distract the traders from their main mission – going short on the Oil.

     

    Tomasz Wisniewski

    Chief Analyst – Alpari Research & Analysis Limited

     

    Alpari Research & Analysis LTD (UK) is a company part of Alpari Brand, which aims to deliver superior market research, analysis and trading education for free both to Alpari’s clients and the general public.

     

    The Alpari brand

    Founded in 1998, Alpari is today one of the largest brands on the financial markets. The companies of the brand provide trading and investment services to over one million clients from tens of different countries.

    Alpari strives to provide its clients with services of the very highest quality. This is possible only thanks to our wealth of experience and knowledge, in addition to the high standards which we set for ourselves and for the quality of the services we provide.

    Visit us and learn how Alpari Nigeria can help you achieve more.