Noticias del mercado & perspectivas

As we examine what may happen in the new year, it is clear that gold continues to be of interest for investors seeking stability, diversification, and opportunities amidst what is likely to be an interesting and changing economic landscape throughout 2025. With a change in the US presidency, significant central bank action likely, and on-going geopolitical concerns likely to rumble on, may all have significant impact on markets generally including, of course, what may happen to precious metals. This article explores the potential trajectory of gold prices in the upcoming year by examining these key factors driving its value, the headwinds and tailwinds shaping its path, and what the current state of gold indicates for its future.

The Current State of Gold Gold has been on a dynamic journey in recent years, reacting to a mix of macroeconomic pressures and geopolitical events. As of now, and after hitting record highs late October just beneath $2,800, gold futures prices are approximately $2,700 per ounce, remaining in long-term uptrend, and reflecting a year of relative volatility influenced by central bank policies and persistent inflation concerns. Inflation in the U.S. remains elevated, with the Consumer Price Index (CPI) year-over-year as of late 2024.

Although down from the 9.1% peak in 2022, inflation pressures are still stubbornly above the Federal Reserve’s 2% target, and appear to have paused at the current time. This persistent inflation has encouraged some investors to allocate capital into gold as a hedge, contributing to its stability. In 2024, gold’s performance was shaped by factors such as the Federal Reserve’s interest rate hikes, geopolitical tensions like the ongoing Russia-Ukraine and Middle-east conflicts, and strong central bank purchases.

These elements set the stage for 2025, where uncertainties around monetary policy, global stability, and demand dynamics will likely play crucial roles. What Moves Gold Prices -- Key Drivers to Watch Gold's value is influenced by a combination of fundamental and technical factors. Here’s a deeper dive into the primary drivers: Macroeconomic Influences Gold’s price tends to rise during periods of high inflation or economic uncertainty.

Historically, during the stagflation of the 1970s, gold surged as investors sought protection against eroding purchasing power. Conversely, rising interest rates often reduce gold’s appeal, as seen in the early 1980s when rates reached double digits, causing gold prices to decline. Geopolitical Events Gold is a classic safe-haven asset, often gaining during periods of global instability.

For instance, during the 2008 financial crisis, gold prices spiked as investors fled riskier assets. Similar behaviour was observed during the early months of the COVID-19 pandemic in 2020. More recently events in the Middle East saw more gold buying in 2025.

Currency Dynamics Gold typically moves inversely to the U.S. Dollar. A strong dollar, as seen in 2022, can suppress gold prices, while a weaker dollar, such as during the 2010-2012 period, supports gold’s rise.

The US is rising again on a perception that further rate cuts in 2025 are less likely than perhaps thought a couple of months ago. Supply and Demand Fundamentals Supply-side factors, including mining output, have remained relatively stable in recent years. On the demand side, central bank purchases hit record highs in 2023, with countries like China and Turkey significantly increasing their reserves.

The World Gold Council reported that central banks purchased over 1,000 tonnes of gold in 2023, the largest annual total since records began in 1950. Notably, China added over 200 tonnes to its reserves, reflecting its strategy to diversify away from the U.S. Dollar.

Jewellery demand from India and China remains another part of gold’s value although arguably less so than perhaps other factors discussed above. Industrial and Technological Use Gold’s role in electronics and green energy technology, such as photovoltaic cells in solar panels, continues to grow, adding a layer of industrial demand. However the new US administration that will be in place from January, appears to be less keen on renewable energy which may curb this to some degree Headwinds for Gold in 2025 While gold has potential for growth, several challenges could limit its upside: Rising Interest Rates: If central banks, particularly the Federal Reserve, maintain or further increase rates, the opportunity cost of holding gold becomes higher.

Higher rates make bonds and savings accounts more attractive compared to non-yielding assets like gold. Strong U.S. Dollar: A resilient dollar, supported by higher interest rates or strong U.S. economic performance, typically reduces gold’s appeal for international buyers.

The U.S. Dollar Index (DXY) remained strong in 2024, trading above 105 for much of the year. Equity Market Resilience: A robust stock market could divert capital away from safe-haven assets like gold.

For example, during the tech boom of the late 1990s, gold underperformed as investors flocked to equities. Geopolitical Stability: If global tensions ease, the safe-haven demand for gold may diminish. Stable geopolitical conditions often correlate with a decline in gold prices, as seen during the mid-2010s.

However at this stage, there are several potentially volatile situations that may be of impact through next year. Tailwinds for Gold in 2025 Several factors could bolster gold’s performance: Inflation Pressures: Persistent inflation, even if moderated from 2024 levels, could drive demand for gold as a hedge. Historical parallels can be drawn to the 1970s, when inflation pushed gold to record highs.

For instance, gold surged from $35 per ounce in 1971 to over $600 by 1980 as inflation spiralled out of control. The new Trump administration continues to Central Bank Buying: Central banks added nearly 1,000 tonnes of gold to their reserves in 2023, a trend likely to continue in 2025. This significant demand underpins long-term price stability.

Countries like Turkey and China remain active buyers, viewing gold as a hedge against currency devaluation and geopolitical risks. Market Volatility: Heightened risks, whether from an economic slowdown or geopolitical shocks, could renew safe-haven flows into gold. With the follow through and potential impact of some of the new US government policies as yet unknown but “promised” during pre-election, there is the narrative that these may dampen down growth in the short term.

Of course, there is an often wide disparity between pre-election promises and reality and the underlying economic metrics, both in terms of data and the recent overperformance of US company earnings (over 75% beating expected EPS), are suggesting that any fall off is unlikely). Weaker U.S. Dollar: If the Federal Reserve continues with the late 2024 approach to rate cuts, the dollar is likely to weaken, supporting gold prices.

However, the decreasingly “dovish” narrative that has been prevalent in the last few weeks suggest a potential pause in rate cut action during early 2025. Technical Analysis: Where is Gold Headed? From a technical perspective, gold’s price action will be pivotal in determining its outlook: Support Levels: Key support zones around $2.600 and more importantly perhaps the mid-November low of $2,535 will be crucial in maintaining bullish sentiment.

A breach of the latter is likely to suggest a change in longer term trend and could precipitate more selling pressure. Resistance Levels: Overcoming previous highs at $2,800 could open the door to new highs, with $3,99 as the next significant target both technically and psychologically for markets. Forward-Looking Analysis: the FIVE key questions Breaking down the above into the key questions that will shape gold’s outlook in 2025: Will the Federal Reserve continue to cut interest rates, or will inflation remain stubbornly higher than desired (particularly influenced by any “Trump Tariffs”) support USD strength and derail the current trajectory of inflation?

Could geopolitical risks resurface, reigniting demand for safe-haven assets including gold? What role will central bank, speculative and institutional activity play in driving prices? How will the demand from emerging markets and technology and renewable energy sectors evolve?

My personal “Flag planting” for 2025 is that although we may be likely to see a ceiling of 2800 in the early couple of months of 2025, with uncertainty and perhaps a “foot off the pedal” approach” relating to Federal Reserve action and a new US administration, it would take something significant in the data to push Gold to, and through $2550. The evidence points to a potentially strong 2025 subsequently and a serious test of $3000 looks on the cards as a strong potential. Summary: Navigating Gold’s Path and your approach in 2025 Gold remains a multifaceted asset, influenced by a complex interplay of economic, geopolitical, and technical factors.

As we navigate 2025, investors must stay attuned to shifts in monetary policy, global stability, and demand trends to make informed decisions. Whether as a hedge against uncertainty or a strategic investment, gold’s enduring appeal ensures its relevance in the year ahead. Your responsibility as a trader or investor is twofold: Keep abreast of changes in those influential factors outlined above, and offer daily and regular updates on all major assets classes, including gold, to avail yourself with the knowledge you need to make the decisions that are right for you and your objectives, Consider alternative ways to trade gold, e,g, gold futures and share CFDs offer the opportunity to trade long or short so you can take advantage of any move, Of course, the former also has the distinct advantage of being “open” throughout the 24-hour period meaning you can respond to changes in a timely way rather than waiting until the next “market open” for stocks.

The "Santa Claus Rally" is a well-documented seasonal phenomenon in financial markets where stock prices often rise during a specific period at the end of the year. While widely discussed, it is frequently misunderstood or oversimplified. This article provides a detailed examination of the Santa Claus Rally, including what it is, why it happens, common misconceptions, its historical trends, and a close look at the factors influencing the markets in 2024.

What Is the Santa Claus Rally? The Santa Claus Rally refers to a pattern of stock market gains observed during the last five trading days of December and the first two trading days of January. This seven-day window, now an established market belief, was first identified by Yale Hirsch, who documented the Santa Claus Rally phenomenon in the 1972 edition of the Stock Trader’s Almanac.

It has since become one of the most recognized seasonal patterns in financial markets, has historically delivered positive returns across major indices, including the S&P 500 and Dow Jones Industrial Average. The phenomenon stands out because of its precise timing and consistent performance, making it distinct from broader year-end trends. Key Characteristics: Defined Timing: The rally occurs between December 26 and January 2, excluding earlier December market activity.

There is a common misconception that it may occur earlier we will discuss this later, Short-Term Nature: It is a brief but significant period, often viewed as a sentiment gauge for markets not only during but subsequent to this defined period. Predictive Potential: A strong or weak rally can sometimes hint at market behaviour in the early months of the new year. Why Does the Santa Claus Rally Happen?

The rally is driven by a combination of market psychology and market dynamics. While no single factor is definitive, the interplay of several influences creates favourable conditions for this pattern occurring. With these factors we will not only define each in turn but suggest the potential impact on such a rally.

Tax-Loss Harvesting Winds Down Definition: Tax-loss harvesting is when investors sell underperforming assets to offset capital gains, reducing their taxable income. Impact: This selling pressure, which weighs on markets earlier in December, subsides by the end of the month. With the selling completed, buying often resumes, pushing prices higher.

Holiday Cheer and Optimism The festive season fosters consumer and investor optimism. Strong holiday spending boosts confidence in consumer-driven sectors, and this optimism often spills over into the broader market. Investors may feel more inclined to take risks, leading to upward momentum in stock prices.

Institutional Repositioning Definition: Fund managers adjust portfolios at year-end to present favourable performance in annual reports. Impact: This often involves buying top-performing stocks, which adds upward pressure to the markets during the rally period. Low Trading Volumes Many institutional and retail investors take time off during the holidays, leading to lighter trading volumes.

In this environment, even modest buying activity can significantly impact prices. New Year Positioning As the year ends, investors reassess their portfolios, positioning for anticipated trends in the coming year. This activity often results in fresh buying, particularly in growth sectors.

Historical Performance relating to the Santa Claus Rally The Santa Claus Rally has proven to be a reliable phenomenon, delivering positive returns in most years. On average, the S&P 500 gains between 1% and 1.5% during this period. Historical Trends: The rally has produced gains in approximately 75% of years since it was first documented.

Its absence has occasionally been a precursor to weak market performance in January or even the full year. Key Examples: In 2008, amidst the global financial crisis, the Santa Claus Rally still materialized, providing a brief positive momentum during a challenging year. In 2015, the rally failed to occur, and markets experienced heightened volatility in January, highlighting its potential predictive significance.

Common Misconceptions about Santa Claus Rallies Despite its prominence, the Santa Claus Rally is often misunderstood. Some of the most common misconceptions include: Timing Confusion? Many believe the rally spans the entire month of December or starts before Christmas.

In reality, it is strictly confined to December 26–January 2. Any other December market move will be due to other market forces, Assumption of Guaranteed Gains? While historically frequent, the rally is not guaranteed.

External shocks or weak economic data can disrupt the pattern. Driven Solely by Retail Investors? A commonly held myth suggests that holiday bonuses or retail investor activity drives any such the rally.

In fact, as referenced above, institutional actions like window dressing and repositioning play a larger role. Overlap with Other Effects? Seasonal trends like the December Effect (general market strength in December) and the January Effect (small-cap outperformance in January) are distinct phenomena often conflated with the Santa Claus Rally.

Do we see a Santa Claus Rally Across World Markets? The Santa Claus Rally is most studied and reported for U.S. markets. While similar patterns may occur globally, their timing and drivers vary, but there is some evidence that may be of interest to those investing outside the US. 1.

European Markets United Kingdom (FTSE 100): The FTSE 100 has shown a tendency to perform well during the last week of December and the first week of January, much like the U.S. markets. A 2017 study by Schroders found that the FTSE 100 recorded positive returns in December approximately 78% of the time since 1986, with an average return of 2.4%. Germany (DAX): The DAX also tends to see year-end strength, reflecting broader European investor sentiment and repositioning similar to the U.S.

German equities benefit from strong consumer activity during the holiday season and institutional adjustments at year-end. 2. Asia-Pacific Markets Japan (Nikkei 225): The Nikkei 225 often experiences a "New Year Rally," which includes strong performance in the last few trading days of December and the first week of January. This trend is partially driven by institutional investors repositioning their portfolios for the new fiscal year (starting in April) and holiday optimism.

China (Shanghai Composite): While the Santa Claus Rally is less pronounced in Chinese markets, some evidence suggests a year-end rally occurs due to investor repositioning before the Lunar New Year (which falls between January and February). Australia (ASX 200): The Australian market often mirrors the Santa Claus Rally, with December being one of the best-performing months historically. Tax-related incentives also play a role, as Australia's fiscal year ends in June, leading to a broader seasonal trend than in the U.S.

Key Metrics to Watch Several indicators can help identify whether a Santa Claus Rally is likely or already underway, I have identified FIVE that may be particularly noteworthy: Market Sentiment Indicators Tools like the AAII Investor Sentiment Survey and the VIX (Volatility Index) reveal investor mood. Declining fear levels, as measured by the VIX, often support rally conditions. Sector Performance Growth-oriented sectors such as technology and consumer discretionary tend to lead during this period, reflecting holiday-driven optimism.

Trading Volume Trends Low volumes are typical during the holidays. However, any surge in buying activity can amplify upward price movements. Macroeconomic Data Economic indicators such as inflation figures or employment data can heavily influence sentiment.

Positive surprises may bolster the rally, while negative shocks could dampen it. Market Breadth A strong rally typically sees broad participation, with a high percentage of advancing stocks. Narrow gains driven by a few large caps indicate weaker underlying momentum.

What About This Year? As we approach the Santa Claus Rally period for 2024, several factors suggest potential market behaviour: Federal Reserve Actions The Fed has been gradually lowering interest rates, with the target range now at 4.5%–4.75%. While this policy supports market liquidity, concerns about persistent core inflation (hovering around 2.7%–2.8%) may lead to cautious policymaking in December.

Future rate cuts remain contingent on positive economic data. Market Performance The S&P 500 has seen year-to-date gains exceeding 27%, recently achieving record highs. This reflects robust investor confidence, with technology and consumer discretionary sectors leading the charge.

Strong earnings reports, such as Lululemon's 15.9% surge, underscore the strength of consumer-driven stocks. Economic Indicators Employment remains resilient, with November adding 227,000 jobs, though the unemployment rate has ticked up to 4.2%. This stabilization signals a soft landing for the economy.

Holiday retail sales projections are strong, if there are additional indications that his may be widespread, it may feed into positive reporting of Q4 earning due in January, this may continue the buoyancy of current market sentiment over the festive period, Geopolitical Factors Trade tensions, including potential new tariffs, introduce uncertainty. These policies could lead to inflationary pressures, dampening consumer spending. Any escalation in existing global conflicts, notably the Middle East situation may also obviously impact quickly and significantly on sentiment.

Investor Sentiment Despite high valuations, optimism remains buoyant, supported by historical patterns favouring December as a strong month for equities. However, caution is warranted given current market highs and the potential for market participants deciding valuations are high enough for right now. Summary The Santa Claus Rally remains a fascinating and historically consistent market phenomenon, driven by a mix of seasonal optimism, institutional actions, and economic conditions.

To stay on top of what is happening during this interesting period in markets may offer opportunity as well as inform risk management, For 2024, the stage appears set for a potential rally, with favourable monetary policy, strong market performance, and resilient economic indicators providing support. However, investors should monitor inflation trends, geopolitical developments, and market sentiment closely as the year draws to a close. Although primarily described in relation to US markets, there is evidence of similar phenomenon in other world markets which we have briefly referenced also.

Understanding the drivers and metrics of the Santa Claus Rally can help investors navigate this unique market period with confidence and insight.

With 2024 fast approaching its conclusion we thought it best to have a really good deep dive into where the Australian economy sits and therefore where the opportunities and risks are for 2025. It's pretty clear that things are soft to say the least but there are signs the household is stirring. Government spending is remaining elevated, inflation is moderating but growth is poor.

So let's dig into the data that matters The Consumer Retail sales saw a solid lift in October 2024, growing by 0.6% month on month (MoM) and 3.4% year on year (YoY)—the strongest annual growth since May 2023 and that is before we see the full picture of Black Friday sales which are on track for a record print with estimates as high as $7.2 billion for the period. This improvement indicates that consumers are starting to spend some of the Stage 3 tax cuts introduced in mid-2024. We should point out that a significant portion of the Stage 3 tax relief appears to be going into savings rather than immediate consumption.

Household deposits surged by 8.3% YoY reinforcing the notion that Australians are prioritising financial security over spending. This has been reinforced by the latest GDP figures – more on that later However what’s also telling heading into the end of the year is consumer sentiment has rebounded although modestly. We will say it's not a high bar as consumer sentiment was at levels not seen since the pandemic.

But it is picking up and that must be seen as a positive. Wage growth appears to be slowing, a weaker signal despite continued strength in employment figures. All this creates a mixed picture of the consumer for 2025.

We expect a gradual recovery in spending as rate cuts are likely in 2025, the full effect of the Stage 3 tax cuts hit full levels ($23 billion to be exact which is about 0.8% of GDP) and the Federal Government gives out more handouts with an election at hand. This is likely to support consumption over the full year however it’s not going to create an immediate boom. We will be monitoring consumer staples and discretionary sectors for signs of movement in the early part of the second quarter.

The Private Side of credit Private credit growth continues to surprise on the upside, something that is likely to keep the RBA up at night. October’s 0.6% MoM increase was above expectations and that led to YoY growth being up a staggering 6.1%—the fastest rate since May 2023 and this after 13 rates over the previous year. This growth is mainly down to housing and overall credit growth picking up significantly.

However, credit growth appears to be nearing its peak, likely to plateau around 6.5% y/y in the coming months. Several factors signal moderation ahead: Business Investment: Surveys show a downgrade in capital expenditure intentions. Home Loans: Demand is likely to stabilise as dwelling price growth flattens.

But the RBA cutting rates may change the trajectory later in the year Personal Credit: Slowing household borrowing suggests cautious consumption and a switch back to savings which manifested in Household deposits growing by 1.3% MoM in October seeing the annual growth in savings to 8.3%strongest pace since mid-2022. Housing Market Shows Signs of Cooling Dwelling prices are clearly losing momentum. November prices edged up just 0.1% MoM—the weakest monthly gain since January 2023—while annual growth moderated to 5.5%, the slowest since September 2023.

The number of dwelling sales also weakened sharply, though some of this reflects temporary reporting distortions. Any sort of recovery is projected only after the RBA begins cutting rates, which again is likely to be in the latter half of 2025. This cooling trend aligns with broader economic signals of moderation in housing demand.

This is a problem for the Bank and REIT sectors. The multiples in these two sectors are at historically high levels. The fundamentals backing banks in particular are starting to look shaky as loan growth is stagnant and house prices are falling in 2025.

Will the bank lead recovery continue next year? That is our question for the market. The Economy and all the rest GDP – is faltering there is no doubt about that now.

Figures to the end of September showed, Australia’s real GDP expanded by just 0.3% QoQ and 0.8% YoY well below the consensus 0.4% and 1.1% expected. This is a materially disappointing outcome and has triggered a new cyclical low, not seen (excluding the pandemic) since December 1991. The questions from the GDP figures are vast and need to be unpacked.

Any recovery in subsequent forward quarters is expected to be modest. As we discussed earlier, households and businesses are grappling with structurally higher cost bases, the need for increased savings and a peak in credit - this cannot be fully offset by potential easing of monetary policy. The RBA has a forecast 1.5% YoY for the final quarter of 2024.

Achieving this would require a significant 0.8% QoQ expansion, which seems increasingly unlikely given current economic dynamics and even if we take into consideration the Black Friday sales. A miss on this target could force the RBA to revise down its short-term growth outlook. Key Drivers Behind Weak Economic Performance on the Headline.

Household Sector Strains: The household sector remains weak, with aggregate spending declining slightly in Q3. Rising costs and weak income growth are pressuring budgets, curbing consumption, and keeping the sector in a vulnerable state. Contributed 0.0% in the quarter.

Business Investment Slows: Business investment softened further, reflecting heightened caution amid economic uncertainty and higher operating costs and tight labour markets in areas of need. All saw 0.0% contribution in the quarter Surprising Uptick in Dwelling Investment: Dwelling investment provided an unexpected positive contribution, rebounding slightly from a weak base. However, this increase is unlikely to represent a sustained trend given broader headwinds in the housing market.

Public Sector Reliance: Countercyclical public demand was the sole driver of growth, accounting for all the economic expansion in Q3 and the past year. Think about that – the only reason Australia didn’t have a negative quarter was from government spending. While this has supported the labour market and provided a buffer to broader weakness, over-reliance on public spending raises major sustainability concerns.

Per Capita recession and Productivity Woes GDP Per Capita Declines: The headline GDP numbers mask a persistent decline in per capita growth. Q3 marked the seventh consecutive quarter of contraction, leaving GDP per capita 2.2% below its Q2 2022 level, that is a horrible story. Productivity Drag: Productivity remains a significant weak spot, further undermining economic resilience.

Falling terms of trade have compounded this issue, leading to a marked drop in living standards. Real net national disposable income per capita has declined in five of the last six quarters, echoing the negative income shock seen during past terms-of-trade retracements. Compensation Pressures: Weak productivity has translated into falling compensation for employees, which in turn is easing unit labour cost pressures.

However, this decline in compensation is exacerbating household financial challenges, limiting their ability to support growth through spending. Where does this leave the RBA? The RBA faces a complex balancing act.

Weak economic growth underscores the need for interest rate cuts to support demand. However, persistently high inflation keeps the central bank in a cautious stance, limiting its room to manoeuvre. Additionally, the labour market remains tight, partly due to public sector demand, which inadvertently keeps inflationary pressures elevated.

This dynamic complicates the RBA’s ability to deliver meaningful monetary easing in the near term. So where does this leave markets for 2025? Structural Growth Concerns The Australian economy remains heavily reliant on two unsustainable drivers: Public Sector Spending: While critical in the current environment, excessive dependence on government expenditure highlights a lack of private sector dynamism.

Population Growth: Expanding population numbers are bolstering headline GDP but masking underlying weaknesses in per capita terms. Without addressing these structural imbalances, along with improving productivity, achieving robust and sustainable economic growth will remain elusive. We are therefore mindful of sectors that have run ahead.

The ASX 200 has just printed 4 record all-time highs in the past 8 trading days. Momentum indicators are running hot and overbought signals are flashing. Couple this with the economy falling into the end of the year. 2025 is likely to be a story or two – a recalibration in the first half – followed by a recharge in the second half.

With geopolitics thrown in and other issues. Volatility is likely to be back with a vengeance in 2025.

Top 5 Benefits of a MT4 Demo Trading Account A MT4 Demo trading account is a virtual trading account that allows you to make virtual trades with play money. Demo trading accounts replicate Live trading accounts, but it removes the risk of losing your own trading capital until you are comfortable trading with real money. Most Forex brokers now offer a trial period of their Metatrader 4 demo account to those who want to familiarise themselves with a trading platform.

A Demo trading account is an ideal way to learn about a platform and how to place and manage trades. In a way, a Demo trading account is your ‘L’ plate when you’re just starting or learning to trade. At GO Markets, we provide the MetaTrader 4 (MT4) platform for a trial period of 30 days.

In this article, we will outline the major benefits of using a Demo trading account before going “Live”. These benefits include: 01. A Demo Trading Account is Free There is no cost to download and access a Demo trading account from your broker.

The only thing you need to provide is your name and email address and other relevant contact details. This is to make sure that you can also get support from your FX broker or provider in case you have any question about the Demo trading account or the platform. 02. Theory Into Practice If you’re new to FX trading, there is a lot to learn, especially about the mechanics of how an FX trade works.

For example, you need to know the different lot sizes, what is leverage and how you can use it for your trading, margin requirements, order types, and stop losses. Using a Demo trading account is the best way to put what you have learnt into practice. This will help you gauge your level of understanding before you commit real money.

Gaining any level of confidence in FX trading, no matter how small, always begins on a Demo trading account. 03. Familiarise Yourself With The Trading Platform If you’re a new trader, one of the most important things to do is to familiarise yourself with a trading platform. This is because a trading platform is your vital tool to execute your trades.

The more familiar you are to your chosen trading platform, the better and more efficient you could be with your trading. You also have to consider that different Forex brokers offer different trading platforms. So, it is important that you choose a trading platform that suits your trading style.

Alternatively, if you’re an existing trader and you’re moving from one broker to another, you may be required to use a different trading platform to one that you are used to. Once again you will need to familiarise yourself with the new platform. This process may take time, and a Demo trading account is the best way to get used to a platform without making costly mistakes. 04.

Testing a Trading Strategy There is a saying that goes, “Plan the trade, and trade the plan.” Planning your trades and sticking to your trading plans are vital if you are set on becoming a successful trader. However, it could be easier said than done. Planning your trades and executing your plans accordingly takes time and discipline.

And this is where a Demo trading account could be helpful as you need time to develop and adjust your trading plan and strategy. So whether you are trading manually or using an Expert Adviser, it is best to test your trading strategy on a Demo trading account. A Demo trading account allows you to test and refine your trading strategies without committing real money until you are happy with the results. 05.

Testing Trading Tools Most brokers now provide additional trading tools as a value add to their trading platform. For example, GO Markets provides the MT4 Genesis, which is a comprehensive suite of trading tools. Before using any additional trading tools, it’s highly recommended to test them out on a Demo trading account.

This will help you become more familiar with the tools and determine which ones are the most suitable and helpful for your trading needs. Considering all the benefits we’ve discussed, one thing to remember is that a Demo trading account does not fully prepare you for when you decide to trade for real. Despite all the benefits of Demo trading, it’s also important to note, that there are some drawbacks. » Different Trading Psychology – No matter how long you practice on a Demo trading account, there is no substitute for Live trading.

The main reason is the different psychology when using a Demo trading account compared to a Live trading account. Your mind acts differently once you are no longer practicing with “play” or “virtual” money, and you start trading with your hard earned cash. Where you may have traded larger lot sizes on a Demo trading account without too much concern, it may be harder to pull the trigger on a Live trading account.

Where a losing trade did not matter so much on a Demo trading account, it may be harder to accept a similar loss on a Live account. You may have been confident of your trading strategy on the Demo trading account, but now you’re about to go Live, you’re not so sure. » Risk Management – When downloading a Demo trading platform, beginners can choose how much virtual money they can play with. If the Demo trading goes well, this could easily lead to a false psychological expectation that placing large trades and making large profits is easy.

This leads to poor risk management practices that can carry over to Live trading. This usually leads to a poor trading performance. Demo trading is an important part of becoming a successful trader.

To get the most out your Demo trading I suggest the following: (1) Hone your skills and refine your trading strategy, and most importantly, learn from your mistakes. (2) If you intend to eventually start trading a Live account with a minimum balance of $500, open a Demo trading account with $500. Choose a starting balance on your Demo trading account similar to an amount that you would start on a Live trading account. (3) Treat Demo trading as if it’s the real deal. Try to feel all the emotions of trading – how it feels to have both winning and losing trades. (4) Stick with Demo trading until you are confident enough to trade Live.

At GO markets we offer a 30-day trial of our MT4 platform to both potential. Please click here to start your trial period today. Clients who open and fund a Live trading account with a minimum of $200, are able to get access to a “non-expiring” Demo account.

Please note that trading Forex and Derivatives carries a high level of risk, including the risk of losing substantially more than your initial investment. Also, you do not own or have any rights to the underlying assets. You should only trade if you can afford to carry these risks.

Our offer is not designed to alter or modify any individual’s risk preference or encourage individuals to trade in a manner inconsistent with their own trading strategies. See our MT4 tutorial videos here. Rom Revita | Sales Manager Rom is the Sales Manager at Go Markets Pty Ltd and manages the day-to-day running of the Sales, Support and Marketing teams.

He has been with the company since 2013 and is also one of our two appointed Responsible Managers, helping to ensure that the company follows all AFSL regulatory requirements. Rom has extensive financial markets experience and originally comes from an equities & derivatives trading background. He has served on the Trading & Sales Desk with several large broking houses, and now specialises in Margin FX and CFDs.

Connect with Rom: [email protected]

Artificial Intelligence (AI) is no longer a futuristic concept; it is a rapidly evolving reality reshaping industries, including financial markets. For traders, understanding how AI impacts price action and adopting strategies to adapt to these changes are critical to staying competitive. This article aims to explore AI's current capabilities, its profound influence on price action, but also offer some thoughts on how traders can potentially thrive during current and future changes that may impact markets.

What is Artificial Intelligence? Artificial Intelligence refers to the ability of machines to simulate human intelligence and perform tasks such as learning, reasoning, problem-solving, and planning. AI can be broadly categorized into three types: Artificial Narrow Intelligence (ANI): Specialized AI systems designed to perform specific tasks (e.g., chatbots, fraud detection, and algorithmic trading).

Artificial General Intelligence (AGI): A hypothetical stage where AI matches human cognitive abilities, capable of learning and reasoning across diverse tasks. Artificial Superintelligence (ASI): An even more speculative stage where AI surpasses human intelligence in every way. Currently, ANI dominates the landscape and drives innovations across industries.

For financial markets, ANI forms the foundation for tools and algorithms that enhance trading efficiency, accuracy, and decision-making. What is Machine Learning? Machine learning (ML) is one of the most important technologies underpinning AI and its potential applications in the trading world and so is worth just a little more explanation.

In simple terms, it may enable machines to learn from data, identify patterns, and make predictions or decisions without requiring explicit programming for each scenario. Let’s look briefly at the key elements, types and applications of ML that may have trading relevance. Key Elements of Machine Learning Data: Machine learning relies on large datasets, such as historical market prices, trading volumes, and economic indicators.

Algorithms: These are mathematical rules and calculations used to analyse data and make predictions. They range from simple regressions to complex deep learning models. Feedback Loops: Feedback allows ML models to learn from successes and failures, continually improving their accuracy over time.

Types of Machine Learning Supervised Learning: Machines are trained using labeled datasets, such as identifying bullish or bearish patterns in historical data. Unsupervised Learning: Machines find hidden patterns or anomalies in unlabeled data, such as clustering similar market behaviors. Reinforcement Learning: Machines learn through interaction with an environment, receiving rewards or penalties for actions, making it particularly useful for dynamic trading environments.

Applications in Trading Machine learning drives key advancements in trading, including: Predicting price movements using historical and real-time data. Optimizing portfolio allocations. Detecting anomalies or potential fraud.

Automating decision-making processes based on market conditions. Understanding machine learning is essential because it forms the backbone of many AI-driven trading tools that are reshaping financial markets. Concepts like enhanced trend identification, predictive analytics, and scenario planning all stem from machine learning’s ability to process vast datasets and adapt to changing market conditions.

AI’s Current and Future Capabilities in Trading As the evolution of AI expands into most areas that impact on our world, trading is no exception, AI applications in the financial world span a wide spectrum of uses but most fall into three main categories. This comprise: Fraud Detection: Identifying irregularities in financial transactions. Predictive Analytics: Anticipating price movements based on historical patterns and real-time inputs.

Advanced Decision Support: Assisting traders by analyzing complex datasets and suggesting optimal actions. As ANI technology advances, it is expected to refine these capabilities further, enabling: Enhanced sales forecasting for financial products. Real-time risk management tools.

The development of more personalized trading recommendations. In the long term, these advancements are likely to create a trading environment driven by increasingly sophisticated AI systems. AI’s Impact on Price Action Price action—the study of historical price movements to predict future trends—is foundational to many trading strategies.

AI's integration into trading may begin reshaping this traditional paradigm in several potential ways: Enhanced Trend Identification AI’s speed and accuracy in identifying trends far outpace traditional methods: Faster Recognition: Algorithms can process vast datasets in real-time, detecting emerging trends before they are visible to manual analysis. Greater Accuracy: AI can filter out noise and focus on genuine market movements, providing more reliable insights. Predictive Analytics AI’s predictive capabilities extend traditional market forecasting: Forecasting: Using historical data and complex algorithms, AI predicts market shifts with varying confidence levels.

Scenario Analysis: Simulating multiple market conditions, AI helps traders prepare for diverse outcomes. Changing Trend Lifecycles AI-driven strategies could alter the nature and duration of market trends: Accelerated Trends: Rapid AI-driven trades may shorten the lifecycle of trends, making them more volatile and less predictable. Increased Volatility: High-speed trades based on AI predictions can lead to significant price swings in short timeframes.

Behavioural Impacts AI is likely to influence trader behaviour and market dynamics: Herding Behavior: Similar AI-driven insights can lead to collective actions, amplifying price movements. Strategy Diversification: To remain competitive, traders must develop diverse and creative strategies. Challenges and Risks While AI offers tremendous potential, it also introduces challenges traders must navigate: Increased Market Volatility AI’s speed and efficiency can exacerbate short-term market volatility.

Sudden price movements may trigger stop-losses more frequently, disrupting traditional risk management strategies. Flash Crashes Algorithmic trading can lead to flash crashes—sudden, sharp price declines caused by cascading AI-driven trades. These events create liquidity risks and potential financial losses.

Over-Reliance on AI Dependence on AI systems could lead traders to overlook market fundamentals, exposing them to algorithmic biases and failures. Reduced Effectiveness of Traditional Tools As AI reshapes market behaviour, traditional tools like moving averages may lose reliability, forcing traders to adopt more dynamic approaches. Ethical and Regulatory Concerns AI introduces challenges around transparency, data bias, and compliance with evolving regulations, requiring constant vigilance.

How to Adapt and Thrive To improve the chances of potential better outcomes in a new more AI-driven market, traders must adopt proactive strategies that embrace rather than push away likely changes in the traditional ways of looking at markets. These may include: Review and Refine Your Strategies Evaluate how AI might impact your existing methods, particularly those reliant on lagging indicators. Incorporate real-time data analysis tools to complement traditional approaches.

Action: Conduct stress tests on your strategies under simulated high-volatility scenarios to ensure resilience. Leverage AI for Competitive Advantage Explore AI-powered platforms for market analysis, trade recommendations, and risk management. Develop custom AI models tailored to your trading style.

Example: Use machine learning to identify unusual trading volumes across multiple markets, providing actionable insights into potential opportunities. Strengthen Risk Management Practices Adapt stop-loss levels dynamically based on real-time volatility metrics. Diversify portfolios to reduce exposure to single-market risks.

Action: Incorporate scenario analysis tools to prepare for unexpected market conditions, such as flash crashes or sudden policy changes. Stay Informed and Educated Keep up with advancements in AI and its applications in trading by attending webinars, reading industry reports, and engaging with experts. Experiment with AI tools in demo accounts to understand their capabilities and limitations.

Example: Test AI-based predictive analytics platforms to evaluate their effectiveness in your trading strategies. Harness Human Creativity and Judgment Combine AI-driven insights with personal market knowledge to develop hybrid strategies. Focus on areas where human intuition, creativity, and adaptability can complement AI’s analytical power.

Action: Use AI as a decision-support tool, relying on your judgment for execution and fine-tuning strategies. Conclusion AI is transforming financial markets, presenting both opportunities and challenges for traders. While its speed, accuracy, and predictive power can disrupt traditional methods, those who adapt their strategies and leverage AI’s potential stand to thrive.

By refining approaches, strengthening risk management, and staying informed, traders can navigate the complexities of AI-driven markets and position themselves for success. The future of trading is here. Embrace the change, adapt your strategies, and unlock the potential of AI to gain an edge in an increasingly competitive market.

Introduction: Understanding the Impact of Entry Errors Trade entry is a critical moment that is undoubtedly contributory to the success or failure of a trade (although exits remain an additional key component of course). Whilst many traders focus much energy and effort on entries, the importance of a well-planned and so called ‘high probability entry’ is often underestimated. Poor entries can put traders at an immediate disadvantage, increasing risk exposure, reducing profit potential, and fostering a cycle of emotional and often questionable decision-making at this critical point of any trade.

This article delves into the most common entry mistakes traders make, why these errors occur, and, more importantly, how to avoid them. Many of these are insidious but if remain unchecked can lead to disappointment in trading outcomes, and at worst, may result in significant trading losses if they are not addressed over time. Through developing a greater understanding of the psychological pitfalls, potential technical missteps, and strategic errors made behind poor entries, traders can take actionable steps to enhance their consistency and performance in the markets.

Whether you're a beginner or an experienced trader, mastering your trade entry process can have a profound impact on your long-term trading outcomes and ultimate success or otherwise. The great news is that many of these are not “hard” fixes. Although by no means an exhaustive list, and often connected, these TEN errors in our experience appear to be the most common, Use these areas covered below as a checklist, making notes on any aspect that may resonate you’re your behaviour and of course subsequently take appropriate action as needed. #1.

Chasing Price Implications: Chasing price happens when traders enter impulsively after a sharp price movement in a particular direction. This is often driven by FOMO (Fear of Missing Out), and typically results in buying at overextended levels where a trend is already very established and may have almost run its logical technical course. This often results in a trade reversing or at best price exhaustion and little or no positive outcome over time.

Price reversal will often, even with the appropriate risk management in place result in repeated losses. Solutions: Develop a disciplined approach by waiting for either retracements to logical support levels, with of course evidence either of a bounce upwards, or even a breach of a new key level, or previous swing high (or low if “going short”). Either of these approaches may result in achieving a more favourable entry.

Also many trading platforms, including MT4 and MT% GO Markets platforms can use notification alerts to identify when the price reaches these levels, which is a useful feature that may assist in making sure robust decision-making occurs on a consistent basis. Additionally pending orders may also be used as part of your effective entry toolbox, set with more “cold” logic rather than being driven by emotional excitement of price velocity that may often be short-lived. #2. Ignoring Market Context Implications: Ignoring the broader market environment leads to trades that contradict prevailing trends or key market conditions.

T his oversight often results in entering trades with low probability, increasing the likelihood of stops being triggered. For long-term success, aligning trades with the dominant market forces is not only logical but appears from any research performed to be generally higher probability of at least some period of time where it is more likely that price will move in your desired direction. Failure to do so on a regular basis, can leave traders feeling like they're always on the wrong side of the market.

Example: A trader shorts the S&P 500 during a small pullback, not realising the index is in a strong uptrend on the daily chart. The pullback ends, and the uptrend resumes, quickly hitting the stop-loss. Solutions: Perform a multi-timeframe analysis before entering a trade.

Use higher timeframes (e.g., daily if trading an hourly timeframe) to understand the broader trend and ensure the trade aligns with it. Incorporate trend-following tools like moving averages or trendlines to validate entries is of course a common method to help substantiate this approach. #3. Over-Leveraging Positions Implications: Over-leveraging magnifies both potential profits and losses, but the latter can have devastating consequences.

Even small adverse price movements can wipe out significant portions of an account, leading to margin calls (and so taking “exit control” away from the trader) or even complete account depletion. This often traps traders in a cycle of "chasing losses," further compounding mistakes. Solutions: Implement strict position sizing rules.

For example, risk no more than 1-2% of your account on a single trade by adjusting your position size relative to your stop-loss distance. Your maximum ‘Risk per trade’ should be based on your Tolerable risk % of Account size per trade (e,g, 1%) x Entry price to Stop-loss distance. #4. Entering Without a Stop-Loss Implications: Trading without a stop-loss exposes traders to uncontrolled risk.

It fosters a dangerous mindset of "hoping" the market will work in their favour, often leading to mounting losses. A single large loss can undo months of profitable trading, shaking both confidence and capital and so have longer term psychological implications such as loss aversion, which can further distort good decision-making. Solutions: Use stop-loss orders based on logical technical levels, such as below a recent swing low.

Although less pertinent to entry but equally important through the life of a trade is potential use of trailing stops can also help lock in profits as the price moves favourably, protecting against reversals and of course profit targets based on logical potential technical pause or reversal points. #5. Over-Reliance on Indicators Implications: Indicators are helpful tools but are often misused when relied upon as the sole basis for trade decisions. Many indicators are lagging by nature, meaning they reflect past price movements rather than anticipating future ones.

Blind reliance on indicators can lead to late or false entries, especially in trending or volatile markets. Price action and associated volume should be treated as the primary decision making points with indicators used for confluence, Example: A trader buys a stock because RSI indicates oversold conditions, but the stock continues to decline as the market remains in a strong downtrend. Solutions: Combine indicators with price action and market context.

For example, use RSI or MACD as confirmation for setups rather than primary signals. Always validate indicator signals with chart patterns, price range within a specific candle, and/or key levels of support/resistance. #6. Trading News Events Implications: News events often create sharp volatility, which can lead to slippage, widened spreads, and unexpected losses.

Trading without a structured plan during (and arguably before) such events exposes traders to heightened risk, especially in fast-moving markets. Examples: A trader enters a position before a Federal Reserve announcement, expecting dovish remarks. Instead, hawkish comments cause a rapid market reversal, leading to a significant loss.

It is worth noting that it doesn’t even have to be an adverse announcement to that which was expected to disappoint. If one believes, as is often cited, that everything that is known or expected is already “priced in” then even an expected number or news release can fail to provide a potentially profitable price move. Also of course, equally as dangerous to capital is not to be aware of significant market events at all.

To enter prior to these from a place of ignorance that they are even happening is potentially as damaging to capital.. Solution: Use a trading calendar to track upcoming high-impact news events. If trading news is part of your strategy, place pending orders above and below key levels to capitalise on breakouts while controlling risk. #7.

Trading Impatience Implications: Entering trades prematurely often leads to setups that fail or require larger stop-losses to accommodate unnecessary volatility. This behaviour stems from a need to "be in the market," and this “itchy trigger finger” which is in essence a compromise of discipline arguably can increase the likelihood of losses. Example: A trader buys a stock before confirmation of a breakout, only to see the price reverse and remain in a sideways trend for a prolonged period of time not only failing to see that specific trade do well but also arguably adds opportunity risk as that money invested could be in a trade that has indeed set up to confirm a change of sentiment, Solution: Establish clear entry criteria and wait for confirmation, such as a candle closing above resistance.

Articulate these clearly and unambiguously within your trading plan, #8. Misjudging Risk-Reward Ratios Implications: Poor risk-reward ratios undermine profitability. Even with a high win rate, losses can quickly outweigh gains if the potential reward doesn't justify the risk.

Either a failure to have defined acceptable levels articulated within your plan or ignoring (based on previous price action) potential pause or reversal points are the two main causes. Example: A trader risks $500 to make $200 on a trade. Over several trades, a few losses wipe out multiple winning trades.

Solutions: Ensure a minimum risk-reward ratio is stated for example 2:1 before entering. For instance, if risking $100, target a profit of at least $200 to maintain positive expectancy. #9. Over-Trading Implications: Over-trading leads to increased transaction costs, emotional exhaustion, and reduced focus on high-quality setups.

This is often driven by revenge trading or overconfidence after a winning streak. Example: A trader takes several trades in a single session after a loss, compounding mistakes and ending the day with a larger drawdown. Solutions: Set a daily trade limit and focus on quality over quantity.

Use a trading journal to reflect on your trades and identify patterns of over-trading. #10. Ignoring Correlation Between Assets Implications: Trading multiple correlated assets amplifies risk, as adverse moves in one asset can lead to simultaneous losses across others. Hence, even if say a 2% maximum risk is assigned to a single trade, if trades are highly correlated then that risk is multiplied potentially by the number of trades open.

Example: A trader goes long on EUR/JPY, AUDJPY and GBP/JPY and a sharp JPY rally causes losses in all three positions. Solutions: Use correlation matrices to assess relationships between instruments and diversify by trading uncorrelated assets. For instance, balance a forex position with a commodity trade.

Summary: Trade entry mistakes are often rooted in a combination of emotional decision-making, poor planning or preparation, and over-reliance on tools or strategies without proper context. By identifying these common errors and implementing structured solutions, traders can greatly enhance their ability to execute high-quality trades. The key to success lies in discipline, patience, and a willingness to adapt and learn from mistakes.

Start reviewing your entry process today, be honest with any of the above that may resonate with you (As awareness is always the first step in improvement) and give yourself the chance to potentially transform your trading outcomes over time.