Tin tức & phân tích thị trường

Trading Volume: General principles Many experienced traders (even those using a simple system will incorporate volume as part of their entry (common) and/or exit (less common) system. It is essential (as with any indicator) that you understand the role volume can and cannot play with suggestions of what is happening to market sentiment. So generally speaking, trading volume may offer some guidance as to whether market participants are changing sentiment towards the pricing of an asset, and if there is a price move, whether it may have a higher probability in continuing in that trend direction.

Many would consider it more “leading” than the majority of other indicators. Indeed, VSA (volume Spread Analysis) which is based on this principle is an approach used by many. In simple terms, a price move (either way) with higher traded volume is thought to be more robust in terms of trend continuation.

Whereas Lower volume with a price suggests market uncertainty or no interest. Trend reversal and retracement A trend reversal is, as the name suggests, sentiment moving from an established upwards trend to, a new trend forming in the opposite direction e.g. upwards to downwards trend (or visa versa). The risk of remaining in a trade that is reversing is loss of potential profit in that position if one delays exit.

A trend retracement, is a temporary pull back in price prior to continuation of that change in the same direction, often termed a trend pause). The risk of exiting a trade on a retracement is that you are missing out of the additional profit from a subsequent trend continuation move. This differentiation is important when the trader is considering an exit from a specific position.

For example, recognition a reversal from a uptrend to downtrend early would be beneficial when in a long trade. Whereas should the price move be a retracement then to continue to hold that position may prove to have a better outcome as the price subsequently moves higher. The challenge, of course, Is that ability to differentiate and identify through the use of technical “clues” what may be happening to market sentiment.

Is volume the “clue”? If one accepts the premise that level of volume is an indicator in terms of the potential strength of a price move, then can this be a “clue” as to whether the more likely outcome is reversal or retracement? See below for an hourly chart of USDJPY.

We have labelled the confirmed start of trend after a double top type of chart pattern through to the end of the trend and subsequent reversal. Note the lower volume of the two retracements (shown in blue highlight) and the subsequent higher volume as the trend ultimately reversed. In terms of trading actions logically one could consider the following: • Retracements may be a signal to trail a stop loss to the base of the retracement. • Increasing volume may be a signal to exit directly in anticipation of a confirmed reversal.

The Forex Volume Challenge? As many readers will be trading Forex it would remiss of us not to discuss the specific issue briefly with the volume seen on an MT4 platform. With shares (and the volume shown on Share CFD charts for example), the number of traded positions is managed and reported by the central exchanges (e.g.

ASX, NYSE). However, with FX there is no central exchange so the volume you see reflects the trades going through relevant liquidity providers. Additionally, Forex volume on MT4 measures a record of ticks rather than the number of lots traded.

One tick measures a single price change. As a price moves up and down this “tick volume” alters within the specific chart period. On the MT5 platform there is a option to choose so called “real volume” and yet it should still be borne in mind that compared to a stock exchange which theoretically shows all trades from the whole exchange this is not the case with Forex.

Hence, some may question as to whether the measured chart volume with Forex is sufficiently valid on which to make decisions (although theoretically the principle remains the same). The reality… Whatever your thoughts on this, arguably you could question the validity of any indicator. So, ultimately you use the same process for testing and subsequently potentially adding any indicator you may be considering the use of in your individual decision making i.e. back-test to justify a forward test and on evidence decide whether, and how to add volume to your trading decisions.

You challenge is to do the testing, and plant your flag as to whether you are to utilise this in your trading.

A written trading plan, usually comprising of several guiding action statements, serves the following two invaluable purposes: Facilitates consistency in trading action e.g. in the entry and exit of trades, allowing the trader AND Measures the strategy used specified within each statement to make an evidence-based judgement on how well these are serving you and test and amend these statements so you can develop an individual trading plan that may work better for you. Let’s move past the fact that many traders choose not to have a plan at all, an approach that goes against what is one of the key components of giving yourself the chance to become a successful trader, to those who have a plan in place already. This article is targeted a those who have made the logical choice to have some sort of written plan in place.

Great though having a plan is, many traders still have issues with the two purposes outlined above. They still fail to some degree to develop the consistency described and are not really able to measure effectively. A common problem, if we look closely at some of the plan statements used, is that such statement may not be specific enough, have some ambiguity, that means that those purposes may be difficult to achieve.

Let’s provide and work through an example for clarity (we have used something generic that applies to all trading vehicles). Consider the following statement… “I will tighten my stop/trailing stop prior to significant, imminent economic data releases” Firstly, on the positive side again, this does demonstrate an awareness of potential risk and a desire to have something within your plan to manage this risk. However, in terms of being a measurable statement that you can make a judgement as to how well this approach is serving you, there are the following issues: What does ‘tightening’ mean in practical terms in relation to current price point of the chart you are trading?

How close to a data release is ‘imminent’? What constitutes a significant data release (amongst the many that are released daily)? So, to take the previous example consider the following as an alternative: “Prior to imminent economic data releases, I will tighten of a trail stop loss for any open trades, 15 minutes prior to the release and to within 10 Pips of the current price (or course this can be adjusted to points or cents dependent on what you are trading).

This will be actioned for the following data points: Interest rate, CPI, industrial production and jobs data from the country of either currency pair (or Germany, France of across the Eurozone if one of the currency pair is the EURO). US and Chinese PMI manufacturing data, GDP, industrial jobs and interest rate decisions as these may impact all currency majors." So, with THIS amended plan statement the following elements could be measured (if journaled appropriately of course): What would the difference be in your trading outcomes if: No tightening had been actioned. If a different proximity to current price is used e.g. 15 rather than 10 Pips.

If other data releases are added/removed. With this level of measurement, possible with the revised statement, one would now be able to make any changes, backed up with evidence, to your trading plan. Alternatively, of course, you could make the choice to do nothing, retain statements such as the original, and not have the ability to create the richness of evidence to make considered amendments to your plan.

Logically ask yourself the question, "which choice is more likely to serve my trading going forward?"

We have discussed many times the importance of unambiguous, and sufficiently specific statements within your trading plan in previous articles and at the weekly “Inner Circle” webinars (for more information see the Inner Circle in the navigation bar). The benefits of this are twofold: 1. Assist in developing consistency in execution when trading when attempting to follow a trading plan in the “heat of the market” & 2.

Facilitate measurement of aspects of your trading plan to review and refine on evidence. This article aims to give you an example in the context of trailing a stop, one of the key exit strategies employed by traders. Below are some commonly used trading scenarios for trailing a stop, relevant challenges faced when attempting to be appropriately specific within your plan are below.

So, for example, using the first example, we could articulate the statement as follows: "I will check the current 15EMA at the end of every chosen candle chart period for any open position, and trail my stop to this level until the price has crossed below (if long), or above (if short), at which point I will exit the trade". Your challenge is simple. Once you have chosen your trail stop method, review your existing statement and make a judgement and take action if you think you could tighten it up to mean that statement potentially better meets those two aims highlighted at the beginning of this article.

In the last article, I wrote about the top 5 gold exporters in the world. Now it is time to look at the top 5 exporters of another one of worlds precious metals – silver. Last year the total sales from global silver exports reached $19.5 billion.

The top 5 exporters made up around 49% of the worldwide silver exports in 2017. So let’s take a look of the countries in the top 5. Hong Kong Hong Kong, officially known as Hong Kong Special Administrative Region of the People’s Republic of China is the top silver exporter of silver with exports worth $3.1 billion or 16% of the total in 2017.

Hong Kong has the 33rd largest economy in the world at $341 billion and 16th per capita at $46,193. Hong Kong is the 2nd largest foreign exchange market in Asia and 4th largest in the world in 2016 with a daily average turnover of forex transaction reaching $437 billion, according to the Bank for International Settlements. Official languages: Chinese and English Population: 7,448,900 Gross Domestic Product: $341 billion Currency: Hong Kong Dollar (HKD) Mexico Mexico, officially the United Mexican States is the second largest exporter of silver in the world with exports worth $2 billion in 2017, 10.2% of the world total.

Mexico has the 15th largest economy in the world at $1.1 trillion and 11th concerning largest population. Mexico was worlds 13th largest exporter in 2017 with 81% of the exports going to their neighbour – the United States. Official languages: Spanish Population: 123,675,325 Gross Domestic Product: $1.1 trillion Currency: Mexican Peso (MXN) Germany Germany is the third on the list of the largest silver exporters with a total value of $1.5 billion exported in 2017, 7.6% of the world total.

Germany is the 4th largest economy in the world and most significant in Europe at $3.6 trillion. Germany’s biggest exports are motor vehicles, machinery, and pharmaceuticals. Official languages: German Population: 82,800,000 Gross Domestic Product: $3.6 trillion Currency: Euro (EUR) China China, officially the People's Republic of China is the fourth largest exporter of silver with total exports of around $1.45 billion which is 7.4% of the world total in 2017.

China is the world’s 2nd largest economy, just behind the US and is expected to overtake the North American nation in the coming years. China’s biggest exports are electrical machinery, furniture, and clothing. Official languages: Standard Chinese Population: 1,403,500,365 Gross Domestic Product: $12.2 trillion Currency: Renminbi (CNY) Japan With total exports of $1.43 billion in 2017, Japan is the fifth largest silver exports in the world, that’s around 7.4% of the world total.

Japan has the 3rd largest economy in the world at $4.8 trillion. Japan’s most prominent exports include vehicles, machinery, and iron. Official languages: Japanese Population: 126,672,000 Gross Domestic Product: $4.8 trillion Currency: Japanese Yen (JPY) This article is written by a GO Markets Analyst and is based on their independent analysis.

They remain fully responsible for the views expressed as well as any remaining error or omissions. Trading Forex and Derivatives carries a high level of risk. Sources: Go Markets MT4, Google, Datawrapper

The Forex market is the largest in the world with around $5 trillion average daily trade volume. It dwarfs the daily trade volume of the New York (NYSE), Tokyo (TSE), and London Stock Exchange (LSE) which stands at around $22, $18 and $8 billion respectively. In this article, we will take a look at the top 5 most traded currencies in the world.

US dollar The United States Dollar (USD, US$) is the official currency of the United States and also eight other countries, including East Timor, Ecuador, El Salvador, Palau, Micronesia, Panama, Marshall Islands, and Zimbabwe. The US dollar is the most traded currency in the world, accounting for a daily average volume of around $2.2 trillion, making up a large proportion of the total average daily volume. There are a few reasons why the dollar is the most traded currency in the world – the US has the largest economy in the world at around $19 trillion.

Euro The Euro (EUR, €) is the official currency of the European Union, and it’s the second most traded currency in the world at $800 million average daily volume. The Euro is the official currency of 19 out of the 28 EU member states. It was first introduced back on the 1st January 1999.

Euro has one of the highest combined values of banknotes and coins in circulation in the world at €1.2 trillion. Japanese Yen The Japanese yen (JPY, ¥) is the third most traded currency in the world, making up a daily average volume of around $550 billion. Japan has the third largest economy in the world, just behind the United States and China at $4,8 trillion.

The Bank of Japan issues the Japanese yen (BoJ), and it is also unofficially used in the African nation of Zimbabwe. Pound Sterling The pounds sterling (GBP, £) is the official currency of the United Kingdom, Jersey, Guernsey, the Isle of Man, South Georgia and the South Sandwich Islands, the British Antarctic Territory, and the Tristan da Cunha. The pound is fourth on the list of the most traded currencies in the world with a daily average volume of around $325 million.

Sterling is worlds oldest currency still in use. Australian Dollar The Australian dollar (AUD, A$) is the official currency of the Commonwealth of Australia and is also an unofficial currency of Cambodia, Gambia, New Caledonia, Papua New Guinea, and Zimbabwe. It is the fifth most traded currency in the world with a daily average volume of around $174 million.

The Aussie dollar, as it is usually referred to by foreign exchange trades is issued by the Reserve Bank of Australia (RBA). This article is written by a GO Markets Analyst and is based on their independent analysis. They remain fully responsible for the views expressed as well as any remaining error or omissions.

Trading Forex and Derivatives carries a high level of risk.

The MACD (or the ‘Moving Average Convergence/Divergence oscillator’ to give its full name) is one of the popular extra pieces of information we often see added to charts. The purpose of this article is to clarify what it may be telling you about market sentiment and offer a description as to how traders commonly apply this in their decision making. This is a slightly lengthier article; brief explanation may not be clear, and we want you to really get to grips with this so you can make the right decisions for you.

Taking a step back. The purpose of technical indicators is to provide the trader with information to assist in entry, or exit, decision making. We have discussed the choice of adding indicators previously and suggested the following: a.

You should not add an indicator unless you understand what it is telling you about market sentiment. b. You should only use any indicator if it provides additional information to that which you have already. To do so may create a more colourful and impressive looking chart but little else. c.

You should always articulate how you are going to use an indicator for entry and/or exit in your trading plan in a specific unambiguous statement to facilitate consistency and measurement. d. There is no point on adding extra indicators if you are not sufficiently disciplined to use the existing plan you have. There is a different priority here you may need to work on if this resonates with you!

In this article we are hoping to add some value in addressing “a” through to “c”. What could the MACD be telling you? The MACD was developed in the 1970’s with the aim of offering information about changes in trend and momentum of a price move.

Additionally, there is a signal line that could assist in pressing the entry/exit button. Despite the somewhat complicated and jargon -filled full version of its title (hence the abbreviation), which unfortunately may put off some inexperienced traders from finding out more before they jump in and blindly use it, when you pick it apart, it is not perhaps as complicated as it may first seem. The indictor is based as the name suggests on using the commonly used and more easily understood moving averages and the principle that if you plot two of these on a chart of different periods e.g. 10 and 20, a cross of these may indicate a change in trend.

Before we move on to looking at the MACD on the MetaTrader platform, it is worth noting that those traders with experience of other software will notice a difference in how the MACD is shown. We will be discussing the MT4/5 version of this indicator as that is the platform that most of you will be using. Before we look at the indicator itself let’s look at a simple chart with two moving averages plotted and explain some of the terms to help explain some of the terminology once we move to the indicator itself.

Here we see a GBPUSD 15-minute chart. There are two exponential moving averages (EMA) namely a 12 and 26 (the reason for this will become obvious in a moment. We see a moving average cross marked; in this case the 26 EMA has moved above the shorter 12 EMA often perceived as indicating a change in trend to the downside.

We also see highlighted in yellow, firstly an example where the moving averages are moving further apart (termed divergence), this is often seen as a signal of increasing momentum as a trend develops. Subsequently, we see highlighted the space between the moving averages narrows (termed convergence). This is often seen as a signal of decreasing momentum and often ultimately results in reversal.

So, back to our MACD, in simple terms, a MACD will give you the same information as above, though admittedly in a different form. Here is the same chart as above but with the MACD added. We have illustrated with the green arrows how the information on the top of the chart relates to the MACD at the bottom.

Now, just to swing back to a point made earlier. The reason we chose the 12 and 26 EMAs on the chart above to help understanding that these are the default settings on a traditional MACD (these are of course adjustable, though most traders wouldn’t choose to do this, nor should without testing). EMA cross and trend direction There is a ‘centreline’ at a zero point on the MACD you can see if there is a cross of the moving averages; the graph also crosses over this line.

If the histogram (the vertical bars) are above the line what this means is that the shorter term (12) EMA is above the longer term (26)EMA. This is indicative of an uptrend. If the vertical bars are below the line, then the longer EMA is on top (see chart above).

Momentum (convergence versus divergence) As referenced earlier in simple terms if the distance between the moving averages is increasing (divergence), this indicates increasing momentum in the trend (and so is thought to be a sign of potential continuation). If you look on the top chart, you will see how this increasing gap is illustrated on the MACD by increasing height of the bars. Conversely, when the moving averages begin to converge (get closer) then length of the bars decreases, this is suggestive of decreasing momentum in the trend which if continues may ultimately result in trend reversal (and a cross of the two EMAs).

On the Metatrader platform the length of the bars in the histogram is a numeric representation of this gap between the two EMAs (12 and 26). It is not unreasonable to question (and many do) that if all this information is on the top chart anyway and easily visible what justification is there to add the MACD box? The signal lines The answer lies in the only new piece of information, that is termed “signal line” as seen on the MACD example above.

The calculation of how this line is plotted is based on taking a simple moving average (SMA) of the difference between the two EMAs. It is seen as potentially important when there is a cross of this line above or below the histogram bar height. The purpose of this line is to potentially give additional information relating to the likelihood of that change in trend momentum and to create a readiness to take action.

To help explain the potential use of this “signal line” let’s use the diagram below which is a “snip” taken from part of the chart as it moves into uptrend. At the start of the uptrend, we see the histogram bar tops over the signal line. As the signal line is a SMA of the height of the bars you note it tracks upwards along with the increased momentum.

Ultimately, as momentum (divergence) begins to “top out”, the height of the bar moves below the signal line. Subsequently, we see a drop-in momentum as the EMAs converge and ultimately the trend ends. Hence, theoretically this could signal a potential reason to exit a trade.

Bringing it all together… Despite the additional “signal” line many questions the usefulness of adding this to decision making processes. However, it remains a popular indicator and as such our advice is, as always, not whether to use or not use it in your system, but rather emphasise the importance of testing your trading system. As with any indicator, general trader consensus is that NO indictor should be used in isolation.

Certainly, there is no information within the MACD that shows whether an asset is overbought or oversold, whether there is associated volume, and of course no accounting for the proximity of key price points (support and resistance), nor the potential impact of economic data. Logic would suggest that all of these are worth consideration alongside the MACD if you are choosing to integrate it within your system. There is some practical use of this that seem odd.

For example, if your “favoured” moving averages on a chart are let’s say 5 and 15 and yet you are using the default 12 and 26 EMAs as part of your MACD set up, this is worth exploring. The fact that much of the MACD information is easily seen on a standard chart is a compelling reason perhaps to test a system with and without MACD and simply look at results. Ultimately, and to finish, it is of course your choice as to which criteria you use.

Remember, whatever these are for you, the key lessons of specifically identifying how you are to use the criteria within your plan, the importance of forward testing (as well as back-testing) of any system change, and of course the discipline of following through are critical whether you use the MACD or don’t.