Young Blood Trader

What happens next ?

According to a market technical strategy, we would have a bundle of sell orders just waiting to be filled below the recent low. But according to some other technical strategies, now would be a good time to buy. If the recent low will be broken, the DAX will most definitely be in a bear market at least the rest of the year.

Since we have a 96% correlation between the Dax and Eurostoxx, the same applies here. I am looking for a pullback and a movement trough 2972,7 that is where I place my order. I am also open for a major bullish correction.

Some successful trades I made this week

Although my bachelors thesis will be written about a market technical strategy, I haven´t had much time to monitor the markets. Still I managed to pull of some positive returns with FTSEMIB and IBEX 35. Since the week started looking bearish on those indices, I was positioned bearish myself.
Despite we do not have definite sings of a trend reversal on the weekly chart with these indices, the daily chart is starting to look like a bear market.

IBEX 35 H1

FTSEMIB H1

How the quants of wall street affect the financial markets

When it takes about four seconds a human to read a tweet, an algorithmic trading system needs only a few microseconds to read a significant article, process the information and make trades. A human can´t compete with these algorithms, since it takes a human brain too long to process the same amount of information. These algorithms have created a new ecosystem in the recent five years that is taking over. It seems scary that the markets are no longer controlled by humans, because we are dependent on commodities. Sean Gourley explains the "ecosystem" of algorithmic trading in the following video.

Always look at the big picture

Like you should not have a long position on the S&P 500 at the same time as you are short on the Dow Jones, you should apply the same rule to different time frames. A trader should always remember to look first at the "general weather situation" before moving on to smaller time frames. One can see a trend reversal on a 15 minute chart but when looking at the daily chart, it appears only to be a correction of a bullish trend. The "the trend is your friend" rule applies also here.

Here is one example of a well constructed position:

Picture 1. We start the trading session by looking at the daily EUROSTOXX chart. We are now at breaking point 2 and see that this could be used as a trend confirmation.

Picture 2. Next we move to a samaller timeframe, for example the hourly chart. We can now identify a formation here and place our order. The direction of the position is now the same as the direction of the main trend.

Picture 3. to give you a hint what it would look like on the 15 min chart.

EUR/RUB about to breakout

The crisis between Ukraine and Russia has been affecting the EUR/RUB currency pair so that it is now in a steady bullish trend. A market technical entry at 50.820 will most definitely work. There is also a probability for a small correction movement just before the breakout. Pay attention to the volume to avoid false entry.