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General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.

iq option review 2018

IQ Option consists of two legal entities: IQ Option Europe Ltd. is registered at Cyprus and is regulated by CySEC, and IQ Option Ltd. which is registered at Seychelles, this entity is not regulated. IQ Option Europe Ltd. provides its services for traders from the following countries: Austria, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lichtenstein, Lithuania, Luxembourg, Malta, Norway, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, The Netherlands, United Kingdom. A reputed online broker, it provides trading options in currencies, stocks, indices and other financial assets.

History

IQ Option entered the market formally in 2013 and quickly set a purpose for themselves. They strive to provide their clients with a straightforward, streamlined and enjoyable trading experience. They stand out among other brokers due to the following features:

  • They provide clients with an absolutely free demo account to try out their services.
  • They have made trading accessible to traders of all sizes, by setting the minimal deposit at $10 per account.
  • Deposit options include Credit Cards, Money Wallets, Wire Transfer, WebMoney, Qiwi, Yandex Money, Boleto, Skrill, Multibanco

The Withdrawal Process

Upon using IQ Option, traders will find that the withdrawal process is user-friendly and less complex, with an increased number of options for traders to withdraw their money from. For instance, traders can use payment options such as credit cards, portfolios or any other trading platform. MasterCard and Visa, both of these credit card types are accepted by them. However, they operate according to the directives issued by the European security standards. To ensure the trader’s financial security, limits have been set on the withdrawal amount.

The withdrawal process is simple and does not require any technical expertise thanks to its insightful user interface. The trader has to simply enter the details of the withdrawal amount, i.e. the currency, amount and desired payment medium, to start the process. Within a few days, the request is processed and the amount is credited to your bank account. This is in stark contrast with other online brokers, where processing takes significant time. Additional withdrawal methods include using Money Wallets, WebMoney, Qiwi, Yandex Money etc.

Customer Service

Security is of utmost importance when trading in the online Forex world and a skilled support team should be present at the broker’s end in case of an unfavourable situation. For instance, in the event when the trader is faced with a problem, a responsive customer service team can guide the trader and provide him with a solution.

Fortunately, IQ Option’s support team is skilled, adept and responsive, with a 24/7 online presence. They have their client database at all times, including contact number and broker account information, thus providing a good customer experience.

Demo Account


A demo account feature is provided by almost all of the top online brokers. The main aim is to provide the clients with a little taste of the services they are about to offer. When it comes to IQ option, however, their Demo Account is an extension of their Trading customer service functions. This completely free demo account gives traders the same rights, privileges, and functionality as the regular account holders with an extended time limit allowing the traders to be adept and skilled in this platform. This is different than other online brokers who set up limitations for demo account access and do not allow traders to thoroughly use their platform without becoming a full-time member.

Forex Trading

Compared to Forex trading with other brokers, IQ Option has a built-in protection mechanism such that the trader can never lose more than the amount s/he had initially invested. The traders should also take the advantage of Stop Loss (SL) and Take Profit (TP) features when trading Forex with IQ Option.

The profits earned in long positions when trading Forex is calculated by (Closing price / Opening price – 1) x multiplier x investment

In case of short positions, the formula is (1 – closing price / opening price) x multiplier x investment

Security

One of the primary concerns of traders in the online trading world is security. A large number of data breaches and hacking attacks have targeted such online platforms in the past, resulting in heavy financial losses for both the broker as well as the traders operating that platform. Banking and security are important, especially where traders are in pursuit of higher payouts.

IQ Option has left no stone unturned, taking the necessary steps to ensure complete security from cyber attacks or data breaches. A series of security protocols and directives are in place for keeping this risk at a minimum.

  • SSL Protocol: Traders can safely withdraw their amounts from their trading accounts because an SSL encryption protocol is in place. SSL encryption is one of the most frequently used security measures in banks and financial institutions for extra security. This ensures that no transaction information can be intercepted by a third party.
  • Validation process: IQ option has a comprehensive validation process for each new pickup method. This means that if someone wants to access the trading accounts and transfer the money to a “never-before-used” bank account or credit card, the system gets locked. This is because the system requires the trader to deposit ID proof, proof of residence and credit card details before he or she can successfully withdraw from the trading account. This adds an extra layer of security and notifies the traders of any unauthorized access.
  • Withdrawal process: IQ Option has a very simple withdrawal process which also makes them more secure. This is because the system is configured in such a way that the proceedings from a trader’s account either get transferred to the trader’s specific bank account or the same credit card that the trader has opened the account with.
Cryptocurrency Trading

Cryptocurrency is a new, innovative and exciting way of transaction in the world of trading. It is basically a virtual currency unit, an alternative to traditional Fiat currency and as such has no physical form. It exists entirely in digital form and hence is useful in making secure transactions very quickly. Traders are increasingly embracing this new technology, and IQ Option has made the necessary provisions.

IQ Option allows traders to trade in popular cryptocurrencies such as Bitcoin, Ripple, Ethereum, and Litecoin, giving traders the opportunity to diversify their existing portfolio and take advantage of trading opportunities in the different markets. Since the Cryptocurrency market is volatile and unpredictable in nature, IQ Option provide traders with trading charts and other related information resources to help them make better-informed decisions.

Using IQ Option for Cryptocurrency trading has several advantages compared to other similar online brokerage platforms, namely,

  • Quick deposit and withdrawal: So that lost trading opportunities are reduced to a great extent.
  • Reliable: IQ Option is a reliable online broker with high liquidity and is duly certified and licensed, with a monthly trading volume of more than $11 billion.
  • Comfort trading: Cryptocurrency trading can be strenuous for a trader, requiring round the clock supervision for capitalising on all available trading opportunities. With Web, Desktop, IOS and Android options, traders can remain connected to the market at all times.
  • Customer Experience: Cryptocurrency is a relatively new concept and traders might encounter some hurdles while trading. Thus for a platform, it is essential that they have a responsive customer service team to clear out any doubts. IQ Option has a highly skilled customer service team, working around the clock to address any problem that a trader might encounter.
  • Margin trading: IQ Option allows traders the chance to make profits which are 25 times more than what other brokerages offer. This is due to the fact that IQ Option allows up to 25x leverage for cryptocurrency
  • Short Selling: IQ Option has a short selling option which allows the traders to short sell a digital asset. This, in turn, ensures that the traders make a profit regardless of price movements in a market.

YouTube Hack

Have you ever visited or watched a video on the Website YouTube? I’m sure most of us have at some point. Last week it was discovered that hackers have used the video streaming giant to mine cryptocurrency on users computers. Just recently the company started implementing more advertisements into its videos, as it has always had advertisements before and between videos, and it seems hackers took advantage of this. How was the YouTube hack discovered? While users were watching ads on YouTube, it automatically triggered anti-virus software on some computers. This raised a big red flag for some and they automatically contacted the company.

On investigating, the company discovered the adverts contained a mining code called CoinHive. CoinHive acted as a malware attack and secretly used up to 80% of the video watcher’s central processing computer units to mine various cryptocurrencies. The primary reason for using someone else’s computer to mine is due to the fact that it takes a lot of computing power to mine cryptocurrency. The hackers were trying to steal the power from other to mine the digital currency on their behalf.

The Largest Exchange Hack in Crypto History

Once Google (NASDAQ:GOOGL), the owner of Youtube, discovered this malware the ads were blocked in less than two hours. The anti-virus company Google hired to investigate, Trend Micro, is still in the works of compiling the list of those affected but so far it shows the countries most affected are Japan, Italy, France, Spain, and Taiwan. Trend Micro discovered that Google’s new DoubleClick advertisement caused three times greater increase in the number of people using CoinHive.

As cryptocurrencies gained mainstream momentum, “crypto jacking” has become a huge issue. Back in December, we reported that a Starbucks in Argentina was found mining cryptocurrency from its customer’s laptops. The company has kept it under wraps if it was an employee who hacked into the wifi router to implement the hack or if it was an outside source. However, the threat remains evident as many individuals want to get their hands on cryptocurrency and the electricity to mine is extremely expensive.

Is this YouTube hack just another cryptocurrency hiccup or are crypto hacks becoming something of a trend? Can companies protect themselves against such an unregulated industry? What do you think? Comment in the box below.

EtherDelta Wallet Hack

Featured Image: DIY

Ripple Vets Raising Money for Crypto Hedge Fund

Two former employees of distributed ledger startup Ripple are raising money for a cryptocurrency hedge fund, public records show.

Twin filings to the U.S. Securities and Exchange Commission (SEC) dated Jan. 25 and 26 show that co-founders Tim Lewkow and Eli Lang are seeking funds to back Fractal Investments, which invests in crypto-assets, per its official website. The company dates back to last summer and has maintained a public profile primarily through its Twitter account.

Lang is formerly creative director for Ripple, having begun working for the San Francisco-based startup in 2012. Lewkow worked for Ripple from December 2013 until June of last year, most recently serving as integration engineering manager, according to his LinkedIn account.

The filings detail two vehicles, Fractal: Virtual Currency Investment Fund I LP and Fractal: Private Investment Fund LP, both of which are incorporated in Delaware. Neither filings indicate how much money is being raised for either entity.

The developments perhaps highlight the continued drive to establish hedge funds and other financial entities amidst a period of heightened activity in cryptocurrency markets and development around the tech more broadly. Like others, Fractal is looking to invest in the growing ecosystem of digitized assets.

And even as traditional investors move to invest in the space, others are pushing even further. As reported last week, a group of former Wall Street vets has raised as much as $50 million to create a fund of funds focused on cryptocurrencies.

Investment Fund Moves to Capitalize on Ethereum Ecosystem

One of Canada’s largest investment funds is hoping to leverage the ethereum ecosystem through a new venture.

Ethereum Capital, a recently incorporated entity formed primarily by Canadian investment group OMERS, is raising $50 million and preparing for a reverse-takeover procedure. When the funding round is completed on Feb. 16, the company will invest the funds in both ether tokens and blockchain startups, according to a press release.

The ultimate goal, the firm said, is to become “the central business and investment hub for the ethereum ecosystem.” To that end, the company will also purchase controlling stakes in companies using ethereum-based tokens.

The company explained it would sell 2 million subscription receipts, valued at $2.50 each, in order to achieve its funding goal.

Once this goal is accomplished, each share of the company, called Ethereum Shares, will be later replaced with a share in Movit Media Corp., which will subsequently take over Ethereum Capital. The company will keep the Ethereum Capital name.

The new firm’s advisors include both traditional investors and representatives from blockchain startups. Notably, Liam Horne, a member of ethereum creator Vitalik Buterin’s L4 Ventures, will serve as an officer of Ethereum Capital’s board.

Joey Krug, a director of Ethereum Capital and co-founder of decentralized oracle startup Augur, said ethereum’s potential is largely untapped, according to a statement.

Krug said:

The Ethereum network is just beginning to demonstrate its potential, with a greater number of transactions and applications being created almost daily. I believe it has the potential to disrupt many existing industries and am excited to advise Ethereum Capital due to its position to capitalize on the most promising of these resulting companies through strategic acquisitions.

The Next Chapter In Binary Trading

IQ Option – the leading broker оf binary options, presenting the world its own modern and user-friendly trading platform developed by a group of leading traders, analysts and IT-specialists. The platform is suitable for both professional traders and beginners alike. On the platform you can trade both classic binary options on a variety of assets (indices, currencies, equities) and the recently popular turbo options (60 seconds). IQ Option’s asset list is unique in that it also offers the Bitcoin Index, which allows you to trade not only during standard market trading hours, but at any other time – including weekends.

The main advantages of IQ Option:

  • Free Demo Account – practice before trading with real money
  • Minimum deposit – $10
  • Minimum Transaction – $1
  • The maximum rate of return on the transaction – 92%
  • Deposit bonuses up to 150%

Regulated by CySeC FMRRC

You can buy binary options on all types of assets:

currency pairs, including: EUR / USD, GPB / USD, EUR / JPY, USD / CHF, AUD / CAD, etc.

Commodities: Gold and Silver

Indices, including: FTSE 100, DAX, CAC 40, Dow Jones, S & P 500, Nikkei-225, NASDAQ100.

Shares of 50 companies including: Barclays, Gazprom, Daimler, Orange, Apple, Google etc

The professional team of analysts and account managers IQ Option work every day to provide traders with personal finance advice, information on the latest news and trading signals. You can take free training webinars to get acquainted with the peculiarities of the binary options market, important trading techniques, terminology and common rookie mistake to be avoided.

Recover up to 45% of your investment on losing trades.

The IQ Option support team works during the operating hours of main stock exchanges: Weekdays from 9:00 to 23:00.

Methods of deposits and withdrawals: Bank cards, Webmoney, YandexMoney, QIWI, PayPal, Liqpay, Skrillex, Moneta and more.

You can get an IQ Option VIP-Account, which means personal service and training, higher payouts, and accelerated withdrawals (just 1 day) by making a deposit of $1,000 or more.

IQ Option developed our own system of education that is available to everyone on the site in both text and video formats. The curriculum includes: An introduction to binary options and the basic concepts used by traders; the main methods of market analysis; methods of money management; common trading strategies and tactics.

One of IQ Option’s latest innovations is the of weekly tournament on turbo options, where anyone can compete for the grand prize, trading on any or every asset. A tournament lasts 30 minutes, the result is determined by the trading balances of the players at the end of the tournament. Tournament winners receive cash prizes.

Article Summary:FXCM Trading Volume on the AUDUSD showed a lack of endorsement on the recent push higher. A lack of endorsement on a countertrend move turns focus on the larger trend, which has been validated by other technical developments. Additionally, with SSI showing retail traders building a long position, sentiment traders are favoring downside.

Talking Points:

  • AUDUSD trading volume was muted on recent counter-trend price spike
  • Volatile Corrective Pattern looks to have finished at the 38.2% Fib Level
  • AUDUSD SSI shows 67% of traders are long favoring further downside

Countertrend price patterns are varied but their message is similar. The inability for the market to build momentum favors the prior trend. A key way to recognize whether momentum is being build is whether or not volume is carrying through in the new directional bias.

The recent spike in AUDUSD happened on muted volume, which favors prior trend. Combining the lack of volume on the terminal move in an addition to the following factors of sentiment and chart patterns. This article will guide you through what to look for on the chart while adding sentiment and volume analysis to see if the trend is ready to resume or rather a reversal is underway.

The Multi-Year Downtrend in AUDUSD with a few Interruptions

AUD Resuming Downtrend Backed by FX Sentiment & Volume Analysis

(Created using Marketscope 2.0 charts)

Complementing sentiment and volume is the technical analysis approach.

Technical analysis looks for potentially repeatable patterns that can provide an edge, so long as risk is managed. The chart above shows AUDUSD traced out a clean broadening pattern (diverging red trend lines), which communicates trend interruption more than trend reversal and often favors a new low is likely in a larger downtrend.

This article will look at what these circumstances mean for the pair moving forward.

Retail Sentiment is acquired using DailyFX Plus’ Speculative Sentiment Index. It is free for real FXCM account holders, but is also free for anyone using a two week trial: DailyFX Plus Trial. Most often, SSI will help you see the beginning of a new trend, which is historically fought by the retail trading crowd.

Retail Volume is available on FXCM’s Trading Station Desktop platform. This free software can be downloaded here and a free demo login can be acquired here. Real Volume is a default indicator that can be added to your charts. Volume is used by Institutional FX traders as well as traders from other markets to understand market participation in a move.

AUDUSD trading volume was muted on recent counter-trend price spike

AUD Resuming Downtrend Backed by FX Sentiment & Volume Analysis

(Created using Marketscope 2.0 charts)

Utilizing FXCM’s real volume indicator has been very helpful for AUDUSD traders. The help came in showing that volume was dwindling on most counter-trend moves through the years as the counter-trend move matured. This occurrence happened once again on the recent volatile correction that appears to have ended on May 14, 2015.

Traditionally, traders can look to volume to see what direction price is moving when volume is at its highest. On the other hand, low volume on moves against the trend rightfully should make traders doubtful regarding the counter trend move. Additionally, traders and can look to support levels or pivot points acting as support to break in order to validate the down trend is resuming.

On the bigger picture, moves against the larger uptrend tend to be discredited. Discrediting counter trend moves aligns with the favorable trend following approach. On the chart above, you can see how volume came up short on the same week a counter trend multi-month high was made.

In last week’s article, we discussed looking at volume as a proxy for enthusiasm or social proof of a move. The lack of volume into Fibonacci resistance on AUDUSD shows that very few traders were willing to push this pair higher and that the next move would join the seemingly inevitable path lower as favored by the RBA.

Going forward, traders can add sentiment while looking for a major breakdown in price that is matched with volume hitting relative record levels. A development where price breaks support, currently at 0.7681 and volume moves higher would complement the idea that the larger trend is resuming.

AUDUSD SSI shows 67% of traders are long favoring further downside

AUD Resuming Downtrend Backed by FX Sentiment & Volume Analysis

(Created using Marketscope 2.0 charts)

A trader can look to the two recent corrective highs to build a bias against. A move near these levels should be expected because nothing moves in a straight line. However, based on the pattern of the move lower since mid-May, these levels holding would encourage the view of new lows.

To help a trader validate that belief of new lows, volume can be utilized. Specifically, a trader can look for volume to push above recent highs if the 2015 lows are broken on the chart. This would validate the view that investors are endorsing the move. Naturally, if price breaks higher on increased volume then a trader would likely be better off exiting the trade until clarity develops.

AUDUSD SSI Shows A Nearly Twice As Many Traders Are Long As Are Short.

The Speculative Sentiment Index, or SSI, is a contrarian tool where we look to take trades that are opposite of its reading. So during times when SSI is positive, we would look for sell trades and when SSI is negative, we would look for buy trades. Typically, a reading above 1.5 or below -1.5 are seen as statistically significant and increases the need to be on the watch out for breakouts occurring against retail crowd positioning.

AUD Resuming Downtrend Backed by FX Sentiment & Volume Analysis

(Screen capture from DailyFXPlus.com)

We use our SSI as a contrarian indicator to price action, and the fact that traders are aggressively adding to their longexposure adds to the potential signal that the AUDUSD may resume the trend lower. You can see in the chart above, the strong downtrend has resumed on positive SSI. This combination has correlated to lower moves, whereas a negative SSI has been present in trend corrections. As a testament to the Speculative Sentiment Index, you can notice that the pattern of positive SSI holds up with trend resumption lower. We will have to see if the positive sentiment holds and if it does a move lower appears promising.

In Conclusion

Every pair has its own sets of tendencies and patterns. AUDUSD did not attract the volume on the prior countertrend extreme showing traders there were was not a lot of enthusiasm for the counter trend move. The subsequent resumption has been sharp and it’s best to expect a weak retracement that could give you a better risk: reward. However, an aggressive reduction in long exposure turns our focus towards price resistance and a potential volume breakout to confirm the larger trend is ready to resume. Thanks to technical analysis, we have a firm shelf of support around 0.7682 to build a bearish bias upon breaking and resistance around 0.7930 & further at the recent high of 0.81623 to invalidate an imminent lower move.

The sentiment and volume readings are providing signals showing the turn lower could have room to run. However, risk must always be managed in case this does not develop as it has historically. Continue to watch price action, sentiment, and volume to see if the view of a turn higher is validated. Also, feel free to utilize a demo account to practice trading risk-free before trading with real money if you are just starting out.

Happy Trading!

Prior Articles:

USDCAD Symmetry Backed by FX Sentiment & Volume Analysis

Using FX Sentiment & Volume Analysis to Spot USDJPY Trend Resumption

EURJPY New Trend – FX Sentiment & Volume Analysis

—Written by Tyler Yell, Trading Instructor

To contact Tyler, email [email protected]

To be added to Tyler’s e-mail distribution list, please click here

Tyler is available on Twitter @ForexYell

Video Lessons || Free Forex Training

Trading Using Fibonacci (13:08)

Trading With Moving Averages (14:25)

Reading the RSI, Relative Strength Index (13:57)

Money Management Principles (31:44)

Trade Like a Professional Workshop (1:44:14)

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

Article Summary:FXCM Trading Volume on the USDCAD has been quiet but other technical developments could show the long-term uptrend is about to resume after an apparent repeat of a price correction pattern. With SSI dropping, sentiment traders are favoring upside.

Talking Points:

  • USDCAD trading volume has been muted with a spike on a recent up day
  • Watch for a break above 1.2304/50 with outsized volume
  • USDCAD SSI shows a 30% rise in short volume favoring upside

The FX market is recognizing a familiar pattern in the USDCAD that mirrored a set-back before new multi-year highs ensued. The push back in USDCAD’s uptrend has come alongside a nearly 30% rise in US OIL. This article will show us what to look for on the chart while adding sentiment and volume analysis to see if the trend is ready to resume.

The Inverse Correlation of Oil & USDCAD

USDCAD Symmetry Backed by FX Sentiment & Volume Analysis

(Created using Marketscope 2.0 charts)

This article will look at what these circumstances mean for the pair moving forward.

Retail Sentiment is acquired using DailyFX Plus’ Speculative Sentiment Index. It is free for real FXCM account holders, but is also free for anyone using a two week trial: DailyFX Plus Trial. Most often, SSI will help you see the beginning of a new trend, which is historically fought by the retail trading crowd.

Retail Volume is available on FXCM’s Trading Station Desktop platform. This free software can be downloaded here and a free demo login can be acquired here. Real Volume is a default indicator that can be added to your charts. Volume is used by Institutional FX traders as well as traders from other markets to understand market participation in a move.

Watch USDCAD Volume to Favors Upside If Resistance Breaks

USDCAD Symmetry Backed by FX Sentiment & Volume Analysis

(Created using Marketscope 2.0 charts)

Utilizing FXCM’s real volume indicator has been very valuable for USDCAD traders. The value came in showing that volume spikes on down days near the 1.2800 level favored the correction playing out as it ended up pushing ~900 pips lower.

Traditionally, traders can look to volume to see what direction price is moving when volume is at its highest. On the other hand, high volume on down-days near prior highs understandably makes traders suspicious and can precede declines like you see on the chart above in March through mid-May. On the bigger picture, moves against the larger uptrend tend to be discredited. Discrediting counter trend moves aligns with the favorable trend following approach. Volume helped Krisitan Kerr in mid-April look for a move to 1.2000, which ended up developing. Once you learn how to use volume, you can find insights similar to Kristian.

In last week’s article, we discussed looking at volume as a proxy for enthusiasm or social proof of a move. The lack of volume towards prior support on USDCAD shows that very few traders were willing to push this pair lower and that the next move would join the seemingly inevitable path higher as favored by the BoC.

What Next?

USDCAD Symmetry Backed by FX Sentiment & Volume Analysis

(Created using�Marketscope 2.0 charts)

When considering the chart of USDCAD, it is easy to see that the trend is up. However, it has paused twice, March to July in 2014 and the current set back. On the chart above, you can also see that volume has depleted over the recent candles as price tested the 1.19 handle. This combination of a paused trend with lower volume on the downside extension begs the question, what is a trader to do?

In short, traders can look for a major breakout to the upside that is matched with volume hitting relative record levels. A development where price breaks resistance and volume moves higher would complement the idea that the larger trend is resuming.

Learn Forex: USDCADChart Shows Potential for 2009 Highs of 1.30632

USDCAD Symmetry Backed by FX Sentiment & Volume Analysis

(Created using Marketscope 2.0 charts)

Complementing sentiment and volume is the technical analysis approach. Technical analysis looks for potentially repeatable patterns that can provide an edge, so long as risk is managed. The chart above shows USDCAD tracing out two nearly identical counter-trend moves that both fail near the 38.2% Fibonacci level.

If the pattern from 2014 does repeat, a trader could expect a push to and through the 1.2830 highs from March & April in USDCAD. To help a trader validate that belief of new highs, volume can be utilized. Specifically, a trader can look for volume to push near 2014 highs on a move higher showing that investors are endorsing the move. Naturally, if price breaks down to new lows on higher volume, then a trader would likely be better off exiting the trade until clarity develops.

USDCAD SSI shows a nearly 30% rise in daily short volume favoring upside

USDCAD Symmetry Backed by FX Sentiment & Volume Analysis

(Screen capture from DailyFXPlus.com)

The Speculative Sentiment Index, or SSI, is a contrarian tool where we look to take trades that are opposite of its reading. So during times when SSI is positive, we would look for sell trades and when SSI is negative, we would look for buy trades. Typically, a reading above 1.5 or below -1.5 are seen as statistically significant and increases the need to be on the watch out for breakouts occurring against retail crowd positioning. However, relative positioning is also significant.

Relative positioning refers to the daily and weekly changes in short and long positions. An aggressive adjustment of greater than 20% shows the retail trading crowd is attacking a move. Because this is a contrarian indicator, and emotional extreme as shown by large percentage changes in short or long positions is similarly as effective as the net ratio difference. USDCAD has seen a reduction of long positions by 31.9% below levels seen last week signaling a sentiment extreme.

USDCAD Symmetry Backed by FX Sentiment & Volume Analysis

We use our SSI as a contrarian indicator to price action, and the fact that traders are aggressively reducing their longexposure adds to the potential signal that the USDCAD may soon continue higher. You can see in the chart above, due to the strong trend a negative SSI has correlated to higher moves, whereas a positive SSI has been present in trend corrections. As a testament to the Speculative Sentiment Index, you can notice that a relatively aggressive negative SSI seems favorable for the Bulls. We will have to see if the negative sentiment holds and if it does a move higher appears promising.

In Conclusion

Every pair has its own sets of tendencies and patterns. USDCAD does not attract the volume or sentiment extremes that other pairs present. However, an aggressive reduction in long exposure turns our focus towards price resistance and a potential volume breakout to confirm the larger trend is ready to resume. Thanks to technical analysis, we have a firm shelf of support around 1.1950 to build a bullish bias against and resistance around 1.2375 to validate a breakout in price and ideally volume would follow suit.

The sentiment and volume readings are providing signals showing the turn higher could have room to run. However, risk must always be managed in case this does not develop as it has historically. Continue to watch price action, sentiment, and volume to see if the view of a turn higher is validated. Also, feel free to utilize a demo account to practice trading risk-free before trading with real money if you are just starting out.

Happy Trading!

—Written by Tyler Yell, Trading Instructor

To contact Tyler, email [email protected]

To be added to Tyler’s e-mail distribution list, please click here

Tyler is available on Twitter @ForexYell

Video Lessons || Free Forex Training

Trading Using Fibonacci (13:08)

Trading With Moving Averages (14:25)

Reading the RSI, Relative Strength Index (13:57)

Money Management Principles (31:44)

Trade Like a Professional Workshop (1:44:14)

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

Talking Points

  • USDOLLAR triggers multi-month H&S pattern
  • USD correction just getting started?

Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.

The FXCM US Dollar Index (equally weighted basket of USD versus EUR, JPY, GBP & AUD) has been under steady pressure since the middle of last month. During this time the index triggered a couple of negative technical patterns including a head & shoulders and a double top. Both patterns saw their respective objectives met in recent days. While not a textbook example, one could also make the case that the USDOLLAR triggered a broader multi-month head and shoulders pattern on the move through 11,740 earlier this week. This pattern has much more ominous implications for USD and would suggest a much a much deeper correction against the primary trend is starting to take shape. Near-term the index looks a bit overdone and susceptible to a bounce, but as long as trendline resistance around 11,770 holds the immediate negative structure will remain intact. The 61.8% retracement of the December – April advance around 11,660 looks to be a clear downside pivot with a daily close below this level needed to signal that another round of USD weakness is underway.

To receive other reports from this author via e-mail, sign up to Kristian’s e-mail distribution list via this link.

USDOLLAR Daily Chart: May 15, 2015

More USD Patterns

Charts Created using Marketscope – Prepared by Kristian Kerr

Key Event Risk in the Week Ahead:

More USD Patterns

LEVELS TO WATCH

Resistance: 11,750 (Fibonacci), 11,770 (Trendline)

Support: 11,660 (Fibonacci) 11,600 (Gann)

Strategy: Sell USDOLLAR

Entry: Sell USDOLLAR at 11,750

Stop: Daily close above 11,770

Target: Open

Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

To contact Kristian, e-mail [email protected]. Follow me on Twitter [email protected].

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.