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Weekly Hedge Position Idea Nzd/UsdHello Traders, Here you can find my weekly trade ideas (unconventional fundamental trading Style, not that what most People know as "Normal"). They mainly serve to achieve a possible learning effect or to show other perspectives how other traders set their positions and act, should be very interesting. The focus is on the "point of view" (learning through seeing). All trades amount to Fundamental, Economical, Mathematical, - Technical information. In the 4 years that I have been trading now, I have simply learned that the trades are only as good as the information that is based on them, the higher the density of information, the better and more likely that the trade will work. Every week on Sunday there is an update, because new information is published over the period. Depending on how these end, the trade is either closed "early" or it continues on its way towards TP (Take Profit). CRV (opportunity-risk ratio) is ALWAYS 1 to 3. Trading style includes hedge and trend based swing trading and position trading approaches. Please use your own criteria (entry, exit,etc.) and don't be a copy, otherwise it won't work, find out which style suits to you. My Trades are always Market Entry, like you can see. Enjoy. Have a nice Week :)
Long
by JR_Tradingideas
BTC Looking Very Bullish 1. We’re in an upwards Chanel overall as you can see. 2. We broke 2 similar resistance levels, bounced back at support for one of them. 3. Bull flags have a high probability win rate. 4. If you study BTC bull runs it’s obvious that the bull run isn’t over. 5. Inflation hasn’t even taken into effect yet! A reason why bitcoin is running up if because it’s a hedge against inflation. Do not get tricked by the media to sell your bitcoin, newsletters have fear headlines to get you to click for their ad revenue, or for bitcoin short sellers to make short term trades. Big corporations and institutions who have smart financial teams are still in so do not panic.
BITSTAMP:BTCUSDLong
by ramiwallaia
1
Hedge Your Investment PortfolioWhat Is a Hedge? A hedge is an investment that is made with the intention of reducing the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting or opposite position in a related security. _______________________________________________ A perfect hedge is one that eliminates all risk in a position or portfolio. In other words, the hedge is 100% inversely correlated to the vulnerable asset. This is more an ideal than a reality on the ground, and even the hypothetical perfect hedge is not without cost. Basis risk refers to the risk that an asset and a hedge will not move in opposite directions as expected; "basis" refers to the discrepancy. _______________________________________________ In our previous educational post we noticed that you really liked this theme. The most pressing question in the comments was, what cryptocurrency is able to hedge the rest. So we made a short research to find and provide this table for you, guys. Here is the list of these cryptos that may safe your wallet from being bankrupt. This is not the financial advice to buy some of these coins or something like this. It is just a short material that all the crypto traders should follow before entering into the trade. _______________________________________________ All the materials were taken from Binance and Bitmex open sources We are glad to share all the materials with this community. Feel FREE to leave comments below about your vision Thank you, wolves🔥
Education
by Berzerk_invest
5
Oil- 4,2% lower since we went short 🍂Hi guys, just wanted to share my thoughts with you not just about Oil - an idea that almost nobody liked!- but about Trading in general. Listen to what I say, try to understand the words and the thinking that comes out of my experience and i hope that I will be able to affect your trading and make it a little better... why not? We keep buying cryptos selectively, it's going well because even in 'red' days like today our selection is performing nicely BUT at the same time we hedge our exposure (we hedge) with some shorts on other assets. Oil for example since yesterday. I hope I am making sense and i wish i can affect your trading positively. If yes please leave a comment and remember to apy attention moreto the ideas with less likes because they tend to be the best ones. One love, the FXPROFESSOR
FX:USOILShort
by FX_Professor
DIA short into strengthWhile the tech sector is getting crushed right now, most financials, industrials, cyclicals, and value stocks which comprise over half of the Dow Jones Index are doing well. However, if you are looking to add some negative delta to your portfolio, you could short into strength. DJI/DIA could still rally up, but the downwards market pressure is getting stronger, so selling into strength might be ideal as the concentration of buyers towards the ATH will trigger stop losses at a high velocity. The probability of a rapid rally on DJI should be slim, but a rapid pulldown is feasible at the current levels.
AMEX:DIAShort
by punitarani
1
The nasdaq has a slight bubble, protect the downside with SQQQThis is not investment advice, do your own homework and evaluate how much you can tolerate risking. SQQQ is triple leveraged to the downside on the QQQ, which is the ETF that directly tracks the NASDAQ. As 2021 has begun to play out, it has become more and more apparent that these overvalued tech and software companies are out way past their skis in terms of multiples. SQQQ provides the perfect protection to these lofty tech stocks as VOLQ is not available on most platforms. VOLQ is the NASDAQ's Vix, which would be my preferred way of protection for the downside but unfortunately is not available for trade on the brokerages I use. So essentially for every 1% that the QQQ (proxy for the NASDAQ:NDX ) falls, SQQQ rises by 3%. Since it is so heavily inversely correlated, it makes for a great hedge. When implementing a strategy such as this into your portfolio, I would recommend starting with a meager 1-3% position and no more than 5%. Another solid alternative strategy that is a good permanent piece of a stable portfolio is a market neutral fund.
NASDAQ:SQQQLong
by EBITDAtiger
GME BABY! HOLD TO THE MOON* short interest: 75.54% of float by Ortex, 113.31% of float by S3 Shortsight * short share public availability: 0 Shorts are exiting their positions, but an amount of shares equal or almost equal to float is still shorted. robinhood and other brokerages didn't have the capital to place buy orders at times yesterday. Robinhood is apparently going so far as to liquidate GME shares in accounts that are not using margin trading(!) If you're still on robinhood, you should find a new broker ASAP. Retail brokers who didn't blow up completely yesterday include: * vanguard * td ameritrade * fidelity
NYSE:GMELong
by a2d1
1
[Advanced Education] Why the US Dollar is Going to DieThis post will be an extremely comprehensive and extensive analysis on the US Dollar. I’ll be explaining the history of this currency, the situation we are faced with today, and what this implies for our future. This post is lengthy, and can be difficult to comprehend if you're a beginner investor, but I've made it as digestible as possible and I highly recommend that you read through the entire post. Disclaimer: I am not a macroeconomist, or a forex expert. Even if I were, that would not imply that I would be able to accurately predict the future of a currency and the financial markets. This is for educational purposes only. Invest and trade at your own risk. Introduction - The entire world has been complaining about the difficulties that the USD has been causing as a key currency. - While there were benefits to having the USD as a key currency, this also meant that the US economy would take a smaller portion of the global economy, and that their trade competitiveness and employment rates would be negatively affected. - While the USD as a key currency provides benefits to major conglomerates and financial institutions, it causes problems to the average working-class people, instigating polarization and conflict. - While the USD’s status as a key currency remains solid, with increasing economic and political cost, the US would have reasons to voluntarily give up on this status. - Nixon gave up on the gold standard, Trump abandoned most international agreements. As history demonstrates, the USD could also be taken down from its place as a key currency as well. History The Beginning - During the mid-19th century, around the first world war, the United Kingdom’s Poud Sterling played the role of a key currency. - Back then, they used the gold standard, in which the currency was backed by gold. - In other words, if you took cash to the bank, they would exchange it for a certain amount of gold. - Around the UK’s end of its heydays in 1914, they were losing competitiveness due to massive gold outflow. (Since they use the gold standard, a trade deficit indicates gold outflow) - They halted the gold standard during WW1, and in 1925 attempted to bring it back. - But in doing so, they made a big mistake of using the same rates at 1914. - As a result, this lead to a even bigger, and faster outflow of gold from the UK, which ultimately led them to give up on their key currency status. - With the UK as the debtor, and the US as the creditor, the power dynamics shifts, and in 1944, the Bretton Woods system is established. The Bretton Woods System - This system defined all currencies in relation to the US Dollar, which itself was convertible to gold, effectively making the USD the world currency, as every other currency was pegged to it. - There were signs of this new system potentially being established. - Individuals were legally prohibited from owning gold from 1933 - The allied forces moved their gold to the US, in order to keep it safe. - With 70% of the world’s entire gold stored, the Bretton Woods system and the gold standard was implemented. (35 Dollars for an ounce of gold) The Triffin Dilemma - But there is a problem that comes with being a key currency, also known as the Triffin Dilemma - The USD becoming a key currency means that the entire world needs to use the dollar. - This means that the US needs to supply USD to the entire world. - But, if they print more USD for supply, the value of the Dollar drops. - If they don’t do so, in order to maintain the value of the Dollar, there won’t be enough Dollar for international trade The Fall of the Bretton Woods System - In the 1950s, with the emergence of the Japanese and European economy, the US faces a balance of payments deficit. - The US’ government expenditure increases significantly due to their War on poverty and the Vietnam war. - With the credibility of the USD begins to deteriorate globally, the world begins to change their dollars into gold. - The US faces a bank-run like situation, and Nixon abolishes the gold standard, implementing the fiat currency policy. Then why do we still use the USD? With the Gold standard, we were assured that we’d get an ounce of gold for $35. If fiat currency isn’t backed by a commodity, and is based on credit, what motivates us to continue using it? In order to figure out why, it’s important to look at what happened between the US and Saudi Arabia. Saudi Arabia - In 1933, not only did the US ban civilian ownership of gold, but they also established their diplomatic relations with Saudi Arabia. - US company Standard Oil of California obtains permission for the exploration of crude oil in Saudi Arabia (its subsidiary company is now Saudi Aramco, an oil company with the largest market cap in the world) - Then came World War 2. - Saudi Arabia wanted to remain neutral during WW2, but with Italy’s attack on the country, they had to find a country they could rely on. - The US realized the strategic importance of oil around this time, and decided to remain good friend with Saudi Arabia. - In 1970, the US’ aid to Saudi Arabia amounted to $16 million. - After the gold standard was abolished in 1971, the US’ aid to Saudi Arabia increased by 20x, reaching $312 million. - In 1974, William Simon, a former bond trader from Wallstreet, goes to Saudi Arabia to conclude a secret agreement - The agreement states that the US would provide military aid to Saudi Arabia, and import their oil. - In return, Saudi Arabia would purchase US Treasury Bonds. - This agreement was made secretly, due to the US’ relationship with other Middle Eastern countries, and Saudi Arabia secretly purchased US Treasury Bonds over 41 years. The Petrodollar System - Hence, the Petrodollar system was born. (Petroleum + Dollar) - This is a system, simply put, allows the US Dollar to be loosely backed by oil. - The US found a way to force other countries to use the USD by setting oil prices in USD. - This means that if Japan were to purchase oil, they would first have to exchange Japanese Yet (JPY) to USD. - As the Bretton Woods System falls, the USD is able to maintain its status through this new system. Why did Saudi Arabia purchase US Treasury Bonds? - If Saudi Arabia doesn’t purchase US bonds with the USD they received, this leads to an increasing amount of Dollar in circulation, devaluing the currency significantly. - By reaching an agreement in which Treasury bonds would be bought, the US would be able to operate with a massive government deficit. The Fundamental Issue of the Petrodollar System - However, the Petrodollar system also encompasses the Triffin Dilemma - The US needs to supply USD to the entire world in order to allow countries to purchase oil - A constant supply of USD means that the currency flows outside the country, indicating a trade deficit for the US - As you probably know from Economics 101, when a country is at a trade deficit, it indicates that their products are relatively cheaper in the international markets - The depreciation of the country’s currency leads to an increasing competitiveness in exports. - But in the case of the UK, because their currency was pegged to gold, a trade deficit led to gold outflow. - But that isn’t the case for the Petrodollar system. - Instead of gold outflow, damage was caused to the manufacturing industries in the US. - This is what explains the Rust Belt. Detroit, which once prospered, became a dead city. So What Does America Gain? - Why would the US want to keep the USD as the key currency? - There are also major benefits to keeping the Dollar as a key currency. - Despite the increasing supply, the value of the currency hardly depreciates. - There are benefits to multinational companies going overseas. - With the increasing demand for US Treasury bonds, foreign capital flows into the US - With this, the US is able to keep the interest rate on the bonds at a low rate. - In other words, the government is able to borrow money for a cheap price. - With this all combined, the US’ financial industry gains a competitive edge. Can this system last forever? - I personally believe that this system cannot last forever, and it’s only a matter of time until we see a huge paradigm shift. - There are mainly five reasons as to why this system cannot last forever. 1. Unnecessary Military Expenditure Post-Cold War - The US played the role of a world police during the Cold War. - But after the end of the war, massive military expenditure was deemed unnecessary and burdensome. - The US continued to play the role of a world police – leading up to the Trump administration – for oil and to keep the USD a key currency. 2. The US Shale Revolution - Then came the US Shale Revolution, in which the US significantly increased its production of oil and natural gas. - As a result, from a country that imports oil, the US becomes a country that exports oil - This indicates that there is no need for the US to play the role of a world police in order to secure oil. - Ultimately, while military expenditure fulfilled three main interests of the country (cold war, oil, and USD as a key currency), it’s only left with one purpose of keeping the USD a key currency. 3. China’s Rise - During the Bretton Woods system, the US GDP covered over 40% of the global GDP. - Currently, it barely covers 20% of the global GDP. - This indicates that the US needs to bear more financial instability in order to keep the USD a key currency. - In other words, the cost of maintaining the USD a key currency increases, in relation to the country’s GDP. - China also created the Petroyuan, which is China’s attempt to overthrow the existing Petrodollar system. - Lastly, China was once had the largest treasury bond holdings, which indicates that they could cause a shock to the US economy by selling huge chunks of their position. (Although this would also entail that China’s remaining Treasury bond holdings would lose a lot of value as well) - China has been exploiting the Petrodollar system’s leeway by not abiding by the conventional rules - In the Petrodollar system, foreign countries are able to build export competitiveness, and gain USD, which they return back to the US by purchasing US Treasury bonds. - China, instead of abiding by the rules, decided to purchase real assets and global infrastructure with the USD they gain. - This way, the FED has to support the US’ national debt, which destroys the benefit of having the USD as a key currency. 4. Political Instability (Socioeconomic Polarization) - As mentioned above, with the rise of American financial institutions and decline of the manufacturing industry, socioeconomic polarization is taking place, and it’s getting worse - There’s a discrepancy between economic classes, industries, and countries. - It’s no surprise that polarizing figures like Trump from the right, and Sanders from the left have gained interest from the general public. 5. The Fall of Labor-Intensive Industries. - In the past, the US was no match against China’s labor power. - But, with the 4th industrial revolution, automated robots and artificial intelligence is replacing labor, thereby providing a potential opportunity for the US to gain potential competitiveness in exports. - They could potentially let go of the USD’s status as a key currency, allow the USD to depreciate, and gain a competitive advantage in exports. - While it would take a long time before something like this happens, I believe that the foundations are being laid for such a transition. For these reasons, I believe it’s highly probable that the USD will stop playing the role of a key currency. How to Profit from this Crisis - With massive change comes massive chaos, and the ones who are able to remain unperturbed, and make the right decisions will be the ones to see opportunity in crisis. - I believe that Bitcoin can be one of the best ways to protect your wealth, as the USD collapses. - For an in-depth explanation on why I think so, make sure to check out my previous post: Conclusion In summary, the fall of the USD is a question of when, not if. As to what would happen in the next decade or two, I have no clue. However, the red lights giving warning signs are certainly getting clearer and clearer. You can either risk losing everything from a crisis that might come sooner than we expected, or be prepared for a situation like that, and capitalize on a once-in-a-lifetime opportunity.
TVC:DXY
by Michael_Wang_Official
21
short the vix via VXX, buy puts or sell callsAs uncertainty leaves the market, the Vix should stabilize. I would buy a long put or sell a long call, as it could take a while for it to check down to the lower trend line. Keep in mind, there is always the possibility of a catastrophic or unforeseen event that could send it through the roof so don't risk too much. Always keep your side bets to less than 5% of your overall account value, 10% at the most for extremely high conviction plays. VXX is the perfect way to play volatility. For instance, if you expect a period of heightened uncertainty and volatile days where the market is churning, you could buy some VXX as short-term protection against high volume sell-off days.
CBOE:VXXShort
by EBITDAtiger
DXY Supercycle analysis. Are YOU hedging vs.declining dollar? Dollar rebounded off 89.56ish and rallied hard today. If it breaks below 89 we will see a plummet to the mid to low 88, I believe. I think 2018 is a good benchmark for current DXY behavior, and what to look for in the oncoming weeks. But what's concerning, in regards to the dollar's current trend, is the length/duration of 2018 decline is shorter than current downtrend, before price recovered. As you can see in the DXY chart provided, length/duration of current dollar downtrend has superseded 2018's by 30 days...And counting. If you haven't adjusted your portfolio with an inflation hedge by now, here's some compelling evidence that you may want to. Good luck m8s and may the odds forever be in your favor. P.S. First post, so constructive criticism is welcome. Please and thank you.
TVC:DXYShort
by differenthax