The Forex Chronicles

Archives for November 2018

Bitcoin Finally Breaks Out… But To The Downside

by Leave a Comment

Bitcoin’s Trading Action

The price of Bitcoin has remained steady for quite some time now because it has continued to trade within a fairly predictable sideways trading range between around $5900 and $6800.

I think it is fair to say that many people, particularly those people who have purchased some Bitcoins as a long-term investment, expected the price to eventually break upwards out of this trading range when the breakout finally happened.

Therefore I think many will have been shocked to see the price drop sharply downwards yesterday. The price hit a new low for 2018 of $5304, according to my IG chart, but has since recovered slightly to $5555 at the time of writing. However it is still well below the previous trading range, as you can see below:

Bitcoin Downward Breakout - November 2018

Cryptocurrency Sell-Off

It is not just Bitcoin that has experienced heavy price falls either because all of the other major cryptos have dropped sharply.

Bitcoin Cash experienced the biggest falls, but cryptos such as Ethereum, Litecoin and Ripple were also affected.

The question is; is this the end for cryptocurrencies, or this just a temporary set-back?

Future of Cryptocurrencies

The reality is that no-one really knows. I personally have never purchased any cryptocurrencies or traded them long or short, and don’t really intend to either because to me it is just gambling.

Yes these assets could well be the future and the price could easily move dramatically higher in the future, but they could just as easily become completely worthless in a few years.

Some of the most well-known cryptos may not be around in a few years time, and there may end up being one or two dominant ones that make all the other ones practically worthless. Indeed the biggest cryptos in 2020 in beyond may not even have been invented yet.

As I say, there is just too much uncertainty to trade these assets with any real confidence, but at least now we have finally seen a breakout on Bitcoin, even it is a negative breakout. This should create some decent trading opportunities for those traders who like to trade these assets on a short or medium-term basis.

AUD/NZD Likely To Find Support At 1.0600

by Leave a Comment

Price Action

The AUD/NZD pair has fallen quite dramatically in recent weeks. After posting a yearly high of 1.1176 back in August, it has since fallen all the way down to 1.0620, which is equivalent to a fall of 556 pips.

Looking further back in time, the price has generally been trading in a fairly predictable sideways trading range, generally fluctuating between 1.13 and 1.03, so there is nothing unusual in these recent price movements.

However the key point I want to make in this article is that the price is now approaching a key support level that may well prevent the price from falling a lot further.

Support Level

AUDNZD Weekly Chart - November 2018

Although there has been a lot of sideways movement, if you look at the weekly chart above, you can see that the price has been slowly trending upwards since 2015 (indicated by the rising trendline), and has always found support when it has come close to this trendline, bouncing off it on 5 separate occasions.

Future Price Direction

Based on this key support level, you would have to say that the price is highly likely to reverse and move higher as it gets closer to this trendline.

Therefore as the trendline is currently around the 1.0600 level, it may be worth watching for possible reversal signals on the daily chart to look for opportunities to go long, although as always, I am not recommending any trades or offering any advice. These are just my own thoughts and opinions.

Pin bars and divergence patterns on indicators such as the RSI, stochastics and MACD are examples of some very effective reversal signals that are worth looking out for on the daily time frame.

The bigger picture is always best viewed on the weekly time frame, but it always a good idea to zoom down to shorter time frames, such as the daily time frame in this instance, in order to spot the reversal signals earlier and get a better entry point.

Profit Target

If the price were to move higher, there is the potential for the price to move back up to the 100 and 200-day exponential moving averages on the daily chart, which are currently around the 1.0860 mark, 240 pips higher, particularly as the 200-week moving average is currently around the same level.

However there are still no guarantees of anything at this stage because trendlines don’t last forever and the longer they go on, the more likely they are to be broken.

This is why there is a need to look for definitive reversals around this level rather than blindly opening long positions at 1.0600 in the hope that the trend will resume.

eToro Have Launched Their Own Crypto Wallet

by Leave a Comment

The New eToro Cryptocurrency Wallet

There are now quite a few sites that enable you to buy and sell Bitcoin and other cryptocurrencies, but many people are still reluctant to use some of these sites due to security and trust issues.

So with that in mind, you may be interested to know that eToro, one of the largest social trading platforms with over 10 million registered users, have just launched their own crypto wallet that promises to be secure and easy to use.

Here are some of the key benefits of the eToro cryptocurrency wallet:

  • supports Bitcoin, Bitcoin Cash, Ethereum and Litecoin (with more added soon)
  • syncs with existing eToro accounts
  • transfer cryptocurrency assets from eToro platform to wallet
  • can be used for wallet-to-wallet transfers
  • easy to access
  • no need to enter private or personal keys
  • multi-signature security
  • crypto to crypto conversion
  • mobile app available from Google Play and Apple app store
  • backed by a secure, trusted and regulated platform

eToro Wallet

Walkthrough Video

Why Do You Need A Wallet?

In case you didn’t already know, crypto wallets basically enable you to store any cryptocurrency assets that you decide to purchase safely and securely.

This is the basic functionality of a crypto wallet, but the eToro wallet has many other useful features as well, including wallet-to-wallet transfers and crypto to crypto conversions, and can be used alongside your existing eToro account.

Company Comments

Here is what the CEO of eToro, Yoni Assia, had to say about the launch of this new crypto wallet:

“We believe that crypto and the blockchain technology that underpins it will have a huge impact on global finance. Blockchain has the potential to revolutionise finance and we believe that we will see the greatest transfer of wealth ever onto the blockchain. We believe that in the future all assets will be tokenised and that crypto is just the first step on this journey. Just as eToro has opened up traditional markets for investors, we want to do the same in a tokenised world. The eToro wallet is a key part of this.”

“The eToro wallet today is just the beginning and we will be adding a whole host of additional functionality which will include supporting additional crypto and fiat tokens, crypto to crypto conversion, the ability to deposit fiat, payment in store and more.”

Rollout

The eToro wallet is currently being rolled out on a phased basis, from country to country. It will initially be used to store Bitcoin, Bitcoin Cash, Litecoin and Ethereum, but will eventually be available for many other cryptocurrencies as well, and as alluded to above, more functions will be available in due course.

Final Thoughts

Cryptocurrency trading and investing is of course very risky. There is a chance you could lose all of your invested capital if one of these cryptocurrencies goes under because your investment will suddenly become worthless.

However if you are looking to buy and hold Bitcoin or one of the other cryptocurrencies and are aware of these risks, you might want to make use of the new crypto wallet from eToro because this offers multi-level security, is easy to use and is backed by a fully regulated and secure trading platform that has millions of users.

Past performance is not an indication of future results. This content is for information and educational purposes only and should not be considered investment advice nor portfolio management. 81% of retail investor accounts lose money when trading CFDs with this provider.

NightlyPips Trader Profile

by Leave a Comment

Who is NightlyPips?

NightlyPips Profile PhotoNightlyPips is a signal provider on ZuluTrade who has quickly become one of the most followed traders on this social trading platform, despite only operating for 11 weeks at the time of writing.

The reason why is because this account is run by the same UK-based trader who goes under the name ThePipsMasterUK, who is currently one of the most profitable signal providers on ZuluTrade with a total profit to date of 3552 pips and a staggering 99% win ratio.

As far as I can tell, he uses the same strategy and offers the same signals on both accounts. The only real difference is that he uses the AAAFX broker (ZuluTrade’s in-house broker) to trade his signals using his NightlyPips account in response to the hundreds of traders who use this same broker and wanted to get the same results.

Trading Strategy

NightlyPips uses exactly the same trading strategy as ThePipsMasterUK, which if you weren’t already aware, is a strategy that exclusively trades the EUR/USD pair during the overnight trading session when volatility is reduced and price moves are more predictable.

Instead of opening a single position, he will often scale into trades and open up to 8 trades per night at 0.1 lots per trade.

Profit Targets

The beauty of this particular strategy is that he only looks for small profits from each trade, generally around 6-8 pips, which is why he has such a high win ratio.

Stop Loss

The drawback of this strategy is that he uses a wide virtual stop loss of around 150 pips to enable his trades to hit their target price without being taken out by a tight stop loss of 20-30 pips, for example.

This is always a risky strategy but it is currently paying off because there haven’t been any blowouts to date, and even if the stop loss was triggered, his high win ratio should hopefully ensure that he still comes out ahead in the long run, but there are no guarantees of course.

Results / Copiers

ThePipsMasterUK continues to produce excellent results, and so it is no surprise that the NightlyPips account has achieved equally good results for all the people that have chosen to copy their signals.

At the time of writing (7 November 2018), NightlyPips has a total profit of 1143 pips from 185 trades, at an average of 6.2 pips profit per trade.

Incredibly, 184 trades out of 185 have been profitable, which represents a win ratio of over 99%, which is probably why he has 1386 copiers and over $1.6m following him already.

So it will be interesting to see if he can continue to produce these kind of results in the coming weeks and months.

The widget below shows his results in real-time, and also has ‘follow’ and ‘register’ buttons should you wish to copy this trader yourself or open an account with ZuluTrade:

ThePipsMasterUK vs NightlyPips

As both signal providers essentially offer the same signals, you should only follow one of these providers instead of both of them.

ThePipsMasterUK trades using the ICMarkets broker, while NightlyPips trades using the AAAFX broker, so your choice of which one to follow may well be determined by which broker you use yourself if you want to achieve the same results in your own account.

Final Thoughts

As I said when I profiled ThePipsMasterUK on this site, I am obviously very impressed by the past results of this particular trader and his incredibly high success ratio.

I know from experience that it is exceptionally difficult to maintain such a high win ratio when trading forex, even if you are only targeting a small number of pips per trade.

My only concern with NightlyPips is the large stop loss because if this is triggered, it could potentially wipe out a lot of the previous profits, so this is something that you should be aware of if you choose to copy this trader yourself.

2023 Update

I am now updating this article in December 2023, and can reveal that neither the ThePipsMasterUK account or the NightlyPips account are still active on ZuluTrade.

That’s not to say that the trader behind these accounts hasn’t set up a new account, but if they have, I haven’t yet come across it.

Important Disclaimer

Please remember that past results are no indication of future performance. The content on this page should be used for information purposes only and in no way represents financial advice. Copy trading is risky and may result in loss of capital.

Why Today Could Be A Significant Day For The Dow Jones And S&P 500

by Leave a Comment

Introduction

After last month’s heavy stock market falls, the markets have bounced back as people have seen this as a good opportunity to pick up some cheap stocks.

As a result, the price of both the Dow Jones and S&P 500 has moved back upwards towards the 200-day exponential moving average, and above it in the case of the Dow Jones.

However even though we have seen a small rally of sorts, the markets are delicately poised right now and could yet go a lot lower.

Looking at the daily price charts of both indexes, I think today could well be a decisive day for the markets, and could potentially determine the future direction in the coming weeks. Let me explain why.

Pin Bar and Inside Bars

Dow Jones Daily Chart - 6 November 2018

Last Friday we had a significant pin bar on both of these markets whereby the price moved a lot higher during the trading session but ultimately fell back downwards and closed close to where it opened.

This is important because it indicates that there wasn’t the momentum to drive it higher (and stay higher), and indicates that there is still a lot of uncertainty in the markets.

To confirm this point, there was an inside bar yesterday where the price traded within the range of this pin bar on both the Dow Jones and the S&P 500, which once again highlights a degree of uncertainty.

Finally, it is worth noting that the 20, 50, 100 and 200-period exponential moving averages have all converged in recent days and are now trading very close to each other, which often occurs before a significant breakout.

Future Price Direction

At this point in time it is absolutely impossible to predict which way the markets are going to go. However I think this is going to be an important trading session today because if the price of the Dow Jones or the S&P 500 closes above or below the range of last Friday’s pin bar, it could be the start of a massive breakout.

If this occurs, we could see the markets move hundreds of points upwards or downwards in either direction.

It could be the start of a new bullish recovery, which could continue right through until after Christmas because this is nearly always a good period for the stock markets, or alternatively it could be a continuation of last month’s falls and there may not even be any kind of Christmas rally this year.

For purely selfish reasons, I would prefer an upward breakout because this would have a positive knock-on effect on my UK stock portfolio, but I still have some cash on the sidelines ready and waiting to pick up some bargains if the markets move a lot lower.

Either way, it should be interesting to watch the price action today, and see if the price can close significantly outside of the range of this pin bar on both markets.