The Pound falls after the Bank of England’s rate decision

The Bank of England has risen its interest rates from 0.25% to 0.50% for the first time since 2007 when the financial crisis started. Even though the rate hike should have supported the Pound, the GBP/USD falls more than 200 pips from the 1.3300 zone to below the 1.3100 level as shown on the daily chart. The drop on the Pound is due to the fact that the Bank of England used a dovish language and said that the next rate hikes will be gradual. Additionally, it looks like the market had already priced in the current rate hike and the GBP/USD had no space to rally further. At the moment, the pair keeps its bearish momentum and it may possibly visit the 200 day EMA, around the 1.3000 zone where it could find some support. Below the 1.3000 level, its most relevant support is at the 1.2800 level. Above the 1.3100 level, the pair would be going back into the congestion area where it may consolidate for a longer period of time.

The bullish momentum on oil could accelerate

WTI oil has had a very good bullish momentum amid the continuation of production cuts of crude and the possibility of a rise in demand from China as the Chinese economy keeps expanding. WTI oil reaches a high around the 55.00 zone, level that was last touched on January 1^st of this year. If the price manages to break above the 55.00 level, then WTI oil would be entering a new bullish trend in the midterm. The MACD indicator is showing us that the bullish trend is gaining strength, therefore a bullish continuation of WTI oil is possible. If the price retraces to the downside for whatever reason, then its closest support level is at the 52.00 zone, followed by the 50.00 zone. The 55 day EMA and the 200 day EMA could also act as support.

The Euro continues consolidating

The EUR/USD is currently consolidating in a relatively tight range just above the 1.1600 level as shown on the daily chart. The pair may be waiting for the NFP numbers to be released this Friday before taking a more clear direction. Today’s FED announcement caused a lot of volatility, but the EUR/USD did not take a clear trend. The MACD indicator is showing us that the bearish trend has come back, but the pair may go in any direction. To the downside, the most relevant support is at the 200 day EMA, around the 1.1500 zone. Below the 1.1500 level, the 1.1400 or the 1.1300 levels may also act as supports. To the upside, the closest resistance is at the 1.1700 level, but the 55 day EMA could also act as resistance. In order for the EUR/USD to go back to its bullish trend, the price must break above the 1.2100 level in the long run.

Gold bounces from the 200 day EMA

Gold was retracing to the downside from the 1300 zone to break below the 55 day EMA (purple line) until it reached the 200 day EMA (blue line) around the 1266 level. Gold had already bounced once from the 200 day EMA at the beginning of October and on this second visit to the moving average it bounce again to the upside. We could possibly see the formation of a double bottom pattern around the 200 day EMA, which is a bullish reversal pattern. But in order for the double bottom pattern to be confirmed, the price of gold must break above the 1300 level, which is its signal line. For now, gold may stay consolidated, stuck between the 200 day EMA and the 55 day EMA around the 1285 level. On the other hand, if the price manages to break below the 200 day EMA, then gold would have the road clear to fall all the way to the 1204 zone.

Summary of the futures market

In the United States, trading futures began in the mid-19th century with the establishment of central grain markets where farmers could sell their products either for immediate delivery, also called the spot or cash market, or for forward delivery. These forward contracts were private contracts between buyers and sellers and became the forerunner of today’s exchange-traded futures contracts. Both forward contracts and futures contracts are legal agreements to buy or sell an asset on a specific date or during a specific month. Where forward contracts are negotiated directly between a buyer and a seller and settlement terms may vary from contract to contract, a futures contract is facilitated through a futures exchange and is standardized according to quality, quantity, delivery time and place. The only remaining variable is price, which is discovered through an auction-like process that occurs on the Exchange trading floor. Conventionally, traders are divided into two main categories, hedgers and speculators.

Hedgers use the futures market to manage price risk. Speculators on the other hand accept that risk in an attempt to profit from favorable price movement. While futures help hedgers manage their exposure to price risk, the market would not be possible without the participation of speculators. They provide the bulk of market liquidity, which allows the hedger to enter and exit the market in an efficient manner. Speculators may be full-time professional traders or individuals who occasionally trade. Some hold positions for months, while others rarely hold onto a trade more than a few seconds. Regardless of their approach, each market participant plays an important role in making the futures market an efficient place to conduct business.

The Forex Market through ActivTrades

The Foreign exchange market (also known as Forex, currency market or FX market) is, by far, the largest financial market in the world. It includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global Forex and related markets is currently over US$ 3 trillion. Lots of traders are starting to trade Forex due to the Forex market advantages. Here are the most important Forex market advantages:

24 hours a day market. The Forex market is open 24 hours a day (except on weekends). So, no matter where you are based, you can trade Forex at your favorite time.

High liquidity. Forex market is the biggest financial market in the world.

Leverage. The leverage at ActivTrades can be as high as 400:1.

Free trading platforms at ActivTrades. On Forex most brokers offer good trading platforms for free and free Demo accounts.

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The Most Profitable Traders

They are experienced – Probably the most horrifying and worst myth shot out to anyone considering trading for a living is that you will compound millions in an extremely short amount of time. The only true way to make every day profitable comes through experience, and countless hours learning is crucial to longevity of success.

They trade to make money, not to be right – They understand the strengths and possible pitfalls of what it is they do for a living, and use that knowledge to curb their emotional output.

They have an edge and know how to use it – They understand that without it they wouldn’t last long

they have a game plan, and follow it explicitly – Each trade is planned and opportunities are scouted for before any trading takes place. They steer away from the killer of all killers: overtrading.

They manage risk – Regardless of how much conviction they have on a trade, they will still do what they can to avoid the potential of any losses and understand rule #1 about trading: anything can happen.

They think about the trade, not the money behind it - Focusing on money can destroy your means to objectively assess the trade itself.