CURRENCIES

French elections:

• National Rally: Leads the polls but unlikely to secure an outright majority.
• Impact: A fractured French government may weigh on the Euro.
• Poll Predictions:
  • National Rally (RN): 31.5% to 35%.
  • People’s Front (left coalition): 28% to 29.5%.
  • President Macron’s alliance: 19.5% to 22%.
• Implications: The fragmented vote will affect both French assets and the Euro in the coming days.
• Second round: Final vote on Sunday, July 7th.

EUR/USD drivers:

• Recent decline due to US dollar strength and Euro weakness.
• Key data releases today: US durable goods and final Q1 GDP.
• Focus: Friday’s US core PCE report for further guidance.

Market impact:

• Volatility: High-importance US data and French elections will create a volatile environment for EUR/USD traders.
• Current price: EUR/USD below 1.0700, struggling to move higher.
• Technical analysis:
  • Downward trend since late December with lower highs and lower lows.
  • Key levels: April 16 multi-month low and October 2023 double low around 1.0516 as downside targets.
  • Initial resistance around 1.0750.

Retail trader data:

• 66.18% of traders are net-long (ratio of 1.96 to 1).
• Increase in net-long positions: 14.14% higher than yesterday, 25.04% higher than last week.
• Decrease in net-short positions: 14.48% lower than yesterday, 22.26% lower than last week.
• Contrarian view: High net-long positions suggest potential for further EUR/USD decline.
• Bias: Stronger EUR/USD-bearish contrarian trading bias due to current sentiment and recent changes.

STOCK MARKET

Market impact:

• Nvidia Corp. (NVDA): Recently experienced a significant drop, losing nearly half a trillion dollars in market value.
• South Korea’s major companies: Samsung Electronics Co. and SK Hynix Inc. also saw declines due to their roles in the AI supply chain.

Micron’s role in AI:

• High-bandwidth memory: Micron’s memory is used alongside Nvidia’s chips for AI applications.
• Stock performance: Micron’s shares had more than doubled in the past year but were punished for not exceeding high expectations.
• Analyst expectations: The company’s outlook was in line with average estimates, but this was not enough to satisfy the market.

Market sentiment:

• Unrealistic expectations: Many companies that beat estimates are still being sold off.
• Andrew Jackson’s view: The market holds unrealistic expectations and is aware that US names are overvalued.

AI sector volatility:

• Nvidia correction: Nvidia shares entered correction territory earlier this week before recovering.
• Semiconductor index: A global semiconductor index fell about 5% from its recent high.

Micron’s position:

• Traditional business: Micron is still recovering from a slump in its traditional memory supply for PCs and smartphones.
• Share price uncertainty: The company’s briefing fell short of SK Hynix’s announcement that its HBM production capacity is sold out through 2025.

Industry insights:

• Tom Kang’s perspective: Micron does not hold a dominant position in AI memory like SK Hynix or in the broader memory industry like Samsung.
• Reality check: This situation serves as a reality check for the AI sector, which appears to be in a bubble.

Valuation concern:

• High valuations: The rally in US megacap stocks associated with AI has led to historically high valuations.
• Micron’s valuation: Micron shares are priced at 4.5 times projected sales over the next 12 months, compared to an average of 2.2 times over the past 10 years.

Click here to open account and start trading.

Dear Client,

As part of our commitment to provide the most reliable service to our clients, there will be server maintenance this weekend.

Maintenance Hours:
29th of June 2024 (Saturday) 00:00 – 12:00 (GMT+3)

Please note that the following aspects might be affected during the maintenance:
1. During the maintenance hours, the Client Portal and VT Markets App will be unavailable, including managing trades, Deposit/Withdrawal, registration and all the other functions will be limited.
2. During the maintenance hours, price quotes and trading management will be temporarily disabled. You will not be able to open new positions, close existing positions, or make any adjustments to your trades.
3. There might be a gap between the original price and the price after maintenance. The gaps between Pending Orders, Stop Loss and Take Profit will be filled at the market price once the maintenance is completed. It is suggested that you manage the account properly.

Please refer to MT4 / MT5 / VT Markets APP and Client Portal for the latest update on the maintenance completion and market opening time.

Thank you for your patience and understanding about this important initiative.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

Affected by international holidays, the trading hours of some VT Markets products will be adjusted. Please check the following link for the affected products:

Notification of Trading Adjustment in Holiday

Note: The dash sign (-) indicates normal trading hours.

Friendly Reminder:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

CURRENCIES

EUR/USD analysis:

• EUR/USD stabilizes above 1.0700 despite political uncertainty.
• Trades below 200 SMA; lower bound at 1.0643, April low at 1.0600.
• Key events: US GDP data and PCE on Friday.

Bond spreads:

• European bond yields in focus ahead of French elections.
• French-German 10-year spread rose to ~80 basis points.
• Potential euro pressure if EU bond spreads widen significantly.

French election polls:

• Marine Le Pen’s National Rally (RN) leads with 33% in the first round, unchanged from the previous survey (Toluna Harris Interactive).
• Left-wing coalition NFP rises to 27%, Macron’s party drops to 20%.
• Projections:
  • National Rally: 215-245 seats, allies (Eric Ciotti): 15-30 seats
  • NFP: 150-180 seats
  • Macron’s party: 85-130 seats
  • Republicans: 30-50 seats
• Ifop-Fiducial poll: RN has 36% share, potentially 220-260 seats.

STOCK MARKET

Nvidia’s 13% stock rout: traders look for support levels

• Selloff Details: Nvidia’s three-day, $430 billion selloff has traders turning to technical analysis for support levels.
• Stock Correction: Nvidia has fallen 13% since briefly surpassing Microsoft as the world’s most valuable company, entering a technical correction.
• Premarket Drop: Nvidia shares dropped another 2.4% in premarket trading on Tuesday.

Technical analysis insights:

• Capitulation Signs: Abrupt reversal with signs of capitulation, per Buff Dormeier, chief technical analyst at Kingsview Partners.
• Support Levels:
  • Short-term support around $115.
  • Next significant level at $100.
  • $115 level near key Fibonacci retracement.
  • 38.2% retracement from April’s intraday low to recent high is about 2% below Monday’s close.
• Long-term Trend:
  • Ari Wald (Oppenheimer): Long-term trend strong, above 50-day moving average ($101) and 100-day moving average ($92).
  • Bruce Zaro (Granite Wealth Management): Breaching $100 could signal a need for patience amid market volatility.

Recent performance:

• Stock Surge: Nvidia soared this year due to high demand for AI chips.
• Recent High: Stock rose 43% from May 22 earnings report and stock split announcement to June 18 peak, reaching a market value of $3.34 trillion.
• Current Status: Despite the recent drop, Nvidia is up 139% this year.

Market sentiment and predictions:

• Ari Wald’s View: Major tops involve several rounds of buying and selling; Nvidia’s long-term uptrend remains intact.
• Bruce Zaro’s Caution: A drop below $100 would signal caution, especially with expected market volatility and upcoming elections.

Click here to open account and start trading.

Dear Client,

Shares product NKLA is about to conduct a share reverse split after the market closes on June 24, 2024. Starting from the market opening on June 25, 2024, NKLA expects to provide investor trading in divided contracts.

After the share reverse split, please be aware of the following:

1. The trading volume of NKLA open positions will become 1/30 of the original lot size.

2. The “opening price” and “take-profit/stop-loss setting price” of NKLA’s positions will become 30 times the original price.

3. NKLA’s price at the opening of the market on June 25 is expected to be approximately 30 times the closing price.

The above data is for reference only; please refer to the MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Making thousands of dollars within a few clicks? Yes please! 

That is the social appeal of forex trading. The instant gratification and the adrenalin rush can often blur the line between strategically trading the markets and gambling.  

To sustain as a profitable forex trader long term, however, is beyond clicking the “trade” button in seeking the jackpot trade to financial freedom. The reality is successful traders maintain the discipline in risk management every single trade they take.  

Only trade when the odds are in your favour 

As a start, it is important to understand the dynamics of the market being traded. Every asset class has its own patterns and psychological price trigger points. But in general, most traders analyse the market with two common approaches: Technical analysis and fundamental analysis. 

Technical analysis 

Primarily, technical analysis is chart reading. By relying on past data in the form of indicators and price actions, one can plan a trade with the belief that the buying and selling actions of the market reflect the sentiment tied to a particular financial instrument. Indicators such as chart patterns, support and resistance levels, price trends, moving averages as well as volume and momentum indicators all fall under technical analysis. 

Read more about technical analysis. 

Fundamental analysis 

Another aspect of analysing a market is by looking at the intrinsic value of an underlying asset via related economic and financial factors. These include macroeconomic factors, such as the state of the economy and industry conditions; to microeconomic factors, like the effectiveness of the management of a company.  

Fundamental analysis tends to point to the long-term direction of an asset class. However, majority of CFD trading are short term in nature, and as such fundamental analysis tends to receive less attention. 

Developing your own trading plan, and sticking to it 

A trader can decide based on technical and/or fundamental analysis whether the odds favour opening a trade position in the market. However, a trading strategy must entail the level of risk exposure undertaken, and the trader must psychologically accept the risk level as planned.  

Without a proper risk management strategy, opening any position in the financial markets is no different from gambling. This is how most traders have their accounts wiped out and never trade again in their lives. 

The 2% rule 

A good way to start is by looking at the trading capital of any given account. The common practice among traders is to risk no more than 2% of trading capital per transaction. This is also known as “the 2% rule”. 

For example, in a $500 account, the maximum loss should be limited to: 

2% x $500 = $10 per trade 

The rationale behind this rule is founded in the possibility that a trader can be wrong fifty (50) times in a row before the account is wiped out. This greatly improves the chances of survival for a trader in the long run. 

To make the execution of a trading strategy more effective, a trader can use the Stop Loss and Take Profit feature to ensure that the risk level initially planned will be adhered to. By setting a stop loss or take profit order, not only a trader can relax without staring at the screen all the time, but also remove the possibility of making an emotional decision.  

Is the risk worth the reward? 

The risk to reward ratio marks the potential profit a trader can earn for every dollar risked on a trade. This is used to justify if the risk is worth taking for the reward one can potential. A trade with a risk to reward ratio of 1:7 would mean that that a trader is risking $1 for the chance of earning $7.  

Obviously, the higher the reward makes a trade more attractive to take, and this is how traders often plan which trades to take. The more experienced a trader is, the more he knows being selective in opening trade positions would help in surviving the markets. 

Leverage: The double-edge sword 

Put simply, leverage is the use of money of the broker rather than the strict use of your own, which is very common in the CFD trading industry. A trader could put down a deposit of just $500 to open trade positions up to $250,000 with 500:1 leverage.  

What does that mean?  

With every $1 profit you make using your own money, you can make up to 500 times of that. However, the reverse also holds true.

With every $1 profit paper loss you are holding, you will also be holding 500 times of that if your position has not been closed yet.  

This is why it is important to balance the use of leverage against the 2% rule. While maxing out on leverage can lead you to the Lambo dream, it often wipes trading account out fast. 

Staying cool and calm is the trick 

Of all the risks, the hardest risk to manage is the emotion of the trader himself. Learning the details of how to plan a trade is nowhere as challenging as executing the trade without emotion. Often, traders stray away when the market move in a certain direction, not taking profits or stopping losses as planned.  

All traders must take responsibility for their own decisions, whether this is a result of failure to plan, unexpected event or just because the trader got emotional himself.

While automation can help to negate emotional decision making, the best way to objectify this is to maintain a trading journal, jotting down the details leading to the success or failure of each trade. 

Copy how others manage trading risk 

If you are unsure how to manage your trading risk, consider using the Copy trading feature for a start. Copy trading is a form of social trading where new traders can replicate the trades from the seasoned traders. By doing so, you can benefit from the expertise of others as you keep learning about the financial markets. 

Profits will follow if risk is managed well 

Risk management is one of the most overlooked areas in trading. With a disciplined approach and good trading habits, losses can stay under control and any trader will have a chance of being profitable. Explore 1000+ assets being offered by VT Markets and tart your financial trading journey today! 

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