Monevis Blog

Gold (XAU/USD) has become a focal point in the markets in recent months, with its consistent uptrend and higher highs (HH) reflecting strong demand. The price of gold is now nearing the psychological level of $2800, signaling a potential milestone. Here, we explore the key factors driving the recent surge in gold prices and provide insights on how traders can navigate this evolving market.

1. Key Factors Influencing Gold’s Price Rise

• Geopolitical Uncertainty and Global Risks
  Gold is traditionally viewed as a safe-haven asset during times of uncertainty. When global stability is questioned or risks increase in various regions, investors often turn to gold for its stability and protection.
• Inflation and Central Bank Influence
  Rising inflation decreases the real value of currencies, leading investors to seek assets like gold that historically serve as a hedge. Central banks play a major role here; their decisions on interest rates can affect gold’s appeal as a secure investment.
• US Dollar Performance (USD)
  Gold and the dollar have an inverse relationship. A weaker dollar typically boosts gold prices and vice versa. When the dollar declines, gold becomes more attractive to investors, pushing its price upward.
• Trade Restrictions and Commodity Market Policies
  Government policies and export bans in the commodity sector can impact gold’s availability and drive its price higher due to reduced supply on the market.

2. Technical Analysis of Gold and Key Levels

• Higher Highs and the Psychological Level of $2800
  Gold’s current trend toward higher highs indicates a robust upward momentum. The $2800 mark serves as a psychological resistance level that could be crucial for the next stages in price movement.
• Support and Resistance Zones
  Significant price levels, such as prior highs or the $2800 resistance, act as potential entry or exit points for traders, providing strategic areas for buying or selling based on market reactions.

3. How to Trade Gold in the Current Market?

• Monitoring Macroeconomic Announcements
  Key reports on inflation, employment, and central bank decisions can have an immediate impact on the gold market. Traders should track these events to make informed adjustments to their strategies.
• Technical Indicators
  Utilizing indicators like moving averages (MA), Relative Strength Index (RSI), and Bollinger Bands can help identify opportunities for entry and exit. For instance, an overbought RSI reading could signal a potential correction.
• Psychological Levels and Resistance Strategies
  Breaking through or rejecting the psychological $2800 level may offer trading opportunities. A breakout above this level could support further growth, while a rejection might suggest a pullback.
• Portfolio Diversification
  Gold can serve as a part of a broader investment strategy, offering a hedge against market risk. Traders should assess whether they wish to hold gold as a long-term investment or as a short-term speculative asset.

4. Risks and Recommendations for Traders

• Market Volatility
  Gold prices can be highly volatile, especially during times of heightened global and economic uncertainty. Traders are advised to implement risk management strategies, such as stop-loss orders.
• Economic and Market Cycles
  Gold reacts to economic cycles, making it crucial to analyze broader economic indicators. Traders should consider market sentiment and determine whether the current trend aligns with long-term cycles.
• Psychological Market Factors
  Market psychology plays a significant role in gold trading. Key levels, such as $2800, can act as decisive points for many investors, influencing buying or selling behaviors.

Conclusion

Gold has captured widespread attention as an asset offering stability amidst economic and inflationary concerns. Its continued rise and approach to the psychological $2800 level indicate its value as a hedge. Whether trading short- or long-term, a solid strategy, close monitoring of market events, and sound risk management are essential for navigating the gold market successfully.

1. What is Liquidity?

• Definition: Liquidity represents a market’s ability to quickly buy and sell assets without causing significant price movements. Higher liquidity means price stability and easier entry and exit.
• Importance for Traders: For traders, liquidity offers more opportunities to enter positions at the current market price, essential for fast-paced markets like forex.
• Role in Forex: Forex is one of the most liquid markets globally, allowing quick and efficient trades on currency pairs due to its vast number of participants.

2. Smart Money Concept (SMC)

• Definition: SMC is a trading strategy that focuses on following the movements of “smart money” or large players, like banks, institutions, or hedge funds, who have the power to influence the market.
• How it Works: SMC identifies key liquidity areas where big players enter the market. This allows traders to anticipate price movements toward areas with high trade volume.
• Key Tools and Terms:
  • Market Structure: SMC is based on analyzing market structure, with key focus areas like highs, lows, and trend lines that indicate where “smart money” might move.
  • Liquidity Zones: SMC tracks areas with liquidity concentrations (support and resistance zones), as these levels attract significant moves from major players.
  • Order Blocks: These are areas on the chart where institutions likely placed large entries. Order blocks act as potential reversal zones.

3. What to Expect from the SMC Strategy

• High Accuracy: SMC aims to identify areas with a high probability of price reaction by focusing on places where institutions make their moves.
• Time-Intensive: Analyzing liquidity and identifying key areas takes experience and time, especially when monitoring multiple timeframes.
• Lower Trade Frequency: SMC is not based on frequent trading; instead, it seeks quality trades with larger potential price moves.

4. Advantages and Disadvantages of the SMC Strategy

• Advantages:
  • Focuses on areas likely to experience significant price movement.
  • High probability of success due to following large market players.
• Disadvantages:
  • Requires a solid understanding of market structure and liquidity analysis.
  • Demands patience, as signals are less frequent than in other strategies.

5. How to Get Started with the SMC Strategy

• Study Market Structure: Focus on highs, lows, and areas where trends confirm or break.
• Identify Liquidity Zones and Order Blocks: Learn to spot areas with concentrated liquidity and where institutions are likely entering trades.
• Backtesting and Practice: Test the strategy on historical data to build confidence in market structure analysis and recognizing key areas.

The SMC strategy offers an advanced approach for traders ready to analyze the market from an institutional liquidity perspective, aiming for profitable trades in the long run.

The 2024 U.S. presidential election is set to be a pivotal moment for global financial markets. Scheduled for November 5, 2024, this election is expected to not only reshape the political landscape but also influence currency pairs and cryptocurrencies, especially Bitcoin. With Donald Trump, a well-known Bitcoin investor, running for office again, his financial moves could significantly impact global markets.

Key Points:

• Political Uncertainty and Market Volatility
  • U.S. elections traditionally bring heightened volatility to financial markets. This time, the stakes are even higher as candidates like Donald Trump and Joe Biden represent very different economic strategies. In 2024, the outcome of the election is expected to affect major currency pairs like USD/EUR and USD/JPY, with market reactions closely tied to changes in U.S. leadership.
• Donald Trump’s Bitcoin Investments
  • Donald Trump has made headlines for his substantial investments in Bitcoin, sparking speculation in the cryptocurrency market. Should Trump win the election, his pro-Bitcoin stance and deregulatory agenda could drive the cryptocurrency’s price higher. His influence may also lead to wider adoption of digital currencies at a governmental level, with Bitcoin at the forefront of this shift.
• Attempted Assassination on Donald Trump
  • Recently, Trump survived an assassination attempt, where the assailant shot him in the ear. While Trump survived the attack, the incident has escalated tensions ahead of the election. Such events contribute to market uncertainty, with currency pairs like USD/JPY, a traditional safe haven during times of turmoil, potentially experiencing significant fluctuations.
• Cryptocurrency Regulation and Its Future
  • If Trump regains the presidency, it is expected that his administration will adopt a much more liberal stance toward cryptocurrency regulation. In contrast to Biden, who advocates for stricter regulations, Trump’s policies could fuel further growth in the cryptocurrency market. This would not only strengthen Bitcoin’s position but also boost the U.S. dollar, should Trump’s economic strategy focus on innovation and deregulation.

Impact on Currency Pairs:

• USD/EUR: This pair could be influenced by economic uncertainty in both the U.S. and Europe. Trump’s plans to cut taxes and deregulate the economy might strengthen the U.S. economy, while European markets might react more cautiously.
• USD/JPY: The Japanese yen is often seen as a safe haven during periods of political and economic unrest. If the election brings more violent incidents or dramatic economic shifts, USD/JPY could see sharp movements.
• Bitcoin: Trump’s affinity for Bitcoin may trigger further growth in its value, as investors could see cryptocurrencies as a refuge in times of political instability.

Conclusion

The 2024 U.S. presidential election is a highly anticipated event that will impact not only politics but also global financial markets. Donald Trump, with his open support of Bitcoin and personal investments, could dramatically alter the U.S. approach to cryptocurrencies and currency markets. His participation in the election, along with the recent assassination attempt, adds tension to an already high-stakes event that will have long-term consequences for investors around the world.

The forex market is the largest and most liquid in the world, with trillions of dollars exchanged daily. Currency pairs are the core assets traded, and some pairs see more action due to their stability and importance to the global economy. Let’s dive into the most traded currency pairs that every forex trader should be familiar with.

1. EUR/USD (Euro / US Dollar)

• The most popular and heavily traded currency pair globally.
• It represents the economies of the Eurozone and the United States, the two largest economic regions.
• Low spreads and high liquidity make it a favorite among traders.
• Influenced by macroeconomic data such as inflation, interest rates, and political stability in both regions.

2. GBP/USD (British Pound / US Dollar)

• Known as the “Cable,” this pair is popular for its volatility.
• Traders watch the relationship between the UK and US economies, with significant influence from geopolitical events and central banks.
• GBP/USD responds to news like decisions from the Bank of England, the US Federal Reserve, and employment reports.

3. USD/JPY (US Dollar / Japanese Yen)

• The third most traded currency pair in the world, representing the US and Japanese economies.
• Popular among traders using technical analysis, as the yen often reacts to global economic events.
• The Japanese yen is known as a “safe haven” currency, making it attractive during times of uncertainty.

4. AUD/USD (Australian Dollar / US Dollar)

• This pair often reflects the state of the commodities market, particularly mining sectors like iron ore, coal, and gold.
• Australia’s economy is heavily reliant on exporting raw materials, so this pair can behave differently based on global commodity prices.
• AUD/USD is popular among traders focusing on cyclical commodity trends.

5. USD/CHF (US Dollar / Swiss Franc)

• Often seen as a “safe haven” currency pair, especially during times of geopolitical uncertainty.
• The Swiss franc is renowned for its stability, making this pair a favorite during financial crises.
• Central banks and international investors frequently use this pair for hedging risks.

6. NZD/USD (New Zealand Dollar / US Dollar)

• A smaller, yet still popular pair, often linked to developments in the commodity sector.
• New Zealand is a major exporter of agricultural products, and its currency is influenced by global demand for these goods.
• Traders monitor weather conditions and global commodity demand closely.

Key Factors Affecting Currency Pair Trading:

• Interest Rates: Central bank decisions on interest rates are a major factor in currency value.
• Inflation: High inflation can devalue a currency, while low inflation can boost confidence.
• Geopolitical Events: Wars, political crises, or international agreements can cause volatility in forex markets.
• Economic Indicators: Macroeconomic data such as GDP, unemployment rates, and industrial production directly impact currency values.

Why Are These Pairs the Most Popular?

• Liquidity: The high trading volume of these pairs ensures traders can easily enter and exit positions.
• Low Spreads: These pairs often have low spreads, making trading costs relatively low.
• Ease of Access to Information: Economic and political data for these countries are readily available and frequently analyzed by media and experts.

Conclusion

Trading the most popular currency pairs in forex provides traders with opportunities to profit from the price movements of the world’s major economies. It’s crucial to monitor the fundamental factors that drive the value of these currencies and be prepared for volatility that may arise from sudden geopolitical or economic changes.

If you’re a beginner, starting with heavily traded pairs like EUR/USD can provide stable and predictable trading conditions.

Prop trading, or proprietary trading, is a form of trading in financial markets where traders use the firm’s capital instead of their own. This model emerged as a response to firms seeking to increase profits from financial operations while giving talented traders the opportunity to trade without the need for significant personal capital. Prop firms provide capital and risk management, allowing traders to focus on trading while the firm safeguards its funds.

Why did the prop trading business emerge?

Prop trading firms arose due to the growing demand for alternatives to traditional investing. Companies realized they could profit not only from the markets themselves but also by enabling skilled traders to operate with their capital. This arrangement benefits both parties – the firm earns a share of the profits, while the trader gains access to large amounts of capital without risking their own money.

Another key reason for the rise of these firms was market globalization and technological advancements, which made online trading more accessible. Today, traders from anywhere in the world can access funds and advance their careers.

How do prop firms operate?

Trader selection: Each prop firm carefully selects traders based on their skills and strategies. Typically, traders undergo a series of evaluations or a trial phase with limited capital to demonstrate they meet the firm’s risk management and profitability criteria.

Providing capital:
After passing the trial phase, the firm provides traders with capital to trade. The capital amount can gradually increase as the trader proves their skills and consistent performance. Prop firm Monevis offers top traders access to substantial capital, and our traders are known for their determination and discipline, which help them follow their strategies effectively.

Payouts:
A key part of working with prop firms is the payouts. Traders work with the firm’s capital, and the profits they generate are split between the trader and the firm, often on a predetermined basis (e.g., 70% to the trader and 30% to the firm). Monevis has already paid out over $300,000 to its traders, with our growth exceeding expectations. We’re hitting new milestones at a rapid pace and continuously enhancing our services.

Risk management:
Prop firms place a strong emphasis on risk management. Every trader must adhere to strict rules limiting maximum daily losses, drawdowns, or the size of individual trades. These rules are crucial for maintaining long-term profitability for both the firm and its traders. Monevis utilizes innovative tools like our trading calendar and ABook, which ensure maximum transparency and efficiency.

What is a prop firm?

A prop firm, or proprietary trading firm, is a company that provides its traders with capital to trade in financial markets. Unlike traditional brokers, who make money primarily from fees and spreads, prop firms share trading profits with their traders. The main benefits for traders include access to significant capital without the risk of losing their own money and the ability to focus solely on their trading strategies.

Companies like Monevis offer talented traders the opportunity to trade with capital as high as hundreds of thousands of dollars, while also providing professional support, advanced analytics tools, and a transparent payout system. This model creates an efficient environment for those passionate about trading, while allowing firms to profit from market returns. Our CEO, Miloš Mošovský, is constantly striving to make Monevis the perfect “home” for all traders – a place where they can fully unlock their potential and grow along with us.

Monevis prop trading firm celebrates its largest payout ever, amounting to $35,053.77, earned by none other than Bernd Skorupinski, an experienced trader and mentor. However, his journey to this success was neither fast nor easy; it was marked by hard work, education, and constant improvement. In this blog, we’ll delve into Bernd Skorupinski’s story, his rise in the world of trading, and the path that led him to this remarkable milestone.

Early Days in Germany and Career at Volkswagen

Bernd Skorupinski began his journey as a student at the Cooperative State University in Germany, where his exceptional skills caught the attention of the Volkswagen group. After graduating, Bernd was hired to help revamp Volkswagen’s brand identity in Dubai. His leadership not only boosted sales but also optimized profits, making a significant mark in his early career in the automotive industry.

Later on, Bernd returned to his hometown, where he shared his experiences and knowledge by lecturing on global management, focusing on successful operations in the Middle East.

Discovering the World of Trading

Driven by a desire for greater freedom, independence, and personal growth, Bernd became interested in the financial markets, particularly trading and investing. He didn’t immediately leave his job in the automotive industry. Instead, he made the wise decision to begin studying trading through an online academy, allowing him to learn at his own pace while balancing his work and studies.

This critical step opened the door to the world of trading, which eventually became his full-time career. Just ten months after his first trade, Bernd transitioned to trading full-time, with education from former Chicago Board of Exchange and New York Stock Exchange traders and further learning from a leading market maker in natural gas and oil futures.

The Road to Success in Financial Markets

Bernd’s success in trading didn’t happen by chance. His deep understanding of markets, particularly forex, futures, and stocks, was the result of years of study and hands-on experience. He recognized that discipline, planning, and adherence to strategy are the keys to success in trading.

He transferred his skills to mentoring as well. Bernd believes that traders need a solid foundation and proper guidance to succeed. As a seasoned supply and demand trader, he helps new traders not only grasp trading principles but also avoid costly mistakes and shorten their learning curve by sharing his own experiences.

Hedge Fund Manager and Innovator

In 2017, Bernd accurately predicted several significant market moves, such as the EUR/USD crash. His ability to foresee these movements attracted the attention of a major European broker, who hired him to help manage a fund focused on alternative investments. This marked Bernd’s entry into the world of hedge fund management, which he humorously describes as an “accident.”

His success in the world of hedge funds and alternative investments further solidified his position in the trading world, eventually leading him to prop trading.

Mentoring the Next Generation of Traders

Bernd places great emphasis on the importance of proper education and mentorship. His own trading academy, called “Campus,” provides traders with the unfiltered truth about what it takes to succeed in the financial markets. As a mentor, he focuses on ensuring his students not only learn theory but also gain practical experience, which he believes is crucial for building confidence—a vital trait in forex, futures, and stock trading.

One of Bernd’s favorite moments is seeing the excitement and confidence in his students’ eyes when they grasp how the supply and demand strategy works and realize how it can lead to consistent success in the trading arena.

The Historic Payout: $35,053.77

A significant milestone in Bernd’s career with Monevis prop firm is his record-breaking payout of $35,053.77. This payout not only reflects his mastery of trading but also his ability to lead and inspire others. Bernd’s journey is a testament to how hard work, education, and discipline can lead to outstanding achievements.

This result is also a testament to Monevis’ commitment to providing a supportive environment that enables traders to reach their full potential. Bernd is now a role model for future traders, showcasing what can be achieved within this prop firm.

Conclusion

Bernd Skorupinski is an inspiration for anyone looking to succeed in the financial markets. His journey from the automotive industry to full-time trading, combined with his education and perseverance, has led him to achieve the largest payout in Monevis prop firm history. His story is a powerful reminder of how knowledge, discipline, and passion can come together to achieve extraordinary success.

Fundamental analysis is a key component of successful trading and investing in the forex market. It monitors macroeconomic and microeconomic factors that affect currency values. Unlike technical analysis, which focuses on historical price movements, fundamental analysis evaluates the intrinsic value of assets and economic contexts, helping predict long-term trends.

Why Track Fundamentals?

Tracking fundamentals provides a deeper understanding of why prices are rising or falling. It’s not just about reacting to chart signals but understanding the real reasons behind currency movements. Monitoring fundamental factors allows traders to make more informed decisions, avoid losses from sudden market moves, and spot opportunities that might otherwise be missed.

What Do Individual Fundamentals Mean?

1. Gross Domestic Product (GDP)

GDP is a key indicator of a country’s economic growth. High GDP growth typically signals economic prosperity, which can increase the value of a national currency. Conversely, a GDP decline may indicate recession and weakening currency.

2. Inflation

Inflation measures the rise in prices of goods and services over time. When inflation rises, it often leads to higher interest rates as central banks seek to curb excessive spending. This can affect currency markets—rising inflation means a decrease in purchasing power, which may reduce the attractiveness of a currency.

3. Interest Rates

Interest rates are one of the most important fundamental indicators for forex markets. Higher rates can attract more foreign investors seeking higher returns, increasing demand for the currency and its value. Conversely, rate cuts may weaken the currency.

4. Unemployment

The unemployment rate is another key indicator of economic health. Low unemployment means the economy is functioning at a high level, boosting consumer confidence and supporting currency growth. High unemployment, on the other hand, may lead to reduced consumption and a weakening economy.

5. Payments and Trade Balance

The trade balance shows the difference between a country’s exports and imports. A trade surplus (more exports than imports) typically strengthens a currency, while a deficit weakens it. This factor is crucial for assessing economic performance in an international context.

6. Geopolitical Situation

Political stability or uncertainty has a major impact on the markets. For example, political crises, conflicts, or election uncertainty can destabilize an economy and weaken a currency. On the other hand, stability can enhance the attractiveness of investments in the region.

How to Incorporate Fundamentals into Strategy?

Fundamentals must be tracked regularly and combined with technical signals. Economic event calendars are important tools that provide an overview of upcoming news and its potential impact on the markets. Successful traders don’t wait for announcements—they prepare their positions in advance and analyze how the market may react to news.

Monitoring and understanding fundamental factors provides a deeper perspective and ensures decisions are not made solely based on short-term price fluctuations but with regard to the market’s long-term potential. Thus, fundamental analysis is essential for success as it helps identify value and growth potential, giving traders a competitive edge.

Conclusion

For successful forex trading, it’s essential to track and understand the fundamental factors that influence currency values. This analysis allows for better insight into why the market reacts the way it does and how best to use these reactions to your advantage. Do not underestimate the importance of fundamentals—incorporate them into your trading strategy to ensure your approach is as comprehensive and effective as possible.

Greed in Trading: The Enemy of a Successful Trader

1. Introduction: Greed as a Natural Human Trait

Greed is one of the oldest human traits, and it can lead to reckless decisions, especially in situations involving money. In trading, greed can be particularly dangerous, as markets are volatile and constantly shifting. A trader who succumbs to greed risks losing not only money but also control over their strategy. Whether you’re a professional or a beginner, greed can be an invisible adversary undermining success. The goal of every trader should be to recognize and control this emotion, ensuring it doesn’t become an obstacle to long-term profitability.

2. How Greed Manifests in Trading

Greed often manifests in trading in several key ways, all of which can negatively impact trading results:

• Holding positions for too long: When a trader opens a position and the market moves in their favor, greed can tempt them to hold the position longer than is safe. The hope of securing even bigger profits may backfire when the market reverses direction, turning gains into losses. For example, ignoring a predetermined exit point to chase higher profits can lead to the loss of both gains and, potentially, capital.
• Overconfidence after a winning streak: Traders who experience several consecutive profitable trades may become overconfident, believing they have an “unbeatable” strategy. This overconfidence often leads to reckless increases in trade size or abandoning the original trading plan altogether. The outcome is typically disastrous, as markets are unpredictable, and no strategy is infallible.
• Neglecting risk management: Greedy traders often disregard the basic principles of risk management. They may add to losing trades, attempting to “rescue” a position, which is a major mistake. Instead of acknowledging the loss and closing the position, they continue to risk more of their capital.

3. The Negative Impact of Greed on Trading Performance

Long-term trading success depends not only on technical analysis and a solid strategy but also on psychological discipline. Greed is an emotion that can disrupt this balance. Here are some of the main consequences of greed:

• Loss of discipline: Trading success lies in sticking to a plan. However, greed often causes traders to improvise, abandoning their strategy in favor of chasing immediate, higher profits. Ultimately, the loss of discipline leads to poor decisions, which can be irreparable.
• Increased risk of losses: When traders ignore their plans and aim to maximize profits, they automatically increase their risk. For example, if a trader increases the size of their position beyond what was initially planned, even a minor market correction can wipe out a significant portion of their capital. By sticking to the original plan, traders could have secured stable, but reasonable, profits.
• Psychological pressure and stress: Beyond financial losses, greed creates mental strain. A trader constantly chasing profits and refusing to close positions experiences stress that can negatively affect both physical and mental health. Trading should be as rational a process as possible, but under the influence of greed, it becomes an emotional rollercoaster that drains energy.

4. How to Avoid Greed in Trading

Greed can’t be entirely avoided, but it can be controlled. Here are some techniques to help traders manage their emotions and trade rationally:

• Maintain discipline: The foundation of successful trading is strict adherence to a trading plan. When a trader has pre-set entry and exit points, they should stick to them, regardless of how tempting it might be to hold a position for longer. Respecting your strategy, even when the market looks enticing, is crucial.
• Set realistic goals: Traders should have clear objectives for each trade – how much they are willing to risk and what profit they expect. Realistic and consistent goals ensure that trading isn’t just about chasing maximum profits but is a balanced activity with manageable risks.
• Self-reflection and trade analysis: After each trading day or week, it’s helpful to review trades. Where did the trader make mistakes? What emotions were at play? Self-reflection is a key step in improving not only the technical aspects of trading but also emotional management.

5. Conclusion: Balancing Profit and Emotional Control

Successful traders understand that trading is about long-term stability, not quick riches. Greed can be tempting, but its consequences are often destructive. In trading, it’s essential to maintain control over emotions and make rational decisions. No matter the phase of the market, a trader who understands their limits and sets firm boundaries will ultimately succeed over time.