Blog: Market Analysis

Recently, there has been quite some movement in the markets on various asset classes, and we have been following them closely.

In my last “Trading Foundation Workshop”, I gave 2 live calls, namely to go long on the USD/CHF, and short on Gold. Here are some charts:

A nice double-bottom breakout pullback shows good odds of a reversal

Turning down after hitting strong resistance

In my workshop last night for my TMP graduates, our analysis revealed that there was much strength in EUR & GBP, while there was weakness in CAD, CHF, JPY, and especially AUD and NZD. This means that if you follow the trend, the odds are good for going long on most EUR and GBP crosses.

Break of trendline followed by break of resistance levels

Last Saturday, during my talk at the “ShowFX Asia Conference” at MBS, I also shared some analysis on Bitcoin and its direction, and why I think it will continue to head up.

Glad to share the stage with fellow speaker Stuart McPhee, who is a famous Australian trainer who used to train for OANDA. #showfxasia

A post shared by Spencer Li ?? Synapse Trading (@iamrecneps) on Oct 22, 2017 at 2:38pm PDT

Lastly, for the S&P 500, many people have been calling for a big crash based on the “10-year October cycle”, but the price has continued to defy gravity and kept on drifting up. However, based on chart, I think it will take one of these 2 possible paths. Either way, the reward vs. risk is not ideal for taking long-term long positions now.

Note: the red bar denotes the month of October

I hope you have managed to catch some of these exciting moves in the market, and till we meet again, trade safe, and remember to follow all the cardinal rules of trading.

Cheers!

Spencer is an avid globetrotter who achieved financial freedom in his 20s, while trading & teaching across 70+ countries. As a former professional trader in private equity and proprietary funds, he has over 15 years of market experience, and has been featured on more than 20 occasions in the media.

Bitcoin Hits New High Above $5000 – There Will Be Another Buying Opportunity Very Soon!

Just yesterday, Bitcoin hit a new high again, breaking above the $5000 barrier, and bringing double digit gains to all those vested.

While there has been much speculation on this fundamentals of this cryptocurrency, it was actually a pretty familiar pattern for those used to reading the charts. I will explain more in the chart below, and show why there is going to be a good buying opportunity really soon.

Trade call and chart posted on our official Synapse Trading FB page – before the breakout!

If you look at this chart of Bitcoin, you will see that the majority of the price bars are green in colour, meaning the buyers have always been in control of this counter.

In addition, the counter has been moving up in a series of higher highs and higher lows, which is a classic sign up an uptrend.

Which means that all you need to do is to enter on dips in the price, as explained in my previous article.

The next question of course is how far can it go, and for this we can use the breakout projection technique, which would give a projection of about $6500.

But here is the exciting part: In such a breakout, especially at a key number, there is a very good chance (not 100%, but high), that the price will pull back to test the $5000 region again.

Yes, you heard right. If you had missed the previous move, hopefully there is another chance. I will be waiting to add on to my positions.

If it goes from $5000 to $6500, that is a gain of 30%, which is way better returns than buying any stock or REIT. And it could happen in weeks/months.

I will continue to monitor this counter. In the meantime, trade safe, and win big! 😀

5 Unconventional Ways You Can Make Money From Bitcoin (And Other Cryptocurrencies)

Firstly, what is Bitcoin and how does it work?

In simple terms, Bitcoin is a cryptocurrency, which is essentially a currency that is not owned by any particular group or person. It allows fast and cheap transactions, and the more people start to use it, the more its value increases. In fact, if you had bought $5 worth of Bitcoins 7 years ago, it would now be worth $4-5M.

And bitcoin could still be in its infancy, since its number of transactions are only a fraction of what the banks and other financial institutions are currently doing. Which means there is a huge potential for more upside. So, how can we get a share of the pie?

1. Investing in Bitcoins

This is the most common way for retail investors to get in on the action, by simply opening an account and purchasing the coins. Some of the common platforms are Coinbase and Coinhako, and it is not hard to open an account and take a nibble. The challenge here is making sure you do not end up buying at the high, so take advantage of price dips (usually happens when there is some negative news about cryptocurrencies) to accumulate more coins.

2. Trading Bitcoin Derivatives

If you are more interested in profiting from the short-term movements in Bitcoin, then you can use derivative instruments that track the price of Bitcoin, for example products like CFDs (contract for differences). The price of the derivative will track the price of Bitcoin, moving up and down in sync with the actual price of Bitcoin, so by buying or selling the derivative, you can profit from the price moves in Bitcoin without actually buying or owning Bitcoin. To do this well, you will need to know how to read charts and price action.

Sharing live on #cryptocurrencies like #bitcoin and #ethereum ? Are you ready for the next big thing? #visionaryinvesting

A post shared by Spencer Li ?? Synapse Trading (@iamrecneps) on Aug 6, 2017 at 11:11pm PDT

3. Lending out Bitcoins

Lending is perhaps the oldest way to use money to make money. Basically, you loan out money to a relevant party and they pay you back, with interest. Interest rates will vary with the risk involved. If you get collateral in exchange for your loan, interest rates will be low. No collateral means higher risks, but it also means higher interest rates. So if you have already purchased some Bitcoins, you can loan them out for some extra interest instead of just keeping them in your account.

4. Bitcoin Mining

Bitcoins are created through solving complex algorithms that create blocks that are added to the public ledger. The public ledger is the history of all transactions conducted through bitcoin. Basically, miners build the public ledger and allow the whole bitcoin system to function. As they create new blocks, miners are rewarded with new Bitcoins. This encourages more miners to get in on the action, which allows the Bitcoin community to grow. In the past, people could use their home computers to mine Bitcoins, but over time mining has become more difficult as the algorithms have become more complex. Now, you’ll either have to buy a specially built mining rig, or join up with a Bitcoin mining pool that harnesses the power of multiple computers.

5. Bitcoin Arbitrage

This is perhaps the least common way of making money from Bitcoins due to its difficulty level. If you have started dabbling in Bitcoins, you might have noticed that the prices of Bitcoins can vary a lot across different exchanges. For example, if the Bitcoins in Singapore are cheaper than the ones in China, you could buy some Bitcoins here, transfer them to China, and cash them out over there. The challenge however would be bringing your money back to Singapore, and also you would need a bank account in China. But some people have managed to come up with creative solutions around theses problems.

Picking the Bottom for Bitcoin & Ethereum – When to Buy?

Recently, Bitcoin prices have crossed $4,800, and year-to-date, its price has surged nearly 400%, making it one of the best investments for the year. And it is not alone.

Other cryptocurrencies, such as Ethereum, have also been making new highs, and many more new products are hitting the market every day.

Which is why many of my friends, followers, and students have been asking me a lot about theses products, and most importantly, “when is a good time to buy?”

Sharing live on #cryptocurrencies like #bitcoin and #ethereum ? Are you ready for the next big thing? #visionaryinvesting

A post shared by Spencer Li ?? Synapse Trading (@iamrecneps) on Aug 6, 2017 at 11:11pm PDT

When I first started trading, I was mainly doing stocks and CFDs, and I developed my “15 minutes a day” price action strategies for these. And as I expanded to new markets, I was pleasantly surprised to find that the same strategies worked perfectly well. To date, I have used them successfully on forex, futures, options, and most recently, on cryptocurrencies.

This means that for a new product like Bitcoin, which behaves very similarly to IPO stocks or some less popular penny stocks, its behavior can be best understood by studying its underlying price behaviour.

Many people who take one look at its prior meteoric rise will immediately come to the conclusion that is it near its high and too late to buy. But many people probably thought the same way about Apple and Tesla’s stock a few years back.

Hands-on analysis and study of Bitcoin chart for precise timing (at my new cafe)

This means that there is potential for cryptocurrencies to go much higher, but how do we time our entry into something that is moving so fast?

Turns out we do have the perfect strategy for that, which is similar to the strategy we use to enter fast-moving counters in times of a strong trend. In fact, I pointed this out using the chart of Bitcoin during my last few workshops, and also at Invest Fair.

Snippet from the “Synapse Network” private forum (posted 24 August 2017)

Bitcoin chart today (04 September 2017)

How far can this trend continue to run?

To be honest, no one can really tell, but all I know is that whenever there is a good buying opportunity, I will continue to add more positions to ride this strong trend until it ends. And when it does, I will get ready to short it down as well. 😀

But that is a story for another post.

Till then, trade safe, and aim big. Cheers!

An Exciting Week of Trades – AUD/CHF, EUR/USD, NZD/USD, etc!

Last week, we had some pretty decent trades in, netting close to US$2,000 in profits for a handful of quick trades, riding on the strength of the USD after the FOMC.

Also took the chance to check out my new house:

Dropping by to check out my new #penthouse and do some measurements. With the recent hot weather, can’t wait another 2 weeks to try out my new #Jacuzzi! ? A big thanks to my #property agent and advisor @edwinjf18 for bringing me to view over 50 units in the last few weeks. Now I need to continue to work hard and study hard to farm more ? from the forex market for my next property! ?

A post shared by Spencer Li ?? Synapse Trading (@iamrecneps) on Jun 16, 2017 at 11:45pm PDT

For those who are keen to join our private network for timely trade calls, you can reserve your spot here, but do so early, as we only allow 20 new people to join each quarter!
Register: https://synapsetrading.com/the-synapse-program/