3 THINGS THAT’LL IMPROVE YOUR TRADING THIS 2023

Traders' Opinions

Summary:

Start Analyzing from the Monthly.

2022 has been an absolutely challenging year for beginners and amateurs a-like! From the Fed and other central banks disrupting the typical zone-to-zone movement with their trend-enforcing interest rate hikes, I’ve come to hear a ton of stories about accounts burning because of a seemingly non-retracing market. With so, here are 3 things you should consider so you don’t do the same thing this 2023!

Watch your news—or read it!

One of the biggest mistakes most victims of the markets are guilty about is not taking the effort to read or watch news. Honestly, taking trades at the wrong side of the market could have been easily avoided if everyone was watching and understanding everything that is happening at the back of the office. If you don’t have time to watch, a hack that I’ve recently come to discover is using FastBull.com News column. As a busy trader, student, and analyst, time is obviously not my most abundant resource. So I left FastBull do all the digging for me—and from there, all I have to do is read what their analysts think of the latest fundamentals.

Start Analyzing from the Monthly.

As boring as that may sound, basing off your trades from the monthly bias filters out the subpar trading opportunities you may encounter. Looking back at the start of 2022, it was identifiable that the market was framed to go further down if you peeked at the monthly timeframe occasionally. Coming from my personal experience, I’ve avoided taking in obvious losses ever since I’ve started incorporating the monthly chart on my trades.

3-to-1 Risk to Reward

This is underrated. Having a decent risk to reward ratio gifted me the ability to make mistakes while still maintaining my profitability. With the market moving more erratically compared to what it was from the previous years, I’ve adjusted my RR in a way that made me less emotional when taking in losses—since 2 consecutive losses could easily be retrieved by a single win. Further into that, I was also able to improve my PnL through carefully curating my trades—as not every set-up would easily fit the 3-to-1 risk to reward ratio. With all that said, 2022 has definitely been a very tough market to trade on. But if there’s one thing that has always been constant in trading, that is—to always adapt through every market scenario. At the end of the day, you are just a mere participant of the market. It is your responsibility to make most out of what the market gives.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Kevin Du

Cryptocurrency

Seventeen of the cryptocurrency industry's wealthiest investors and founders have collectively lost an estimated $116 billion in personal wealth since March, according to Forbes.

Fifteen of them lost more than half their wealth over the past nine months while 10 lost their billionaire status altogether, Forbes reported.

Before he was arrested in the Bahamas, FTX co-founder and chief executive Sam Bankman-Fried, who was once ranked the industry's second-wealthiest person worth $24 billion by Forbes magazine in April, told media outlets that his bank account was down to $100,000 and that he was "not sure" how he would pay his lawyers.

The fortune of Gary Wang, FTX's other co-founder and former chief technology officer, was once estimated at $5.9 billion but has since been wiped, Forbes reported.

Mr Bankman-Fried co-founded FTX with Mr Wang in 2019. He also founded Alameda Research in 2017, a cryptocurrency trading company.

This year was characterised by wealth destruction in the cryptocurrency and blockchain sector. Investors fled risky assets such as digital currencies in an environment of inflation and rising interest rates.

The "crypto winter" has been exacerbated by the collapse of "stablecoin" TerraUSD and its sister token Luna, as well as the bankruptcy filing of US cryptocurrency lending platform Celsius Network.

In June, Bitcoin dropped below the key $20,000 level for the first time since December 2020 after peaking at $69,000 in November 2021, while about $2 trillion has been wiped from the market value of cryptocurrencies since late last year, according to data compiled by CoinGecko.

The net worth of Changpeng Zhao, the chief executive of Binance, the world's biggest cryptocurrency exchange, has also plummeted this year.

He is now worth $12.7 billion and is the world's 138th-richest person, according to the Bloomberg Billionaires Index.

CZ, as he is known, has an estimated 70 per cent stake in Binance, which Forbes values at $4.5 billion — down from $65 billion in March.

The collapse of Mr Bankman-Fried's net worth came after Mr Zhao stoked speculation about the financial health of FTX in a tweet on November 6, which snowballed into $6 billion of withdrawals from the exchange in 72 hours, Reuters reported.

However, Mr Zhao must now contend with the consequences. That could include the clawback in bankruptcy court of the more than $2.1 billion that Binance made from selling its stake in FTX back to Mr Bankman-Fried in the summer of 2021, according to Forbes.

Meanwhile, the net worth of Barry Silbert, head of cryptocurrency conglomerate Digital Currency Group, has also nosedived this year.

One of DCG's key assets, cryptocurrency lending unit Genesis Global Capital, owes creditors at least $1.8 billion, Reuters reported earlier this month.

DCG is saddled with debt. It assumed a $1.1 billion liability from Genesis, which stemmed from a bad loan Genesis made to the now-bankrupt Three Arrows hedge fund, Forbes reported.

Separately, DCG owes Genesis another $575 million, which is due in May.

For these reasons, Forbes estimates the current value of Mr Silbert's 40 per cent stake in DCG to be approximately $0.

The difficulties at Genesis have also buffeted the fortunes of billionaire Winklevoss twins, Tyler and Cameron, owners of the Gemini cryptocurrency exchange, whose net worth fell to $1.1 billion each, from $4 billion in March, Forbes reported.

The net worth of Brian Armstrong, chief executive of publicly traded exchange Coinbase, plummeted to $1.5 billion from $6 billion in March.

The company's stock is down 64 per cent since August and more than 95 per cent from its $100 billion initial public offering in April 2021, according to Forbes.

Coinbase's other co-founder, Fred Ehrsam, also got burnt by Mr Bankman-Fried. His cryptocurrency venture company Paradigm invested $278 million in FTX equity and subsequently his net worth is currently down to $800 million, from $2.1 billion in March, according to Forbes' estimates.

Jed McCaleb, co-founder of crypto company Ripple, is believed to be the only person who has managed to retain most of his fortune through the downturn, because he sold out almost entirely before the crash.

Mr McCaleb offloaded about $2.5 billion worth of XRP, Ripple's native token, between December 2020 and July 2022, Forbes said.

Chris Larsen, Ripple's other founder and its chairman, has lost more than $2 billion this year, due to XRP's declining price.

Tim Draper, a venture capitalist who holds around 30,000 Bitcoins, dropped from the billionaire ranks earlier this year when the digital token hit $33,000. He is now worth $550 million, according to Forbes.

Source: The National News

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Devin

Commodity

The global trade war will shift from fossil fuels to metals and raw materials. Russia's invasion of Ukraine highlighted the risk of relying on autocratic states for energy. Even if Europe's gas crisis eases, Western manufacturers' focus will switch to reducing China's dominance in materials key to a cleaner economy.

Europe needs to cumulatively spend US$5.3 trillion on clean energy projects by 2050. That requires a sixfold increase in the global production of copper, lithium, graphite, nickel and some rare earths by 2040, International Energy Agency estimates show. Yet China dominates the processing, and to a lesser extent the extraction, of many critical industrial ingredients. It refines 58% of lithium produced globally, 65% of cobalt and over one-third of nickel and copper. Ostracised Russia is also big in nickel, palladium and cobalt. Europe, which imports between 75% and 100% of most metals, looks particularly vulnerable.

In response, Western companies can strike deals with suppliers in friendly countries, open mines at home, or boost recycling. The first approach is the fastest and is underway. In 2022 carmakers have ramped up partnerships with mines and invested directly in mining projects, data from Fitch Solutions shows. General Motors took a stake in Australia's Queensland Pacific Metals to secure nickel and cobalt for green SUVs.

Opening new mines at home looks safer but takes longer. Take lithium. Europe doesn't currently mine an ounce of the key electric-vehicle battery component. And the US only supplies 2% of global demand. But things are changing.

Sibanye Stillwater is aiming to operate Europe's first lithium mine in Finland in 2025; France's Imerys is seeking to extract 34,000 tonnes of lithium hydroxide annually from a mine opening in 2028. If all European lithium mining projects transpire, they could supply around 40% of its expected demand of 600,000 tonnes of lithium carbonate equivalent a year by 2030, says one European miner. The US, which only holds 3% of the world's lithium reserves, has passed legislation to subsidise domestic extraction of crucial materials.

Neither approach is foolproof. Mining in developed markets may mean pushback from environmentally conscious citizens. Critical metals producers could also make life trickier for buyers by forming cartels.

That's why Western nations' best option is ultimately to recycle metals from used appliances. Companies like Umicore and Redwood Materials already own the technology to reuse batteries and smartphones. Europe recycles 17% of the globe's battery production. But this share will rise to 48% by 2025, Fitch Solutions suggests.

Unfortunately, recycling is costly. But in a polarised world, protecting Western industries and jobs will merit a premium. East-West Battleground Will Shift from Fossil Fuels to Metals_1

East-West Battleground Will Shift from Fossil Fuels to Metals_1

Source: Reuters

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Devin

In the past year, the Egyptian government has been striving to curb soaring inflation caused by rising food and energy prices as a result of the Russia-Ukraine conflict and lingering COVID-19 pandemic.

As the most populous Arab country and one of the world's largest importers of wheat, Egypt's economy has been particularly overshadowed by soaring global commodity prices since the conflict's breakout in February 2022.

Under pressure, Egypt decided in October to sharply devalue its currency the Egyptian pound, sending the annual urban consumer inflation rate surging to 18.7 percent in November from 16.2 percent in October, marking a near-five-year high.

DOLLAR SHORTAGE

"The situation is difficult for Egypt, but it's also difficult worldwide," said Rashad Abdo, an Egyptian economist, citing recent protests in some European counties due to high inflation and increasing cost of living.

Moreover, the Egyptian financial market suffered from a shortage of hard currency that led to the decline in the local currency's exchange rate against the U.S. dollar.

Rampant inflation in Egypt came after two sharp devaluations of the Egyptian pound against the U.S. dollar this year, the latest of which was on Oct. 27 when the Central Bank of Egypt (CBE) lowered the value of the pound by about 14.5 percent.

To contain soaring inflation, the CBE announced on Dec. 22 to raise the interest rate by 300 basis points.

"There are problems, but the government is working hard to address them," Abdo told Xinhua, noting that the Egyptian government is taking measures to intervene in commodity prices on the market and expand the social safety network.

IMF LOAN SUPPORT

Egypt's devaluation move was endorsed by the International Monetary Fund (IMF), which last week approved a 3-billion-dollar loan to Egypt over the next 46 months as a support package.

Egypt relies on the IMF loan and offers international bonds "to narrow the finance gap related to foreign currency," said Abdo, also head of the Egyptian Forum for Economic Studies.

"The government has raised the interest rate to absorb the liquidity available on the market, and liberated the exchange rate against the U.S. dollar to fluctuate with the market needs and under the guidance of the IMF for approving the 3-billion-dollar loan," he said.

The IMF loan approval, which enabled an immediate disbursement of about 347 million dollars to Egypt, is expected to catalyze additional financing of about 14 billion dollars from Egypt's international and regional partners, the IMF revealed.

Fakhri al-Fiqi, an Egyptian professor of economics and head of the parliamentary Planning and Budget Committee, said the IMF loan is "a certificate of confidence" in the Egyptian economy.

"The international business community has been waiting for this certificate of confidence, as the IMF will be evaluating and reviewing Egypt's economic and structural reform program biannually for the coming four years," the economist told Xinhua.

Al-Fiqi explained that the IMF support package, along with the anticipated 14 billion dollars from other partners, will make up for the hot money outflows that led to the foreign currency shortage and eventually contain the inflation.

ECONOMIC REFORM PROGRAM

The IMF's financial support was granted in exchange for an economic reform program to be implemented by the Egyptian government, under which Egypt agrees to reduce the state's footprint, facilitate private-sector-led growth, and more.

In a similar experience, Egypt carried out a three-year economic reform program that started in late 2016 in order to secure a 12-billion-dollar loan from the IMF.

With the fresh funding from the IMF, Egypt will be able to clear a backlog of requests from importers and businesses to access hard currency.

"With the expected foreign currency inflow, the Egyptian government will gradually clear the backlogs of importers' requests and will provide facilitations to foreign exporters, which would help businessmen in Egypt import the materials needed for their factories," Al-Fiqi said.

The IMF loan and the CBE's decision to increase the interest rate will help gradually slow down the inflation rate over the coming four years to 4-5 percent as it used to be, which will be acceptable to average Egyptian citizens, the Egyptian economist said.

"When foreign currency is available at Egyptian banks to businessmen, the latter won't resort to the black market, which will in turn stabilize the exchange rate and restrain the black market," he added.

Source: China Daily

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Samantha Luan

Stocks

Stock markets gained while the U.S. dollar softened on Tuesday after China said it would drop its quarantine requirements for inbound visitors, further easing three-year border controls aimed at curbing COVID-19.

China will stop requiring inbound travellers to go into quarantine starting from Jan. 8, the National Health Commission said on Monday. It will also downgrade the seriousness of COVID-19 as it has become less virulent and will gradually evolve into a common respiratory infection.

By Tuesday morning in Hong Kong, MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5%. China's bluechip gained 0.6% and Japan's Nikkei stock index rose 0.43%.

U.S. stock futures, the S&P 500 e-minis, inched up 0.61%, indicating the market is set to rise as traders return to their terminals on Tuesday after the Christmas holiday.

Markets in some regions including Hong Kong and Australia remain shut on Tuesday.

Chaoping Zhu, a global market strategist and JPMorgan Asset Management, said the latest policy move from China indicated economic activity in most major cities may return to normal very quickly, which is very positive for investors.

"Most Chinese cities could recover from the first wave of the latest COVID-19 outbreak by January... this would be faster than people have expected," he said, adding there was concern of an outbreak lasting longer and weighing on the economy, but that developments have been in general better than expected.

He also said the reopening of China, which also entails resuming outbound visits for Chinese tourists, will lift consumer and service sectors outside of the country, particularly those in nearby Southeast Asia.

Inbound tourists had recovered 60% to 70% by November for many ASEAN countries, Zhu said, citing in-house research, but there is still a gap between now and 2019 before the pandemic.

"This gap will be filled by Chinese tourists. This is the last piece of the puzzle," he said.

The dollar moved broadly lower on Tuesday while Australia's and New Zealand's currencies jumped as risk appetite grew after China scrapped its quarantine rule.

The kiwi surged 0.65% to $0.63115 while the Aussie gained 0.25% to $0.67485 in mostly thin year-end trading. The two currencies are often used as liquid proxies for China's yuan.

Oil prices ticked up on thin trade on Tuesday, on concerns that winter storms across the United States are affecting logistics and production of petroleum products and shale oil.

Brent crude was up 73 cents, or 0.9%, at $84.65 a barrel by 0122 GMT, while U.S. West Texas Intermediate crude was at $80.41 a barrel, up 85 cents, or 1.1%.

U.S. Treasuries will resume trading on Friday. The benchmark 10-year yield climbed the most last week since early April, ending around 3.75%.

The latest Personal Consumption Expenditures (PCE) price index, released on Friday showed inflationary pressure is easing, but Federal Reserve policymakers remain concerned by the strength of the labour market and the stickiness of service sector and wage inflation, which could complicate the central bank's efforts.

Analysts from Citi flagged upside risk in a report on Friday that the Fed's policy interest rate could reach 5.25% to 5.50% by the end of 2023, largely based on expectations of the labour market continuing to add jobs in the first months of 2023 despite already being very tight, putting further upward pressure on wages and non-shelter service prices.

Source: CNA

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FastBull Featured

Daily News

【Quick Facts】

1.U.S. holiday season retail sales growth of 7.6%, dining and online shopping performance are hot.

2.Democratic Congress pushes the approval of the FY23 omnibus appropriations bill.

3.Kuroda denied the possibility of withdrawing from easing in the short term.

4.An ECB rate hike of 50bps will become the new normal.

【News Details】

U.S. Holiday Season Retail Sales are Up 7.6%, Dining and Online Shopping are popular

Mastercard reported Monday that U.S. retail sales rose 7.6% between Nov 1st and Dec 24th, as steep discounts attracted consumers eager for deals. This period covers most of the holiday season. However, this year's holiday season retail sales growth was lower than last year's growth of 8.5%. Retailers, including Amazon and Walmart, offered significant discounts during the holiday shopping season to dispose of excess inventory and bring inventory back to normal levels.

This resulted in strong demand for a variety of items, from toys to electronics, during the five days between Thanksgiving and Cyber Monday.

In addition, sales in the apparel and restaurant categories increased by 4.4% and 15.1%, respectively, boosting general retail sales.

Democratic Congress Pushes the Approval of the FY23 Omnibus Appropriations Bill

The U.S. House of Representatives passed the $1.7 trillion FY2023 omnibus appropriations bill on Friday (Dec 23rd) by a 225-201 vote. The Senate passed the bill the day before by a 68-29 vote.

The omnibus appropriations bill now goes to President Biden for his signature, thus avoiding the previous round of temporary funding that expired on the 23rd and forced the government to shut down on Christmas Eve. Moreover, the bill will fund the government until Sep 30th, 2023, and the debt ceiling will be raised accordingly.

The $1.7 trillion price tag covers $858 billion in defense spending, a 10% boost from the previous year ($782 billion). In addition, non-defense autonomous spending is $772.5 billion, an increase of nearly 6% over the previous year ($730 billion).

The Congress, which is still held by the Democrats, pushed through the omnibus appropriations bill before the new Congress takes office in January. It reflects an unprecedented unity not seen in the past two years and is in line with my previous expectations.

Next, the control of the House of Representatives will be passed to the Republican Party, part of the Republican establishment fears that intra-party differences may lead to a breakdown in consensus, trying to minimize the adverse impact of budget allocations and the debt ceiling on the FY2023 agenda. It is also a major reason for the passage of the bill by many votes.

Kuroda Denied the Possibility of Withdrawing from Easing in the Short Term

According to Kyodo News, Japan's Finance Ministry will raise the coupon rate of 10-year Japanese government bonds issued in January to 0.4-0.5% from the current 0.2%. On Monday, BOJ Governor Haruhiko Kuroda said in a speech at an event that adjusting the yield curve control program does not mean the first step to exit the super-easing policy, but a way to make the easing sustainable and run smoothly.

Haruhiko Kuroda also demonstrated that wage growth is likely to accelerate gradually due to the intensifying labor shortage and structural changes in the Japanese job market, which will drive up the pay of temporary workers as well as the number of permanent employees.

The strength of wage growth is seen as key to how soon the BOJ can raise its yield curve control (YCC) target, which is set at a negative 0.1% short-term interest rate and a 10-year bond yield of around 0%.

With inflation exceeding the 2% target, the market is awash with speculation that the BOJ will raise its yield target at the end of dovish Governor Kuroda's tenure next April.

ECB's 50 bps rate hike will Become the New Normal

In a recent interview with the French newspaper Le Monde, ECB Vice President Guindos said that monetary policy works to suppress demand, which in turn suppresses growth, and there is no other way. If the ECB does nothing, the situation will be worse, because inflation is one of the factors of the current recession, which reduces the disposable income of households. By reducing inflation, the ECB will contribute to growth.

A 50-bps rate hike could become the new normal in the short term and should be expected to raise rates at this pace for some time. Rates will then move into restrictive territory. Furthermore, the measures taken by the ECB so far will have an impact on inflation, but more still needs to be done.

Additionally, Guindos denied a wage-price spiral and claimed it was normal that payrolls were catching up with inflation.

【Focus of the Day】

UTC+8 21:30 U.S. November preliminary monthly wholesale inventories rate.

UTC+8 23:30 U.S. Dallas Fed Manufacturing Production Index for December

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Devin

Central Bank

Major central banks ramped up interest rates at the fastest pace and biggest scale in at least two decades in 2022 as policy makers went all out in the battle to contain surging inflation.

Central banks overseeing the 10 most heavily traded currencies delivered 2,700 basis points (bps) of tightening in 54 rate hikes over the past 12 months, Reuters calculations show.

All major central banks bar the Bank of Japan raised rates this year, though policymakers in Tokyo roiled markets in December with a surprise policy tweak to its yield target, fuelling speculations that an actual rate hike might be on the cards in the not-too-distant future.

However, it was primarily the U.S. Federal Reserve's 225 basis points of hikes over the past 12 months - and the prospect of possibly more to come - that has kept markets on edge against a backdrop of sharply slowing growth.

"When you look at the tightening in the U.S. it is basically one of the sharpest ever in the past 20 years," David Hauner, head of emerging markets cross-asset strategy and economics, EMEA at Bank of America Global Research told Reuters.

"Normally when you have such a sharp tightening in financial conditions you basically have something more than just a small recession, which seems now the general consensus."

Global Central Banks Deliver Historic Rate Hike Blast in 2022_1

On a monthly basis, data showed that seven out of the 10 major central banks lifted rates in December.

The U.S. Federal Reserve, the European Central Bank, the Bank of England, the Reserve Bank of Australia, Norway's Norges Bank, the Bank of Canada and the Swiss National Bank all raised their benchmarks by a cumulative of 300 basis points. This compares to the monthly peak of 550 bps in September, though not all central banks meet on a monthly basis.

The Reserve Bank of New Zealand and Sweden's Riksbank did not hold rate setting meetings in December.

Global Central Banks Deliver Historic Rate Hike Blast in 2022_2

Meanwhile, there was more evidence that the tightening cycle in emerging markets was slowing down.

Five out of 18 central banks delivered a total 260 bps of rate hikes in December, down from 400 bps in November and some way off the 800-plus bps monthly tallies in June and July.

The majority of those came from policymakers in Asia, who are lagging in the tightening cycle Latin America and emerging Europe. Central banks in Indonesia, India and the Philippines raised rates, alongside Colombia and Mexico.

"Most emerging market central banks are close to having completed their rate hike cycle," said Charles-Henry Moncheau, chief investment officer at Syz Group.

Emerging market central banks have raised rates 93 times this year to lift benchmarks by a total of 7,425 bps this year, nearly three times the 2,745-bps tightening in 2021, calculations show.

Central banks in Korea, South Africa, Thailand, Malaysia and Israel did not hold rate setting meetings in December.