A shorthand for market mood: risk-on means money flows into stocks, crypto, and high-yield currencies; risk-off means it flees to dollars, yen, Treasuries, and gold.
Recognizing the regime helps explain why an individual setup is failing: in a risk-off day, most longs fail regardless of their charts.
Example: a geopolitical shock hits overnight. ES gaps down 2%, Bitcoin falls 8%, AUD/JPY drops 3%, and gold and the 10-year Treasury rally. That is a risk-off session.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Contango and backwardation. A futures curve shows what buyers will pay for delivery in one month, two months and so on. When later contracts cost more than the spot price the curve is in contango; when they cost less it is in backwardation.
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