Monday, December 21, 2009
Tuesday, December 15, 2009
- CPI for GBP - it show that forecast (1.8%) is more than previous (1.5%).So,here i can say that GBP currency will Bearish.
- German ZEW Economics Sentiment for EUR - Forecast (50.1) is less than previous (51.1).So i can say that EUR currency will Bearish
- PPI for USD - It show that forecast (0.8%) is more than previous (0.3%). So I can say that tonite USD currency will Bearish.
Friday, December 4, 2009
Thursday, December 3, 2009
- Min Bid Rate for EUR
- ECB press conference
- Unemployment claim for US resident
- US Governor Ben Bernanke
Wednesday, December 2, 2009
Tuesday, December 1, 2009
Monday, November 23, 2009
Weekly Trend direction: Bearish
Weekly trend reversal level:1.5050
Key G7 resistance levels: 1.4950/60, 1.5000, 1.5050
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
Another day – another dollar for range traders as the euro has been stuck in the 1.4800-1.5000 range since the beginning of the month. This really could break out eitherway(as it eventually will) but there are signs that the 1.5000/5050 barrier is going to be tough to break. Notice on the hourly chart that we have the makings of a “descending triangle” with lower highs each time the rally to near the range top takes place. We are currently butting up against the downward top of the triangle as I write, and I’ll be watching and waiting for signs of reversal on the hourly chart. Target for short trades is the range bottom around 1.4800 and, on a successful break lower, 1.4650.
Sell rallies to 1.4950/60 or at higher resistance levels, target 1.4800 and then 1.4650
Weekly Trend direction: Bearish
Weekly trend reversal level 1.6880
Key G7 resistance levels:
1.6600/20, 1.6680, 1.6720
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal
Today's trade suggestion:
A big bearish engulfing candle last week means that we are going to look to sell the pound into rallies this week.There is little doubt that the markets are struggling with the levels they are at presently, and this is causing a lot of quite volatile (and often unexpected) intra-day movement. This makes trading tricky and one needs to be patient and wait for the clear setups before leaping into trade positions. Resistance on the pound lies quite some distance above at 1.6600/20 and above, so we’ll have to wait for some decent counter-trend rallies before
selling. Don’t rush this process. It may be tempting to sell with out a clear signal or at lower levels, but this would be a strategic mistake!
Sell rallies to 1.6600/20 (or higher up if this fails) Target 1.6500 and then 1.6250.
Wednesday, November 11, 2009
Here is a list of things you should do:
1 - When you're looking for a Forex system, course, ebook or software, use your good sense.
2 - If you're planning on buying some Forex product, choose one that has a guarantee or a free trial offer.
3 - Check a reviews website in order to know what other traders are saying about the product you're thinking of buying.
4 - Read the entire sales page of the product and if you have any question, contact the owner.
5 - Before you use the product on a real account, test it deeply on a demo account.
These simple advices might save you a lot of money and time.
There is an ideal mindset, character, and mental attitude that traders need to acquire. I say "acquire" because few people have the innate personality that makes this mindset "natural". With respect to your trading, this involves being free of anxiety, fear, despair or regret. It also involves being able to remain calm, confident, focused and disciplined in the face of adverse trading outcomes.
Here is a list of 6 advices:
1 - Trade with a Disciplined Plan:
The problem with many traders is that they take shopping more seriously than trading. The average shopper would not spend $500 without serious research and examination of the product he/she is about to purchase, yet the average trader would make a trade that could easily cost him/her $500 based on little more than a feeling or hunch.
The plan must include stop and limit levels for the trade, as your analysis should encompass the expected downside as well as the expected upside. Be sure that you have a plan in place before you start to trade.
2 - Don't Trade Based On Emotions:
This is the worst thing you can do. If you're with some kind of problem in your head that just don't let you think straight, take the day off. It's better not to make any money than losing it.
It may also happen that you just lived a losing strike. You're jut furious and you just can't wait to show that you're in charge... Don't! Stop! Take a deep breath, calm down and try to ignore what you just went through. Follow your system rules and ignore everything else.
But this isn't the only case. You might just be on a winning strike. Well, you're winning, you're the man... Stop! You're not the man. You're a trader that is being successful. If you want to keep trading well, put those emotions aside...
3 - Good Execution Good Anticipation:
Everybody knows that trading is a number game. I mean, our success is not dependent on the outcome of the next trade; our success is dependent on the overall profitability of many trades. So, while we are trading, whether the last trade we did was profitable or not is definitely not important. There is no point drawing conclusions on the outcome of just one -or even a few-trades. We can only access our anticipation skills when we have made a reasonable number of trades and see the longer-term result of our action. It is so important that when we are trading, our goal should be focus on executing our trades with ruthless efficiency and to judge only that. If you consider the ways that you lose money trading, you will find that it is down to poor execution, rather than poor anticipation.
4 - Cut Your Losses Early and Let Your Profits Run:
This simple concept is one of the most difficult to implement and is the cause of most traders' demise. Most traders violate their predetermined plan and take their profits before reaching their profit target because they feel uncomfortable sitting on a profitable position.
These same people will easily sit on losing positions, allowing the market to move against them for hundreds of pips in hopes that the market will come back.
In addition, traders who have had their stops hit a few times only to see the market go back in their favor once they are out, are quick to remove stops from their trading on the belief that this will always be the case. Stops are there to be hit, and to stop you from losing more than a predetermined amount. You simply allow your profits on the winners to run and make sure that your losses are minimal. What is it about cutting a loss that is so hard?
5 - Do Not Over Trade:
One of the most common mistakes that traders make is leveraging their account too high by trading much larger sizes than their account should prudently trade. Leverage is a double-edged sword. Just because one lot of currency only requires $1000 as a minimum margin deposit, it does not mean that a trader with $5000 in his account should be able to trade 5 lots. One lot is $100,000 and should be treated as a $100,000 investment and not the $1000 put up as margin.
Most traders analyze the charts correctly and place sensible trades, yet they tend to over leverage themselves. As a consequence of this, they are often forced to exit a position at the wrong time. A good rule of thumb is to never use more than 5% of your account at any given time.
6 - Do Not Marry Your Trades:
The reason trading with a plan is the #1 tip is because most objective analysis is done before the trade is executed. Once a trader is in a position, he tends to analyze the market differently in the hopes that the market will move in a favorable direction rather than objectively looking at the changing factors that may have turned against your original analysis. This is especially true for losses. Traders with a losing position tend to marry their position, which causes them to disregard the fact that all signs point towards continued losses.
Well, that's it.
Sunday, November 8, 2009
News that the US unemployment rate rose to a 26-year high of 10.2% failed to dent risk appetites as seen in stocks, at least in the immediate aftermath on Friday (more on the data below). Commodities, however, did register the pain of rising unemployment and the implicit hit to demand, with the CRB index dropping to its lowest level this month, and now down about 5% from the Oct 21 high. JPY-crosses also responded appropriately to the downbeat labor market news, erasing most of the week's gains. The USD, however, failed to see much strength overall. In a sense, that's to be expected after the Fed reaffirmed its commitment to maintain exceptionally low rates for an extended period of time, a decision which was reinforced by the soft jobs news. But there's also the 'risk on/risk off' correlation, and while stocks managed to rebound, the USD remained under pressure.
In a scene reminiscent of the Wile E. Coyote/ Roadrunner cartoons, stocks seem to have run off a cliff, but are hanging in mid-air until they stop, take a look down and then plunge into the canyon. We view this past week's rebound in stocks and accompanying set-back in the USD as a correction after the larger reversal seen in the last week of Oct. The S&P 500 is holding below the broken trend line that guided the move higher since March, currently at 1070/71, along with the 21-day sma. A re-test of a technical break point is normal and we think that's the case with this past week's price action. EUR/USD followed shares higher after basing out above key trend line support, basically the equivalent of the S&P trend line, at 1.4600/20. The euro effectively retraced 61.8% of the decline from the 1.5060 high to 1.4620 low, another very normal corrective movement. We think a combination of excessive USD-short positioning, increasing risk aversion in light of the weak US data, and possibly some verbal support are likely to return to weigh on risk assets and support the USD.
G20 and Eurozone Fin. Min.'s may lend USD verbal support vs. the EUR in the approach to Nov MPC
The G20 is gathering in St. Andrew's Scotland on Friday and Saturday and a communique is expected to be released before noon EST on Saturday. The main topic of the meeting is to orchestrate so-called exit strategies, with the main message likely to be a slower withdrawal of stimulus. On FX, the Chinese will be pressed to allow the Yuan to strengthen, but comments from PBOC head Zhou on Friday suggest the pleas will fall on deaf ears. The Europeans are also expected to press the US Treasury to step up its defense of the USD, and there is minor potential for a revision to the wording of the US strong dollar mantra. In terms of the communique, we think the standard language on currency volatility being undesirable for global growth will be retained. Any bolder comments on USD weakness, EUR strength, or currency volatility are most likely to come from individual participants. On Monday, Eurozone finance ministers will gather for a regular monthly meeting, which will continue on Tuesday, and comments on FX could be heard beginning Monday evening European time. The Europeans are the most concerned about USD weakness/EUR strength as it may undermine their export competitiveness, which is the key to their nascent recovery.
Bank of England set to revise up near-term inflation forecasts
The Bank of England has already warned that "inflation is likely to rise sharply to above the 2% target in the near term, reflecting higher petrol price inflation and the reversal of last year's reduction in VAT". The revision to BoE inflation forecasts can be expected in the Bank's Quarterly Inflation Report due on November 11 but crucially upward revisions to inflation are unlikely to have any significant impact on expectation for BoE interest rate policy. Over the past couple of months the BoE have taken every opportunity to warn of the forthcoming rise in near-term inflation forecasts. At the same time the Bank has continued to stress that excess capacity will continue to bear down on price pressures over the medium-term. Despite signs of improvement in the UK economy, GDP failed to turn positive in Q3 suggesting the recovery in the UK economy is lagging that of most other G10 nations. While this year's rise in oil prices has shown up in the 2.6% m/m rise in Oct PPI input, the lagging impact of last year fall in oil is still having an impact; PPI y/y remains subdued. Even if the weaker pound vs the EUR and higher oil prices push input costs higher, the weakness of the consumer sector suggests that producers/retailers have little pricing power. UK interest rates are likely to remain at their 0.5% low at least until the latter half of 2010.
QE could be phased out by February
Low expectations for medium term inflation in the UK combined with disappointing growth in money supply meant that many proponents of quantitative easing were disappointed that the BoE opted for a relatively conservative allocation of GBP25 bln in November. While QE has no doubt played an important part in helping the financial system move away from crisis, the lack of response in either money supply or inflation indices could be illustrating that it is a policy unable to lend significant support to the real economy. By opting for GBP25 bln this month rather than GBP 50 bln, the BoE was probably hedging its bets but it seems likely this will be the last extension of the plan meaning that QE could be phased out by February.
While the change in the BoE's inflation forecasts this week is unlikely to bring forward rate hikes, the news could lead some short-term support and encourage cable back towards the USD1.6680 recent high. Significant upside in cable could be difficult, however, failing a break by EUR/GBP below 0.8900. The 0.8920/00 area is likely to continue providing solid support for EUR/GBP.
Somber US employment report makes for ominous outlook
US nonfarm payrolls slipped a touch more than expected in October, falling -190K on the month. The real shock was the jump in the unemployment rate to an eye-popping 10.2% from a prior 9.8%. This will make for some bold headlines over the weekend and should weigh on consumer confidence further in the short-term. The details of the report also suggest that the labor market has still not bottomed and we retain our cautious view with regards to risk assets and short-term constructive view on the USD and JPY specifically.
The surprise in the unemployment rate will without a doubt lead to a ratcheting up in forecasts for where that number will peak. Indeed, that we will eventually surpass the 11% mark sometime next year now looks like a foregone conclusion. The leading indicators of the employment market (mainly jobless claims and hours) have yet to show any marked improvement. For all the talk of the downturn in the trend of initial jobless claims, continuing claims remains near all-time highs. Indeed, those folks in state and federal programs still total around 9 million and this metric has merely moved sideways in recent weeks.
The monthly drop in aggregate hours worked is also ominous. Historically, the annual rate of hours has bottomed and bounced sharply as the recession comes to an end. This data point remains well in negative terrain on an annual basis and has shown little improvement on a sequential basis to boot. We know much has been made about the increase in temp employment but this is only a good leading indicator of employment activity if the pace of job declines in other sectors slows significantly - something that has yet to happen.
Fundamentally weak labor markets in the US suggest a market that will trade in choppy fashion into year-end at best, and much lower at worst. Keeping in mind recent inter-market correlations that are unlikely to break over the next couple of months, a major stock market correction would still favor USD and JPY the most. This also makes for a sideways USD/JPY market so selling other yen crosses on rallies makes more sense.
Key data and events to watch next week
The United States calendar is on the light side in the week ahead. The NFIB business optimism index and the IBD/TIPP consumer sentiment indicator kick things off on Tuesday. The usual initial jobless claims, oil inventory numbers and monthly budget statement are on deck Thursday while Friday rounds out the week with the trade balance and the University of Michigan sentiment index.
It is not terribly busy in the Eurozone either. Monday starts the action with French business confidence, German trade and German industrial production. The German ZEW economic sentiment survey, French industrial production, German consumer prices, and the Eurozone ZEW survey are all up on Tuesday. Friday closes out the week with Eurozone GDP reports. Look for the Eurozone Finance Ministers meeting starting Monday evening CET and continuing on Tuesday - remarks on currencies are always possible.
The economic calendar in the UK is heavily weighted to early in the week. Tuesday has the BRC retail sales monitor and the trade balance on tap while Wednesday brings the employment report and the Bank of England's quarterly inflation report.
Japan has a characteristically light week. The trade balance will be important to watch on Monday while machine tool orders are the highlight Tuesday. Friday rounds out the week with industrial production and consumer confidence.
Canada also has a limited amount of events lined up. Housing starts are due on Monday while new home prices are up on Thursday. International trade and new motor vehicle sales close things out on Friday.
It is pretty busy down under. In Australia we'll see home loans on Monday, business conditions and consumer confidence on Tuesday, and inflation expectations and the employment report on Thursday. New Zealand has credit card spending on Monday and retail sales on Wednesday
Monday, November 2, 2009
Bearish Regular Divergence – price makes a higher high while the oscillator makes a lower high. This is a warning or indication of a potential impending bearish reversal after an uptrend.
Bullish Regular Divergence – price makes a lower low while the oscillator makes a higher low. This is a warning or indication of a potential impending bullish reversal after a downtrend.
Bearish Hidden Divergence – price makes a lower high while the oscillator makes a higher high. This is a warning or indication of a potential downtrend continuation.
Bullish Hidden Divergence – price makes a higher low while the oscillator makes a lower low. This is a warning or indication of a potential uptrend continuation.
Thursday, October 29, 2009
The Euro edged higher in early Europe on Tuesday, but was again unable to make much headway with resistance below 1.4850 and was subjected to renewed selling pressure during the day.
German consumer prices provisionally rose 0.1% for October which was in line with market expectations and did not have a significant impact on currency rates.
The US durable goods data was broadly in line with expectations with a 1.0% monthly increase and an increase in capital spending provided some limited optimism over the manufacturing sector.
In contrast, the housing data was weaker than expected with new home sales declining to an annual rate of 402,00 from a downwardly-revised 417,000 the previous month. There was a drop in inventories for the month with the number of un-sold homes at the lowest level sine August 1982. Nevertheless, there were further fears over the housing outlook, especially with tax credits for first-time purchases due to expire during November.
Risk appetite deteriorated again following the housing data as Wall Street dipped significantly with particular pressure on the Nasdaq index. In response, the Euro weakened to lows near 1.47 during the US session.
There was some further speculation that the Federal Reserve will tighten its policy rhetoric at next week’s FOMC meeting which provided some dollar support. The Fed will need to tread a very careful path as it will remain very sensitive to a rose in bond yields and currency volatilities are liable to increase.
The trend of a firmer Japanese yen persisted on Wednesday with Asian equity markets weaker with the dollar retreating to 91.20 while the yen also recovered to a 1-week high against the Euro.
The Bank of Japan will announce its interest rate decision on Friday and there is a possibility that they will announce a timescale for removing emergency corporate funding measures, although a further delay is the more likely outcome, especially with pressure from the government. Further evidence of policy tensions between Finance Ministry and central bank would tend to undermine the yen to some extent.
As global equity markets came under further pressure, the yen strengthened to highs near 90.50 against the dollar and also secured a renewed advance to beyond 134 against the Euro.
Sterling again found support below 1.63 against the dollar during Wednesday and secured a significant advance in US trading with a peak above 1.6450. The main catalyst for the move was a sharp Sterling advance against the Euro with some stop-loss Euro selling once there was a break of the 0.90 level.
There were no significant economic data releases during the day and Sterling was surprisingly resilient when global stock markets were subjected to renewed selling pressure. Any renewed stresses within the UK banking sector would tend to undermine the currency.
There will be further uncertainties over monetary policy ahead of next week’s Bank of England policy decision. Sterling is in a better position to gain protection from a lack of confidence in other major economies rather than any great optimism over the UK outlook.
The dollar found support below 1.02 against the franc on Wednesday and strengthened to a high around 1.0270 during New York trading. The Euro drifted back to near 1.51 against the Swiss currency which will inevitably result in fresh speculation that the National Bank will intervene to prevent further franc appreciation.
The bank will certainly be on alert, but it is also likely to be cautious, especially as they will not want to get locked into a pattern of defending specific levels.
The franc will still tend to gain some defensive support when there is a deterioration in risk appetite.
The headline Australian consumer inflation data was marginally higher than expected with a 1.0% increase in prices for the third quarter, but the data was not strong enough to trigger increased expectations of a 0.50% interest rate increase at next week's Reserve Bank meeting and this curbed Australian dollar support as at least a 0.25% increase is already priced in.
Risk appetite was also generally weaker which encouraged profit taking and there was a low near 0.9070 in Asia. The Australian currency was subjected to renewed selling pressure as Wall Street weakened and there was a slide to lows below 0.8970 during New York as the break of 0.90 triggered stop-loss selling.
Monday, October 26, 2009
1. No Inherent Conflict of Interest. Non-dealing desk brokerage firms do not trade against their clients. As facilitators of trading, they do not take positions that may from time-to-time conflict with the interests of individual traders.
2. Market Access. Non-dealing desk brokers offer every trader, big and small, equal access to the interbank market. The rates (bid and ask prices) on a non-trading desk platform are not those set by an individual broker but those derived from active trading between participating banks, institutional investors, FCM's and individual traders. The process itself makes every trader regardless of size an independent market maker.
3. Anonymity: Trading is done in total anonymity - the non-dealing desk broker does not know or have a need to know your positions so stop loss orders are not/cannot be targeted for takeout when a broker has a need to meet liquidity requirements.
Note: There is a growing suspicion that dealing desk brokers spike rates to take out trades when it suits their purposes. An insider a friend of mine talked with recently, a key programmer working for a dealing desk brokerage firm on the East coast, acknolwedged that brokers spike rates of up to 10 pips on a routine basis and for a variety of reasons. Whether used to fill unbalanced trades, leverage the broker's own account, or to meet immediate liquity requirements, spiking is a fact of life and difficult to prove. Sooner or later he believes the NFA will find a way to document the practice, but until then a lot of dealing desk brokers will continue to manipulate rates to their own advantage. At this point, they don't have any compelling reason not to.
4. Pricing Intervention (Bias). Non-dealing desk broker rates as well as bid/ask prices come directly from the interbank system. They are not filtered or otherwise manipulated to maintain established (undisclosed) profit margins or spiked by the broker to gain a trading advantage.
5. Reorders. Non-existent. Traders never get "reorders" from a non-dealing desk because they serve no purpose - the broker has nothing to gain or compensate for.
6. Full Disclosure. The non-dealing desk broker's fees are limited and clearly disclosed.
7. Transparency. No mind games. What you see is what you get.
1. The Cost of Trading: A large number of traders still believe that there is such a thing as commission free trading , a myth that continues to be perpetuated by a large number of dealing desk brokers. Make no mistake, the so-called "commission free" broker generates a transaction fee every time a trade is executed.
The difference is that the non-dealing desk fee is fully disclosed; the dealing deak broker's "fees" are not. What's more, the dealing desk's offer of fixed spreads also affects the individual trader's profitability because he/she is locked out of trades when market spreads drop below the broker's fixed differential. Instead of executing a market order, the broker responds with a reorder which guarantees that broker a fixed, undisclosed profit while at the same time depriving the trader the opportunity to take maximum advantage of a pricing move.
2. Spreads are Variable, Not Fixed. The Forex is an extremely fluid market. Spreads are in a constant state of flux and when traders trade through a non-dealing desk, they may see a dozen or more banks posting rates - the most attractive appearing above all the others.
During peak trading hours, spreads can drop to zero, a fact most traders using a dealing desk are not aware of. During off-peak hours, spreads can be considerably higher.
Non-dealing desk brokers don't offer or execute trades based on fixed spreads. They charge a nominal transaction fee. Such is not the case with the dealing desk broker. Whether interbank spreads are high or low, they just boost their rates to guarantee the profits they have imputed in their fixed spreads. They also generate an undisclosed amount of income trading against their trader clients.
On Sunday, November 22, FXCM LTD will be making changes to existing margin requirements for all account holders.
Margin requirements will be increasing, particularly for currency pairs with EUR or GBP as the base currency. FXCM’s experience in Hong Kong, where significantly lower leverage levels (higher margins) are mandated by law, suggests that trading with lower leverage may assist clients in trading more successfully over an extended time period. The new margin requirements are intended to reduce risk by restricting traders from using excessive leverage.
Below, you will see the a comparison of the present USD margin requirements* for some of our most popular currency pairs next to the new USD margin requirements that will take effect on November 22.
NEW MARGIN REQUIREMENTS — USD DENOMINATED ACCOUNTS**
CURRENT USD MARGIN*
NEW USD MARGIN
USD/JPY AUD/USD (most USD based pairs)
EUR/USD EUR/JPY (most EUR based pairs)
GBP/USD GBP/JPY (most GBP based pairs)
VARIABLE BY PAIR
VARIABLE BY PAIR
*CURRENT USD MARGIN IS BASED ON AN FXCM LTD 10K STANDARD ACCOUNT WITH 0.5% MARGIN. If you have changed your default margin to be above 0.5%, your NEW margin amounts will be higher. Please consult our FAQs for details.
Based on price fluctuations, all margin requirements are subject to change without notice and will be adjusted up or down in increments of $10 for USD denominated accounts. At present, FXCM does not anticipate that margin requirements will have to be changed more than once a month. Up-to-date margin requirements are and will continue to be displayed in the “Simplified Dealing Rates” window of the trading platform by currency pair.
- All positions and orders established after November 22 will be subject to the above margin requirements.
- Additionally, open trades and active orders initiated prior to November 22 will also be subject to the new margin requirements.
Why Lower Leverage Is Important
The combination of high leverage and volatile currencies can be extremely dangerous. Accounts that trade volatile pairs, such as GBP/USD and GBP/JPY, with the maximum amount of leverage tend to have less positive performance. On the other hand, traders that focus on less volatile currency pairs, such as USD/JPY and AUD/USD, and use more conservative leverage may benefit from the reduced risk that accompanies trading on lower leverage. When trading volatile currencies with high leverage, one bad trade can wipe out the profits from many good trades. By trading with less leverage, a trader can reduce the risk of a big drawdown from one bad trade.
Monday, August 31, 2009
For obvious reasons this is often called an "M-top". The market is failing twice at a resistance and is reversing then sharply. A break of the support would indicate further losses towards the target that can be evaluated through the following procedure. The vertical width of the "M" (price difference) is projected downwards from the breakpoint of the support.
2. Double bottom (reversal formation)
The opposite of Double top. (often called an “W-top”). When the market is failing twice at a support and is reversing then sharply. A break of the resistance would indicate further rising towards the target that can be evaluated through the following procedure. The vertical width of the “W” (price difference) is projected downwards from the breakpoint of the resistance.
The triangle formation can be quite difficult to analyse and the fact that a few different types of triangles exist doesn't make this task any easier. Furthermore a triangle is most commonly just a pause in a trend (continuation pattern) but can also terminate a trend (reversal formation).
4. Head and Shoulders
Formation of left shoulder forms a new high with a corrective dip, next rally forms higher high = head, correction from head goes below high of left shoulder and near as low of the left shoulder correction, breaching up trend line, rally of right shoulder does not breach head high, retracing half to three quarters of head correction..