Tuesday, May 10, 2011
•British Pound Traders May Make Up for the Lack of BoE Reaction with the Quarterly Report
•Euro Once Again Pacified by Empty Words of Stability from Officials, Poor Greek Auction
•New Zealand Dollar Under Greater Pressure after RBNZ’s Bollard Agrees with IMF
•Canadian Dollar Borrows Inspiration from the Rebound in Oil, Looks Ahead to Trade
•Australian Dollar Doesn’t Fear the Withdrawal of Stimulus Like the Pound Does
•Gold Advances at a More Controlled Pace as Investors Await Dollar’s Fate
Dollar at High Risk of Reversal Unless Aggressive Euro Selling or Risk Aversion Kick In
The impressive climb the dollar was able to manage last week has fully stalled. What we need to determine now is whether this lack of momentum is merely a period of consolidation or the beginning of a revived selling effort. Looking back to the genesis of this counter-trend move (there is no doubting the bearish intentions of the market since the year began), we were coming up short on the primary fundamental drivers. Though there are literally millions of potential catalysts for the dollar, a meaningful trend will really only come through specific developments. It so happened that the advance began with a tame retracement in investor sentiment that saw the S&P 500 pull back from multi-year highs. Playing to the safe haven appeal of the greenback is one of the few sure-fire ways to encourage the currency higher. However, by Thursday, the burden of momentum shifted over to the aggressive unwinding of the euro; which benefits the dollar by virtue of EURUSD representing the most liquid currency pair if the FX market. Given the conviction in the euro selloff; it was easy to overlook the fact that sentiment trends were staring to rebound. Therefore, when the run against the greenback’s primary counterpart tapered, we would be left to the same lackluster fundamentals.
In addition to a notable euro bounce this past trading session, the dollar would also confront the S&P 500’s biggest rally in two weeks. When yield appetite supersedes doubt over uncertain risks, the record low yields on the dollar and ample speculative liquidity pumped in through stimulus will quickly put the greenback under pressure. Yet, we need to keep a close eye on conviction behind the build in risk appetite and the dollar’s position as a funding currency. Optimism itself, is proving harder and harder to generate and sustain. With this week’s recovery, we should note that the benchmark equity index’s climb sees volume is still running at exceptionally low levels following the second lowest level of turnover noted this Monday. As for the dollar’s role as a safe haven, the role is still well-engrained; but we are quickly coming to the June expiration of the $600 billion QE2 program. Richmond Fed President Jeffrey Lacker made note of this fact Tuesday when he commented that stimulus should be withdrawn after the facility matured. And, offering a more definitive hawkish tone, he went on to say the central bank risks “losing ground on inflation” and it was better to act “preemptively” on price pressures. We’ll look to see whether Kocherlakota can keep up the hawkish speculation in the upcoming US session; but don’t expect it to offer the dollar much reprieve.
Data out of China overnight has failed to materially influence price action on Wednesday thus far, with risk appetite remaining intact despite some higher inflation and softer retail sales and industrial production out of one of the world’s fastest growing economies. The Australian Dollar which is highly correlated to China, has in fact rallied on the day back above 1.0850 thus far. Meanwhile, both the Yen and Franc are finally starting to show signs of basing, and we could see these currencies start to sell of more aggressively over the coming sessions. We contend that even in a risk negative environment, both the Yen and Franc stand to lose ground with both currencies trading by record highs and due for a major trend reversal. Some softer inflation data out of Switzerland on Tuesday certainly helps our argument.
Looking ahead, the Pound will come back into focus in Wednesday trade with the highly anticipated Bank of England inflation report due out, along with some other key data in the form of UK trade. Other important data releases on the day include German inflation and US trade. On the official circuit, ECB’s Mersch, Bini-Smaghi, Stark, and Orphanides are slated to speak along with Bank of England Tucker and Fed’s Lockhart, Kocherlakota and Pinalto. US equity futures and oil prices are flat while gold tracks moderately higher.
Thursday, April 21, 2011
The Manufacturing Index of the Philadelphia Fed tumbled from 43.4 in March to 18.5 in April, while it was expected to go down to only 37.1. The index shows that the manufacturing still expands, but much slower. The unemployment claims decreased from 416,000 to 403,000 last week, while forecasts promised more optimistic value of 394,000.
There was some positive data too. The leading indicators rose 0.4 percent in March, following the 1.0 percent growth in February. Analysts expected an increase by 0.3 percent. Nevertheless, the unexpected slowdown of the manufacturing growth is a very troubling sign as this sector was of the strongest in the US economy.
EUR/USD was at 1.4556 as of 23:50 GMT today after it jumped from 1.4521 to 1.4647 earlier. GBP/USD went up from 1.6407 to 1.6519, while USD/JPY dropped from 82.55 to 81.90.
The UK retail sales increased by 0.2 percent in March on month-on-month basis, following the drop by 0.9 percent in February. This report surprised analysts, who expected a decrease by 0.5 percent. The public net borrowing was £18.6 billion, in line with forecasts.
You-na Park, a currency strategist at Commerzbank AG, explained the potential changes of the interest rates:
We have speculation about a Bank of England rate hike this year, maybe in the middle of the year, but the Federal Reserve will probably keep its expansionary stance and we expect the first hike only in the beginning of 2012. The BOE will probably begin its tightening this year so the pound is able to gain against the dollar.
GBP/USD traded at 1.6515 as of 2:30 GMT today after it jumped from 1.6407 to 1.6520 yesterday. EUR/GBP traded near 0.8810, following the drop from 0.8848 to 0.8806 on the previous trading session.
Tuesday, December 15, 2009
Ranked FRWC Robot At 70.95% Profjt In Only 11
Many of my subscribers have been steadily following the
Forex Robot World Cup (FRWC)...
Just a small re-cap for those that haven't:
The FRWC was created with the objective of finding the
best NON-COMMERCIAL Forex robot in the world through
a competition based on solid and transparent rules.
What does non-commercial mean? Simple, robots that are
not being sold or marketed anywhere but are solely used
by their developers.
Hundreds of independent robot developers from all over
the globe joined the FRWC to compete for the #1 Prize...
Now... the competition has two phases, the qualification
phase and the live (real money) trading phase.
On December 1st 2009 the live trading phase started with
24 robots from the 329 submitted during the qualification
phase (which lasted over 2 months!)
Yes... ONLY 24 robots!
Why so few? Simple, the FRWC's qualification rules are
They were devised with the sole objective of truly having
the best of the best compete... robots that did not just
have the potential for good results over a short period
...but robots that can be consistently profitable over the
You can view the live (real money) results of the 24
competing FRWC robots here (updates every 15
minutes during normal market hours):
By the way, you will also be able to view each robot's real
money, live account statement so you can see each and
every trade it takes as the competition progresses.
It is truly exciting to finally see an event designed to
separate truth from hype.
Let me explain...
Once the live phase of the FRWC is over, the winning robots
will be available for purchase (in very small quantities).
This means one simple thing:
THE END OF B.S. ROBOTS IN THE MARKET!
Once and for all, FX traders will be able to lay their hands
on true, PROVEN money and pip-making FX robots.
No marketing hype... no cheap sales pitches... just the
natural outcome of the most important automatic FX
trading competition which YOU can follow live AND
verify on a daily basis:
By the way... it's been just 11 days since the live trading
phase started and the leading robot is already at 70.95%
We don't know about you but we have been (and will be)
following this thing on a daily basis :-)
Wednesday, December 9, 2009
Here is a complete checklist to determine the most important aspect of money management, position sizing:
1. What is my account balance? $4234.58
2. What percentage of my account balance will I be risking? 1.0%
3. What is my stop loss on this particular trade? 50 pips
4. What currency pair am I trading? GBP/USD
5. How much is a pip worth on a 10K (mini) account? $1
6. CALCULATION What is my dollar risk amount? (Account Balance x Percentage Risk) $42.35
7. CALCULATION What is my position size (Dollar Risk Amount x 10000) ÷ (Stop Loss x Pip Worth)
It’s up to you to determine what percentage of your account balance that you want to risk. I’ve heard traders risking from 1.0%-5.0% per trade. I risk no more than 1.0%. It’s important to determine what your stop loss will be before continuing with the checklist. None.
This is the hardest to determine by hand with the exception of currency pairs with the USD in the quote currency such as the GBP/USD, EUR/USD, and AUD/USD. These currency pairs always have a pip worth of $1 on a 10K (mini) account. Take the account balance and multiply it by .01 (1.0%), .02 (2.0%), etc. to obtain your dollar risk amount. This is the most important calculation. Do it right.
EXAMPLE #1 (Answer questions 1 - 7)
USING A CALCULATOR-> ($4234 x .01) = $42.35
USING A CALCULATOR-> ($42.35 x 10000) ÷ (50 x $1) = (423500) ÷ (50) = 8470 units
What you might be thinking… I can only trade a mini-lot which is 10,000 units. This is more than my calculated position size. This means that you are under-capitalized. You need more capital to trade mini-lots. Another option is to use a variable-lot size broker like Oanda where you can specify 8470 units. Another option is to risk a smaller percentage per trade (use 0.5%.)
EXAMPLE #2 (Answer questions 1 - 7)
USING A CALCULATOR-> ($10582.26 x .02) = $211.65
USING A CALCULATOR-> ($211.65 x 10000) ÷ (75 x $0.8829) = (2116500) ÷ (66.22) = 31962 units
In this example, you could enter a trade in the USD/JPY with 3 mini-lots or 30,000 units. If you have a variable-lot size broker like Oanda, you can enter a trade with 31,962 units. There may be a better or quicker formula for calculating position size. This method works but if you know of a more efficient way, let me know. FYI if this is a bit complicated for some of you, no need to worry as the forex megadroid software automatically trades with conservative settings, but risk automatically increases as the account coutinues to grow. The URL for this automated trading platform is:
http://forextradingexpert.mirrorz.com/. The above method is moreless for manual trading strategies.
Monday, December 7, 2009
Forex megadroid (http://forextradingexpert.mirrorz.com/) is, in fact, a great trading tool. It is a full automated system, which makes you able to make trading as your secondary source of income. With Forex megadroid, you do not need to sit on the computer through out the day. You just need to fix the settings and then it will do trading on the behalf of you. The main purpose of this system program is to automate the Forex trading system. It has the ability to make the work easier for a trader by providing assistance to them in analysis and trading matters. Even if you are not near to your computer, you can earn a lot of profit. This system is very easy to operate. You can easily download and install it. Hence, you can say that this automated system is user friendly.
You can run this software as long as your computer system remains on. For this, you must have to be connected with net and keep your system on throughout the day that is not possible. For this, what you can do is simply to get a subscription of some remote server that has the ability to trade on your behalf. Now, you are no longer bound to monitor the each and every day. forex megadroid performs this task on your behalf. This Forex trading system software offers you money back guarantee of about 60 days. If you feel satisfaction with its requirements, you can continue it. If it does not meet your requirements, you can return it back and refund your money. Therefore, it makes trading easy for newcomers. Moreover, you can start trading with initial investment of just $50, which is quite reasonable. Due to the above mentioned reasons, we can say that, forex megadroid makes the trading process so much easier. Even a new trader can make his money double by using it.