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FOMC fed USD interest rates
Posted on 16 Sep at 14:58 by AdrianWS
As we all know, the US economy is performing well to all accounts. And as such, the FOMC are going to be considering raising interest rates in the not-too-distant future. Right now, as I type, the futures market for the Federal funds rate sees the first hike at some date between Early June and September.


So that puts us roughly 9 months from the first rate hike from the Fed. The 1st in many, many years. Many junior traders and investment managers who started their career in 2007, have never seen a Fed hike - and these are the people who will now be managing directors or Portfolio managers at sizeable hedge funds. While looking at historical charts of how various assets respond to hikes is one thing, actually trading it is another. Typically a Fixed income manager will look to buy USD-denominated, short duration bonds during a hiking cycle, so as to protect themselves from the MTM impact of higher rates.

In FX, typically higher US rates act in multiple ways to benefit the USD;
  1. Higher interest rates serve to decrease (in theory) inflation, and as such, real interest rates rise leading to a high USD
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Today, I would like to share one of the trade management strategies which I like most. I have been testing this management quite a long time and in my opinion is one of the most powerful tools in trading. Trade management as a part of the risk management is highly related with trading style and ability to hold good decisions in various time frames. This setup is highly recommended for long term traders or investors but in fact, there is no limitation to use it even during the high volatile days at single trading session.

Small curiosity – Many of huge institutional futures traders with lot of money and thousands of lots in positions trades the same way especially during the trading sessions with clear direction. In fact, there is causality between their trades and direction of the day, because they are key market movers. You can see it in a Depth of market (DOM) if you are familiar with reading of orderflow. So let’s take a look what this is all about.

Same picture for all of us

Let’s say that we have a guy who strongly believes that AUDNZD rate has a huge potential to rise. It is a beginning of the year and our guy sees picture like this front of him.

No matter what analysis…
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Graphic patterns.
Technical analysis uses a variety of methods of analysis of the trend, one of them are graphical models, called patterns.
In fact, these figures there are at least a dozen, but the main is considered to be the following:
  1. Double Top Double Bottom.
  2. Triangle.
  3. Flag.
  4. Head and shoulders.
Patterns are determined by the schedule, has some similarities with their names. For example, the silhouette of the flag on the chart really reminds fluttering banner. However, a close resemblance is not enough, each figure has its own rules of formation.
Consider in greater detail.
Double top and double bottom depending on the type of trend - are reversal patterns. This means that after their formation probability of a change of trend is much higher than the probability of continuation of the previous movement.
Double top watch on an upward trend:

As you can see from the graph, after the formation of the figure the price breaks through the support line and a downward trend becomes. Potential movement after breaking the support level is usually equal to the pattern from top to bottom.

Double bottom can be seen in a downtrend, and its properties, the figure opposite
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SERIES 1 No. 2
A Superior Strategic Edge: Inter-Market indicator (IM-I)
By Gino Roverssi


INTRODUCTION

After reading several books about inter market analysis, I realize there was a common denominator in most of them. The majority of authors wrote: “Sell when the markets go bearish and buy when the markets go bullish. Clearly that’s sound logical, but to really understand what they were trying to say we need to define what the market is.

We can define The Market as a set of 4 major markets. First the FX Market or Currency Market, second the Commodity Market, third the Equity Market and fourth the Bonds Market. The sum of these is called the Market. These Fourth Markets are interconnected. What does interconnected means? Well the Merriam-Webster Dictionary definition is: “having internal connections between the parts or elements”[1]. This definition is a key element in understanding market relationships, in simple words you could say anything that happen in one market will affect the other and vice versa.

Then we can say, “If FX, Commodity, Equity and Bonds are bearish then every asset in those categories should begin a bearish cycle within its own price action”. [/1]…
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Introduction


“Should Scotland be an independent country?” This will be the question that the Scottish citizen will be answering through a referendum on the 18th of September 2014. Though the question seems simple, the effects are far reaching.

This article will take a look at the impact that this event will have on the financial markets, in particular the GBPUSD and the FTSE100.

Background

Scotland was an independent country until the 1707 Acts of Union, which united Scotland with England and latter Wales in the Kingdom of Great Britain. Following the 5th of May 2011 parliamentary election the Scottish National Party (SNP) gained a clear majority and a mandate to govern until the next election in 2016. After wide-ranging consultations on the independence of Scotland, the Edinburgh Agreement was signed October 2012 by First Minister Alex Salmond and Prime Minister David Cameron. The Agreement ensures that the Scottish Parliament will deliver a referendum on Scottish independence that meets the highest standards of fairness, transparency and propriety. On March 12, 2013 when the Scottish Independence Referendum Bill was introduced to the Scottish Parliament to extend the fr…
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I personally started trading EURCHF pair after Swiss National Bank intervention on September, 6 2011. At that time I was new forex trader and for me it was epic move. The exchange rate of EURCHF skyrocketed from 1.1018 to 1.2187 in just 3 hours, which is 1169 pips move as you can see on figure 1. Many traders lost or made really lot money thanks to this event.

Figure 1. EUR/CHF Hourly chart. Swiss National Bank Intervention in 2011


Yesterday it was just three years from SNB annoucing 1.2000 floor and market wasn´t able to break this floor as you can see on figure 2. The main question for me right now is, will SNB protect 1.2000 level this time? Will be or will be not market able to break this level in medium term perspective? What are the risks in current market situation?

Figure 2. EUR/CHF Weekly chart. Situation after SNB intervention.


Technical analysis of EUR/CHF pair

Current market exchange rate is 1.2063. The most important level to watch is 1.2000, which should be protected by Swiss National Bank, many retail traders and big players, so the best level, where to put stop loss to protect capital is under level 1.2000. For my trading style is ideal level 1.1970, which is …
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Despite Simple and Clear like Crystal. Not many traders know about this simple trading method that may turn you from poor to rich or from rich to more rich. Some know about it but have no patience to hold on their positions for long term in order to see profits accumulating.

What is a Central Bank Peg about?

It is a policy central bank of a country applies to its currency exchange rate. It is also known as fixed exchange rate.
It is the maximum price the currency pegged can't get overvalued against the another currency.
It helps in stopping inflation and holding interest rates.

I'm not going to further explain it in detailed Forex language, but plain one as it can be traded by any person even if not a market trader.

I'll explain it in pairs examples to make it more clear for all.

USDHKD is a pair pegged by the Hong Kong Central Bank at 7.75, price can go above this level as much as it likes but must not break and trade below it!

EURCHF is a pair pegged by the Swiss National Bank at 1.20, price can go above this level as much as it likes but must not break and trade below it!

There are other types of pegs like was for USDJPY. The pair was not pegged by the Bank Of Japan.

Aft…
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I won 4th place in the June Binary Options Trading Contest. This was my first month of participation in the contest. I traded for a total of three days and made a profit of $19,032. After winning the 8th place in the January Trader Contest, I wrote this article that shows how I did it. Continuing in the tradition of sharing, in this piece I will again give away some of my ‘’secrets’’.



1. Have a view and stick to it

Have a view and stick to it. Just like in regular trading, to get anywhere with binary options you got to have a plan. I mostly trade on price action. For others, their system may involve following the longterm trend signalled by the 50 simple moving average. There are literally hundreds of different ways to trade the market and going over them is beyond the scope of this article. Here I will focus on how to trade binary options and more specifically about how you can maximize your odds of winning a prize in the Dukascopy Binary Options Contest.



As you can see on the pic above, I made all my gains of over 19K in one day, June 19th. If you look at a chart of June 19th, the day wasn’t particularly exciting. The total daily range of the Eur…
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The Dukasopy Forex Community is a great forum for meeting some very cool and interesting people. With several contests and lots of cash prizes to be won monthly, there is a lot of creativity at display in the community. From the beautiful, sassy contestants of the Miss Dukascopy contest to the analytic minds of the trader and strategy contestants; there is hardly a dull moment in the community.

Personally, I believe I have become a better trader simply by interacting with some of the members of the community. In this large and rapidly-growing community, there are certain members who stand out. These members have shown skill and mastery in several contests; they have also been amply rewarded with great cash prizes. They are generally referred to as "Community Stars".

For the next couple of months, I am going to be doing profile pieces on some of these members, and hopefully give them an opportunity to share with us the secret of their success.

"When you're around enormously successful people, you realize their success isn't an accident - it's about work".
Ryan Tedder

Michael Jordan is one of the greatest basketball players that ever lived. If you ever watched any of his game…
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Introduction


Technological advancement has not been kind on a number of businesses. A few examples that come to mind is how Kodak was affected by digital cameras and smartphones, snail mail was made redundant by e-mail and the impact of WhatsApp and other instant messengers on SMS and mobile telecommunication revenues. A mobile telecommunications operator who would have stuck to voice and SMS only will sure be running into bankruptcy now despite having registered huge success in the 1990s. As technology advances, businesses should adapt quickly to ride on the wave otherwise they will be no place for them.

Today the evolution of cryptocurrencies is in its infancy and a lots of businesses such as online stores, departmental stores, multinational financial services companies such as VISA and Master card, banks and central banks should be well equipped to deal with this emerging threat and capitalise on the opportunities presented. Bitcoin may not be a perfect currency now but as time goes by the concept will surely be perfected and made more secure and acceptable, this will surely revolutionize how the payment system operates.

Bitcoin in brief

By definition Bitcoin is a d…
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Best Choices to Handle with Loser Forex Positions
Introduction:

After minutes of opening position in Forex, the position will either be profitable or loser, you will see your equity increase or decrease according to position. opening a trade in the market of Forex is very easy and simple but sometimes the pair move against your trade or Simply your position make looses instead of profits and this is great test for your profession and strategy.

From profitable to loser trade:


Generally, any one open a trade it may go against his/her favor and then it would decrease the equity of account. Losses may deepen if your stop loss is set far from entry or according to your exit strategy. Sometimes, the trade may convert from profitable to loser or the opposite in minutes or seconds especially at the time of strong data.

Loser positions adverse effects :

When a trade begin to make losses our adrenaline work and adversely affects our physiological and emotional behavior and this an enemy for any trade, but all of this depends on trading profession and experience, below the common adverse effect of a loser trade posit…
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Using the Three Wide Candle Pattern on the Four Hour chart

In this Article I would like to share with you a profitable strategy that I have been using in my Live account,
and that can also be a very interesting technical trade setup for Contests.

The buildup of this Article is as follows:

  1. Introduction
  2. The Technical setup of the Strategy
  3. Examples of the Three Wide Candle Pattern strategies

I hope this Article will help you make some money on the Forex Markets and/or improve your Trading Arsenal

Introduction

This Strategy: A Technical indicator setup for Trading on the 4 hour charts, is a profitable way of trading on the Forex Markets for me,
and is something that I have been using for Trading in my Live account the last few months
It has helped me make some money, and it is a relatively easy strategy to set up, while the results can be great!

The Strategy works with all pairs, and is an Intraday Trading tool, because we look at the 4 hour charts
The Trades typically last between 1 and 5 days, and if the setup is executed correctly, the average profit is around 100 pips
In my case I have found that 60-80 % of the trades are successful, again - if the setup is executed correctly.
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Today I will write very personal article for me. I think that we need to share our experience on market, if we are real traders.
I am sure that most of those who will read it, will do not understand me, and my action, and will say - "You're an idiot!". Anyway, I honestly will tell you about it.

August 20, 2012, had very little time to 13 September 2012, when QE3 was launched in the United States, and Eurozone debt crisis would be finished. Two events, after which the dollar began its non-stop fall down. At that time, I had some problems in my life about which I will not talk in this article. Let me just say that I was very angry at the whole world, and even on the market, although it is very silly.

The market does not know anything about our existence, it does nothing to spite us. In all our losses we must blame only ourselves. I understand it now, and I knew it at the time. However, I went on principle. I decided that I could beat the market. I decided that I could be more stubborn than the market. And August 20, 2012 I made short EUR/USD trade, at the 1.2459 level. As I recall, take-profit was only 1.2409, just 50 pips. And I did not use stop-loss. I decided that I was g…
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In the second part of the story will be about the levels of support and resistance. This is all my personal achievements, which I did during my training. Any indication of the only levels I hope you article will help in this case is not easy forex trading.
Support and resistance levelsAt these levels, changing the distribution of buyers and sellers, as the price dictates the supply and demand ratio. Recall the law:
"If the desire and ability to buy exceeds the supply in the market, the price increases. In the reverse situation, when the sentence above demand, the price will go down. "

Does not really react to price support and resistance levels, and traders. The big players just concentrated on them their orders, waiting for the price breaks the next frontier. In this case, the levels are reversed.

If one day the majority of the big players decide to urgently close a deal to buy and start selling, the market will fall sharply. Thus, it becomes clear that these levels do not affect the situation in the market, but rather demonstrate the balance of power.


Next we will focus on the false breakouts and rebound.
Sooner or later, the market is changing. Price, pausing in the chan
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I'm sure that most of you guys are exasperated about the current never-ending low volatility environment(see Figure 1) as current market conditions has become increasingly challenging. The Forex Exchange market has been in a very deep sleep for the most part of this year and swing trading opportunities have vanished away and that's one of the reasons why in current low volatility environment the Carry Trading Strategy are preferred more as it makes sense that investors who are chasing yield to rush in and park their money with high yield currencies in seek for return, you can read more about this in my previous article here: Carry Trade Returns

Before going any further we need to define "Volatility", and the way I like to look at it is from two key perspective:
  1. How many times it moves(up and down) in a given period of time --> Frequency.
  2. How faster and bold is the move-->Severity.
In this regard the best definition of volatility I found it to be:"Volatility refers to the frequency and severity with which the market price of an investment fluctuates."

Figure 1. JPMorgan global-currency volatility index.



[list]
  • Why is Volatility so Low
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