Verbal stance as a viable tool of monetary policy is described. Immediate risks of rate hike for leveraged financial institutions are outlined. The root causes of sovereign debt crisis in Europe are outlined. The future course of Fed`s actions on interest rates is proposed; the feasible downsides of such policy for USD are put forward.
The unconventional measures deployed by the Fed in the wake of financial crisis of 2007-09 were initially sold to public as transient means to enhance liquidity in the markets and prevent total collapse of banking system in the US. While some programs, implemented by the Fed, were transitory – TARP, TALF, CPFF etc. were unwound at some point, the main tool of monetary easing – the fed fund interest rate is being kept intact at 0.25% for over 5 years. This Fed`s persistence, inexplicable by any traditional arguments, raises pertinent questions from general public, forced to forgo risk-free return on its savings, and provides endless fodder for financial commentators, speculating on the future course of Fed`s actions.
Verbal stance – essential tool of monetary policy
In current conditions of artificially depressed interest rate…
We have been witnessing a strong bear market in the gold correcting from 1910 in 2nd quarter of 2011 to the recent low of 1180 which was quick $730/oz or nearly 40% correction in flat 2 years which is a sharp correction. Now the question arises is will it stop here or how much more will it correct. I am trying to present the scenario with daily and weekly charts. I am using the trendlines, Fibonacci retracements, RSI for my supporting the bull side in my analysis.
First look at the daily chart and apply the Fibonacci retracement. Applying it from the closing low of 2008 and the high in 2011, gold is retraced up to 50% and as the chart suggests, it’s taking a strong support at that level i.e., $1180/oz zone it tested those levels in July and December 2013 and also this month. Every time it’s reaching those levels we are seeing a strong volume up wards.
On the weekly chart we are witnessing previous downtrend resistance trend line is acting the support trend line for the gold. The lagging indicators Exponential Moving averages of 50, 100 and 200 are currently in sell mode. Where as the leading indicator RSI is currently showing a positive divergence and also suggests over…
Fear and confidence are two of the most used words when it comes to the markets. This is no coincidence given that they the two most important drivers of the markets. Whilst trade account for some movement in the markets, it cannot be accountable for the larger violent movements.
Of course if a Canadian business owner needs to purchase materials from Japan the conversation of currency will register within the markets however this won’t be enough to drive price, not in the same way that fear can! Fear can absolutely destroy a market and once it takes hold only the bell or government intervention can stop it.
When George Soros shorted the pound on black Wednesday he did so with such aggression that there was no stopping the pounds collapse and while Soros was responsible for the initial movement, fear soon spread and as people started dumping the pound there was no way to stop it. The UK governments attempt to prop up the currency failed miserably as they simply couldn't cope with the amount of money flooding in against the pound. Eventually the government was forced to remove the currency from the ERM at an estimated cost of 3.3 billion.
Introduction. It's no secret that every trader has its psychological and professional features and characteristics. As in any business, in Forex set of such tools is very important and fully effect on the result.
Set of the main priorities in market behavior, using the terminology of psychologists, can be defined as: Activity - Positivity - Motivation - Discipline. And from the relocation of the terms, and even more from their absence changes dramatically result.
Bid. The evaluation of each of the behaviors of traders, I suggest you familiarize yourself with the basic psychological portrait of a trader, a little embellished sarcasm. Let's move on to consider them:
Psychological portraits of traders:
TRADER-APATHETIC . Favorite phrase: "You have to sell anything!" Trader-apathetic is uncommon. Most speculators so emotional about their workthat is difficult to be apathetic. Therefore, this type occurs among experienced. Its nothing surprises, he's already passed hundred times, and washing dishes provokes the appearance of more adrenaline than the actual sale! Oversleep the opening of markets. Forgetting that he had sold or bought. Go to the country of the trading week. Most li…
In the series I shared my personal insights, which I gathered throughout the years in forex markets. Most of what I’m arguing about can’t be find in popular sources of investing/trading material and there are couple of good reasons for that.
First of all, many people operates methodology/knowledge of someone else’s without even taking thought what is the source of such viewpoint and what reasoning is hiding behind this. You can see in publicized technical analysis of respectable sources, like major bank analysts, but all they show is just couple of trend lines and moving averages. Technical reasoning behind price action is much more complex than that. Really – geometry is not the way to analyze markets, but still – this principle keeps to be pushed as the best way to forecast markets. I guess there is no need to explain the reasons behind biggest players of the markets and especially – market makers in forex markets (major banks) and their need to constantly delude sentiment of the crowd.
Second, when you begin to truly dig in, analyze every pip of the price movement - you starting to get ideas inevitably. And ideas gather in to alternative look, which gets closer to the truth, h…
The term “triangulation” is one that you hear and Forex very often. In the real world, it is often a reference to the science of taking at least three points and finding the middle. It can be used to track cellular phones, radio signals, and it even missing persons. Essentially, what you were doing when you use triangulation is finding a common theme, and pinpointing what you are looking for. In a sense, I can do this in the Forex markets by using a very similar strategy.
When looking at the charts this weekend, I noticed a common theme: the British pound appears ready to strengthen. Most Forex traders will simply look at the GBP/USD pair, and think of it as living in a vacuum. The reality is that relative strength comes into play. Remember, you are simply trying to find one currency that is going to outperform another one, and by mean it. That is the essence of Forex trading.
Looking at the GBP/USD weekly chart, there is a hammer which of course is a very bullish sign in and of itself at the 1.60 level. However, it is also at the 50% Fibonacci retracement level, of the most recent uptrend. The fact that we fallen back here and formed a hammer is indeed a very positive sign i…
Why it is not fashionable and prestigious to be a trader on Forex market?
In this article, I want to talk about the following questions:
Why the Forex market and trading in it has such a bad reputation?
Why to be a FX trader is not fashionable, not prestigious?
Why traders do not like to talk about their work?
Why, if you will ask them about their activities, they will answer: "I work in finance", "I work in the financial markets," or something similar?
Why traders are shy of the fact, what they trade in the Forex market?
Why nobody talks about it proudly?
So many why!
I heard this from so many people, many of my friends are traders. I am a trader in the Forex market, and I know this. Let's try to clarify this issue.
Trader can lose money.
Often you can read the article or see the video on the topic: "Why is it so dangerous trade in the Forex market? Why is it better to trade stocks? ". Or "Do you really want to trade currency? – Trading Futures on currency on the exchange! Do not trade on the SPOT market!"
The reason for such statements is, in the first place, that existed before, and there is still very large numbers of Forex companies, which work for…
It’s a hard fact to swallow sometimes but the fact is that the markets are only 20% trade 80% speculation. I often find unless there is HUGE economic data a trend will not turn on sixpence. Common sense should always be applied as should the trend!
The above image is nothing special and can be commonly found though-out the FX market. The concept of stop hunting isn't a new one, and it should not be confined to the conspiracy files. It is something easily found on most charts and is easily exploited. Why is it easy? Because these pattern are easily seen on longer term charts and therefore harder to hide... You can’t hide a long term trend!
The best question to yourself is why would a trend suddenly spike or turn, take out stops and then continue with the original trend? We all know why! But we struggle to believe it because it goes against normal trading strategies.
The big players own the market, there is no point in arguing this fact, large players when in tandem will move markets; and always to their advantage. Why not spend 50 mil to move a pair to a price where you know there is 500 mil of stops and therefore cheap prices too take advantage of and send it in the o…
I'm sure it was interesting to some of you, but also, I can see the trader's rising interest to Intraday and Intraweek trading.
Intraday and intraweek trading - by saying this, I mean - when the trader is trading during the hours, days or weeks.
In this article I will explain How to Use the signals, provided by the Higher timeframes, to enter the trades on a lower time frames, and much more frequent with better quality.
***A picture Above, reminds you the entry signals, on a Quarter - period charts, that I have talked about in previous article
I would like to recall, that the main task is to find out the entry points on the market. I will show you how to enter the market using a daily charts, where I will demonstrate, that it is not necessary t…
Introduction Although it is a matter of taste, I can't feel the truth from some article based on very few past chart. I want to read an article which has something real for improve my trading. So, at first, I try to write a something like that. And I hope that many articles based on long term back test at short period chart will be show up on this contest... It aside this article's research theme is Simple Volume Average Indicator. Many FX-websites says that "Look the volume". But is it true? Does volume indicator has a something meaning? I can't believe that without any back data. So I did check that with back-test in decade by myself.
Back Test Settings At first, this chapter explains the strategy which was used for get the default back-test data.
This article will serve as a precursor to my next article in the series, where I go into detail describing my Bollinger Band Breakout Strategy. The article aims to provide a good foundation on Bollinger Bands as a technical analysis tool.
Bollinger Bands are named after the creator John Bollinger. As pictured on the right.
He is a technical analyst that developed the tool as a measure of volatility. He has wrtten a book titled "Bollinger on Bollinger Bands" and is considered the foremost expert on the subject.
He also currently runs a website and has a pay service where he analyzes the markets for setups as per different bollinger band strategies he has developed.
Without going into excessive detail on the construction of Bollinger Bands, to briefly illustrate I will provide some examples of different types of setups and information that can be obtained from the bands. The bands themselves are a measure of volatility based on previous price action. They utilize the simple moving average and the amount of data to be measured back is input by the user. The standard settings, and often the default is based on a 20 period Moving average.
By now, most of us already know the main differences between an ECN Broker (Electronic Communications Networks) and a Market Maker. In this article, I am giving some comments on the most outstanding ones, but, the real purpose of my essay is not just to emphasize such differences -- you can easily find this information on trading forums, even on brokers's websites -- , but is to develope how working with ECN in stead of with Market Maker could economically benefit any trader, either daytrader or swingtrader. I did not find any article which help to find the best solution to the matter, most of them conclude with afirmations as: in order to work on the intraday charts in minutes is essential to work with an ECN, but for graphics swing trading hours is not as important to work with an ECN. The purpose of this article is to clear your doubts. A Market Maker broker uses a technology which provides to its customers demand and supply prices of the different currency crosses, as consideration for each forex transaction. Market Maker must cover the operation in the market with their own capital. If market is covered, the benefits of the market maker is the spread, but they also may decide …
All traders have heard the mantra “Cut your losses short and let your winners run but many don’t know how to do this effectively. In this article I’m going to share a great way to ensure that you stay in your profitable trades for as long as possible.
When considering any trade, most new traders focus on getting the right entry and spend less time thinking about how they will exit a trade, especially a profitable one. As a supply and demand I trader, I enter trades based on the levels I think will hold; shorts from supply and longs from demand.
Common advice is that you should exit at the nearest opposing level which for a short trade would be a demand level and for a long trade would be supply. The thing is, sometimes price goes straight through the nearest opposing level and on to the next one. It can sometimes go further. If you always exit at the closest opposing level then you are likely to miss out on some easy pips. The same is true for long trades if you exit at the nearest supply level.
One way to make sure you stay in trades for as long as possible is to monitor price action when it arrives at the opposing level. If you see signs that price will reverse then exit and i…
► Introduction This article consists of two separate sections. -The first section shows how to apply the tools of the trading platform for further research to preserve the historical data in the Office package Excel. -The second section of the example of daily data the EURUSD shows one of the relatively simple methods of determining the trend line using the package Excel.
► Section 1. Saving quotes data in Excel
Choosing from the menu «Tools» and sub «Historical Data Manager» are able to store data for quotations for a certain period in the files of type * .CSV or * .HST (see next image).
We define the fields for data selection: - The currency pair (note the selected currency pair EURUSD); - Specify the date range of data output; - To save in a format readable by Excel format *.CVS; - The date format to choose for their future goals (I did not change); - Choose the price Bid or Ask (I left Bid); - Indicates the type of data (minutes, hours, day ...) choose Days and the next 1Day; - Essentially specify the delimiter data "; . " - To select the direction to save data to your computer using the «Browse». When you are ready to save the press «Start». If …