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The interconnectedness between trade balance, interest rates and foreign exchange rates of national currencies is discussed. The case for gold standard and free market interest rates is outlined. The reasoning behind the introduction of free-floating exchange rates is presented. The inherent flaws of current system are exposed; the indispensable conditions for balanced trade and fair exchange rates are formulated.


By historical standards the currently existing global system of free-floating fiat currencies is fairly new – the last tie of US dollar with gold was severed in August 1971. Although this drastic step was initially offered to the American public as a temporary measure, the course of action had never been reversed. The immediate fallout, albeit unnoticed by public, had profound effect on the global economy – gold has been supplanted by fiat currency, namely US dollar, as clearing tool of international trade. Somewhat flawed, but overall rather robust, system that kept multilateral international trade in check was insidiously superseded by a system inherently unstable and, as history demonstrated, bereft of necessary ability to balance international trade…
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I didn’t expect to be writing this article so soon. The idea first came up after the Bank of Japan unexpectedly eased monetary policy on October 31st The BOJ increased its bond buying program from 70 to 80 trillion and tripled its ETF purchases from 1 to 3 trillion yen. The surprise move lead to a 292 pips rally in the USD/JPY and on October 31st the currency closed off the week at 112.32. In the next month the Yen continued to be sold aggressively and last Thursday the Dollar/Yen spiked at a high of 118.97. But let’s start from the beginning.

The Rise of Abenomics

The latest round of easing is a continuation of a BOJ policy started back in 2012. After coming to power in December of 2012, the current prime minister of Japan, Shinzo Abe, started to implement a set of policies termed ‘’Abenomics’’. The aggressive policy changes involve radical quantitative easing, increase of public investment and structural reforms. Abe appointed Haruhiko Kuroda as head of the Bank of Japan with a mandate to generate 2 percent inflation. The inflation goal lead to the bank embarking on a massive buying spree during which the BOJ balance sheet almost doubled.

What’s Behind the Japanese Obs
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1. Overview

As major pairs usually moves in some intervals I just got an idea to try to develop trading method which is dedicated to exploit certain pairs movements inside some intervals. I will analyse EUR/USD, GBP/USD and EUR/GBP pairs movements and possible scenarios for opening and closing positions. For testing purposes visual jforex platform will be used. Analysis will be done in several publications including results from live strategies loading in demo account.

2. Basic principles of the strategy

Main principle of strategy is to trade within some predefined interval in several currency pairs. In described approach EUR/USD, GBP/USD and EUR/GBP pairs will be used.
If we analyze EUR/USD pair movement during this year we can see that pair had movements in quite narrow interval for bigger part of the year before it dropped sharply below 1.30.
This rate developments we can see in the chart below.

As can be seen from the chart EUR/USD fluctuated in around 1300 pips range for 2 years starting from September 2012 till September 2014. During the same interval GBP/USD and EUR/GBP also fluctuate in relatively narrow ranges and usually when EUR/USD goes down GBP/USD also goes down…
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Hello dear community members,
It was long time I was willing to write a good article about trading, with the intention to bring you some useful trading stuff, that could really help you to increase your profits in the market. For that purpose, I did a long research that took me a lot of time, trying to offer you the best materials I was able to found.

After collecting, selecting and synthetizing all that, I summarized in 18 points what I considered as most useful as follows:
1. Trading’s industry is a world of big conflict of interest. It is one of the less regulated business fields, being the aspirant trader its most vulnerable element.

2. The world of the retail traders is the most disadvantaged place – despite their good intentions, it is a well-known fact that on the long run, more than 95% of them end losing their money.

3. More than 95% of the aspirant traders are losers, simply because more than 95% of the information they have in their brains about trading’s world is false and toxic. 4. The point is that a novice trader has no possibility to differentiate what information is true and useful and which information is toxic and wrong. 5. It is possible to
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Poker v Currency Trading - for me, there's a very clear correlation.

How many people would regard poker as a financial investment ? . Is it simply gambling ? .So tell me then why forex broker websites are set up exactly the same way as poker sites .
On any poker site you have the poker school 'come my friend,we here at shyster poker will teach you how to play,free of charge, because we nice people'.
On any poker site you have the demo (play money ) .'Come my friend get a taste, win a little play money,No harm no foul ,The real money side is just a click away after all ' .
On any poker site you have the bonus offer ( * Turnover required) . So School ,Demo, Bonus ...Sound familiar !!.

Why do forex brokers spend a whole lot of money setting up demo software for you to practice on and why has every second broker now got several contests where you can win cash ( * turnover required ) . It's all candy for your predictable gullible human nature and your lust for easy money . A fool and his money are easily parted and in this day and age it's just a mouse click away for you to get your endogenous morphine hit that the risk of Poker or forex can bring .

A few years back when regula…
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Introduction
This article contains a set of rules about one of the most profitable tested strategies when the Non Farm Payroll is released.The U.S. Non-Farm payroll (NFP) is one of the most notable macro-economic releases in the US. The NFP measures the change in the number of people employed during the previous month, not considering the farming industry, government employees, private household and non-profit organizations employees. Job creation is correlated with the consumer spending, which accounts for the majority of economic activity. The NFP influence is usually notably larger than that caused by any other economic print in the Foreign exchange market. The release of the NFP generally occurs on the first Friday of every month at 8:30 a.m. EST.An higher than expected reading should be considered as positive/bullish for the USD, and a lower than expected reading should be taken as negative/bearish. As a result, many speculators, scalpers, traders, fund investors try to anticipate the NFP print and consequently could become very relevant the variance of the pair. The variance measures how far a set of numbers is spread out. A small variance indicates that the data points (p…
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Fig.1 “Oh dear! Oh dear! I shall be too late!”

Chap.1 Introduction
What is the longest yet shortest thing in the world? It is the swiftest yet slowest, the most divisible but most extended, the least valuable and the most regretted, without this, nothing can be done, it devours everything no matter how small and yet opens life and spirit to every object. What is it?

The answer is a time, and also it is this articles main theme.

Which is your time zone of the area you live in? I live in Japan. This area's time zone is GMT+9. In this season, the sun rises in the east at 6 o'clock, and sets in the west at 16 o'clock. And of course my biorhythm is synchronized with this nature rhythm.
Well then, How about a FX market? Does FX market has a something like a biorhythm which is synchronized with a timepiece? So I examined the 484820 orders of my back-test results to see if there are any relationships between open time of orders and average gain pips, for my researched whether there is any rhythms or not.

Chap.2 Sample Strategy and Settings for Back-Test
Sample strategy for this research is MinMaxCounter. It is a kind of breakout-counter strategy. Trading rules is very simple. Let …
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I bet you are wondering what has the trading to do with poker and the African savannah, draw your own conclusions after reading the article. This article is written for beginners and professionals in markets with technical analysis basics and know the rules of poker. You can find a similarity between trading and poker, which more than a card game, is a game of people. It could be written thousand of pages about trading and poker, but is not my intention to dwell on deeper technical aspects which would be boring, in this way I will focus future articles on topics such as money management. This time, the aim is to understand that we can integrate a basic poker strategy which works in our trading. Moreover, I will confess the technical pattern which has proven to me to be more efficient in my experience in trading, I will develop "The trap pattern".

Speculation in financial markets is not suitable for all psychological profiles, speculation is hard and wild, it is very dangerous to get into markets with intent of winning immediately. Imagine a gazelle approaching a pride of lions who are resting in the shade of a tree, with the intention of fighting and winning. Could it achieve it? …
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Fooled by Randomness?
Ranking 4/28
Title of this article may sound familiar, but it’s not about the similarly named book and its general statement that price action in financial markets as a reflection of the thousands of minds concentrated in a single spot - moving it in nervous path, which is much more random than the general assumption is. Although ironically -price action becomes random, when it is interpreted the wrong way. All the macd’s, RSI’s and alike, moving averages, trend lines – these are very useful for market movers to load in to – luring the crowd in. Yes, sometimes these tools work, and sometimes they don’t. And as a rule, in times when these tools doesn’t work – major movements get missed. Good analogy of this none-randomness, designed to be a trap, would be a fish farm. In fish farming there is one specific point in the pond (usually it’s the deepest area of the pond) – where after dewatering grown fish gets taken out. Upon every feeding – specific sound is created in order to make fish associate this part of the pond with food and it works (from fish’s perspective) every time until the final day comes…

Traps of wishful thinking. Price action is a spiky thing where many reference points for techn…
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The Rand at Crossroads
Ranking 2/28

Introduction

For the first time since October 2008, we are witnessing the USDZAR trading above 11. With Mr Lesetja Kganyago taking over as Governor of the Reserve Bank of South Africa (RBSA) on the 9th of November 2014, the investment community is eagerly waiting for action.

This Article looks at the fundamental and technical aspects affecting the rand.

Monetary policy

The monetary policy in South Africa (RSA) endeavors to create a stable financial environment that is essential for economic growth and employment creation.

  • Inflation
In February 2000 the RBSA introduced an inflation targeting framework and under this framework the inflation target was specified as a range between 3% and 6%. This band, together with the actual inflation rates achieved are shown in Fig 1.

Fig 1

As of September 2014 the inflation rate in RSA was 5.9%. This shows that inflation is close to the upper bound of the range and there is need from the central bank authorities to keep it in check. However inflation is not at problem at the moment and there is no need for action at the moment.

[list][/list]…
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Most traders prefer to try and catch a turning point in the market; most are not comfortable buying at high levels or selling at low levels. Ironically, these are the areas that have a high probability of trading success.

Momentum trading is a style of trading which focuses on currency pairs that are moving significantly in a particular direction with high liquidity.

Wikipedia defines momentum as "prices continuing to trend".
Webster's dictionary defines momentum as " the strength or force gained by motion or through the development of events".

So essentially, momentum refers to rapid movement or speed. In the same vein, momentum traders are traders looking for currency markets that are showing swift movements in price; and they take positions in the direction of the trend, with the hope that the momentum will continue in the trend direction.

There are two groups of momentum traders;

  1. There are those who trade using indicators that show price momentum
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Time Killers in Trading
Ranking 14/28
This article will be useful for beginners in trading and for professionals to get relax and laugh a little remebering times when they were at start line.

To become a trader you need only two qualities: 1. to know how to handle stress; 2. to be good in math.
You will handle your stress only when make trading not emotional, but profitable occupation.

If your definition of trading can be described with words: "genius" transactions, magical prediction of events and billions of dollars' – it will be hard to become successful trader, better try your talents at the movie plot writings.
Only when your psyche is ready to accept definition of trading as statistics, theory of probability, the calculation of risk and psychologically difficult, tedious following of the strategy – you are ready to try.

Usually, algorithm of obtaining of any profession looks simple: get the knowledge, and then get the experience. In trading it is vice versa: people jump into practicing and after first loses start to learn how to make this occupation profitable. The biggest mistake and time killer for almost all beginners is to follow balance all the time. I agree, this is fascinating spectacle to look at …
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Introduction
We often wonder how to understand and evaluate the market. What comes first, and has a higher priority. And the fundamental and technical analysis confirm the price. Among the traders say - the price includes all. Therefore, any trading strategy should confirm the price, not the rules by which we expect it. According to the rules tendencies - price can grow can drop, and can move laterally. And these movements are constantly changing each other. And so we come to the point, and what is secondary. Secondary to analysis.

The pattern of "head and shoulders"

Let's look at this from a slightly different angle. For, example, there was a sudden change in the growth and movement. What we can talk about it? On the chart we can see a trend reversal. See the direction of prices. And we can say the indicators? Depending on the type of indicator ( flat or trend) we get different data. Price change direction, and the indicators are often not confirm this. Some delayed more than others in time. But this is so and it must be considered. To be precise, we say that the indicators "are silent or even lie" and we get a signal from them with some delay. If the price has changed the …
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Since my core trading strategy is a swing trading style in this article I will attempt to outline some trading rules that help me catch the big waves. But before going further we need to define what swing trading is all about and what kind of traders usually employ swing trading strategy.

  • What is Swing Trading?
Swing trading is a style of trading in which positions are held for longer than a single day, between 3 days and 3 weeks, and which attempts to catch the big movements in the market. There are many types of traders who uses swing trading from retail traders to institutional traders(prop traders, small-medium Hedge Funds, CTA). Above all you have to find by yourself if swing trading really suits your personality otherwise it may not work for you as not everyone can endure the risk and the ups and downs of a swing wave. Holding a position overnight can be an stress factor for many traders.

  • What is the right market for Swing Trading?
This is probably the most important question you would have to ask yourself before even starting to submit a trade. Swing trading is all about having the right trading environment and proper conditions otherwise you may end up wi…
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After spending months trading based on a currency’s depreciation and appreciation, there are some things I have discovered and I hope these points will help other traders out there in achieving success in their trading. Currency pairs fluctuate in price; these fluctuations are almost none-stop during trading hours. The fluctuations are caused by appreciation or depreciation of a currency.

When we see the EURUSD chart heading up; we call it a bullish reaction or an up-trend. In such a situation, traders start buying or opening long positions on the pair. I want us to take a minute and go “under the hood”, to have a clear understanding of what is happening to the currency pair.

A bullish trend on the EURUSD means that the EURO is appreciating much more than the USD. This means the market perceives the EURO as being stronger than the USD (U.S Dollar).

The chart below shows a bullish trend on the EURUSD, and a subsequent bearish trend. A bullish trend is marked by price making higher lows, while a bearish trend is marked by price making lower highs.

Traders also use trend lines and moving averages to easily spot the trend direction.

When price is bouncing off the trend line and …
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