Share This: Market Review Posted on: 07 January 2016, by: Pepperstone S – Market Review Brace yourself for a string of news that may continue to play out negative for G10 commodity and EM FX: WTI settled at the lowest level since January 20, 2009 of 33.97. RUB was the worst performing currency, while CAD losses were capped by 1.4100 resistance. Geopolitics continued to show a divide between Saudi, its allies and Iran. Meanwhile, tensions are high of North Korea’s claims, despite the White House not believing it. US data was solid. The market’s slightly dovish read of the FOMC minutes may have provided balance but Vice Chair Stanley Fischer’s interview likely carried more weight than the dated document. Fischer says the market is underpricing the pace of hikes in 2016. Consensus on USDCNY is that the fixing strength will continue. JPY remained the safe haven of choice US equities continued to slump, on all these factors plus any indications from news regarding major companies that global demand should be questioned. Getting back to US data and events, it was all positive on balance. The main takeaway: NFP expectations of 200k are supported, with upside risk. In order of release: US ADP rose by 257k in December versus just 198k expected. Prior month saw a small revision of 211k. Looking at the details, Large and Small firms led gains with +97k and +95k respectively. As expected, services comprised most of the gains at +234k. US ISM nonmanufacturing index remained strong in December, holding slightly above 55. There was strength in business activity (58.7) and new orders (58.2). The employment index, which tends to coincide with services payroll trends, edged up to 55.7. US deficit at USD42.37 versus 44bn expected and 43.89 prior. Even Canada also best expectations. Deficit at CAD1.99b versus 2.6bn expected and 2.76bn prior. US durable goods final for November was not revised from 0.0%. Ex transportation and nondefense, revised by 0.1% higher. Some expected negative revisions.
Share This: Forex — The Anxiety Is Killing Me! It’s tough, isn’t it? Having an investment out there and being patient enough to just let it run its course is something that is difficult for even the most seasoned of veterans—but especially so for those trading on the Forex! The Forex, or Foreign Exchange market, is where nations, investment banks, and other investors come to exchange currencies. Nearly two trillion dollars exchange hand in a given 24-hour period of trading (the market is open 24 hours per day, Sunday through Friday) making the Forex the largest and most fluid market in the world. Investors love the Forex because it is simple and has plenty of opportunity for profit thanks to its volatility. However, while those fluctuations in exchange rates can lead to large profits—they can just as easily zero out an account! In fact, they can cause losses to mount even faster than potential profits because Forex accounts tend to be highly leveraged—as much as 100:1—or even more in some cases! Fear, greed, even faith—all of these very basic and real human emotions play very huge roles in the decisions made by investors. The fear of loss is a very real and valuable human emotion meant to help us evade danger and survive—but it can kill you when it comes to trading on the Forex! Every investor on the Forex—every single one—will lose from time to time if they trade long enough. The market is always right and we humans can never achieve this level of perfection—not even the investment gurus like Warren Buffet get it right every time. Like it or not, investing is a gamble—a calculated risk. Investors increase their odds of success on the Forex by identifying the most profitable currency pairs with the least volatility and then place stops with their order to insure against catastrophic loss. However, even with brilliant technical analysis and the best investment strategy, a loss is going to happen. Fear can play two damaging roles at this point: Fear can either scare the investor away into not investing again; or, it can compel the investor to “get back in” on a position quickly in order to make their losses back. In both cases, fear is now guiding investment decisions and will ultimately lead to missed opportunities and potentially greater losses. Backtesting is a common tactic practiced by many of the top investors on the Forex market. To do this, an investor creates a theoretical portfolio performance history. This is accomplished by applying current asset criteria to the hypothetical portfolio and then evaluating the accuracy of the strategy. How accurate is it in predicting price movements? If you can consistently identify long term trends using the strategy at least 70% of the time, then the theory has merit. You do not need to backtest forever before investing again but definitely continue this practice while investing on the Forex in order to further refine your strategy and test its effectiveness. Whatever you do, […]
Share This: Amazing Tricks On How To Make Money On The Foreign Exchange Market Foreign currency exchange trading is a tempting pastime, not unlike skydiving. It can be extremely exciting, and few people dare to take it up. And just like skydiving, forex trading requires thorough preparation and education to avoid disaster. This article presents a few tips that can help a forex trader steer away from a cataclysmic crash. A good thing to know about forex trading is that it is a zero sum game. This simply states that if there are 60% of people investing long term then that means that there are 40% of people that are investing in the short term. People concentrating in short term investments usually have lots of money. When starting out in Forex, it’s best to stay close to home. The easiest culture to understand, and therefore the easiest currency to trade in, is Canadian. Since the Canadian dollar moves in similar trends to the American dollar but with fewer extremes, it makes a good low-risk investment currency. Use short stop losses to ensure you don’t make any mistakes in a Forex trade. Set them at the risk level you are comfortable with and then let them stay put! If you do this every time you trade you will ensure only small loses and permit larger gains over time. Some unethical brokers might offer biased charts to push you to buy or sell. You should always check the source of a chart, and make sure it comes from an approved broker. If you have any doubts, don’t trust a chart, especially if it is free and advertised in an insistent way. Always set goals for yourself. The amount that you are going to trade does not really make a difference; as with any business, you need to have an idea of what you want to accomplish to be successful in Forex trading. If you do not set goals for yourself, you may make impulsive decisions, which can lead to mistakes. When discussing the market with other traders, it is great to get their opinion about how things are going and where they think the money is going to be at. Do not trade on their opinions alone. Take the information that they have given you and analyze it with the charts to see if they may be on to something. Keep your cool as you are trading. Do not get over excited when you win a lot or lose a lot. It will keep you from thinking clearly and there is a good chance that you will lose everything that you won or that you have. Do not over trade and shake your money management. Don’t get into Forex trading unless you have a good amount of capital to trade. Market action should be the driver behind your trading decisions. When financial circumstances cause you to alter your trades, you may have trouble staying in the market when it temporarily goes against […]
Share This: How To Really Make A Living Trading Forex Trading on the foreign currency exchange is a tempting investment opportunity. Be wary! The forex markets are not for the faint of heart, or the ignorant. To become a successful forex trader, you need patience, confidence and most of all, education. Fortunately, your forex education can start with simple ideas like the ones in this article. Watch out for the political factors in your forex analysis. You can rather easily predict the financial situation of a country over the long term, but the political world is unpredictable. If you believe there is a strong risk of political unrest in a country, do not trade in this currency. On the forex market it is tempting to respond enthusiastically to good news for a country by trading in its currrency. This is a mistake. Mainstream news is ultimately external to the forex market, and has not nearly as much to do with the trading as does the activity of the market itself. Good news for a country does not always mean good news for its currency – invest accordingly! Avoid trading in the forex markets on Monday unless you spot a highly lucrative opportunity. In general, Monday trading activity is tentative, with lots of minor, contradictory trades and low-activity stretches. In this environment it is especially hard for you to read the trend of the market, and trading without knowing the trend is dangerous. Make sure you choose a time to trade that works for you. Trading when you are overly tired or stressed is never a good idea. You will not want to take the time to make sure you are doing the best thing with your money. Choose a time when you have the energy and concentration that you need to succeed. One important Forex fact to keep in mind is that every currency pair has its own unique behavior. While there are overall strategies every trader can apply to every market, the wise investor will be careful not to treat every pair as equal. Trade in a new pair should start out cautious until the trader is comfortable with the pair’s particular idiosyncrasies. If you wish to get into forex trading, ensure it’s for the right reasons. You can’t start in this business because you want to get rich quickly or because you need to make money. You should consider it a job you do for fun, which just happens to make you some money while you do it. Use the live trading signals from Forex traders to your benefit. It can help you to discover what methods of analysis and informational study that they use. Only follow their leads if you are looking to learn how they do what they do, not to just find the right trade to take. Forex trading is neither a get-rich-quick guarantee nor a money-sucking shell game. Diligent traders make plenty of money through forex trading and they do it with hard work […]