Which Forex System?: April 2012

Monday, 30 April 2012

Simon Denham's Daily Market Comment

The markets seem to be defying gravity at the moment as they brushed off the weaker than expected US GDP figures on Friday and managed to post a half decent gain ending the week where they had started off following a turbulent few days that saw many of the major macro issues return to the forefront. Spain’s woes continued with unemployment hitting the 25% mark whilst at the same time being downgraded by S & P which acted as a reminder that all is not well in the eurozone. Over the week end protests against the government’s austerity measures took place across the whole country. For now the protests have been peaceful but it’s almost certain that there’ll be more to come in the future and it will be very interesting to see whether they evolve into Greek style demonstrations.

The last couple of years have served to show that austerity is not the only answer to the debt crisis and when it is imposed it needs to be done hand in hand with growth stimulus. There’s no denying that profligate government spending is in dire need of cutting back even further than most of the proposed plans, but when it is being done at the same time as curtailing bank lending, then economies are going to be suffocated.

In the UK we’ve also seen the evidence as our economy dipped back into recession and now voters are seriously out of love with the Tories who are footing the bill for all the recent political clangers. It’s amazing how a few headlines about granny/pasty taxes and an inquiry into telephone hacking can turn large swathes of voters against you in such a short space of time. With the austerity still to come and further government spending cuts planned it will be near impossible to win voters back unless the government can actually do something meaningful to make is easier for businesses to invest and grow as opposed to tinkering around the edges. It wasn’t all that long ago that the majority of people were in favour of the cuts but now that’s all changed.

This morning the FTSE is hovering around recent highs finding the resistance around the 5800 level just a bit of a hurdle for now. Trading at 5778 at the time of writing there’s no rush to the exit for investors and considering the recent strength an attempt at breaching the resistance can’t be ruled out.

This week sees European finance ministers meet to talk about the new European wide banking rules. Consensus is unlikely to be reached this Wednesday as growing disagreement from other member states including the UK is likely to push the discussions into the following month.

We saw a rise in the EUR/USD pair to 1.3270, a level last seen on April 3rd with the session finishing 64 pips up at $1.3252. On the surface, it defied the odds as Spain’s credit rating was downgraded with unemployment reaching 24.4% an 18 year record. Nonetheless, the lower than expected US GDP growth rate might have just convinced enough investors that QE3 is a distinct possibility and that could have been a more bearish outlook for the greenback on a relative basis.

One more in favour of easing the monetary policy even further was possibly the perception on Friday after the US economy grew less than consensus. Buying gold as a hedge was understandably triggered especially when the greenback weakened. So the precious metal continued its rally, gaining $4.9 for the day to $1662.3.

Following a weaker than anticipated US GDP growth, the WTI crude prices were on the back foot initially. However, the usual suspects, a rebounding equity market combined with a lower US dollar reversed the daily trend pushing crude prices into positive territory, 83 cents up to $104.93. In addition, some of the energy investors might have chosen to close their short positions established in the morning, unwilling to stay exposed over the weekend.

http://www.capitalspreads.com/simon-denhams-daily-market-comment

Friday, 27 April 2012

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.

Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>

Yours 'Forexly',

Cliff

4 Tips for separating your Emotions from your Actions in Forex Trading

By Yohay Elam

Everybody tells you that controlling your emotions is the key to successful trading. Yet this is hard to do. Some people spend years on the psychologist's couch.

So what can you do to manage this critical component of trading? Here are 4 practical tips that will help you separate emotions from actions:

1. Keep a journal: Many traders acknowledge the importance of logging their trades, but they don't really practice what they preach. The value isn't only for offline analyzing of your actions, but for making the right decisions. So, update your journal in real time, and write what you intend to do before making the move. Having to express your intentions to the journal will help you digest your move and verify if you're about to do the right thing or not.

2. Think again: Do you feel like you've reached the right decision about opening a trade, closing one, or any other action? Great. But don't act just yet. Trying thinking about it once again to make sure you are not acting out of an impulse or a gut feeling that might be wrong. Gut feelings are not necessarily bad, but they need to be verified.

3. Count to 10: Another way to separate an emotional impulse from action is to count from 1 to 10. Slowly. This will enable you to calm down either from a euphoric feeling or rather a desperate action.

4. Stick to your plan: I guess you've heard that before, but this cliché is certainly useful. It is too easy to make a real time decision to ditch your plan "just this time" because there is a "one time extra-ordinary" opportunity that is beyond the scope of your plan. Bending and breaking your own rules is a slippery slope. So, check if your actions correspond to your plan before making the move, no matter how promising it looks.

How do you deal with emotional temptations during trading? Do you manage to separate your actual moves from your feelings?

http://www.dailyfx.com/forex/fundamental/article/guest_commentary/2012/04/25/Guest_Commentary_4_Tips_for_separating_your_Emotions_from_your_Actions_in_Forex_Trading.html

Wednesday, 25 April 2012

Monday, 23 April 2012

Simon Denham's Daily Market Comment

The first round of the French elections has thrown up a few surprises and indicates voter dissatisfaction for the mainstream politicians as parties on the far left and right benefit from voter delusion. French elections have often thrown up surprises in the past, and even though Hollande is ahead in the polls to win the head to head run off with Sarkozy it could be a very tight call. Only ten years ago the National Front’s leader, the incumbent’s father, knocked the main socialist candidate spectacularly out of the race in the first round to hand an easy victory to Jacques Chirac. The next fortnight will be very interesting to see whether the support for the far right will assist Sarkozy in winning a second term but he will have to fight hard to win them over. One tactic will be to get the message across that, without their support, the alternative is the first socialist government for seventeen years.

But it’s not just a question of left and right with France, but Europe or not. Many of Hollande’s and Le Pen’s supporters are being attracted by their more euro-sceptic stance, whereas Sarkozy has been in the thick of Europe throughout his past 5 years in office. If the incumbent President looses in just under two weeks then it could be more to do with an anti-Europe vote than anything else.

The polls currently suggest that Hollande will breeze into the Élysée Palace and this will see significant change for France. His policies aim to reverse much of the work that Sarkozy has done to make France more competitive, calling for mass government spending via increases to the minimum wage, raising the retirement age and then viciously attacking the country’s banking sector and rich individuals.

Financial markets will not like these moves and already this morning they are looking a little nervous with the French Cac down almost as much as 2%. French ten year government bond yields are also slightly higher. The risk aversion this morning is not only down to the first round French elections as Chinese manufacturing data showed that the world’s second biggest economy is seeing its manufacturing sector contract. At the time of writing the FTSE is bang on the 5700 level and has broken up the recent short term upward trend that it formed in the last couple of weeks. This area where it is currently trading is a key support level, but looking at the German Dax, which really is in sell mode, it may not hold for long.

The euro is also in sell mode this morning after spending the last three sessions going nowhere, EUR/USD moved up on the last trading day of the week largely on positive comments by the ECB President Mario Draghi. He said that Spain and Italy had made remarkable progress in addressing their structural problems, discarding calls from the IMF and US Treasury for further actions. The move back above the 1.3200 has not lasted long however with EUR/USD trading at 1.3140 at the time of writing.

Gold closed marginally lower at $1642.09 in a very tight range as most investors waited on the sidelines. After testing $1680 unsuccessfully on April 12th the precious metal started to retrace, and if buyers continue to delay their comeback into the market we could see a challenge on $1620 soon, especially when gold failed to reach $1650 in the last session. At the time of writing the precious metal is at $1632.

Although Brent crude oil managed to gain 75 cents on Friday ending at $118.76, its weekly performance was negative. There are concerns over the short term trend for the bulls as ongoing worries regarding the health of the European economy puts downward pressure on the near future oil demand. If the support turned resistance just above $120.00 continue to hold we could see a move towards the recent lows around 117. This morning Brent is a little lower at 118.20.

http://www.capitalspreads.com/simon-denhams-daily-market-comment

Friday, 20 April 2012

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.

Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>

Yours 'Forexly',
Cliff

Goals For Novice Traders

by Cory Mitchell

When you begin trading, there are a lot of questions. With all the information out there it can be hard to filter through and decide where to start. Setting goals can help, but often novice traders set the wrong type of goals when they decide to start trading. With this is in mind, as a novice trader your initial goals should help you to eventually make money, but making money should not be your goal. Instead, opt to make your initial goals about process and emulating traits of professional traders.

Make Your Goals about Process not Results

Initially, traders want to make goals about numbers: "I will make 1% per day on my $30,000 capital" as a day trading example, or "I will make 30% per year" as an investing example. While it seems simple, in order to get to certain percentage or dollar targets you will need to refine your market approach and knowledge and hone your discipline. By plunging into the market and expecting to make a certain amount of money, the goal becomes almost impossible to reach over the long-term. These types of goals require that the trader actually know the capabilities (and limitations) of the trading plan they are employing - not think they know, but actually know.

Traders must know the potential and pitfalls of the strategy they are employing. Based on the method being used, it may be impossible to reach a dollar or percentage goal, but it still could be valid and provide a good return; therefore, the trader must either abandon the strategy or deviate from it in an attempt to find more yields. For many traders this becomes an endless cycle of abandoning strategy after strategy or never being able to adhere to a plan.

Looking at charts in hindsight makes trading look easy, those who trade know that it is harder in reality and real-time. Novice traders must not only become knowledgeable about the markets, but also about themselves.

When starting out, do not set goals for precise results, instead, focus on process. In order to achieve great results there is a process. Focus on the process and attempt to perfect that, and results happen on their own. Attempt to achieve results without perfecting the process, and the markets will likely continually take your money.

Focusing on the Process

Just like any other business, to become a good trader you must focus on a solid process. Result will not come instantly. Most businesses take quite a bit of time before profits come, and many, many more businesses fail completely. Trading is no different. Results will not come instantly, and if they do it is likely due to luck. Without understanding how the markets truly work and developing a winning process, the results are based on chance, not skill.

In order to build a winning process for trading the markets, try using these three goals. These may not seem like goals at all, but in fact are very hard to do, and even professional traders battle with these issues throughout their careers. Focus on mastering these areas from the very beginning, and positive results are more likely to ensue.

Always Have a Plan

In business school, you are taught that to start a business you need a business plan. Trading is a business. Therefore, every time you trade you must be trading according to a well thought out and calculated plan.

The plan should include how trades will be entered, exited (profits and losses) and how money will be managed. The plan should be very detailed, outlining the markets that will be traded, risk parameters, if filters will be used on trade signals, what constitutes a trade and exit signal, position size and what market environments will be traded (and how that will be determined) such as ranges or trends.

Therefore, the goal here is to create a complete plan for trading the markets...before making another trade.

Learn NOT to Trade

Especially when a specific dollar amount is the goal, traders will push to achieve that goal even when opportunities are not present. The market does not present statistically probable trading opportunities at all times there are often times when you will be far better off sitting on your hands or watching TV than trading. This does not sit well with most people; they want to continually be doing something. In the markets this can slowly (or quickly) erode profits that came during good trading times.

When, and when not, to trade should be covered in detail in the trading plan. Yet, trading during slow times or making impulsive trades outside the scope of the plan is such a common issue that it deserves special attention. Make one of your goals to be as disciplined as possible, only making trades that are outlined in the plan.

Keep it Simple - Avoid the Mysterious

A complex strategy can be very alluring. Many people believe that because something is complex it is more likely to work than something that is simple. Avoid getting too fancy with your analysis and trading strategies. As you progress, avoid the desire to make a winning trading plan more complex, usually this only results in destroying the profitability of it.

If you like the stock market, stick with trading stocks. If you like currencies, then trade FOREX. Focus on only one market and a couple of simple strategies when starting out.

The goal here is to avoid constant tinkering in order to improve performance, or continually switching markets, strategies or analysis methods. Stick to the plan. If it occasionally needs to be reworked a bit that is fine, but keep the revisions simple and avoid getting overly complex.

The Bottom Line

When starting out, be a niche trader focusing on a very few small manageable goals. These goals should focus on the process of becoming a successful trader hone attributes which professional traders have and not on results. Results will come in time if you are trading according to a trading plan which you devise and stick to, are not trading when there are no opportunities (this should be covered in the plan) and avoid getting too complex. Keep it simple to start and focus on process, not results.

http://www.investopedia.com/articles/basics/12/goals-for-novice-traders.asp

Wednesday, 18 April 2012

Monday, 16 April 2012

Simon Denham's Daily Market Comment

The FTSE has commenced the week tentatively as investors reflect on four weeks of declines on the trot with the big question being, do the falls for the FTSE and Dax of around 5% and 9% respectively represent a buying opportunity? Since European indices had recorded the most impressive gains so far up until mid March they are the ones suffering from the correction the most. The FTSE, as mentioned previously in this comment, has bounced neatly off its 200 day moving average at 5560 which is where the support still currently remains, whilst at the same time being at the level that we pretty much commenced the year. The recent bounce of the last few sessions has yet to prove itself though as the 20 and 55 day moving averages crossed themselves earlier in April, and with the same moving averages on the verge of doing the same on the Dax’s daily chart, the bulls continue to look nervous about buying at these levels.

The catalyst for any rise could come from a number of factors, the first being the US earnings season that is now underway and so far has not exactly set off any fireworks, but there have been no major disappointments. The Wall Street banks kicked things off on Friday and this week will be dominated by them as we see Citigroup today followed by Goldman Sachs tomorrow, and Bank of America along with Morgan Stanley on Thursday. JP Morgan beat expectations last Friday showing that Q1 was a bumper quarter for Wall Street banks as they have benefited hugely from the massive liquidity provided by the ECB from their LTRO program which not only saved European banks, but led to a flurry of deals within the capital markets. This however does not necessarily mark a turning point for investment banks as many of them continue to shed jobs in a bid to rein in the costs.

This morning the FTSE is at 5680 at the time of writing just benefiting from that little bit of buyer interest as mentioned above. Near term key levels for the index are seen at 5630, 5570 and 5535 to the downside with 5730, 5750 and 5810 to the upside. Like investors clients have been tentatively buying into the recent weakness but not to the extent that we would normally expect after such a retracement. As a result few are benefiting from this morning’s little bounce.

This week sees lots of economic data to focus on including today’s retail sales from the US. The UK releases its retail sales on Friday but before then unemployment figures on Wednesday will be closely scrutinised.

The euro reversed Thursday’s gains, spurred on by a spike in yields on Spanish and Italian debt, indicating resurgence in the European sovereign debt crisis. Fears are brewing that yields could once again soar as trader’s fear the Spanish government will need to be bailed out. Italy, with its even greater debt burden, is applying even more downside pressure to the single currency. With the mood so negative, traders could soon test the 1.3000 big figure, and this morning EUR/USD is at 1.3015.

USD/JPY has been in a tight range recently despite broad risk-off sentiment which has seen other currencies decline against USD. The pair is likely to continue traversing sideways despite the volatility in other assets and currencies, on the one hand the prospect of further easing from the BoJ is still on the cards weakening the appeal of the yen, whilst clear indications of another European sovereign debt crisis and possible QE3 from the Fed keep it well supported.

Gold prices fell sharply on Friday, spot gold losing $19 to close at $1,652.29 an ounce on Friday as the dollar strengthened due to safe haven in-flows and as traders exited riskier euro holdings due to worries over Spain’s gloomy economic health. Whether or not gold returns as the choice for safe haven flows will be answered as it approaches the support level of $1620. Any break below this level could see the yellow metal retrace significantly.

Crude oil dropped $0.80 on Friday as several negative cues translated into a strengthening dollar. Weak Chinese economic data and fears over the fragility of the euro zone weighed on crude, but also comments from Saudi Arabian Oil Minister Al-Naimi stating that there is "no shortage in global oil supply" and "his country was determined to see lower prices" further added to the selling pressure. This morning Brent is softer again at 119.70.

http://www.capitalspreads.com/simon-denhams-daily-market-comment

Friday, 13 April 2012

Hi and welcome to the 'Which Forex System?' blog.

Yours 'Forexly',

Cliff

In-Trade Management

By James Stanley

Many experienced traders will often be overcome with guilt, remorse, and dejection; and not just because of how much they spent on Black Friday.

The concept of trade management can prove difficult for traders. Let’s just imagine the scenario that many of us have been in before:

After a streak of bad trades, we enter a position that FINALLY seems to be moving in the direction that we want. After an initial move in our favor, we experience the jubilation that can only come from being right AND making money for being right. In a matter of a few moments, seconds, or hours – all the despair that we had felt going into the trade is wiped away and overcome by the enormous feeling of success.

We are refreshed, we are profitable.

And then…. The position turns against us.

We watch helplessly as our profit disappears before our very eyes. We scour the news wires to see if anything has changed in the underlying economies that would necessitate such a move. We try to justify our original analysis, scrambling… as if we could do anything about it!

This can be one of the toughest situations for trader to learn how to handle. And there isn’t one right or wrong way to go about trade management, as market moves are unpredictable.

Some traders in the above scenario will react with a knee-jerk and close off the position entirely – taking whatever profits they can.

Other – more aggressive traders – might leave the position on in the hopes of the original momentum coming back – propelling the trade further in their direction (which may or may not happen).

In both scenarios, the trader runs the risk of leaving potential gains on the table versus the prospect of giving up what gains they have left.

My opinion is that the best way to handle the situation comes down to the individual trader, to what that trader feels most comfortable with. For conservative traders, removing the entire position and capturing what gain is left may be the best way to go – so they don’t have to worry about the prospect of giving up the remainder of the gain. For aggressive traders, they may want to keep the position open so they don’t have to worry about the ‘what if’s’ in case the position moves in their favor.

The way that I choose to handle such situations is – in my opinion – a happy medium between the two. I’ve set the mannerism in which I want to manage trades as part of my trading plan. When I get a pre-determined profit printed in my position – I will move the stop to breakeven. The amount of this profit is dictated by the strategy, currency pair, and timeframe that I am trading.

In the example above, I will have this strategy planned before I ever enter the trade. Before clicking on ‘Buy,’ or ‘Sell,’ I want to know at what level I am going to remove my initial risk. And further from that point, I can design the manner in which I want to exit, whether it is a strategy in which I am scaling out or taking the entire position off once a pre-determined profit goal has been reached.

Trade management is a large part of my strategies. I cannot control price, momentum, the news, or any of the other million factors affecting my trade. But I can control my risk; that is in my hands. I control my trade, risk, and account management – and that is what makes me a Trader.

I encourage you to think about, and examine which of the above scenarios would be most difficult for you as an individual trader (removing the position to capture what profit may be left v/s letting the position continue in the hopes of additional gain). And once you know whether you would be more comfortable being aggressive or conservative, design your trade management strategy in that direction.

http://www.dailyfx.com/forex/education/trading_tips/daily_trading_lesson/2011/11/23/In-Trade_Management.html

Wednesday, 11 April 2012

Hi and welcome to the 'Which Forex System?' blog.

Yours 'Forexly',

Cliff

What is the Forex Market?

By Rick Wright

Hello traders! This week I’d like to explore the background of the spot foreign currency exchange market and explain why it is my favorite market to trade. I’ll explain what foreign currency exchange actually is and some of the positives and negatives of this market.

First of all, what is foreign currency exchange, also known as Forex or FX? If you’ve ever traveled to a foreign country you have probably had to trade your home currency for the currency of the country you are visiting. A week later when you left that country you probably traded your leftovers of that country’s currency for your own home country’s currency. Congratulations, you are a Forex trader! Now, this is slightly different than what professional Forex traders do. Very often we plan on being in trades for a few minutes to a few hours, instead of a vacation week or two. Plus, we don’t place our trades at little blue kiosks in airports! Most of our trading is done very similarly to any type of stock, futures, or options trades you’ve done in the past through your own computer.

So how did this market come to be? Towards the end of World War II, the “Bretton Woods System” was enacted to help stabilize the world financial markets by setting up an exchange rate for all currencies vs. gold. Over time, the rules enacted were deemed to be too stifling and obsolete, so in 1971 the Agreement was abolished, which allowed currencies to more freely float against each other. Until the late 1990’s, this foreign currency market wasn’t readily available to the average United States retail investor. In fact many traders in the US had never even heard of Forex until 1999!

As more and more brokerage firms in the US started offering Forex, and more and more traders started trading this market, the volume in this marketplace has increased dramatically. According to a survey coordinated by the Bank for International Settlements, Forex market turnover has increased from ~$500 billion/day in 1988 to ~$1.5 trillion/day in 1998 to over $4 trillion/day now! By comparison, volume on the New York Stock Exchange (NYSE) is approximately $74 billion/day. Not even close! Along with this increase in volume comes a few benefits. Tighter spreads (the difference between the bid and ask price) has certainly helped decrease our costs of doing this trading business. When I first started trading Forex in 2002, the spread on the most popular/liquid currency pair, the EUR/USD, was 3-5 pips. Today the spread has been cut by more than 50%, now commonly .9-1.5 pips. What is a pip you ask? It used to be the smallest tradable unit in the Forex market. Much like US stocks very often trade in .01 (one cent) increments, the Forex market used to trade in .0001 (one one-hundredth of a cent) increments. These days this market now trades in fractions of a pip (.00001). Sounds a bit confusing, but all it really means is our cost of doing business measured by the spread has dropped considerably, which is a great thing!

The above numbers are referencing currency pairs where the US dollar is the quote currency, meaning it is the second of the two currencies in the pair. The first currency is called the base. When talking about the British pound vs. the US dollar currency pair, the trading symbol is GBP/USD (sometimes GBPUSD) where the pound is the base (first) currency and the dollar is the quote (second) currency. So when you look at the trading price of the GBPUSD of 1.5900, the price you see is actually how many US dollars and cents it takes to buy one British pound. The odd thing about the Forex market is that you are actually exchanging one currency for another-essentially buying the first while selling the second, and vice versa. When the GBPUSD moves from the 1.5900 to 1.5905, that is a move of 5 pips. That move doesn’t look like much when we are used to seeing prices move in many pennies or dollars at a time when we trade stocks-with the large leverage in this market that few little pips/fraction of a penny move can help us make a nice living!

Let’s talk about the leverage available in this market. Leverage basically means you invest a little bit of money to control a lot of money/stocks/real estate/or whatever else you are investing in. In the US stock market your broker will very often offer you 2:1 leverage, meaning if you deposit $10,000 in your trading account they may allow you to buy $20,000 of stock. Sounds great doesn’t it? It is when your trade makes money, not so good when your trade loses money. Over-leveraging your account-trading too big of size for your experience and account size-is one of the primary reasons people blow up their trading accounts. In the US, leverage of 20 or even 50 times your money is available at most brokers! In the stock market, you are trading things called shares, in futures you are trading things called contracts, and here you are trading things called lots. One standard lot costs you ~$2,000 to place the trade, and you control $100,000 of currencies with a 50:1 leverage. That should sound a bit scary because it is. Here is an example of over-leveraging:

Say you have a $5000 trading account and do a trade for two standard lots (each lot in this example costs $2000) where you control a total of $200,000 of currencies. If you bought the GBPUSD at 1.5950 each pip would be worth $20 in this trade. This also means that a move of 250 pips against you would wipe out your entire account. That 250 pips is only two and a half cents!

If you look at the Average True Range (a measurement of volatility) of the GBPUSD, you will see that it currently moves approximately 120 pips per day. In the above example you could have blown up your account in about two trading days! Again, this is an example meant to scare you. When used properly and with discipline, leverage may help to increase the profits in your trading account!

Another terrific benefit of this marketplace is the fact that it is open 24 hours a day straight, from Sunday afternoon to Friday afternoon. That means you can trade at 2am, 12 noon, or 8pm at night! You get to customize your trading plan and style to fit the rest of your life instead of the other way around. Have you ever had the urge to place a trade at 12 midnight EST? I have! If you only trade stocks, all you can do is place a limit order and wait for the market to open the next trading day. In the spot Forex market you can place trades and perhaps make money at midnight!

So there you have it. A brief history of the foreign currency market, and a couple of the reasons this is my favorite market to trade-leverage and 24 hour trading. To find out much more about this terrific marketplace, come to one of our Online Trading Academy classes-hope to see you soon!

http://lessons.tradingacademy.com/article/what-is-the-forex-market/

Tuesday, 10 April 2012

Simon Denham's Daily Market Comment

The FTSE is on the back foot this morning following the extended week end as the US employment data that was released on Good Friday disappointed significantly. Any markets that were open yesterday, namely the Dow, saw selling and whilst the FTSE enjoyed two days off for Easter that selling has fed through to today’s session.

Even though the non-farm payroll number was almost half what had been expected the unemployment rate actually fell from 8.3% to 8.2%, which probably prevented an even larger sell off in the US session yesterday. The figure highlights Ben Bernanke’s caution in recent weeks where he has caveated any optimism about the world’s biggest economy with his concern for the outlook and fragility of the US labour market. In order to really bring unemployment down there needs to be consistent figures of 200k plus, and with the US elections at the end of this year faltering, job creation could be the nail in Obama’s coffin, who has continually had question marks over his running of the economy across the pond.

This data coupled with the focus back on the likes of Spain and Italy is unsettling investors. Greece has seen industrial production decline further and Portuguese banks have been going cap in hand to the ECB to borrow more funds. This morning government bond yields for Italy and Spain are creeping higher with the former back above 5% and the latter edging towards 6%. These fear gauges are also reigniting the concerns that caused economic turmoil during the summer of last year. There’s still that grey cloud hanging over the markets that we could see a repeat of last year where, just as it looked like things were on the mend and confidence was returning, the next European domino could fall bringing the recovery crashing down to earth again.

The FTSE is at 5655 at the time of writing having been higher on the open but it’s now testing the lows of the session so far. A downward trend has just started to form in the FTSE and near term support is seen at 5625 and 5585 with resistance at 5740 and 5805/20.

Economic data is thin on the ground today and remains so for the rest of the week, so it’ll be all eyes on the US earnings season which gets underway today in the traditional fashion of Alcoa reporting after the close this evening.

The euro continued its correction against the dollar after recently being rejected from the 1.3380 resistance, but appears to have found near term support down at the 1.3030 level. However, the on going concerns surrounding Spain will likely keep pressure on the euro whilst the lack of enthusiasm for further stimulus from the Fed looks to keep the dollar well supported. At the time of writing EUR/USD is at 1.3080 and near term support and resistance is seen at 1.3055/30 and 1.3135/60/80 respectively.

Gold advanced $13.80 a troy ounce as traders bet that the weak jobs data on Friday would increase the possibility of further stimulus from the Fed. Despite the Fed suggesting that further stimulus wasn’t warranted at the recent FOMC minutes, traders are betting that the recent run of weaker economic data will force the Fed to engage in some form of extraordinary monetary policy in an effort to prop up growth, weakening the dollar and boosting the price of gold. This morning the precious metal is at 1648.

Crude oil continued to make new lows on Monday, following the disappointing jobs data on Friday. Also adding to the declines are the upcoming international talks with Iran, where traders look to be unwinding earlier supply tightening trades. Crude oil futures for May delivery slid 85 cents a barrel to $102.46. Despite the declines the $100 level looks to be firm support. Brent is softening further this morning trading at 121.90 down some 80 cents.

http://www.capitalspreads.com/simon-denhams-daily-market-comment

Friday, 6 April 2012

Wednesday, 4 April 2012

By Jack Wright

Ray Allen is the NBA’s all time leading 3 point shooter. He hangs around the 3 point line and waits for his opportunity to knock down a 3 point shot. He’s simply an assassin with his 3 point shot! In so many games with just seconds left in a close game, his teammates find him and he shoots a dagger in the opposing team to win the game. He is truly a master of his craft. Not only that but he’s smart. He was once interviewed along with his key teammates Kevin Garnet and Paul Pierce, they were all asked to answer one question at the same time, the question was; if there was time left for one last shot, who should take it? Kevin Garnet and Paul Pierce both answered “Ray Allen” should take the shot but Ray Allen himself answered “The open man should take the shot”, of course the right answer is what Ray said, the open man should take the shot because the chances are better he would make it. It goes to show that even though we all know, and his teammates know, he is the best shooter, Ray himself knows better.

So what does Ray Allen have to do with Forex? The answer is discipline. When Ray Allen started playing basketball, he decided that to be successful, he had to stay healthy and that meant eating healthy, no more hamburgers and french fries! Recently in one of the games the announcer said this about Ray Allen;

“Ray Allen has not eaten a hamburger in 20 years!”

WOW, that fact blew my mind away, how could anyone go twenty years without eating a hamburger? The answer is discipline. It takes discipline to succeed. If you wanna be the greatest NBA 3 point shooter of all time, you have to have the discipline it takes to succeed. At age 36, Ray Allen is still playing and still knocking down 3 point shots.

Forex also takes discipline to succeed. We often know and have the systems that tell us when to take a trade and when not to but we lose our discipline, we get emotional and enter too early or exit too late. We don’t stick to the plan, we lose our discipline.

I know one person who has a winning system that wins 80-90 percent of the time. He sells his system at a very high price to the few who can afford it and he told me that still a lot of the buyers don’t stick to the system and lose their discipline. They have a winning system in their hand that they payed a lot of money for but they still can’t stick to it. They get emotional or try to change the system and end up doing much worse. They simply lack the discipline to execute the trades the system gives them.

We are after all human, we get greedy, we get emotional and get excited. Very few people have the kind of discipline that Ray Allen has. But if we can just learn to work on our discipline, our trading results would be much better, with any good trading system.

http://keyforexadvice.com/what-does-ray-allen-have-to-do-with-forex/

Monday, 2 April 2012

Simon Denham's Daily Market Comment

Equity markets ended the first quarter well and recorded some of the best gains for Q1 for many years, particularly across the pond where the S & P hasn’t seen such strength since 1998 and the Nasdaq since 1991. That’s enough to make even the most sceptical of bulls mildly optimistic, however the overriding fear remains that we see a repeat of a year ago where expectations were for the economic recovery to grab a stronghold and continue well into this year only for the European sovereign debt crisis to blow up in investors’ faces.

So far 2012 has started in a similar fashion as businesses are becoming slightly more optimistic about the future and they are starting to recruit a few more people in expectation of improving growth, but they are holding back from really ramping up investment as they don’t want to have their fingers burnt again like they were this time last year. There’s a high probability that the next European nation might become embroiled in the crisis with either Portugal needing another bailout or Spain and Italy, far bigger economies than those bailed out so far, suddenly falling off their tightrope.

The markets are being tempered by the fact that last week European leaders (sorry I meant Germany) have agreed to increase the bailout facility with a few extra hundred billion euros and that confidence surveys have not yet fallen off a cliff.

China remains a crucial piece in the whole jigsaw and their PMI numbers overnight have given the market a little boost as we commence this second quarter. The PMI theme continues throughout this week as we see surveys from the UK, Germany and US on manufacturing and services. UK and EU manufacturing data is out this morning with the UK number due to fall but remain above the 50 mark and for the EU it’s due to remain unchanged under the 50 level. Then this afternoon we see the US’s cards, as well as construction spending which are both expected to rise, and good numbers here might just spur the US markets into action and see them start the second quarter where they left the first.

At the time of writing the FTSE is at 5790 up almost one percent as the index finds support around the 5730 area for the second time in a month. This double bottom is not only a crucial support level for the index, but it might be enough to attract bulls back into the market, an indication of which we’re already seeing this morning.

The euro ran out of a bit of steam as the week drew to an end, but momentum started to pick up again over the weekend after news that EU finance ministers will increase the eurozone bailout funds. This along with Spain's latest budget report, which outlines plans to cut 27bn euros in deficit by raising taxes, has encouraged the euro bulls back into the market. The euro is trading higher against the dollar this morning at 1.3345 and could push on higher to its next resistance level at 1.3385.

Gold pushed higher last week as the dollar weakened and ended the quarter comfortably higher. News that the eurozone bailout fund is to be increased also gave the yellow metal support as money will continue to be pumped into the system. The safe haven is up over 6.5 percent for the year already, but this is the first time since 1998 that the S&P has had a better first quarter. This suggests that confidence is high and the gearing is more towards higher risk investments, which may cool the interest for safer places like gold. This morning it is trading at 1666, down 0.1 percent on the day.

http://www.capitalspreads.com/simon-denhams-daily-market-comment