Your Trading Diary

Is this the end of the strong rally? I think so!

2012-02-02T16:24:00.000Z

After a strong rally since mid-December, has the bull hit the wall?

The S&P has rallied more than 90 points for a better than 7.5% gain, the Dow Jones Industrials jumped 900 points, and most impressively, the Nasdaq has gained 10.5%.

But now, the chances are excellent that the bull has hit the wall, at least for awhile.

Here's why we think we will start to see a significant sell off:

Fundamentals are deteriorating.

1. Europe remains a problem. If Greece is solved, which would be a miracle, Portugal is next with a 10-year bond yield of 15.2% which is clearly unsustainable. The only reason it isn't higher is because of the aggressive intervention of European Central Bank Chief "Super Mario" Draghi, who so far has managed to avoid a most serious credit crunch in Europe. Last weekend, Germany made proposals for the European Union to basically annex Greece and its economy which, needless to say, did not fly. That was either a bold or a desperate move, and as negotiations drag on this week, it's looking more like desperate.

2. Corporate earnings are slowing. Outside of Apple's blowout results, the earnings season has been lackluster and Amazon's results on Tuesday didn't do much to lift spirits.

3. The Federal Reserve has effectively said, "Houston, we have a problem." Last week's GDP report was an anemic 2.8%, well below historic norms for "recoveries," and certainly not strong enough to make a dent in unemployment or the deficit. In response, Dr. Bernanke and the Fed have said they're going to keep interest rates low for as far as the eye can see, continue with Operation Twist, and even possibly fire up the printing presses again with QE3, QE4, whatever, to keep the economy from sinking back into the abyss of recession and deflation.

4. Tuesday's much cheered ADP report of 170,000 new jobs in January was actually a miss of the expected 182,000 and well below December's reading of 292,000 which was revised downward from the initial estimate of 325,000, so one can only wait to see what Friday's nonfarm payroll report will bring.

5. The bond market is pricing in hard times with near-record low yields, while equities have partied like there's no tomorrow. Only one of these markets can be right, and history falls in favor of the bond market, which is supposed to be the "smarter" of the two. What does the bond market see that equities haven't?

Technical indicators are deteriorating, as well. RSI, MACD R% indicators and many more show signs off weakness.

After a very strong six weeks, we see signs that the bull is tiring.

Consumer Confidence Declines

2012-01-31T15:25:00.002Z

U.S. consumer confidence in January gave back some of the huge gains posted in the previous two months, according to a report released Tuesday. Views on labor markets darkened.

The Conference Board, a private research group, said its index of consumer confidence retreated to 61.1 this month from a revised 64.8 in December, first reported as 64.5. The January index was far less than the 68.0 expected by economists surveyed by Dow Jones Newswires.

The fallback was concentrated in consumers’ view of the current economy. The present situation index, a gauge of consumers’ assessment of current economic conditions, dropped to 38.4 in January from a revised 46.5, originally reported as 46.7.

Consumer expectations for economic activity over the next six months slipped only slightly, to 76.2 in January from a revised 77.0, first reported as 76.4.

“Regarding the short-term outlook, consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects. Recent increases in gasoline prices may have consumers feeling a little less confident this month,” said Lynn Franco, director of the Conference Board Consumer Research Center.

Perceptions about the job markets worsened this month. The survey showed 43.5% think jobs are “hard to get” up from 41.6% saying that in December, while only 6.1% think jobs are “plentiful” down from 6.6% in December.

Source: http://blogs.wsj.com/economics/2012/01/31/consumer-confidence-unexpectedly-declines/

Larry Williams Forecast 2012 Report

2012-01-12T16:22:00.002Z

I have just completed my 2012 forecast... it is an exciting one, projecting three major moves this coming year. Here is a hint at two of them:

1) There will be a significant sell off in the first half of the year

2) There will be a very strong rally - before the elections

You are probably wondering how I he does this? It is simple to explain but not simple to do. He first determines all of the short-term intermediate and long term cycles in a market then blend these together with the historical very long term cycles. The result is a road map of what I expect the market to do this coming year.

As you can see the Dow has repeatedly followed the road maps with a good deal of clarity. That's good news, but the even better news is the same technique can be used on individual commodities and stocks. This is his 7th year of formalizing these forecasts in a report, with an ever increasing readership because they have been correct.

Don't take my word for it. Take my charts, the forecasts I made last year. See for yourself. Here are the exact forecasts made for Gold, Silver, Copper, RBOB Unleaded Gasoline, Treasury Bonds, and Microsoft for 2011.

http://www.ireallytrade.com/forecast.html

Stop being shocked and surprised, and unprepared. Know the future.

All sales will stop on January 20, 2012. After that no copies of the report will be sold. Also note the report is copyrighted and watermarked on every page so you are protected from copyright pirates.

S&P 500 spx Index targets for YE 2011

2011-12-14T13:12:00.001Z

The S&P 500 is a stock market index containing the stocks of 500 American Large-Cap corporations. The index is owned and maintained by Standard & Poor's, a division of McGraw-Hill. All of the stocks in the index trade on the two largest US stock markets, the New York Stock Exchange and Nasdaq. The Dow Jones Industrial Average and the S&P 500 are the most widely watched indexes of large-cap US stocks. The S&P 500 is often quoted using the symbol SPX or INX, and may be prefixed with a caret (^) or with a dollar sign ($).

Target for year end is 1302-1308. This is based on cam levels, which you can read about on our ealier posts.

Black Friday - The day after Thanksgiving Day

2011-11-21T12:25:00.001Z

What Does Black Friday Mean?
1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold speculators, including Jay Gould and James Fist, who attempted to corner the gold market. The attempt failed and the gold market collapsed, causing the stock market to plummet.

2. The day after Thanksgiving in the United States. Retailers generally see an upward spike in sales and consider this to be the start of the holiday shopping season. It's common for retailers to offer special promotions and to open early to draw in customers.

Read more: http://www.investopedia.com/terms/b/blackfriday.asp#ixzz1eLFrI25j

Interesting to note that with respect to Thanksgiving Day week where the S&P 500 was up month-to-date on close of Friday prior to Thanksgiving

the S&P 500 showed a positive weekly performance on 27 out of the last 37 occurrences (or 72.97% of the time) ;
did not post a single lower close below option expiration’s close on 15 out of the last 37 occurrences ; and finally
posted a weekly loss greater than -1.0% on only 3 occurrences (max. loss -1.56%), but a weekly gain greater than +1.0% on 18 occurrences.

Conclusions:

From a statistical and historical point of view, there is a good chance (and a significantly above-average expectancy as well) that the market will probably continue its up-move during Thanksgiving Day week.

Trading FTSE & SPX 500 CAM LEVELS

2011-11-02T11:54:00.002Z

Trading CAM levels really is simple. You just need to have patience and wait for the signals. The best are the breakout long/short moves - these generally set the trend for the trading session ahead.

If the H3 (Short) level is hit, the idea is that you go SHORT (against the previous trend) in the expectation that the market is about to reverse, with a stoploss point somewhere between the H3 and H4 levels (if it his H4 (Breakout), chances are it's going to breakout upwards, so you want your stop to be before that!).

The opposite is true for L3 (Long). These levels are great and have a history of success as long as you have patience to wait for them... Below are today's ftse and spx levels.

Good luck trading.

SPX 500 - US 500

^GSPC 1 Nov 2011 End of Day Data
Open	High	Low	Close
1,251.00	1,251.00	1,215.42	1,218.28

^GSPC 1 Nov 2011 Pivot Points, Fib Pivots and Camarilla
R3	1,276.63	Fib R3	1,263.46	Brk Out Long	1,237.85
R2	1,263.81	Fib R2	1,250.29	Short	1,228.06
R1	1,241.05	Fib R1	1,241.75	HL2	1,224.80
Pivot	1,228.23	Pivot	1,228.23	HL1	1,221.54
S1	1,205.47	Fib S1	1,214.71	LL1	1,215.02
S2	1,192.65	Fib S2	1,206.17	LL2	1,211.76
S3	1,169.89	Fib S3	1,193.01	Long	1,208.50
				Brk Out Short	1,198.71

FTSE - UK 100

^FTSE 1 Nov 2011 End of Day Data
Open	High	Low	Close
5,544.20	5,544.20	5,338.40	5,421.60

^FTSE 1 Nov 2011 Pivot Points, Fib Pivots and Camarilla
R3	5,736.87	Fib R3	5,638.48	Brk Out Long	5,534.79
R2	5,640.53	Fib R2	5,562.33	Short	5,478.20
R1	5,531.07	Fib R1	5,512.94	HL2	5,459.33
Pivot	5,434.73	Pivot	5,434.73	HL1	5,440.47
S1	5,325.27	Fib S1	5,356.53	LL1	5,402.74
S2	5,228.93	Fib S2	5,307.14	LL2	5,383.87
S3	5,119.47	Fib S3	5,230.99	Long	5,365.01
				Brk Out Short	5,308.41

EU Economic Summit – 26 Oct 2011

2011-10-26T09:55:00.005+01:00

EU Economic Summit is going all day. And it is most important event for today. Germany’s parliament is being called on to get behind Chancellor Angela Merkel before she attends today’s critical European summit in Brussels.

Merkel wants the Bundestag to agree to boost the euro zone’s 440-billion-euro European Financial Stability Fund without pouring more taxpayers’ money into it.

A strong showing vote will give her a mandate to negotiate a deal with other leaders aimed at delivering a range of measures to stop the debt crisis from spiralling.

CDU parliamentary floor leader, Volker Kauder said:

“It would be very nice if a large majority in the German Bundestag could give support to the German government for the negotiations taking place in Brussels.”

In general her EU colleagues are looking for agreement on:

The banks taking bigger losses on the money they have loaned to Greece.

A top-up to those banks’ reserves with the help of the public sector.

A beefing up of the EFSF bailout fund and getting the Italian economy back on track.

But at the end of the day will the gathering live up to its title as the summit that rescued the euro?

If we have positive outcome from today's meeting we will for sure see stocks rally and break out long. If however there is negative news, get ready for new lows. Keep note of the break out long and short figures below.

FTSE 25 Oct 2011 Pivot Points, Fib Pivots and Camarilla
R3	5,686.50	Fib R3	5,629.21	Brk Out Long	5,585.23
R2	5,630.30	Fib R2	5,589.03	Short	5,555.37
R1	5,577.90	Fib R1	5,562.97	HL2	5,545.41
Pivot	5,521.70	Pivot	5,521.70	HL1	5,535.46
S1	5,469.30	Fib S1	5,480.43	LL1	5,515.55
S2	5,413.10	Fib S2	5,454.37	LL2	5,505.59
S3	5,360.70	Fib S3	5,414.19	Long	5,495.64
				Brk Out Short	5,465.77

SPC 25 Oct 2011 Pivot Points, Fib Pivots and Camarilla
R3	1,273.96	Fib R3	1,263.80	Brk Out Long	1,244.12
R2	1,264.08	Fib R2	1,253.66	Short	1,236.59
R1	1,246.56	Fib R1	1,247.09	HL2	1,234.07
Pivot	1,236.68	Pivot	1,236.68	HL1	1,231.56
S1	1,219.16	Fib S1	1,226.26	LL1	1,226.54
S2	1,209.28	Fib S2	1,219.69	LL2	1,224.03
S3	1,191.76	Fib S3	1,209.55	Long	1,221.52
				Brk Out Short	1,213.98

Eurozone crisis is dragging UK into double-dip recession

2011-10-25T11:26:00.000+01:00

The economy might already be shrinking because of the crisis in the eurozone, one of the Bank of England’s leading experts has warned.

Martin Weale – who sits on the Monetary Policy Committee which sets interest rates – said that the economy is at high risk of contracting in the final quarter of 2011 owing to anxiety about the single currency bloc.

If his prediction is correct, the country would be on the verge of a double-dip recession.

‘Looking at the economy at the moment, I think the problems of the euro area and the knock-on consequences for our banks, for business confidence, for the way consumers feel about things are likely to prove important,’ he said.

‘I certainly do think the underlying rate of growth of the economy is weak now and I wouldn’t be terribly surprised if we were to see output contract in the fourth quarter.’

A transcript of the October MPC meeting reveals that the nine-person group predicted growth in the last three months of the year would be ‘close to zero’.

United States Fed's Bernanke Speech 18th October 2011

2011-10-18T16:20:00.001+01:00

U.S. stocks are poised to extend Monday's slide today, thanks to uninspiring gross domestic product (GDP) data out of China and a few lackluster big-cap earnings reports. Among the notable pre-market decliners are blue chips IBM Corp. (IBM) and Bank of America (BAC), which are both set to start the session in the red. Meanwhile, lingering concerns about the fiscal health of Europe have also fueled the bears ahead of the bell, with Moody's warning that France's triple-A credit rating could be in danger. Against this pessimistic backdrop -- and ahead of an afternoon speech from Federal Reserve Chairman Ben Bernanke (6.15pm UK TIME) -- the Dow Jones Industrial Average (DJIA) is flirting with a second straight triple-digit drop.

1190 is a key support level which has been hit a few times, perhaps this is the level if broken will send the spx 500 down to 1150.

Good luck trading.

Multi-Millionaire Traders Share Their Thoughts On Trading

2011-10-18T15:26:00.000+01:00

“The key is consistency and discipline,” says Richard Dennis who grew $400 into $200,000,000.

“The key is consistency and discipline. I don’t think anybody winds up making money in this business because they started out lucky.”

For legendary trader Richard Dennis, the importance of being consistent isn’t just theory. In 1984, on a bet, Dennis trained 23 individuals off the street to religiously follow a set of trading rules. His point was to provide that discipline was the key to trading success. All but 3 of those beginner traders made over 100% return their very first year of trading and Dennis won his $1,000,000 bet. Consistent discipline is also what is taught in the “Futures in Motion” advisory service.

“Always use stops” recommends Michael Marcus who turned $30,000 into $80,000,000.

“Always use stops. I mean actually put them in, because that commits you to get out at a certain point … to be a competent trader and make money is a skill you can learn.”

“Your Passport to Professional Advice”

“MarketClub” is your passport into the exciting and sometimes super profitable world of trading, where turning a small bankroll into a huge fortune is not an impossible dream.

Notice that none of these incredibly accomplished traders attribute their success to some secret formula. The methodologies of Schwager’s 17 super-traders varied greatly, but they all had one thing in common. Through experience they developed the method and the discipline to act decisively time after time.

FED MINUTES - FOMC Minutes - 11-10-2011

2011-10-11T13:03:00.002+01:00

TODAY'S FED MINUTES - WILL THIS BRING ABOUT ANOTHER MARKET SLUMP?

The long moves over the last week were triggered entirely by the optimism of Europeans who hope that their policymakers would finally get their acts together and deliver on their promises to stabilize the region. Considering how much of the concern of central bankers around the world centers on the uncertainties in Europe, we are not surprised that investors have reacted so positively to the prospect of Germany and France reaching a deal by the end of the month. Given the large amount of short euro positions in the market, we still attribute much of the move to short covering. With that in mind however, if Europe truly resolves its problems and the deal sketched out by Germany and France effectively stabilize the market, then a rate cut by the ECB may not be needed, leaving the U.S. dollar a less desired currency because the sluggish pace of U.S. growth could still necessitate more stimulus from the central bank.

Later today the FOMC minutes will shed light on how close the Federal Reserve is to initiating QE3. The last time the central bank met, they took the rare step of twisting the yield curve by selling short term Treasuries and purchasing longer term ones. This was exactly what the market had anticipated at the time but meeting expectations was not enough. The Fed did the minimum of what investors expected and they were punished for it. Last week, Bernanke stepped out and admitted that that Operation Twist had only a modest impact on the market. Traders will be looking at the minutes to see how close the central bank was to implementing QE3. If they discussed it heartily, then the prospect of more stimulus next month is still realistic. If there was a lot of debate about the need for any stimulus at all and the only reason why they chose Operation Twist was to give the market something instead of nothing, it would be a major disappointment that could lead to a renewed rally in the greenback.

At the time, there was absolutely no mention of additional asset purchases in the FOMC statement and by not mentioning QE3, it certainly appears that the central bank could be saving their few remaining bullets in case the volatility in the financial markets intensifies or the U.S. economy falls into recession.

How to Trade Bernanke, President Obama Speeches

2011-09-08T15:25:00.000+01:00

http://videos.thestreet.com/v/44802793/how-to-trade-bernanke-president-obama-speeches.htm

THE REAL RECESSION - WORLD MARKET CRISIS

2011-08-08T15:16:00.003+01:00

It's been an awful week for stock markets across the globe. Last Friday, the UK's main index, the FTSE 100 (Euronext: VFTSE.NX -news) , stood at 5,815. At the time of writing, it's trading at 5,340. That's a fall of 8%. As various screaming newspaper headlines will tell you, many billions of pounds have been lost, for the moment at least.

What's caused the rapid sell-off? Well, several different problems have come to a head. To be honest, most of these issues have been hanging around for a while, but investors have just chosen to ignore them up until now.

The recent political bickering over the US debt ceiling was a bit of a sideshow. The fact that US economic growth figures have been revised downwards probably spooked investors more. A key US employment indicator, called 'non-farm payrolls', provided some relief on Friday afternoon though. It showed that the US economy created 117,000 jobs in July, which was slightly more than expected.

Here in Europe (Chicago Options: ^REURTRUSD - news) , once the Greek debt situation was dealt with (temporarily at least), the bond market turned its attention to Spain and Italy. Both economies are in significantly better shape than Greece but are much, much larger. The theory is that these countries are too large for a bailout, so more radical action, including further spending cuts, is required. When you're relying on politicians to 'do the right thing', it's hardly surprising everyone's getting skittish!

It's not just the US and Europe though. Australia, which largely sailed through the credit crunch unharmed due to its abundance of natural resources, has lowered its growth forecast. And then there are worries that Chinese economic growth is slowing down as well.

As the West goes through its period of austerity, we're relying on Asia to provide the demand we need to grow again, thereby boosting our tax revenues and shrinking our deficits. In other words, any slowdown in the East will make our recovery much more difficult.

What does it mean for you?

Although the UK stock market has fallen in tandem with other markets, our own economic outlook hasn't really changed that much. GDP growth for the first and second quarter was pretty anaemic, but it's still heading in the right direction, albeit at a glacial pace.

Let's face it, this recovery was always going to take several years and be a bumpy ride. After all, we spent from 2000 to 2007 getting into this mess and it's not unreasonable to think getting out of it will take a similar period of time. Quick fixes might sound great, but the problems we face are too complex and deep rooted to be solved overnight.

If that all sounds too gloomy, then you'll pleased to hear there's some good news around. For example, investors have been buying gilts (UK government debt) in recent days, as they're perceived to be a safe haven. This will bring down the likely cost of any new government debt we have to issue in the near future, costing us taxpayers a little less in the long run.

This week's events have also knocked about $10 off the price of a barrel of oil. This should lead to lower petrol and energy prices in due course, and also ease inflation pressures across the board. What's more, it's probably a safe bet that UK interest rates will stay at rock-bottom levels for at least another twelve months, keeping mortgage costs low for many people. And the mighty pound has even managed to strengthen a bit against the euro this week -- there's always a silver lining if you look hard enough!

The big unknown is how far this particular crisis will go. To some extent, that depends on how quickly European politicians get their act together and stop pretending the large national debts across the euro zone will simply fix themselves. The message seems to be sinking in, but it's not clear yet what their next steps will be.

If the politicians continue to waver, the European economy will slow down even more and that's bound to have a knock on effect on the UK economy, and on our banks in particular. Europe is our largest export market after all.

So while this latest financial crisis is nowhere near as bad as the one we faced in 2007-08, it does have the potential to get a lot worse than it is at the moment.

http://uk.finance.yahoo.com/news/What-The-Market-Crash-Means-foolcouk-2213330774.html?x=0

source:

5 Tips For Making Money Trading Forex And The Stocks

2011-07-27T20:10:00.000+01:00

Day trading forex currency is becoming a more and more popular way to make money. Forex is the foreign exchange market where trillions of dollars worth of currencies are exchanged worldwide every day. Money is made by exchanging one currency for another when you think that the values will change, and then exchanging them back at a profit if this was successful. Day trading systems involve opening and closing trades within the same day, although many day traders work on a much shorter timescale of just a few minutes.

Some people become involved in forex day trading because they only have a short time available to trade. One advantage of the forex markets is that they are open 24 hours Monday through Friday, so you can hold down a job and trade in the evenings. Other traders become successful enough to do this full time. The fast and furious atmosphere provides a big rush, and although it is risky, there is the potential to make a lot of money very fast.

Of course you cannot just jump in and make tons of money. You will need to know something about currency trading and have a profitable system that tells you when to open a trade, when to close it and how much profit to aim for.

Here are our top 5 tips to help you make the most from day trading foreign currency.

1. Choose your broker carefully.

Some brokers do not like day trading and will close your account if you make money this way. Others are fine with it. Check this out before you open an account to save yourself a lot of time and frustration.

2. Start with a demo account.

Most brokers will provide a free demo account and you should start implementing your system with this. This will help you get to know the trading platform thoroughly and understand how to the make the most of your system before you ever risk any real money.

3. Plan your trading time.

You cannot be sure of having a trading opportunity right when you want it so it is important to be prepared through all of your potential trading time. Arrange not to be interrupted and minimize distractions by switching off your email and phone. See what is happening in the market including major world news. Check whether any financial reports are due during your trading time. A report being released when you did not expect it can lead to disaster!

4. Improve your analytical skills.

The fast moving world of day trading almost always relies on quick and accurate interpretation of charts and financial data. You do not need to be a math genius because most of the calculations are done by the software. You just need to understand what you are seeing and make confident decisions based on the data.

5. Stay level headed.

All forex trading relies on maintaining calm judgment, without being swayed by our hopes and fears. The fast pace of day trading makes this even more important. You must be able to apply your system patiently and consistently without being carried away by greed or panic.

Remember that day trading is risky and money can be lost as well as made. Be sure you have your system tested and these tips fully mastered if you want to make big money by day trading forex currency.

How To Become Foreign Exchange (Forex) Trader

2011-04-07T10:30:00.001+01:00

Being a forex or foreign exchange trader no longer means you have to work for a bank in one of the world's financial centers. These days you can trade on your own behalf, from anywhere.

Since the rise of the internet many people are doing this from their own homes, making money in their spare time or even making a full time income. But what is forex trading and how does it work?

A foreign exchange trader deals in currencies. He or she will sell one currency that seems to be falling in value, to buy another that seems to be rising. There are always two currencies involved in a trade (a currency pair) because when you want to buy dollars you have to have another currency to exchange for them.

In the beginning it is best to be involved with just one currency pair. Most people start out trading in the EUR/USD market, that is the euro against the US dollar. This is the biggest forex market. There is plenty of information available for this market and it tends to have lower costs and be relatively stable.

Nevertheless forex is a very volatile market. This means that the prices can rise and fall steeply and quickly. The risk is high. It is easy to lose money. In fact, some losses are inevitable, so you should manage your account so that you never risk too much on one trade. You can use stop losses so that your broker will automatically sell if the price goes a certain way against you. The aim is not to have no losses, but to make sure that your profits are higher than your losses so that you end up with a net gain.

You will need access to a computer with a high speed internet connection any time that you want to trade. Unless you use a robot to control your currency trading, you will also need time where you can concentrate on learning a profitable system and then on trading itself. You pretty much need to be able to lock yourself away in a room to do this, at least for a couple hours a day. It is no good trying to trade from your desk at your day job with your boss interrupting you, or using a computer in the family den with kids climbing on your knees wanting to play games. You must be fully concentrated on the movements in the market or you could miss the right moment to either open or close a trade.

If you are a cautious person who likes a solid investment with predictable low returns, you should not become a currency trader. Forex traders are people who enjoy risk and love the challenge of trying to turn a profit in a fast moving market.

It helps if you are strongly focused on your goals and not easily swayed by emotion. It is important not to let fears of losses or dreams of huge wealth divert you from your strategy. You also need to stay aware of financial news, not only in your own country but in all of the major world powers, because this will affect the forex markets. With these characteristics and a good trading system in place, a foreign exchange trader can reap substantial gains from his or her investment.

Billionaire Warren Buffett bowled by hospitality

2011-03-23T11:33:00.000Z

The Chief Minister, attired in a formal suit, briefed Warren Buffett about the investment opportunities in Karnataka, the progressive policies of the state government, the close to 400 MOus signed at the Global Investors Meet and the speedy implementation of several of the projects.

"I invite you to invest in Karnataka in different sectors and assure you all the support and coordination from our government," Yeddyurappa told the legendary investor.

To a question as to what Karnataka needs to be doing to woo more investors, Buffett said, "You are doing the right thing."

Asked what his own assessment was on the impact of the Japanese crisis on the re-insurance sector, he said, "It is very early to assess that."

"Much of the loss is uninsured... It is a wild guess at this point, but I would say that it will be probably be between half a billion and a billion dollars.

To put that in perspective, Katrina (hurricane) cost us USD 3 billion and we are much larger. It is a significant amount of money, but it is not what I call a super catastrophe from the financial standpoint," he said, but added that it was a great tragedy from the human loss point of view.

What is Margin Trading?

2011-03-21T12:31:00.000Z

Forex margin trading is a way of applying leverage to increase the purchasing power of your money. Leverage simply means using a small sum to control a much larger sum. This is possible because it is unlikely that the value of a currency will change by more than a certain percentage over a short time. So you can place a few hundred dollars in your brokerage account to trade on the margin - the amount that you think the price will fall. Your broker will in effect lend you the balance.

Trading on margins is also known in stock and futures trading, but because of the special nature of currencies, you can get a lot more leverage in the forex market. Depending on your broker's terms, you may be able to control 50, 100 or even 200 times your account balance.

This can lead to big profits if you are successful, but it can also mean big losses if not. In general, the more leverage you use, the more risky your trading is.

We can understand leverage and margins if we consider an example.

Imagine that the current rate on the British pound to US dollar forex market is shown as GBP/USD 1.7100. So to buy one British pound you would need $1.71. If you expected the value of the dollar to rise against the pound you might decide to sell enough pounds to buy $100,000. If your broker used lots of $10,000 each, this would be 10 lots. Then you would sit back and wait for the price to go up.

A few days later you might find that the price had moved to GBP/USD 1.6600. Sure enough, the dollar has risen and the pound is now worth only $1.66. If you sell your dollars now and buy back into pounds, you will have made a profit of 2.9% less the spread. 2.9% of $100,000 is $2,900, so that would be an excellent trade.

But most of us do not have $100,000 spare cash that we want to trade on the currency exchange market. So here is where the principle of forex margins comes into play.

Since you are buying and selling different currencies at the same time, your own money only has to cover any loss that you might make if the dollar falls instead of rising. And you would put a stop loss into place to limit that loss, so $1,000 might be all you needed to have in your account to make this $100,000 purchase. Your broker guarantees the other $99,000.

In fact many brokers now operate limited risk amounts where the account will automatically close out the trade if whatever funds you have in your account are lost. This prevents margin calls which can be disastrous for a trader because they mean that you can lose more than you have. But with a forex limited risk account that is not a possibility. The broker's software that you use to control your account will not let you lose more than your account balance.

Using leverage in this way is so common in currency trading that you will soon do it without even thinking about it. Still it is important to keep in mind the risks. Lower leverage is always safer and you may never want to go to the maximum forex margin that your broker would allow.

Forex Market Hours: Can You Really Trade Currency 24/7?

2011-03-16T13:22:00.000Z

The forex market hours stretch from Monday morning in Sydney, Australia to Friday afternoon in New York. During that time the market is open somewhere around the globe at all hours of the day or night.

However it is not a 24/7 market because it does shut down on weekends. 24/5 would be more accurate.

If you need to know the exact times that the markets open and close, you have to take time zones into consideration. It is very simple when expressed in UTC. This is Universal Coordinated Time, formerly known as Greenwich Mean Time. This is the standard (winter) time in Greenwich, London which is the point of zero longitude on the globe.

So, the normal forex market hours are 22.00 Sunday UTC to 22.00 Friday UTC. This is 10 pm in the UK in winter time.

New York is 5 hours behind the UK so the global forex market opens and closes at 5 pm Sunday/Friday in New York, 2 pm on the US west coast, 11 pm in Germany, 8 am Monday/Saturday in Sydney.

Things get a little complicated when you start to try to take summer time daylight saving into account. This makes one hour difference in countries that observe it. But daylight saving operates in a different way in the southern hemisphere countries such as Australia which have summer time from September to March instead of March to September.

The hours of the different major national markets are as follows:

Sydney: 10 pm to 7 am UTC
Tokyo: 12 midnight to 9 am UTC
London: 8 am to 5 pm UTC
New York: 1 pm to 10 pm UTC

Or we can express that in EST (Eastern US time):

Sydney: 5 pm to 2 am EST
Tokyo: 7 pm to 4 am EST
London: 3 am to 12 noon EST
New York: 8 am to 5 pm EST

You can see that these correspond to 24 hour cover.

However, this does not necessarily mean that trading will be good at all of these times. Just after a major market opens, the prices can be very volatile and unpredictable. Many traders will stay out of the forex market for up to an hour four times a day when the financial markets are waking up in these major cities.

The US dollar is the most traded currency by a long way, involved in 2.5 times as many trades as its nearest rival the euro. This means that events in the USA have a greater impact on the financial markets than events in other countries. The New York market tends to slow down around 3 pm local time (8 pm UTC) and if you are involved in a US dollar pair, this can be a good time to stop trading for the day.

So theoretically you can trade 24 hours a day from Sunday night to Friday night. Automated software in the form of a forex robot can even make this physically possible. However, a cautious trader will choose his times and will not be active during all of the forex market hours.

Beginner To Forex Trading: What Is It All About?

2011-03-10T11:06:00.001Z

For a beginner forex currency trading may seem to be a whole new world but in fact the basics are quite easy to learn. You just need to understand the buzz words and trading terms and grasp a basic understanding of how the markets work.

Making big money in a short time is what forex currency trading is all about! It is possible for investors to make a lot of money very fast because the rates of exchange on the foreign market can rise and fall quickly. This means of course that it is risky and there is also a chance of losing a lot, just like most things in life that have the potential of big returns.

As you will know if you have ever exchanged currency for a vacation, the rates are constantly changing. For example you may change $100 into another currency planning to travel, and then find that you do not need it and change it back. The rate will probably have changed in the meantime and you may even have made a profit.

Forex traders deal in currencies hoping to make a profit all of the time, but instead of changing money at the bank they use a broker. Most transactions these days are handled online. In many ways it is not so different from stock trading. There is the same potential to trade in margins where a small balance held by your broker can control much larger deals.

One difference from stock exchange trading is that forex traders are not limited to dealing in their own country. You can trade any two currencies regardless of where you live. This also means that the market is international. Because of time zone differences, it is open 24 hours a day from Monday morning in Australia to Friday afternoon in New York.

Each currency is represented by 3 letters: USD for the US dollar, GBP for the British pound, EUR for the Euro, JPY for the Japanese Yen, CHF for the Swiss franc, CAD for the Canadian dollar, AUD for the Australian dollar etc. The exchange rate between two currencies may be expressed like this: USD/CHF 1.14. This means that to buy one US dollar you will need 1.14 Swiss francs.

If you want to start out in forex trading you will need to look for a forex broker or investment management company that you trust. It is worth shopping around and checking online forums for recommendations. Check out how long the company has been in business and what your rights and liabilities will be. Read all of the fine print.

You will probably also want to use a bot to do your trading for you. This is automated forex trading software that can trade 24 hours a day according to rules that you set for it. There is usually a demo option so that you can test out the whole system for a while before you let it trade with real money. There are many forex robots on the market and most of them come with full instructions for beginner forex currency trading.

Dollar Soars as Stocks Slump on Oil Rebound

2011-03-10T11:01:00.000Z

The US Dollar outperformed in overnight trade, rising 0.6 percent against its top counterparts as stocks slumped in Asian trade, boosting demand for the safety-linked currency. The MSCI Asia Pacific regional benchmark equity index slumped 1 percent as crude oil prices resumed their advance amid escalating violence in Libya, with government forces launching a fresh round of air and artillery strikes as well as offering a $407,000 reward to anyone who arrests the head of the rebel leadership. The WTI crude oilcontract added as much as 0.5% percent overnight.

The Australian Dollar underperformed, bearing the brunt of risk aversion as disappointing economic data compounded pressure on the risk-sensitive currency. Prices slumped as much as 0.6 percent asChina’s Trade Balance unexpectedly slipped into deficit as export growth slumped to the slowest in 15 months while February’s Australian Employment report showed the economy unexpectedly shed 10.1K jobs in February, marking the first decline since August 2009.

China – itself an export-geared economy – is Australia’s largest trading partner; a drop in its exports foreshadows a decline in its own demand for Australian raw materials (notably coal and iron ore). Indeed, imports from Australia dropped to the lowest in 10 months ($4.5 billion) in February while overall inbound shipments added grew at an annual pace of 19.4 percent, the slowest since October 2009.

The Reserve Bank of New Zealand cut interest rates by 50 basis points to bring the benchmark lending rate to 2.5 percent. Economists and traders alike had expected a 25bps reduction. The New Zealand Dollar took the announcement relatively well however as RBNZ Governor Alan Bollard said current monetary policy accommodation will be removed as rebuilding efforts following the Christchurch earthquake boost growth by 2012, labeling today’s move “pre-emptive”. On balance, the central bank seems to be signaling that no further easing ought to be expected, with markets now pricing in a return to rates at 3 percent within 12 months.

Source: http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2011/03/10/FOREX_Dollar_Soars_as_Stocks_Slump_on_Oil_Rebound_China_Export_Slump.html

Economic Indicators Turn Postive for the U.S.

2010-12-02T09:52:00.000Z

U.S. dollar higher in forex trading

Economic indicators are turning positive for the U.S., with hopes for another increase in nonfarm payrolls. Additionally, there has been an increase in consumer confidence, and that is helping matters.

For the most part, a cautious optimism has come to the U.S. market, helped along by holiday sales from the Black Friday weekend. The U.S. dollar is higher in forex trading, but that may just be due to weakness in Europe, and continued weakness shown by gold prices

For now, though, it does appear as though there is some hope for the U.S. economy, and that the U.S. economy may be finding its footing.

Euro Catches a Break in Forex Trading

2010-12-02T09:04:00.002Z

Currency trading with EUR/USD

The euro is catching a break this morning in forex trading on the currency market. The last few days have been somewhat grueling for the euro, as it has been rather weak. Concerns about the state of the euro zone -- thanks to sovereign debt concerns -- have predominated.

Today, though, forex traders have something different to think about. Economic data has been pouring in from around the world, and the result is encouraging. High beta currencies from the pound to the Aussie are gaining along with the euro as the U.S. dollar drops.

With the U.S. dollar no longer needed as a safe haven, and with gains by metals to lend strength, EUR/USD is gaining rather handily in currency trading on the FX market. We will have to see how long this new found optimism lasts, however. More bad news could easily send the euro tumbling again.

U.K. Deficit Decreases, Thanks to Spending Cuts

2010-11-01T11:31:00.003Z

Sterling heads higher against the U.S. dollar

The U.S. dollar is gaining against most major currencies today as confidence in global economic recovery slips a bit. However, the one major currency that is gaining against the U.S. dollar is the sterling.

U.K. Deficit Retreats

David Cameron's government promised to cut spending and lower the deficit, and it appears that just such a scenario is under way. The U.K. deficit is being reduced, and that is providing forex traders with a currency to be confident in.

While deficits in the U.S. and euro zone grow, Britain is showing that it is possible to cut back. The move now means that the risk of a credit rating downgrade has been significantly reduced, and that Britain is likely to maintain its sterling rating.

U.S. Dollar Slips in Forex Trading

2010-10-29T12:35:00.003+01:00

U.S. Dollar Slips in Forex Trading

Gold prices, optimism pressure greenback in currency trading
The U.S. dollar, after enjoying a bit of a rally recently, is now slipping again in forex trading on the currency market. Today's developments are pressuring the greenback a bit in currency trading.
Gold prices are moving higher, and that is putting some pressure on the dollar, which often moves inversely to the precious metal. Additionally, there is some optimism about earnings today, and the direction of the global economic recovery. This sort of optimism precludes the need for the dollar as a safe haven.
Developments in Japan have had little effect on the U.S. dollar. Japan makes its moves to weaken the yen against the greenback, but so far efforts at quantitative easing in Japan have failed to produce the desired results of yen weakness.
The next big market mover for the U.S. dollar in forex trading is likely to be next week's Fed announcement. More quantitative easing is expected, but there is uncertainty about how big the Fed's efforts will be.

London dominant in global currency trading

2010-09-01T17:41:00.003+01:00

The average daily turnover in the City this year was $1.85 trillion (£1.2 trillion) - or 37pc of global turnover, according to a three-year report into currency dealing by the Bank of International Settlements.

Around $4 trillion changed hands around the world every day in April, up from $3.3 trillion in April 2007.

New York, the second most important currency centre, does about half the amount of trading taking place in London.

The dollar continued to be the most traded currency in the UK market, involved in 85pc of all trades, while the euro and the Japanese yen gained relative to April 2007.

Simon Derrick, the head of currency research at Bank of New York Mellon, said the growth in foreign exchange trading reflects a number of important recent trends in the real economy - including the economic strength of developing countries.