forex trading

WEEKLY FOREX UPDATE: USD-JPY

2010-11-17T02:34:00.000-08:00

The USD-JPY pair continues to trend lower as the Yen remains strong against a USD that was stable, but range-bound, throughout last Monday’s trading session.

The stronger Yen augurs risk aversion, as the Yen is sold or borrowed primarily when risk appetite is present, as the purchase of more risky and higher-yielding assets are funded by borrowing, that is, selling, Yen, due to its low 0.10% Central Bank rate.

Bullish equities movement is best confirmed when Yen is sold against the USD and the EUR.

The Falling Wedge pattern on the USD-JPY’s daily chart shows that the Bearishness over the last 40 candles has formed a strong downtrend; this is confirmed by Autochartist’s seven-bar Initial Trend reading. Any reading greater than 6 bars indicates a trending market. (See Chart Below)

The current push South towards support at the Wedge pattern’s bottom line shows that prices are likely to test the 2 prior lows at 86.97 and 87.02.

A break of this support level would likely push prices closer to the downtrend line support level at 86.60 (A).

Do not underestimate the support that is likely waiting at the whole, round number known as a ‘Big Figure,’ as price levels ending in ‘00′ are called.

If prices can rally from the pattern’s support, look for selling pressure to be waiting at 90.20 (B).

Posted by Shayne Heffernan on Jul 31st, 2010 and filed under Asia, Equities, Latest News, Markets, News & Events. You can follow any responses to this entry through the RSS 2.0. You can leave a response by filling following comment form or trackback to this entry from your site

World Market Pulse Forex Update: Analyzing Sterling’s GDP Boost

2010-11-17T02:30:00.000-08:00

The GBP received a significant boost as it posted its biggest one day gain against a basket of currencies in 3 months after the surprise rise in UK Q3 GDP to 0.8% in addition to a ratings upgrade from Standard and Poors to a “stable” outlook bringing them into line with their agency peers, Fitch and Moody.

An Overview Of UK GDP Figures: U.K. GDP came in stronger than expected, up 0.8% q/q and 2.8% y/y in Q3, compared to the consensus forecasts for 0.4% and 2.4% respectively. This was the highest annual growth rate since Q3 of 2007. Service sector growth came in surprisingly strong, up 0.6% q/q, same as in Q2, while industrial production growth was 0.6%, after 1.0% in Q2. Construction sector output rose 4.0% q/q, after rising 9.5% in Q2, when it rebounded after weather related weakness in Q1 of 2010.

Meanwhile according to analysts at BNP Paribas, the sterling remains a sell despite the better UK Q3 GDP. We base our projection on weak money supply and credit indications, the sharp decline of savings seen over the past three quarters and weakening cyclical conditions coming on the back of fading global demand.

FXCast, Oanda Release New Mobile Trading Platforms; FXCM Restructures

2010-11-17T02:07:00.000-08:00

1. FXcast Pro Mobile

Good news for FXcast trading junkies out there. There's no more need to be tethered to your PC or laptop! The company just launched FXcast Pro Mobile and FXcast Pro Mobile Smartphone Edition (SE). The apps will allow you to access your accounts and trade anytime and from anywhere in the world.

FXcast Pro Mobile is designed to run on pocket PCs with Windows Mobile OS while FXcast Pro Mobile (SE) is meant for smartphones with MS Windows Mobile. Not only do the apps allow full management of trade accounts, but they also provide you with the latest market news and charts with about 30technical indicators. Fundamental and technical analysis on the go, anyone?

Learn more about it and download the apps here.

2. Oanda for the Blackberry

If you're trading with Oanda and you have a BlackBerry, you're also in luck! In addition to its other mobile applications, Oanda released OANDA fxTrade Mobile for BlackBerry just last week.

It's best used with the 9000, 9650, and 9700 series, but it can also work with other models. Its features are pretty sweet. Besides being able to buy, sell, and set orders, the application also has multiple time frame charting capabilities. Yep, that's right - you can setup custom-colored live-streaming charts on your BlackBerry!

The application is available to both live (fxTrade) and demo (fxGame) users. You can download the application here.

3. FXCM's Restructuring Plans
For most forex brokers, the tough part in getting clients from all over the globe is having to conform with the local regulatory rules in different countries. FXCM Inc., for instance, is being questioned by regulatory firms in U.S., Canada, and Japan regarding the way the broker solicits clients and executes trades. Because of that, FXCM decided to come up with some plans to restructure.

In the U.S., the financial reform law requires FXCM's U.S. customers to hold trade accounts only with a subsidiary overseen by the CFTC. To comply with that regulation, FXCM has to move some of its U.S. customer accounts to CFTC-regulated subsidiaries and freeze some accounts whose holders refused.

Meanwhile, Japan's Financial Services Authority is requiring FXCM to revise its plan for soliciting retail customers. The broker is then thinking of moving some of their retail customers in Japan to subsidiaries overseen by another regulator. However, this move could be met with sanctions from Japan's FSA or complaints from customers.

FXCM is undergoing a similar situation in two Canadian provinces, in which regulatory agencies are requiring information about the broker's retail customers in the region. Now, FXCM is planning to conduct their business through registered investment dealers to help manage its customers, but then this action would cost FXCM some of its profits since they'd have to split their revenue with a third party.

Sick and tired of "sanction of the victim"

2010-11-17T02:04:00.001-08:00

Is it a stretch to say the Chinese wish to destroy the United States? Maybe! But it isn’t a stretch to say that China wants to become the primary global economic and military power in the world. It is why the G-20 was so fresh with irony. We have China and Germany teaming together for the “sanction of the victim” -- the United States. Even though it is US liquidity that is keeping both their economies afloat, now that Germany has become attached at the Chinese hip.

You know what they say boys: Be careful what you wish for ... it may come true! I guess it doesn’t translate well into either Chinese or German.

Bashed, indeed, Mr. Obama was at the G-20; and for a lot of good reasons. But, the reality is this problem in the global economy is first and foremost a global imbalance problem with China and Germany (to a lesser degree) as the two spoiled children creating a problem they fail to admit.

German Finance Minister Schauble, tell us again how that single currency regime, structured primarily by your country to your own benefit by creating a captive market for your industrialists knowing all too well by locking the other countries into a system whereby they cannot adjust to compete with Germany’s efficiencies, i.e. the straightjacket of the euro, is working for you?

Oh yes, you are correct Mr. Schauble -- it is working very well. Germany is sucking the air completely out of the eurozone as the others are wheezing on life support. Nicely done! And you hammer the US for liquidity generation? That is fresh!

Why so fresh? Well it is US liquidity and ability to take on China’s huge manipulated trade surplus that is creating the demand for Germany’s industrial orders, Mr. Schauble, in case you hadn’t noticed. Ahh ... no good turn goes unpunished, does it Mr. Schauble?

But not to be outdone in the hypocrisy department, China, always one to love sanctioning its victims, tries to turn the G-20 into a US bash fest. And because the so-called leaders of most other countries are a bunch of weenies, afraid China will turn its power on them with even more predatory practices should they speak up, remain quiet as doves cooing in their pens.

One again, in case the rest of the world hasn’t noticed, the US in all its so-called fx manipulation has once again taken on the bulk of Chinese exports, keeping the game alive through both US demand and the Fed’s QEs.

We can’t remember China ever complaining about the dollar’s decline when demand was brisk before the credit crunch. We can’t remember China complaining about US consumers spending like drunken sailors and over leveraging then. But much seems to have changed since US demand has fallen after the credit crunch. But much is still the same because it is the US demand that is keeping the commies in power. It is the US demand that is still delivering the goods to the powerfully politically connected spoiled brats known as the “Princelings.” And it will be interesting to see what happens to these “industrial wizards” once the US finally gives them what they are asking for -- less liquidity.

How come nobody seems to mention China’s massive quantitative easing program which on a relative scale was much larger than that of the US? Because my friends, the vested powerful interests inside and outside the US who make huge money inside China would be showing the emperor with fewer cloths than he currently appears.

“Chinese credit expansion was 9.6 trillion yuan in 2009 and will be 7.5 trillion yuan this year from 5.8 trillion in 2008. This immense credit goes to the state-owned enterprises at 5.5% interest, lent by state-owned banks that amass captive household savings at 2.25% deposit rates.”

Leto Research

China GDP growing at 10% and they pay 2.25% to depositors? Talk about incredibly suppressed market interest rates, Batman! And the US is typically the recipient (rightfully so) of bashing criticism for its artificially low rates. Just close your eyes ... push the China-Cheerleading stuff and the “US is always the bad guy” stuff you hear from the financial press out of your head for a moment ... then think of the massive displacement of capital inside the Commie Kingdom; it will end badly. The only question is when. And we know the answer to that riddle.

It ends badly when the leaders of the US government reach around and finally find some spine!

This maybe a bit egocentric; it may sound a bit like your typical ugly American yahoo; it may sound like yet another philistine in the wilderness that has not come to grips with the new power structure of one world order; it may appear my blue-collar roots are showing; to all that I plead guilty as charged; proudly so. But I am sick and tired of watching the US enrich poor Asians on the backs of blue collar workers and the rest of the middle-class so platform companies, and the powerfully politically connected can enrich themselves and their shareholders as they transfer massive industrial power and research to a country that wants to bury them. And then they dicker around the edges of econometrics bull$*&^ wondering why the US has a structural unemployment problem. It is to laugh, but so pathetic it makes you cry.

So when does it all end badly? When the US finally erects very high tariffs against Chinese goods flowing into the US economy -- that’s when. The latest election cycle should make it very clear to the Chinese that this game is about over. The victims are sick and tired of being sanctioned.

Cross-Eyeing: Fib Play on GBP/JPY - PT1 Hit

2010-11-17T02:03:00.000-08:00

We saw some pretty wild trading last Friday, as the currency pairs were all over the place. Once the London session opened, we saw the pound falling across the charts. Guppy dropped by 150 pips over the span of 3-hours and it looked like it was headed for new lows.

Luckily for me, the wave of risk aversion was short lived as the bulls came back in force. Taking a look at the charts, we can see that the 61.8% Fib held pretty nicely. This also lined up nicely with a major rising trend line. I suppose many traders were eyeing this level.

In any case, the pound remained resilient and midway through the New York session, I hit my first take profit. I moved my stop to break-even, giving me a risk-free trade now. Now, I know I said I was gonna let my remaining position ride, but it seems that the pair has formed a channel on a longer time frame and is now encountering resistance at the top. I may have to cut this short and find a way to re-enter if it seems like bullish run is losing steam.

Trade Idea: 2010-11-12 00:10

I've been scanning the charts and it looks like the pound is being resilient. It's been on a major roll against the euro and has been holding its own in the face of dollar strength. The reason for this?

Apparently, currency bulls have been tripping over themselves in buying the sterling after the Bank of England's inflation report showed that steady growth predictions are still in place even with the economy's inflation concerns.

The markets also got a kick out of finding out that the BOE fellas are still tossing coins over quantitative easing, which suggested that the economy might not need one after all. Meanwhile, the markets starting losing its love for the yen when less-than-stellar economic reports popped up from Japan this week.

Technically, I see that GBP/JPY has broken past a major descending trend line. This gives me reason to believe that this pair could be headed for new highs.

I've popped on the Fibonacci tool to help me find a good entry point, and as it turns out, I see that the 38.2% Fib level lines up with a former high. In addition, the 50.0% Fib lines up with the former trend line, while the 61.8% also coincides with former resistance levels.

While any of these levels may hold as support, I will be placing my buy orders at 132.00. Stochastic has yet to crossover, so I may still have a chance of getting triggered. I'll be placing a stop of 140 pips, which is equal to the pair's daily ATR.

My first take profit will be at the recent high at 133.25. At that point, I will lock in profits and let the rest of my position ride while moving my stop to my original entry point.

Risk Aversion and the Dollar-Dow Connection

2010-11-17T02:00:00.000-08:00

If yesterday's Dow Jones pullback could have been used as an indication to the risk aversion seen today, then I feel traders would have much more aggressively shorted the EUR/USD and the AUD/USD earlier in the day and as Europe and the U.K. opened. I don't think it was that obvious and the evidence can be seen in the sharp sell-off in equities today. In my opinion, the dollar is the big beneficiary of the equities weakness as dollar bulls are finally unconvincingly trading above not only the October highs but also 79.00 - the major psychological level that we have not been above since September 28.

With those notable about the pullback in the Dow Jones is the fact, I believe, that in just a single session uptrend on the daily time frame may be broken as well as the 11000 level. Continued risk aversion could propel the U.S. Dollar Index towards the 80.00 decade level. I feel the challenge is not in recognizing the dollar's momentum, but in determining whether or not in uptrend will ensue. This is where transitional markets can be account killers.

In my opinion, do not automatically assume that a broken trend in one direction equates to the beginning of the trend in the opposite direction. There is still the potential for daily time frame charts like the EUR/USD, AUD/USD, USD/CHF and USD/JPY to continue to range and not necessarily to trend.

Benefits of Automated Forex Trading

2010-11-14T20:45:00.000-08:00

Forex trading is today’s largest financial market, without any doubts.. In fact, $3 trillion are traded in the Forex market daily on a global scale. Because Forex trading is mostly based on speculation, fluctuations in the world’s currencies determine whether profits are made – or whether traders lose money. Due to the sizable profits that can be had in the Forex trade, many investors are attracted to the market. The same holds true for novice Forex traders, and to make it much simpler, there are automatic Forex trading systems that lessen the troubles that novice traders may have when entering the market for the first time.

An automatic Forex trading system provisions you with a pre-programmed strategy that will keep track of your progress in the Forex market – and all of this will take place in real time. Automated Forex software uses what is known as an EA – or expert adviser – and a collection of indicators that interpret the complexities of the Forex trade – so much so, that they will signal you the best moment in time to enter a trade, and of course in which direction..

One of the best advantages of Forex automated software is the fact that it greatly reduces the amount of time needed to learn the basics of Forex. Automated Forex software minimizes the amount of time you need to learn the ins and outs of Forex market. Because of this, you do not need to sit in front of your monitor all day long, watching graphs and trying to catch market move, because your software will constantly be monitoring the markets for you, 24 hours a day.

Thanks to this technology, you are now capable of staying on top of things in real time. This will help you to make the necessary alterations to your Forex software, based on the various fluctuations that your software notifies you of. This is especially true of the Forex market , where market fluctuations take place literally in milliseconds. The human element is also eradicated from the trading process thanks to automatic Forex trading systems. Sometimes a losing trade can upset you to the point of affecting the way you place your next trades. This could quite possibly result in you making rushed, careless decisions. But, have no fear – automated Forex trading systems take care of that problem for you.

Another great feature of Forex automatic trading systems is the fact that they are fairly easy to use and install on your computer. You can set your software to run on complete autopilot, if you so choose. Adjusting the settings in your software only takes a few minutes, and then it can be let go to work on your behalf. If you are using a system which is customized for you and your particular needs, then you could be extremely successful in the Forex market.

Automatic Forex trading systems also give you much more flexibility and allow you a lot more variety. This is because you can work with different types of Forex brokers in many different kinds of currency pairs. For example you could be trading even while you are not at your desk, or be trading on different markets at the same time. However, the automated Forex trading system should not be assumed to be perfect. If these automated systems were truly perfect, then there would be no losing trades on the market. Managing your money is essential for success in the Forex trade. How much are you willing to risk, for example? The most successful, experienced traders constantly have a fixed percentage of capital that they are willing to risk. Obviously, they can adjust this figure as they need, depending on their win-loss ratio.

If you already happen to own an automated Forex trading system, then it is ideal for you not to make any alterations or reconfigurations at this time. Just because you have an automated Forex trading system does not mean that you are going to trade successfully 100% of the time – and, you should not depend solely on your automatic software to determine your success.

There are a lot of different situations that have an effect on the Forex market. Fluctuations can happen very fast, and depend on a number of different influences. Besides simply owning a piece of Forex software, you also need to have a basic background knowledge on how the Forex market works, as well as a familiarization of how a trading system works.

If you are considering trading with the help of forex signal software I invite you to read our forex signal software reviews

CADJPY Break Out

2010-11-14T20:35:00.000-08:00

I hope you enjoyed your weekend and spent some time preparing for the trading week ahead.

The CADJPY recently passed the VI after convrgence of MACD on the daily time frame. This has now been added to my watchlist and for those new traders looking for an entry, go down to a smaller time frame to establish a low risk position but as always beware the traders remorse.

Todays forex trends chart taken from the Dynamic Trader Trend Analyser is below for your guidance.

You can read Javid's forex update on our sister forex blog.
You can read Richard's update on our other sister forex blog.

I wish you all a good trading week.

Anne Chapman
Currency Analyst

New Regulations

2010-11-14T20:30:00.000-08:00

As most of you will be aware the new NFA regulations have come into force and you may see some new additions on your trading account on Sunday night (GMT).

Those of you who hedge on your currency accounts will no longer be able to continue this practice. The NFA FIFO rule that is in place (for US accounts only) is to prevent the ability to hedge. If you open multiple position on a currency, until now most of you (depending on broker) have been able to close whichever position you wanted and in whatever order you wanted. The FIFO rule (first in first out) means you can now close only the first position first and then the second position second. In other words, the order in which you opened your multiple positions on that currency is the order you will have to close them.

Also, if you take out a long position on a currency lets say using our Double Deviation strategy and you decide you want to take out a short positon on that same currency using our 3D strategy, then in effect what will happen is your 3D position will close your Double Deviation position. The short position will not open because a long position is already in play, so instead now the short position will actually close all or part of the original long position.

To get around the above issues, you can move your broker to the UK account broker if they have one or close that account and open a spread betting account in the UK (if your not a US citizen). If you really want to continue with your current US broker, then if they allow this, you can open multiple accounts so then you can choose one account to always use for long positions and you can use the other account for short positions. This will be the same as hedging but across two accounts with the same broker. However, the first in first out ruling will still stand but that should not really be much of a concern to dynamic traders from they way you all trade based on what you have been shown of the members webinars.

Another trading month is over and most of you will have had some very good trades so now it is time to enjoy the weekend, do not think about trading until you perform your analysis.

Do not forget to visit our other forex blogs.

Saba and Bijal's updates
Richard and Zaheer's updates
Clayton and John's updates

Thinking Small Will Lead You to Big Profits

2010-11-13T09:45:00.000-08:00

We often take technological change for granted. Many of us would not be here to read this if it weren’t for new medical breakthroughs. As a cancer survivor, I know I wouldn’t.

We can see the change in other fields as well. Computing power and software that were once only the musings of science fiction writers are now commodities. Intel founder Gordon Moore first described this technological ramping-up back in the 1960s.

Moore noticed an industry wide trend in semiconductor fabrication. Observing a rate of transistor density in integrated circuits that was doubling every 24 months, he also noted that the cost per transistor was halving as well. Extrapolating upon this trend, Moore predicted it would continue well into the future. Now famously known as “Moore’s Law,” it has proven prophetic.

I’d like to point out, however, that the principle of technological improvement through increasing smallness extends to a much larger field than semiconductors. Tininess is touching on many industries.

We are witnessing a growing ability to precisely manipulate and assemble materials at a scale measured in nanometers. As you know, a nanometer is a billionth of a meter, and comes from the Greek root for “dwarf.”

Technology that operates at this scale is called nanotechnology. Increasingly, it is blurring the lines between different technological and scientific fields. Instead of fumbling with matter at the macro scale, we are developing the ability to build things at the molecular level. This was the subject of Nobel laureate Richard Feynman’s famous 1959 talk There’s Plenty of Room at the Bottom. We are starting to do many of the things Feynman, who is considered the father of nanotechnology, dreamed of.

In doing so, nanotechnology is helping us to solve problems and improve life. In fact, our ability to manipulate matter at the most basic level is already changing the way we do nearly everything. New breakthroughs in medicine, energy and electronics will be driven because of the nanotechnology revolution.

The importance of this change to civilization is like the discovery of fire or metallurgy. Future historians will point to the nanotech shift taking place sometime in the late 20th/early 21st centuries. Visionary investors that cash in on this shift will turn tiny investments into huge fortunes.

New products will be radically different from anything we have yet seen. This is true even if they are manufactured out of otherwise common elements. In nature, for example, we see how substances have very different physical properties depending on how the atoms are organized.

Eventually, physical limits to how small we can build will be reached. In the future, instead of removing material, computer components will be grown from individual molecules. This will not only extend Moore’s Law for some time to come, but it will create completely new kinds of computers. At these smaller scales, quantum effects become more important. Computers that harness these quantum effects will be far more powerful than anything available today.

Biotechnology, by the way, has been a nanotechnology in practice long before it became a buzzword. Few areas are feeling the impact of nanotechnology right now more than medicine. The discovery of the DNA molecule in the 1950s and the development of ways to read and manipulate it have set the stage for huge advances.

Nanotechnology is a natural avenue for medical advancement, since our bodies are built out of nanomachines-cells. Improved instruments and models for understanding how these biological nanomachines work have opened new avenues for treating disease.

This means that the human cell is no longer a black box. We not only know far more about what is going on inside cells, we can also control what they do. Nanotechnology is unlocking the secrets of cellular biology and turning the cell into a cornucopia. This is literally true when it comes to agricultural sciences.

The increased knowledge of how cells function at the molecular level allows us to create computer simulations about how they work. This greatly speeds up drug discovery compared to traditional laboratory techniques. Rather than randomly testing existing compounds, custom molecules are being discovered that selectively target only the parts of the cell that we want to modify to cure disease.

Molecular nanotechnology is designing carrier molecules that can transport therapeutic drugs directly into cells. There, they provide the greatest benefit while minimizing side effects. Researchers are even developing the ability to control how genes are expressed in individual cells. This creates opportunities for curing the majority of genetically caused human diseases.

Also developing are therapies that can create new young cells out of adult stem cells. These cells can be used to regenerate damaged tissue. Additionally, nanotechnology raises the possibility of reversing the cellular aging process by repairing molecular damage inside the cells themselves.

Pathological nanomachines — viruses — are being targeted as well. Some of the worst ones that have eluded us for decades will be curable. In so doing, fantastic investment opportunities on these breakthrough medical technologies are being created.

The Single Most Important Investment Decision of the Coming Decade

2010-11-13T09:44:00.000-08:00

Imagine a world where a cup of coffee costs $10… and the following year, it costs $12. Imagine nearly everything starts going up in price, year after year. Where I live, folks call that inflation.

Sound far-fetched? Actually, it’s already started.

Let’s start by looking at what’s happening to food prices. Corn prices are up 44% in the past year. Soybeans are up 22%; wheat is up 23%. Even sugar is up 24%. It’s pretty clear something is going on here.

Because of those rising commodity costs, food companies are jacking up their prices to cope. As a result, expect to pay more for Big Macs, boxes of cereal and baking mixes, to name just a few things.

Two heavyweights have already weighed in. McDonald’s said it would raise prices in the U.S. for the first time in more than a year. General Mills, which makes Cheerios and Wheaties, said it will raise its prices for cereal and baking goods.

There are many more examples, but these two firms are bellwethers. More will follow in their footsteps. As they raise prices, inflation, as we commonly speak of it, will be here.

You won’t see it in the consumer price index, a popular inflation index — not at first. It currently bumps along at about 2%. But you should know that the government doctors up the CPI like a pitcher putting scuff marks on the ball to make it behave unnaturally. The government has made many adjustments to how it calculates the CPI over the years. All of the adjustments aim to make the CPI lower. Economist John Williams tracks the unadjusted CPI. According to him, it’s running at 8.5% already.

It’s not just food commodities that are rising. If they were the only things going up, we might just say something unique is happening in the agricultural markets.

But the prices of many commodities are surging. Metal prices are also up. Copper, for example, is up 27% in the last 12 months. The prices of gold and silver are up 26% and 32%, respectively.

Clearly, something greater is at work here for all these commodities to be rising so swiftly together. The truth is we’ve seen this movie before.

I recently attended Grant’s Fall Conference, held at the great old Plaza Hotel in New York. Marble and bronze decorate its halls and chambers. Amid the old-world splendor of the belle époque, Frank Byrd, the founder of Fielder Research, delivered a persuasive presentation arguing that what we are going through is a lot like the 1970s.

Unemployment was rising. And the CPI was actually coming down. Capital utilization was low, meaning there was a lot of slack in the economy. “Just before the great inflation,” Byrd told us, “things looked more deflationary than inflationary.

In the autumn of 1971 — on the eve of the greatest inflation in America in the 20th century — most people didn’t expect inflation at all. But three years later, the CPI hit 12%. The food CPI hit 20% in 1973. Are we setting up for another bout of 1970s style inflation? Byrd says absolutely.

There were five signposts in the 1970s that also exist today, Byrd maintains. In the 1960s, America began to pile up trade deficits. It consumed more than it produced. By 1971, foreigners started to cash in those dollars they accumulated, which forced the U.S. dollar off convertibility to gold at fixed prices and led to inflation at home. An eerily similar scenario could unfold today.

Secondly, money supply grew faster than the economy. The printing presses were running, in other words, to finance the government’s fiscal deficits. We’ve got that too.

Third, commodity prices went up. Oil increased fourfold, for instance.

Fourth, the government stepped in with price controls and ham-fisted regulations. We have a big government today, too. As Byrd points out, transfer payments — such as Social Security — make up nearly 20% of Americans’ disposable income today. Meaning, we’ve propped up consumption like never before.

Finally, bottlenecks and shortages emerged in the 1970s — think gas lines. We’ve seen that sporadically with the food crisis and oil spike in 2008.

Byrd goes further. And this is where his presentation introduces a novel element.

The environment of the 1970s discouraged investment, Byrd said, as inflation forced up interest rates, raising the cost of capital. You can see it in the falling dollar amounts companies invested during that period.

The last 30 years have been very different. Interest rates have been falling… and investment has been rising. A chart of the 10-year Treasury yield shows you all you need to know. It’s been an era of cheap money getting cheaper. As Byrd said, “No chart better defines the past 30 years: A long secular trend of declining interest rates and a declining cost of capital. No one under the age of 53 has experienced a world with a rising cost of capital.”

Keep in mind that investment trends often unfold slowly. And often, things happen exactly the way people least expect them to. Think about it: On the eve of the 1970s, the greatest inflation wave of the 20th century in America, investors were accepting Treasury yields of 4%. The bond market didn’t anticipate the great inflation, and it doesn’t today with the 10-year rate even lower, at 2.38%.

“Prices are liars,” John Burbank, the bearded manager of Passport Capital likes to say. Prices today don’t tell you about prices tomorrow. That is certainly true in the bond market.

Since high inflation is not widely discounted in the market, the effect it will have on certain investment could be big. This leads Byrd to say: “I believe being on the right side of the inflation question could be the single most important investment decision of the coming decade.”

It may well be. And certain investments do better than others in this kind of environment.

I have been doing research on investments that will provide great inflation hedge… investments where profits will soar if inflation and interest rates pick up. And while there are a few opportunities I see in this space right now – most of them are too illiquid to talk about here (although I have just recommended one to my smaller group of Capital & Crisis readers). That said, I am working on some industry-wide ideas that I should be able to share with you shortly. Stay tuned…

Chart Smarts: Know When to Sell Your Stocks

2010-11-13T09:41:00.000-08:00

When you trade penny stocks, it’s important to confidently make buy and sell decisions based on facts, not fear.

You won’t be able to time every trade perfectly — no one can. Instead, you need to shoot for consistency. That means using all available tools to decide whether a stock is breaking its uptrend or merely consolidating for its next leg up. In just a minute, I’ll explain how to decide when to hold for better returns — and how to decide when to sell — using a couple of key indicators.

First, it’s important to look at the different types of uptrends. Any stock that runs straight up without any consolidation at all can be exciting. But it can be a nerve-racking experience if you’re looking to hold for more than one or two days. That’s why most traders will sell these quick runners at the first sign of weakness. Shares can fall hard and fast. No one wants to be left holding the bag.

A healthier breakout will consolidate, leveling out or moving a bit lower on lower volume awaiting another wave of buyers. Take a look below at this snippet I took from a chart:

The blue line is the 50-day moving average. The red line is the 200-day moving average. The 50 is on top of the 200, and both are pointed in the right direction — in this case, up. That’s the first indication that everything is OK. Our trend is intact.

Our next indicator is volume. Notice the big grey bars in the first blue box. Volume is high as the stock powers higher, and volume dies out the week the stock moves lower (red arrow). It’s obvious at this point that sellers are holding out for better prices. With the bulls in control, the buying picks back up, and the stock breaks through its previous highs and continues upward.

If you were to cave into your fears and sell as the stock dipped, you would lose out on better returns. But if you let the chart make the decision for you, you’ll maintain a much better batting average.

There’s no question that trusting technical indicators can be difficult for investors who are accustomed to investing based on fundamental attributes — like earnings growth and debt — alone. But few experienced traders would question the effectiveness of gauging market conditions using charts. It all comes down to experience. If you’re a newcomer to reading charts, I suggest that you paper trade your next few trades using charts alone and see how you fare.

Once your confidence in charts comes around, you’ll be able to take advantage of the information these tools can provide…

Contraction by $1.39 billion seen in India's forex kitty

2010-11-13T09:33:00.000-08:00

A fall in India's foreign exchange reserves was noticed to $251.702 billion as on 1 May from $253.091billion a week earlier. This made a drop of $1.39 billion.

It was confirmed by Reserve Bank of India in its weekly statistical supplement on Friday that changes in foreign currencyassets, expressed in dollar terms, include the effect of appreciation or depreciation of othercurrencies held in its reserves such as the euro, pound sterling and yen. It should be noted that India's reserve tranche position in the International Monetary Fund is included in foreign exchange reserves. It was specified by RBI that the fall mainly came to scene due to revaluation of currencies and a decrease in value of gold assets held by RBI.

A decline by $346 million to $9.23 billion was witnessed in gold reserves since the gold price declined in the week. It should be noted that during the week where special drawing rights remained static, the reserve position with the IMF also remained unchanged.

Foreign institutional investors bought equities worth $402 million (about 2,000 crore), during the period under consideration.

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2010-11-12T11:15:00.000-08:00

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Forex Trading:How to Resolve the Appreciation Pressure

2010-11-08T07:41:00.000-08:00

Forex Trading:The situation in the second half of year is remained to be seen, the government has taken the precautions to resolve the RMB appreciation pressure.

On 27^th August, the State Administration of Foreign Exchange (forex) published the notice that to keep the export income abroad.

The foreign exchange (forex) analysts hold that this measure can reduce the hedge pressure of the central bank, so does the RMB appreciation pressure.

In addition to, China Foreign Exchange (forex) Trade System release the notice that since the 19^thAugust of 2010, in interbank foreign exchange (forex) market, China set up the RMB against Malaysian Dollar trading.

—-Forex news from Forex Trading

Forex Trading_SAFE: Improve the Legislation in Forex Management Field

2010-11-08T07:39:00.000-08:00

Forex Trading_The director of the State Administration of Foreign Exchange (forex) Yi Gang said on the enlarged meeting of the State Administration of Foreign Exchange (forex) that they will improve the legislation and system construction work in the field of the foreign exchange (forex) management and promote the scientificity, rationality and the operability of the relevant law and regulations.

The meeting analyzed the new trend and challenges that the current foreign exchange (forex) management administrative work faces with and deployed the key tasks at present or in the next period.

The first is to enforce the legislation and system constructions in the field of the foreign exchange (forex) management to improve the operability of the relevant law and regulations of the foreign exchange (forex) management to serve to the overall economic development better.

Secondly, they will perfect the relevant decision-making system of the important policy of the foreign exchange (forex) management.

And then, they will continue to perfect the administrative licensing producers of the foreign exchange (forex) management, conducting the foreign exchange (forex) management work in strict accordance with the legal limits and legal producer.

And the fourth one is to promote the government affairs public of the foreign exchange (forex) management work to improve the transparency of the foreign exchange (forex) management.

Forex Trading Business features Yield Value

2010-11-08T07:37:00.000-08:00

Forex Trading-Nowadays, foreign exchange (forex) trading is the good field to bring high yield.

The foreign exchange (forex) trading business performed well in the first quarter of the year.

According to the report of the Bank of International Settlement, the trading volume of in April increased sharply 20 percent compared to the first three years. The investment bank of Britain has good performance in the foreign exchange (forex) trading income.

The foreign exchange trading is attractive to the forex investors. And the foreign exchange business can respond to the more strict capital requirements. For the banks, the foreign exchange (forex) trading possesses enough liquidity.

When there are good environment, the foreign exchange (forex) trading business can bring capital yield that is higher 150 percent.

—-Forex news from Forex Trading

For more forex info, please go to forex_trading.

Forex Trading_Within Currency Structure of Forex Reserves USD takes the Largest Part

2010-11-08T07:32:00.000-08:00

Forex Trading_Chinameiti.com.cn quoted the lay-in of the foreign exchange (forex) management department as saying that the proportion of the currency structure of the global foreign exchange (forex) reserves is that the USD takes 65 percent, EUR 26 percent, GBP 5 percent and the Yen 3 percent, China’s situation is close to the global condition basically.

The report also said that China sets about to alter the proportion of the foreign exchange (forex) reserves currency structure, in addition to the purpose of decentralizing the operation and fulfilling hedge, the diversified foreign exchange (forex) reserves also contribute to promote the effective exchange rate reforming system on real significance.

The foreign exchange (forex) reserves refer to the foreign exchange (forex) part in the international reserves capital that one country holds.

And the forex reserves also refer to the foreign exchange (forex) accumulation of one country.

—-Forex news from Forex Trading

For more forex info, please go to forex_trading.

By Sarah

Forex Trading“Central Parity of RMB increased for continuous Four Days”

2010-11-08T07:28:00.000-08:00

Forex Trading, The central parity of RMB/USD in interbank foreign exchange (forex) market yesterday was 6.7799, on the basis of hitting the new record high for three week by 6.7838; it increased 39 basis points and being close to the highest point by 6.7768 on 11^th August and hit the record high of one month.

The foreign exchange (forex) dealer of a bank in East of China stated that if in accordance with a basket of currency trend, the EUR dropped while the USD increased, RMB, with logical thinking, should decline, however, the central parity of RMB/USD in interbank foreign exchange (forex) market increased.

The forex dealer also said that during the time of America officials visiting China, the uncertainty of the RMB forexrate trend make the forex investors keep cautious attitude.The businesses in foreign exchange (forex) market were weak.

—-Forex news from Forex Trading

For more forex info, please go to forex_trading .

Effective Forex Trading

2010-11-08T06:48:00.000-08:00

With average trading happening daily of more than a trillion, the forex market is the worlds largest financial market. It is also the most liquid market to trade in. This foreign exchange market deals with the synchronized buying of a currency while selling off a second currency. As you can see, currency are traded in pairs.
The most popular trading pairs are the US dollar and Japanese Yen. Another favorite is the Euro and US Dollar and all these trades are done with the idea that money will be made. You may wonder why there is a need for this kind of trading and the answer to that question is because of the unique characteristics of the forex trading market.
The forex market is done differently than the stock market as there is not actual physical location as to where these transaction take place. Many trades are done over the phone or electronic exchanges. Computers make this all possible along with technical analysis. Because of the attractive pricing, there is better odds at increasing profits.

Compare Forex Trading and Stock Trading

2010-11-07T11:09:00.000-08:00

Foreign currency exchange market i.e. Forex is one of the largest and most smooth financial markets in the world. With dissimilarity of stock markets, the Forex market is an over-the counter market. Here no clearing house or central exchange is matched. As the Forex market was opened only to Hedge Funds it was not approachable to retail traders like us. And therefore, it is not much popular with retail traders or investors. Nowadays Forex trading is also for retail investors. But while comparing Stock trading is for long time for retail investors. Now with use of internet and many advancement in computer and internet it is easy for retail traders to trade foreign currency from anywhere in the world with less charges and easy approach. This has increased the ratio for retail traders in stocks and Forex.

The most popular form of investment is Stock trading where you can buy and hold the position. Many companies are there who are enduring the recession where there stocks are collected for rebound. After the crash in stock market of 2008, Forex trading has also been popular too many people. They have started trading in Forex market.

But which of this is better option for a trader? Is it Forex trading or stock trading? Let us compare two of them:

Fluidity and size of market:

In the world Forex market is one of the largest markets. It dominates the stock market with daily dealings of over US$ 3 trillion. There are elite currency combinations in the Forex market whereas thousands of different stocks in stock markets. Therefore, compared with stock trading Forex trading is less prostrate to price handling by big investors. A Forex investor can get in and get out of market easily. Whereas stocks are of less fluidity and trader can be in difficulty during big bad news. For small cap stocks this can be worst. Due to high liquidity of Forex market, traders can relish better price than compared to stock traders.

Trading Hours:

Forex market is opened 24 hours while Stock market opens daily from 9.30am EST to 4pm EST. This means Stock markets have limited time for trade whereas Forex traders can choose any time for trading. The main disadvantage of stock market traders is that it is opened only for few hours.

Nature of the items:

The type of items used in selling and buying in Forex trading markets and stock trading are very much different from each other. In Forex trading buying and selling is of currency pairs whereas in stock trading buying and selling a share is done with a particular company in a country where many factors decide the rise and fall in share.

Affordability

While trading with stocks, trader needs enough amounts for trading. But Forex trader can start with a least amount of few dollars this is because they allow for higher purchase. There can be larger transaction as compared with stock market.

So with the help of these points you can make your Forex trading experience better and easier in comparison with trading in global economy.

Forex Trading Tools – Developing Your Skills for Consistent Profits

2010-11-07T01:55:00.000-07:00

For honing any skills, there have always been various approaches. All have their particular pros and cons. Forex trading is a science in itself. There are so many methods by which one can learn forex trading and gain mastery over it. Despite this the fact remains that people who actually make profit from it are so very few.

.Inspecting this particular matter, several questions immediately cross the mind.

What apart from trading tools make an investor succeed?

The primary reason for this is that there are millions of investors, only a few handful people have the aptitude to analyze what is going on everyday in the markets. Also an investor needs to relate the knowledge of various fields like the political scenario, the foreign exchange policies of several nations, the economic standing and the goodwill of a particular nation with his know-how of forex market. It is the acumen of the investor to see the larger picture and correlate it with the various available trading tools that helps in maximizing the profits.

What it takes for an investor to become professionals from amateurs?

It is very important that you have access to large amount of resources. The more knowledge of the market you have, the faster it will take to be successful. In this case, an individual who is not all that well informed will have limited access as compared to banks and other financial companies. The result would be that the decision making capability of the individuals cannot be efficient. The probability of pulling out profit will be far less as compared to the latter.

What are the prerequisites for becoming a part of the forex trading?

The basic requirement to begin any venture is capital. And apart from that, in order to make oneself available for forex trading, one also needs to have a forex trading account along with a proper trading platform. Learning is always an exponential curve. As you become more and more involved with the trade, you learn more and more which ultimately helps in recovering the investment faster reaping profits.

The quality of the product is optimized due to the talent and the ability of the craftsman making the product. Similarly, the amount of profit accumulated is dependant solely on the skills of the investor and the forex trader. It may seem that technical knowledge would suffice as the skills necessary for an investor to be successful. But the fact remains that the various technical know-how combined with the effort put in by the forex traders constitute the forex trading system.

Forex trading is not just merely a two-dimensional system. It is a multi-faceted thing that uses all the aspects of a forex trader. For getting maximum benefit, one has to know the trading system in and out. He should have the knowledge of the magnitude of risk involved, the management strategy to be implemented and synchronizing forex trading with the personal life. The whole process of making sizeable profit and becoming successful traders requires consistent dedication. One has to keep on learning from the market and keep on updating yourself. That will somewhat guarantee consistent profits.

Forex Education = Forex Success

2010-11-07T01:51:00.000-07:00

Forex trading is a great way if you are looking to make money online. Forex means foreign exchange market and can be best money making day trading choice those who want to make money in the right way. One of the easiest and quickest ways to earn money via internet is Forex online trading. With hardly $1 in your account, you
can begin Forex journey thereby increasing money returns. Since few years ago, Forex trading became genuinely popular, large people are taking advantage of vast potential with a market of $1.3 trillion daily ratio average that is offered. So you can earn thousands of dollars per week. But Forex trading can be tough as there’s no success guarantee. Most of the best traders spend hours daily studying the market.
There are some features of Forex trading online that you should understand before you start trading and spending large amount of your money. Lets see the 3 ways to get started with Forex online trading:

Use the Best site for trading.

Many of the sites will give you information about how to trade in this market and also offer you support. These sites are paid sites where you can be member and they will give you best tips on software, brokers and will also help you to learn about Forex market and trading. Those who want to trade in Foreign Exchange Market; the forex market is a best way for that. And while doing so Internet is the best option which has made possible for trading market to do by online Forex trading. But you have to get better information in such cases.

Selecting a best Broker

Before you start your forex trading you need to choose an appropriate broker who can help you in your foreign exchange dealings. Take advice from your family members and friends and also you can read the reviews of different people posted on their wesbsites. This way you can be sure whether your broker is really capable of handling your dealings. All the brokers take some commissions for their services. So to start with you can just register in a mini broker account so that there are less risks involved if you are investing money on forex trading for the first time.

Use best trading software.

You can use best Forex software which help you to set up you trade automatically. Sometimes it is not possible for us to sit besides monitor whole day due to some work. But using best Forex software, now it is possible for you to earn money while working, sleeping without sitting to monitor all the time.
Another best way is to open Forex demo account which will truly help you to make money easily. This scheme will help you to view the account online and will show how it will perform if it was a real account. In this way you can use demo account for buying and selling as if you are really doing them. With new modern inventions the software brings reality to the account and tells whether you have profited or loss your money at the end of your trading day.
So with these few best ways you can get started for Foreign Exchange Trading easily.

Forex mentor course

2010-11-07T01:48:00.000-07:00

informational data available on the internet was very scarce a couple of years ago when I decided to step into the Foreign exchange trading business. In the beginning I was very unsuccessful in finding the perfect study material to learn about the forex trading. I did a lot of searching both online and offline. Basically I used to refer to the main forum sites related to forex for the basic idea related to it. Reading the reviews posted by the traders, the steps and strategies followed by them. But all those data and guide were suited according to their personal interests. It was very difficult to comprehend that information to my style of trading.

With only the basic idea of forex trading I never had the courage to get into this trading arena. My basic capital to start forex trading was so low that even a single loss will shatter my dreams from becoming a successful forex trader. Once while browsing I came upon a good forex tutorial site that offered good course material on trading facts and strategies. Website guaranteed that after studying the course material your success rate would be higher that 82%. This encouraged me to buy the material and become a professional trader. The study material covered the topic of money management, risk assessment and management in detail. But after reading the material some questions aroused in my mind that left unanswered. So, decided to contact the author of the material to seek the expert advice. Despite of written and oral request I never heard a word back from the author. This taught me the first lesson of my life that never get fooled by the some fake internet sites trying to sell fake materials. All my excitement to become a forex was sidelined by this incident. For a year I stayed away as I had other personal reasons to take care off.
It was a dejavu, when again I came across a website offering forex information. I laughed untruthfully and began to read the content of the site. But as I went on reading the study material was rather very interesting and nicely sorted for any newbie to begin from the start. So, this before buying the material I decided to do a research on the author Peter Bain.
I came to know that he has successfully trained many traders and was expert in the field of stocks and forex market. He emphasized on the pivots points how this strategy can be implemented successfully. The system developed by him was an automated system that can automatically check for the price fluctuations in the market. Mr Peter Bain was always available whenever I had any query related to the subject matter. There is also a forum that he handles, where in only registered member can come, share and discuss their views on forex trading. So, this way you can also get in touch with other traders in the market. The author is fully committed to his work and he personally receives and answers all the email queries that you post him.

Forex profiting

2010-11-07T01:46:00.000-07:00

Forex stands for foreign exchange market where in you can trade with currencies of different countries. The foreign exchange market is vast and ever expanding. The liquidity flow is so high that trillions of transactions take place daily. This is the only place in the world where the money fluidity is so sky rocketing. And no country or economy can even get close to this figure. This is like an ocean full of money where only an expert and professional can stay afloat while others may sink deep within with uncountable losses. This is the only place where in you can start with thousand dollars and make up to a million dollars in just two weeks.
Considering the above fact people all over are tempted to try their luck in this trade. But you should know that this is a not place to try your luck. People just blind heartedly invest their money without knowing the facts and end up losing all their money.
It is true that you can gain huge profits in forex trading; but all doesn’t come easy you need to be patient and disciplined enough, study the basic concepts of forex trading, do you research and analysis and try free online demo software’s where in you will get a real time look of the real system. But out of all off these only a few reach the top and majority will tumble down facing the wrath of failures. So, be careful and wise when invest your money. This is a field where you need to spend some cash using your knowledge and information gained from the market; unlike other fields where in you have to advertise or create your product or service or selling a product.
You need to be strategically very strong if you want make your mark in forex trading. You need to have your own strategy if you want to be successful and if you try to imitate someone else’s strategy then the same stuff might not work for you, so be very careful. Trading in forex is not that simple as most of them think. The fact is that today you might by earning profits but tomorrow you never know you might run into loses too. Especially newbie’s or beginners are the people who suffer huge losses and the keep on repeating the same mistakes again and again. Let’s see few mistakes repeated by them:
There are people who enter the forex trading with the sole purpose of profits. They try to develop their own strategies so that will guarantee them success with undo risks. But you have bear in mind that no business or trade is risk-free. If you have courage enough to take risks only then you can taste some profits. Sometimes your strategy might work for you sometimes not; there is level of uncertainty attached to it. Remember that no strategy will turn you into a millionaire just a fort night; the people who have reached the top are those who have stayed posted to their rules, remained disciplined and waited patiently .