Month: March 2010

Along with your other forex trading tools, consider evaluating your strategy mathematically. A number of mathematical tools can give you an objective analysis of your strategy or even provide a predictive advantage that will make a difference in your profits.

A forex guide calculates your profitable mathematical expectation (PME)—the mathematical probability that your strategy will yield profits rather than losses.  This method is essentially a form of financial self-discipline, because it forces you to assess the risks and potential costs. If you calculated your values accurately and your formula renders a positive number, you have a positive expectation. Naturally, you should abandon a strategy with a negative expectation, but the higher the number, the better you can expect your strategy to perform. The value of this method, therefore, is in the discipline of evaluating your risks and critically testing your strategy.

The put-call ratio is a simple mathematical tool for gauging the mood of the market towards a specific currency. To use this tool, simply divide the number of traded put options by the number of traded call options. (More simply, you can use this as a fraction with the puts as the numerator and calls as denominator.) As the ratio goes up, it signals a pessimistic sentiment—traders expect the currency you are evaluating to go down. The value of this tool is that it lets you read the market’s mood objectively and respond as quickly as possible.

Z-score is a mathematical tool that helps you evaluate whether there are any trends in the pattern of your wins and losses. For instance, you might discover that your trading strategy generates wins and losses in streaks rather than randomly. This conclusion can guide your trading, making you more wiling to strengthen your position at the beginning of a winning streak or pull back at the beginning of a loss. The value of this method is in evaluating whether you should trust the hunch that your winnings come in streaks or if your winnings are actually random.

Implied volatility is  a complex tool for calculating the expectation that a currency’s price will be volatile in the future. By definition, this tool has to assume a pricing model, which is the Black-Scholes model in the case of foreign exchange. Implied volatility is priced into the premiums for options, meaning that quiet markets offer lower premiums than markets with high implied volatility. Recent studies have demonstrated that implied volatility can helpfully predict price uncertainty within a short time-span—about a month. Beyond this, there are too many biases and uncertainties for the tool to be helpful. The value of implied volatility is in evaluating the amount of risk you accept by making a call. It is usually best to use financial software for this calculation. Consult a forex broker list to see which firms include this and other statistical calculations in their software.

Of course, these mathematical tools are only one part of the total package necessary for successful forex trading. There are other helpful models, such as Fibonacci retracement and pivot points, which are more of techniques than mathematical evaluations. But along with knowledge, experience, and discipline, mathematical analysis can make a successful trader even more successful.

Article courtesy of Forex Traders

Enjoy your 8 free chapters from Prechter’s Conquer the Crash — the book that foresaw what others have missed.

By EWI Editorial Staff

There is no question that Robert Prechter’s Conquer the Crash foresaw and explained nearly every chapter of today’s financial crisis, years before it happened. Enjoy your 8 free chapters from the book with this free Club EWI report; here’s a quick excerpt from chapter 23, “What To Do With Your Pension Plan.” Note especially the last two paragraphs.

Make sure you fully understand all aspects of your government’s individual retirement plans. In the U.S., this includes such structures as IRAs, 401Ks and Keoghs. If you anticipate severe system-wide financial and political stresses, you may decide to liquidate any such plans and pay whatever penalty is required. Why?

Because there are strings attached to the perk of having your money sheltered from taxes. You may do only what the government allows you to do with the money. It restricts certain investments and can change the list at any time. It charges a penalty for early withdrawal and can change the amount of the penalty at any time.

What is the worst that could happen? In Argentina, the government continued to spend more than it took in until it went broke trying to pay the interest on its debt. In December 2001, it seized $2.3 billion dollars worth of deposits in private pension funds to pay its bills.

In the 1930s, the world heard a lot of populist rhetoric about why “rich” people should be plundered for the public good. It is easy to imagine such talk in the next crisis, directed at requiring wealthy people to forfeit their retirement savings for the good of the nation.

With the retirement setup in the U.S., the government need not be as direct as Argentina’s. It need merely assert, after a stock market fall decimates many people’s savings, that stocks are too risky to hold for retirement purposes. Under the guise of protecting you, it could ban stocks and perhaps other investments in tax-exempt pension plans and restrict assets to one category: “safe” long-term U.S. Treasury bonds.

Then it could raise the penalty of early withdrawal to 100 percent. Bingo. The government will have seized the entire $2 trillion — or what’s left of it given a crash — that today is held in government-sponsored, tax-deferred 401K private pension plans. I’m not saying it will happen, but it could, and wouldn’t you rather have your money safely under your own discretion?

By Greg Holden – The Scandinavian currencies all seem to be gaining ground on their European and American counterparts. The Swedish Krona may be the exception, however. Although the SEK has made substantial gains versus the US Dollar, it has continued to struggle against the EUR as regional concerns continue to mount.

Amid the turbulence coming out of the Euro-Zone and Britain, few seem to have taken note of the strong bullish channels which the Scandinavian currencies have experienced over the past two weeks. Oil prices have been relatively stable, despite last Friday’s sharp drop and today’s rebound. This stability has helped maintain the strength of the Norwegian Krone, one of the world’s primary commodity-linked currencies.

Denmark’s recent struggle with matching discount rates with a closer Euro-Zone integration has put a strain on the DKK, but its trends have mirrored those of the NOK rather closely regardless of these concerns.

The Scandinavian regional economy has gained from recent surges in risk appetite, and held steady despite the appearance of risk aversion in Monday’s trading. There seems to be a general sentiment that the Kroner will continue to post advances so long as the Euro-Zone’s stability remains uncertain.

Technical Analysis

– Below is the USD/NOK 4-Hour chart by ForexYard.

– The indicator used is the Stochastic (slow). A Fibonacci Retracement grid was also superimposed on the chart.

– Point 1: The pair has been trading in a range between 5.8180 and 6.0400, but there is a possibility that it has just breached the 50% retracement level and could now experienced a sharp downward movement.

– Point 2: On the other hand, the Stochastic (slow) shows a fresh bullish cross and the current price is visibly at a very strong support level. The amount of upward pressure could push this pair back up into a correction.

– Traders should watch this pair closely. Any indication of a major breach below the 50% line could mean a sustained downward movement is impending. But if the pair continues to waver at its current support line then we can expect to see an upward correction.

USD/NOK 4-Hour Chart

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Forex Market Review by Finexo.com

Source: ForexYard

Yesterday ended with traders returning to the EUR and GBP while selling safe-haven currencies such as the USD and the JPY. An agreement regarding a future safety net for Greece’s debt problems helped lift the EUR. Later, Standard & Poor’s affirmed its rating for Greece which gave the euro another boost. The GBP experienced its biggest daily gain in several months after better than expected data was published.

Economic News

USD – Economy Slowly Improving, Rates Held Steady

The EUR/USD was up for most of the day and is currently trading at 1.3778 from yesterday’s opening price of 1.3690. The weakness of the greenback is expected to continue today unless news about Greece and UK debt concerns makes it to headlines, causing investors to jump back into the safety of the Dollar.

Traders were not taken by surprise yesterday by the Federal Reserve Board’s decision to keep rates below 0.25%. Fed Chairman Ben Bernanke also calmed investors in his statement by saying that he would leave its target interest rates steady at 0-0.25%.

At 12:30 GMT today the US will publish its PPI (Producer Price Index), forecasts are for 0.2% decline, whereas the previous reading came in at a 1.4% growth. A higher than expected result may increase market volatility for the greenback. Later, the US will publish its Crude Oil inventories report. Low inventory data may support an economic revival. Good results will send investors away from the USD, as they will be diverting investments to riskier assets.

EUR – EUR Closes Higher vs. USD as Greece Concerns Ease

The EUR traded higher against the greenback for most of the day. The EUR/USD climbed 80 pips and is currently trading at 1.3778. The EUR/JPY was also up by 100 pips, marking the rise of riskier assets in lieu of safe-havens from the growth in European consumer sentiment. Both pairs ended yesterday close to the daily high, signaling the rally is expected to continue into today.

The EUR gained after a statement by the European Union (EU) about an aid package to Greece. Standard & Poor’s final decision to keep its ratings for Greece steady added to investor confidence in the EUR. Germany’s ZEW Economic Sentiment figures, published yesterday, also came slightly above forecasts, supporting a rise in risk appetite and a boost to the Euro-Zone.

The Euro-Zone will be largely absent from the economic calendar today. With a number of significant reports expected from Britain today, the GBP’s recent spike may be in the crosshairs for many investors. The big question is whether the Pound is expecting a correction, or if this recent upward move can sustain itself.

JPY – Yen Slides as Risk Appetite Grows

No significant news came out of Japan yesterday. The Yen, as a result, was mainly influenced by traders’ appetite for risk. The JPY was primarily down against the GBP and is currently trading at 137.60, from yesterday’s 135.70. The Japanese currency saw similar losses to the EUR and is currently trading at the 124.45 price level. Against the USD, it is currently trading at 90.35.

The weakness of the Yen is a consequence of the Bank of Japan’s (BOJ) previous announcements to keep the JPY weak. Following these statements, traders were waiting to hear about new monetary easing measures, which were published this morning around 4:00 GMT. In a split vote, the BOJ indeed decide to ease its monetary policy further by releasing additional low-interest loans in order to help jump-start the economy and combat deflation.

Crude Oil – Crude Oil Prices Rise supported by a Strong EUR

Crude Oil is currently trading at $82.13 a barrel. The price was significantly higher yesterday supported by the strength of the EUR vs. the USD. Crude Oil prices rose when the dollar weakened against other major currencies yesterday. If the EUR will keep to yesterday’s rally against the USD, oil prices might see new recent highs above the $83 mark. If the price close above this level today this might signal a buy opportunity. Any downturn in EUR sentiment will influence oil prices in a similar fashion.

In recent trading, volatility was common in regards to Crude Oil prices. Traders are awaiting an OPEC meeting which will take place later today. OPEC is still expected to keep production at current levels, which shouldn’t affect prices too heavily. Additionally, the US Crude Oil inventories report will be published at 14:30 GMT and may add to today’s price fluctuations. Low inventories may in fact push oil prices higher.

Technical News

EUR/USD

A bullish formation on the daily chart is still intact; however the momentum is already quite low. The 4 hour chart is also maintaining a slightly bullish configuration yet with no distinct conclusion. Traders are advised to hold for the break and then swing into it.

GBP/USD

The price of this pair appears to be floating in the over-bought territory on the RSI of the hourly chart, signaling an impending bearish move. The fresh bearish cross on the 4H chart’s Slow Stochastic also supports this notion. Going short appears to be a good strategy today.

USD/JPY

The pair continued with the bullish trend, as it’s now being traded around the 90.50 level. The 4-hour chart’s RSI lacks downward momentum, suggesting that the bullish trend has more steam in it. Going long seems to be the preferable choice today.

USD/CHF

The typical range trading on the hourly chart continues. The 4-hour chart Slow Stochastic is floating in neutral territory. However, the pair currently sits near the bottom border of the daily chart’s RSI, suggesting an upward correction may be imminent. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

The Wild Card

Gold

Bullish trends were initiated around the $1118 level, and have continued with full steam as currently an ounce of gold is valued at $1126. Currently, gold is reaching towards a very strong resistant level placed at the $1130 level. If the resistant level will be breached, another sharp bullish move might take place. This could be a great opportunity for forex traders to join a very popular trend.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By CountingPips.com

The U.S. dollar reversed course from yesterday’s gains in the forex markets to fall sharply against the other major currencies today. The dollar has lost ground today versus the euro, Swiss franc, British pound, Canadian dollar, New Zealand dollar and the Australian dollar while trading close to unchanged versus the Japanese yen, according to currency data by Oanda at 5:25pm EST.

The U.S. stock markets, meanwhile, had a positive session today with the Dow Jones gaining by roughly 44 points, the Nasdaq increasing over 15 points and the S&P 500 showing almost a 9 point gain. Oil and gold both rose as oil climbed $2.02 to the $81.82 level while gold jumped $17.10 to the $1122.20 per ounce.

Today’s major economic event was the Federal Open Market Committee statement on the U.S. federal funds interest rate. The FOMC, as expected, concluded its monetary policy meeting today by keeping the U.S. interest rate steady at its record low level.  The committee last cut the federal funds interest rate to the current target range of 0 percent to 0.25 percent in December 2008.

Today’s statement on the economy said that “economic activity has continued to strengthen and that the labor market is stabilizing. Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit.”

Most of the anticipation for the last few meetings has been on whether the FOMC would give any hint on when the interest rate level might change. Today, the statement continued to use the same language as in the past, saying the rate is likely to remain at “exceptionally low levels” and for “an extended period.”

For a second consecutive Fed meeting, the decision was not unanimous as Kansas City Fed President Thomas M. Hoenig disagreed with the other nine FOMC members. According to the release, Hoenig thought that “continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability.”

Housing Starts, Building Permits decline

Also released out of the U.S. earlier today was U.S. housing data for February. Housing starts and building permits fell in February while housing completions rose for the month, according to data released by the Commerce Department on new residential construction. Housing Starts declined by 5.9 percent in February to a seasonally adjusted annual rate of 575,000 starts following an annual rate of 611,000 in January. February’s data, despite the decline, was better than the economic forecasts that were predicting a fall for the month to a 570,000 starts pace.

Building permits statistics, used as a predictor of future construction, showed a seasonally adjusted annual rate of 612,000 permits in February which was a decrease of 1.6 percent when compared to January. Building permits also surpassed matched forecasts that were expecting permits to number approximately 601,000 annually.

Housing Completions for February increased when compared to January as completions rose to an annual rate of 700,000 privately-owned housing completions. This is an advance by 5.4 percent from January’s completion totals which numbered a revised 664,000 completions.

AUD/USD Chart – The Australian dollar today surging higher versus the US dollar in forex trading. The AUD/USD rose to its highest level since January 19th to trade above the 0.9200 level.

By GCI Fx Research

€

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3770 level and was supported around the $1.3655 level.  As expected, the Federal Open Market Committee kept its benchmark federal funds target rate unchanged at 0.25%.  The FOMC reported “Information received since the Federal Open Market Committee met in January suggests that economic activity has continued to strengthen and that the labor market is stabilizing. Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly. However, investment in nonresidential structures is declining, housing starts have been flat at a depressed level, and employers remain reluctant to add to payrolls. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability.  With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.  The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve has been purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt; those purchases are nearing completion, and the remaining transactions will be executed by the end of this month. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability. In light of improved functioning of financial markets, the Federal Reserve has been closing the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities and on March 31 for loans backed by all other types of collateral.” Kansas City Fed President Hoenig dissented with the decision, arguing “that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability.” Data released in the U.S. today saw February housing starts off 5.9% to an annualized 575,000 units while February building permits were off 1.6% m/m to an annualized 612,000.  Also, the February import price index was off 0.3% m/m and up 11.2% y/y.  Data to be released in the U.S. tomorrow include February producer price inflation data.  In eurozone news, Standard & Poor’s affirmed Greece’s BBB+ credit rating and removed the country from “creditwatch negative.”  Eurozone finance ministers last night reiterated their plan to “take coordinated action” but did not provide much additional information other than to suggest any assistance would take the form of bilateral loans rather than loan guarantees.  Data released in the eurozone today saw the EMU-16 consumer price index expand 0.3% while the core consumer price index expanded 0.4% m/m, up from -0.1% in January; consumer prices were also up 0.9% y/y.  Also, the EMU-16 March ZEW economic sentiment survey fell to 37.9 from the prior reading of 40.2.  The German March ZEW survey’s economic sentiment and current situation indices improved to 44.5 and -51.9, respectively.  European Central Bank member Stark called on more regulation for credit default swaps and called on countries to improve their fiscal finances.  Euro bids are cited around the US$ 1.3335 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.00 figure and was capped around the ¥90.75 level.  Traders await Bank of Japan Policy Board’s interest rate decision tonight with strong expectations of additional monetary easing.  The central bank may expand a ¥10 trillion fund that provides funding to banks when policymakers convene on 16-17 March and this is important because an unlimited uncollateralized loan facility expires on 31 March.  Some BoJ-watchers believe the facility could expand by at least ¥5 trillion. The central bank remains under significant pressure to do more to combat the deflation problem further. Finance minister Kan today reported “Fiscal policy focusing on stimulating demand will have some impact against deflation.  The central bank can make an inflationary impact with monetary policy…I want to overcome deflation as soon as possible in cooperation with monetary policies.”  National Strategies Minister Sengoku called on the central bank to enact policies that will be positive for “production activity, capital investment, and consumer spending.”  Former MoF mouthpiece “Mr Yan” Sakakibara reported deflation is a “structural problem” that monetary policy cannot remedy.  Data released in Japan overnight saw February machine tool orders climb 217.4% y/y and dealers await the release of January tertiary index data.  The Nikkei 225 stock index lost 0.28% to close at ¥10,721.71.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥124.60 level and was supported around the ¥123.20 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥137.45 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥85.80 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8260 in the over-the-counter market, down from CNY 6.8262.  People’s Bank of China reported inflation expectations are rising in a quarterly survey released today and this could render it difficult for the government to meet its 3% annual inflation target.  Higher inflation expectations will likely propel interest rates higher.

₤

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5200 figure and was supported around the $1.4975 level.  Data released in the U.K. today saw the DCLG January house price index expand 6.2% y/y, the highest increase since February 2008.  Bank of England Monetary Policy Committee member Barker yesterday reported the U.K. economy could recede again, adding the economic recovery will continue to be “bumpy and fragile.”  Cable continues to suffer from political uncertainty ahead of the upcoming mandatory General Election.  Prime Minister Brown is expected to lose to Tory leader Cameron but Cameron may not be able to form a majority government if he wins, and this could lead to a weaker pound.  Many data will be released in the U.K. including February jobless claims along with the BoE MPC meeting minutes.   Cable bids are cited around the US$ 1.4455 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the US$ 0.9045 level and was capped around the $0.9120 level.

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0545 level and was capped around the CHF 1.0625 level.  Notably, the franc rocketed to its highest level vis-à-vis the euro since October 2008 as the common currency plumbed the CHF 1.45 handle. Traders are speculating Swiss National Bank will be less inclined to intervene by selling francs as the Swiss economic recovery strengthens.  SECO released economic forecasts today that are calling for economic growth of about 1.4% in 2010, up from the +0.7% forecast issued in December.  Unemployment is expected to decline to 4.3% from 4.9% in 2010 and private spending is expected to ramp up.  Data released in Switzerland yesterday saw February producer and import prices decline 0.3% m/m and fall 1.0% y/y.  U.S. dollar offers are cited around the CHF 1.1045 level.  The euro moved lower vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.4505 level while the British pound moved higher and tested offers around the CHF 1.6050 level.

Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

I am often amazed to see that there are many forex traders out there that don’t know how to use the basic tools of the platform. Unless you’re sitting in front of the screen 24 hours a day – there are some features on our platform that you must master, otherwise losing seems to be a very logical outcome.

The first thing that you need to understand is the different options you have to open a new position. There are 4 different ways to open a position:

1. Market Order – This is the simplest way to open a position. It means that I want to enter the market right now at the current price.
2. Entry Stop Order – This order allows you to enter the market at a future price, and to join the trend. For example, let’s assume that the current price of the EUR/USD is 1.3700. I think that if the EUR/USD will reach the 1.4000 level, it will probably continue to rise. So I will set an entry stop order for a EUR/USD buy position at the rate of 1.4000.
3. Entry Limit Order – This order allows you to enter the market at a future price, and go against the trend. For example, again, let’s assume that the price of the EUR/USD is 1.3700. I think that if he EUR/USD will reach the 1.4000 level, the uptrend will probably halt, and the EUR/USD will later drop. So I will set an entry limit sell position at the rate of 1.4000.
4. An OCO Order – The OCO is exactly like placing both entry limit and entry stop orders for the same currency pair, with one big benefit: Once one of the orders is triggered, the other one is automatically cancelled. For example, I’m setting the following OCO order – an entry stop sell at the rate of 1.3200 and an entry limit sell at the rate of 1.4000. Now if the market will reach one of these prices, this will trigger one order, and cancel the other.

Now that you know how to open positions, let’s understand what our options are in terms of closing a position.

Once again, we have 4 different ways to close a position:

1. Market Order – Remember the market order for opening a position? Well this is exactly the same. This means that I want to exit the market right now at the current price.
2. Limit (take profit) Order – The limit order gives me the ability to determine how much I wish to profit from a position. For example, if the EUR/USD is currently trading at the 1.3700 level and I have a buy position open, I can then set a limit for 1.4000 – this means that once the pair will reach the 1.4000 price level, my position will be automatically closed by the trading platform.
3. Stop (stop-loss) Order – The stop order allows me to determine how much I’m willing to risk from a position. For example, if I have a sell EUR/USD position that was opened at the 1.3600 price level, and I’m willing to risk as much as a 300 pip drop – then I will set a stop order for the price of 1.3900.
4. Trailing Stop Order – The trailing stop order is a dynamic stop loss order. Instead of setting a specific level that you are not willing to reach below, you can automatically let the platform readjust the level of your stop according to movement of the market. Let’s say that we opened a long EUR/USD position at the price of 1.4000, and we set a trailing stop order for 30 pips. So now, the trailing stop is located at 1.3970. However, if the market moves in our direction and the pair is now traded at 1.4040, then the trailing stop relocates itself in accordance, and is now placed at the 1.4010 level. The beautiful thing about it is that it will never go lower then its highest high. In our case, the worse scenario for us is that it will close the position if the pair will reach the 1.4010 level again, leaving us with a 10 pips profit. In a better scenario, the pair will continue its bullish momentum and reach above the 1.4040 level. The trailing stop will then move in accordance, of course, adding further to your profits.

By Adam Hewison – The crude oil market came under pressure on Monday and I’m disappointed that I did not have this video out to you earlier. I created the video on Sunday along with the other three videos on the S&P 500, gold, and the euro that did make it to the blog.

Nonetheless, I think you will find this video  useful as it outlines our position in this market. The video is short and to the point, nonetheless I think you’ll have a lot of good takeaway information.

As always our videos are free to watch and there are no registration requirements. I would really like to hear back from you with regards to your thoughts on this video.

Watch the Video Now….

All the best,

Adam Hewison
President, INO.com
Co-creator, MarketClub

By Fast Brokers – Gold is staging a rally during the Asia trading session as investors await key EU economic data and the Fed’s monetary policy decision later today.  Gold was a beacon of stability during yesterday’s risk-averse movement in the FX markets.  The precious metal continued its consolidation above $1100/oz and is currently moving in line with its negative Dollar correlation despite last week’s deviation.  However, although gold’s pop is encouraging, it still needs to surpass our 1st and 2nd tier downtrend lines along with 3/12 highs before establishing a more sustainable recovery.  After all, the precious metal did dip below $1110/oz and some key uptrend lines last week during its pullback.  Should EU data print strong and the Fed stick to its loose monetary policy for the foreseeable future gold could find enough strength to overcome its topside technical barriers.  On the other hand, should data disappoint and the Fed tighten its language then gold could come under selling pressure again.  On the other hand, gold hasn’t exactly been behaving according to its past correlation patterns as of late, so analyzing gold according to its usual correlative forces could be a mistake.  Either way, gold and FX markets could experience heightened activity over the next 24 hours as investors digest the wealth of news and data.

Technically speaking, gold faces multiple downtrend lines along with 3/12and 3/10 highs.  As for the downside, gold still has multiple uptrend lines serving as technical cushions along with intraday, 3/15, and 3/12 lows.  Furthermore, the psychological $1100/oz area could continue to have an influence on gold over the near-term.

Present Price: $1113.30/oz

Resistances: $1113.77, $1115.19, $1116.32/oz, $1117.66/oz, $1118.87/oz, $1120.77/ oz

Supports: $1112.30/oz, $1111.13/oz, $1110.06/oz, $1109.09/oz, $1108.17/oz, $1106.94/oz

Psychological: $1100/oz, $1150/oz, March highs and Lows

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.