Month: August 2010

fhuetter, the winner of the latest traders championship is sharing some trading
tips with eToro’s community

Profile:

Age: 46
Country: Austria
Family status: married
Occupation: Quality/Risk Manager at a hospital
Experience: 2 years CFD trading (hobby / free time)
Trading Mantra: Crazy for short
Preferred currency: EUR/USD and EUR/JPY
Hobbies: diving

Why are you trading with eToro?

Because it’s a very quick and easily understandable trading platform.

What is the most important lesson you’ve learned about trading so far?

Strict money management. It means not being too greedy and accepting a loss when it happens. Sometimes I thought that I could even turn a bad trade into a profitable one when I  put all my eggs in one basket, but as we know, and as I have had to learn the hard way, the market is always right, no matter what I happen to believe at the moment. So, I never spend more than 30% of my deposit. If I lose it, I turn off my account and try trading the next day.

What is the most important tip you can give to novice trader?

Start with small leverage and far stop losses (medium risk trades).

Please give me a general description of your trading technique/strategy?

Looking for short entry points by using 1min/5min/15 min/ 1 hour MACD and Stochastic indicators. If they turn to “sell” at the same time, I start with shorts. The same goes for long Trades.  What’s important for me is that they all turn to sell or buy at the same time.

Did your Account Manager help you to improve your trading?

I get useful tips and actual warnings when I take any positions (very useful). The Account Manager calls have more than once given me some well-timed info about possible trends and events with effects and consequences to my trades.

Please recommend a trade to our readers?

Actually EUR/USD short till 1,267 then go long.

How long it take you before you started to make profit?

1 week.

How much money do you currently trade with?

About EUR 45,000.

What is your number one trading rule?

Not to be greedy and not to run after profit; this means using strict stop losses ,never expanding them in the hope of “only a little bit longer and then it will turn in my direction” – it never does!

What is the part you love the most about eToro?

I find the weekly/monthly championships stimulating and I also like the bonus program.

How much money have you withdrawn from eToro so far?

About  USD 218,000.

How did you learn to trade

Mostly  I learned by myself from some internet brokerage sites and some books I bought – and some trial and error experiences! I learned some basic charting techniques and the principles of Elliott-Waves.

Which tools do you use for your trading?

I use the MACD (1min/5min/15min and 1 hour) and the Stochastic (1min/5min/15min and 1 Hour). Also I use the top traders’ insight list at eToro as a contra-indication: if 70% or more are on sell, I go long and vice versa.

Your message to the eToro community:

Don’t work hard (using complicated trader tools with “academic” analytical tools and information) – work smart (use eToro´s simply designed trading platform and trade with your own proven trading strategy).

How much profit have you made so far with eToro?

About EUR45.000.

eToro Analysis:

The trader is exceptionally proficient in the art of short selling. The main strategy the trader uses is indentifying pivot points in the Euro/Dollar and then using them for extremely accurate short sells of around 50pips.For example one of the trader’s most successful trades lately from the 18^th of August was when the trader shorted the Euro at 1.2847 and then closed at a take profit of 1.279.The trade was closed with a gain of 68 pips earning the trader close to $3,000. The trader always uses a leverage of 100X and approximately the same stop loss size, pointing to a well organized strategy built for constant gains. Overall the trader has profited from more than 65% of his trades in a period of 1 year. This indicates that the trader has a well planed trading style and could be very valuable to follow for those seeking long term gains.

Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

It’s a bad day for the Aussie bulls since it seems that the bears have just taken over the trading driver seat. As you can see from the AUDUSD’s 4-hour chart, the pair appears to have broken down from a head and shoulders pattern. Remember that the Australian dollar had risen to as much as 0.9200 over the greenback early this month after touching a low of just above 0.8100 in June. though, by the looks of it, it’s luck has already turned. Yesterday’s movement pushed the prices below the pattern’s neckline and also under the previous resistance-turned-support. Given this, the price could head all the way down to 0.8500 though the previous support at 0.8600 could possibly halt its descent. In any case, things still look bearish for the AUD unless it is able to move back up above the neckline.

Due tomorrow (August 26) at 00:00 GMT and at 1:30 am GMT are Australia’s Conference Board leading index for the month of June and the country’s second quarter private capital expenditure. The CB leading index had risen by 0.3% in May though it could print a lower gain or even a contraction given Australia’s weak home loans figure and the country’s high unemployment rate. In case you do not know, home loans have fallen by 3.9% in June after posting a jump of 3.0% during the other month. Unemployment rate has also jumped to 5.3% from 5.1%. The country’s private capital investments for the 2Q, on the other hand, is projected to have expanded by 2.3% after dipping by 0.2%. Capital investments take up about 28.54 of Australia’s overall GDP or output. Hence, an increase in this number could push the Aussie higher in the near term. Though in my opinion, a hike of 2.3% or lower is not enough to push the Aussie back on the bullish track unless of course the figure prints a much stronger score. Watch out for the report tomorrow!

More on LaidTrades.com …

Good day FX friends! Here’s an update on the EURUSD which I posted last August 17 (please see my previous blog here). In that post, I mentioned the possibility of the euro breaking out to the upside. It turns out that I was wrong as the EUR, instead of moving north, slid and broke down. As you can see from its chart, it appears that the euro’s recent rally over the greenback is over. After breaking out from an inverted head and shoulders pattern, the fiber or the EURUSD pair managed to achieve its minimum target and more. It then continued to rise and it even marked a new 3-month high at 1.3334 before dipping again. After its drastic slide from its 3-month high I though that it would reverse and turn up as suggested by what appeared to be another inverted head and shoulders. However, a break out from this pattern did not materialize. Its price then formed a head and shoulders (bearish and not to be mistaken with the inverted version) pattern. Its price action during the first days of this week proved costly as it pierced through and below its uptrend line and the formation’s neckline. Given this, the pair could now fall all the way to the 1.2150 area. Even if it rallies, the head and shoulders neckline at 1.2750 would prevent it from rising any further.

The euro lost its appeal on fears over Europe’s economy. The services PMI of France, manufacturing PMI of Germany, and the euro zone’s overall manufacturing purchasing manager index all failed to meet the market’s consensus. The French services PMI fell to 59.9 (versus 60.7) from 61.1. Germany’s manufacturing index also weakened to 58.2 from 61.2 which resulted into a broader fall in the euro zone’s number to 55.0 from 56.7. Note that the index can be used to gauge the business activity of the respective sectors in the economy. Why? Well, purchasing managers hold perhaps the most current and relevant insight into company’s view of the economy. For example, if the company is starting to pile up their invetory then perhaps it is expecting a uptick in its business in the near future. In any case, a drop in these figures suggests that the recovery in the euro zone’s economy could have slowed down.

On tap on August 25 and 26, respectively, are the German Ifo business climate index and the GfK German consumer climate index. Ifo’s account is seen to have retreated to 105.8 from 106.2 while the GfK index is projected to have increased to 4.1 from 3.9. But given the weaker-than-expected PMIs in the euro zone and the recent tentativeness in the global markets, business climate in Germany and the euro zone could have dipped as well.Such could very well reflect in the upcoming business and consumer climate surveys. If this is the case then the euro could once again take another hit.

More on LaidTrades.com …

By Natalie R. – After dropping below $72 a barrel overnight, to an 11 week low, crude levels rebounded slightly in today’s early trading ahead of the release of U.S inventories data later today that is predicted to show a modest gain in gasoline supplies. U.S inventories report is a weekly indicator that shows the change by barrels of U.S crude oil levels as well as gasoline and distillates such as heating fuel. A distinction is made since it is important to measure not only the level of the unrefined oil available but also its byproducts, as these are better indicators of demand.

Analysts expect crude inventories to post a modest 300,000-barrel gain, according to a survey by Bloomberg. According to a survey by Dow Jones Newswires, gasoline stocks are expected to fall by 500,000 barrels, while inventories of distillates, which include heating oil and diesel fuel, are seen rising by 900,000 barrels.

This expectation is in line with the recent slowdown in economic recovery in the U.S. High unemployment and concerns about the economic recovery have had a major impact on demand for oil and fuel products. Oil prices dropped significantly yesterday after the release of worse than expected housing data. Oil lost 5.5% in the previous five days amid concern the global economic recovery would stall and curb fuel demand. Consumers have cut trips and other expenses, leaving the market saturated with gasoline during the important summer driving season. Along with the winter months, the summer is regarded as a period where demand increases due to increase in gasoline consumption. This summer season, however, proved to be highly disappointing as demand continued to decline. Despite declines in the level of Crude Oil, there was a continuous rise in distillates levels, causing oil prices to drop.

As there is abundance of supply available in the markets, oil levels are mostly determined by demand. The current pessimistic mood brought on by the recent surge of negative economic data has greatly dampened expectations of increased demand, dragging down oil prices. There will need to be a significant change in stockpiles to influence the pessimistic outlook. More importantly, the change will need to be not in the crude level but in the distillates, namely gasoline and fuel levels.

Forex Market Analysis provided by ForexYard.

© 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 Anton Eljwizat – The Oil prices are once again dropping, and it is currently traded around $71.65 per barrel. However, there is much technical data that supports a bullish move for today as described below. Forex traders involved with commodities like this can take advantage of this knowledge by going long on Crude Oil now, and at a great entry price!

• Below is the 8-hour chart for the crude oil.

• The technical indicators used are the Slow Stochastic, Relative Strength Index (RSI) and MACD.

• Point 1: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the oversold territory, signaling upward pressure.

• Point 2: The Slow Stochastic shows a fresh bullish cross which may indicate an impending bullish movement.

• Point 3: The MACD indicates an impending bullish cross, which may signal a upward movement is going to occur in the near future.

• The volatile downward movement which occurred prior to this upward correction has generated these indicators, and there appears to be room for this correction to continue.

Crude Oil 8-Hour Chart

Forex Market Analysis provided by ForexYard.

© 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 4XEagleEye.com

Down Trend

Prices should stay below (1.56160) in order to maintain the bearish outlook.. GBPUSD is facing a selling pressure pushing it down as long as it remains below (1.56160) any four hours close below (1.52813) will open the way for the instrument to test the next support level at (1.51937). Any four hours bare close above (1.56160) will change instrument`s direction. Traders should consider selling each rally with a stop loss at (1.56160).

Source: ForexYard

A downgrade of Ireland’s sovereign debt rating late Tuesday further roiled foreign exchange markets already agitated by dismal U.S. housing sales. The Standard & Poor’s Ratings Services downgraded Ireland’s credit rating late Tuesday on concerns about the cost of bailing out the country’s ailing banks.

Economic News

USD – U.S Dollar Extends Losses

The U.S currency extended declines versus the Japanese yen on Tuesday after a report showed sales of previously owned U.S. homes dropped more steeply than expected in July. The dollar also lost ground against the euro, with the single currency erasing earlier losses versus the greenback after the report.

Fears the U.S. and global economic recovery could falter have contributed to safe-haven flows into the yen, the U.S. dollar and government bonds as investors unload stocks and other assets perceived as risky. USD fell in Tuesday trading amid concerns over economic weakness and following the housing data. If risk-aversion flows accelerate into September, dollar/yen will continue to drift lower irrespective of any policy moves from Tokyo, analysts said.

EUR – Euro Hits New Lows vs. the Dollar and the Yen

The European currency took a hit on Tuesday when Standard & Poor’s downgraded Ireland to AA- and warned the outlook was still negative, fanning worries about euro zone sovereign debt and the banking system.

A resulting wave of short-covering lifted the euro from a low of $1.2587 to as high as $1.2718 at one stage, before news of the Ireland downgrade dragged it back to $1.2635.

The single currency may gain further as it approached two technical levels that indicate it may rise against the U.S dollar. The shared currency was near the 50 percent Fibonacci retracement of its advance from a more-than four-year low of $1.1877 on June 7 to a three-month high of $1.3334 on Aug. 6. It could rise to $1.29 in the next few days.

JPY – Yen Rises Broadly on Global Risk Aversion

The Japanese yen rose to a 15-year high against the U.S dollar and a 9-year peak versus the euro on Tuesday amid fears the global economy is slowing, testing Japanese authorities’ resolve to stem the currency’s climb.

Declines in stock markets and a weaker-than-expected housing report in the United States also helped buoy the yen and other safe havens such as the Swiss franc.

Crude Oil – Oil Rebounds with U.S. Durable Goods Data Ahead

Crude Oil prices bounced from a 7 week low on Wednesday as investors looked for relief in U.S. durable goods and oil inventory reports due later in the day, after fears of a double-dip recession intensified with dismal housing data.

Oil slid 2% on Tuesday on news that sales of previously owned U.S. homes dropped by a record 27.2 percent in July, sending global equities to one-month lows.

Meanwhile the U.S. crude stockpiles unexpectedly fell last week, an industry report showed late on Tuesday, raising some hope that government statistics due later today would show an improvement in oil demand by the world’s largest user.

Technical News

EUR/USD

The EUR/USD cross has experienced a bearish trend for the past 2 weeks. However, it seems that this trend may be coming to an end. The RSI of the daily chart shows the pair floating in the over-sold territory, indicating that an upward correction will happen anytime soon. Going long with tight stops might be a wise choice.

GBP/USD

The price of this pair appears to be floating in the over-sold territory on the daily chart’s RSI indicating an upward correction may be imminent. The upward direction on the 4-hour chart’s RSI also supports this notion. When the upward breach occurs, going long with tight stops appears to be preferable strategy.

USD/JPY

The cross has experienced much bearishness yesterday, and currently stands at the 84.25 level. There is much evidence in the chart’s oscillators that supports a possible bullish correction today. This is supported by the 4-hour chart’s RSI. Going long with tight stops may turn out to bring big profits today.

USD/CHF

The USD/CHF has gone increasingly bearish in the past few days, and currently stands at the 1.0305 level. The 8-hour chart’s Slow Stochastic supports this currency cross to fall further today. However, the 4-hour chart’s Stochastic Slow signals that a bullish reversal will take place today. Entering the pair when the signs are clearer seems to be the wise choice today.

The Wild Card

Crude Oil

Crude oil prices are once again dropping, and it is currently traded around $71.80 per barrel. And now, the daily chart’s RSI is giving bullish signals, indicating that oil prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

Forex Market Analysis provided by ForexYard.

© 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 eToro – The Euro held its ground today despite worse than expected US data which should have created an exodus out or riskier assets, but instead initially created a EUR/USD short squeeze. A poor technical picture should create a defensive Euro down to 1.2500.

Click here to read the full daily Review

Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

After dropping below $72 a barrel overnight, to an 11 week low, crude levels rebounded slightly in today’s early trading ahead of the release of U.S inventories data later today that is predicted to show a modest gain in gasoline supplies.

U.S inventories report is a weekly indicator that shows the change by barrels of U.S crude oil levels as well as gasoline and distillates such as heating fuel. A distinction is made since it is important to measure not only the level of the unrefined oil available but also its byproducts, as these are better indicators of demand.

Analysts expect crude inventories to post a modest 300,000-barrel gain, according to a survey by Bloomberg. According to a survey by Dow Jones Newswires, gasoline stocks are expected to fall by 500,000 barrels, while inventories of distillates, which include heating oil and diesel fuel, are seen rising by 900,000 barrels.

This expectation is in line with the recent slowdown in economic recovery in the U.S. High unemployment and concerns about the economic recovery have had a major impact on demand for oil and fuel products. Oil prices dropped significantly yesterday after the release of worse than expected housing data. Oil lost 5.5% in the previous five days amid concern the global economic recovery would stall and curb fuel demand. Consumers have cut trips and other expenses, leaving the market saturated with gasoline during the important summer driving season. Along with the winter months, the summer is regarded as a period where demand increases due to increase in gasoline consumption. This summer season, however, proved to be highly disappointing as demand continued to decline. Despite declines in the level of Crude Oil, there was a continuous rise in distillates levels, causing oil prices to drop.

As there is abundance of supply available in the markets, oil levels are mostly determined by demand. The current pessimistic mood brought on by the recent surge of negative economic data has greatly dampened expectations of increased demand, dragging down oil prices. There will need to be a significant change in stockpiles to influence the pessimistic outlook. More importantly, the change will need to be not in the crude level but in the distillates, namely gasoline and fuel levels.

Elliott Wave International Chief Market Analyst Steve Hochberg Sheds Light on a Feared Technical Indicator

By Elliott Wave International

On Aug. 12, volatile market action coincided with a technical signal called the Hindenburg Omen, whereby a relatively high number of new highs and lows in individual stocks occur at the same time.

This indicator instantly gained an enormous amount of media attention. So we sat down with Steve Hochberg, EWI’s chief market analyst and close colleague of Robert Prechter, to ask him about the now-infamous Hindenburg Omen.

EWI: Steve, recently a market indicator called the Hindenburg Omen has been in the news, what is going on?

Steve Hochberg: Discussion of this indicator certainly has been everywhere. Someone emailed us and said they even saw it mentioned on the front page of the Drudge Report! Look, headline-grabbing names grab headlines. Essentially it measures the fractured nature of market action. Over the years, we’ve discussed numerous times in our publications how a fractured market is oftentimes an unhealthy market. The multiple non-confirmations registered at the recent August 9 stock high, which we talked about in the Short Term Update, are another manifestation of this bearish behavior. The message is consistent with how we view the Elliott wave structure.

EWI: Why are people interested in this particular indicator?

SH: That’s a good question, and it speaks to a broader issue, viz., the “re-emergence” of technical analysis into the mainstream consciousness of market participants. In Prechter’s Perspective, Robert Prechter discusses the timing of the popularity of technical analysis, of which Elliott waves, or pattern recognition, is the highest form:

“In long term bull markets, no one really needs market timing because the market is always going up. This was true during the 1950s and 1960s, a period of market strength. And it has been mostly true since 1982. From 1966 to 1982, though, the market was very cyclic, so investors couldn’t sleep like babies with a buy-and-hold blanket like they do today.”

The S&P 500 has a negative return over at least the past 12 years, so investors are naturally questioning the “broadly diversified, buy and hold” stance advocated by 90%+ of investment advisors. EWI subscribers are way ahead of the mass of investors because as the bear market progresses, the media should show increased focus on technical analysis, including patterns such as head-and-shoulders as well as trendlines, moving averages and, yes, even Elliott waves, just as they did during the last great bear market from 1966 to 1982. It will be an exciting time for those with even a cursory knowledge of the technicals.

EWI: So, what are you seeing now?

SH: Obviously we cannot give away our analysis, but the wave structure is clear, the myriad indicators we keep offer compelling confirmation and the market is accommodating our forecast. If readers have any interest in what this means for not only the stock market, but also all other markets, please give us a read to see if our work might be useful in helping to formulate your investment portfolio. We think it will be a worthwhile endeavor.

Read some of the latest nuggets directly from Elliott Wave International President Robert Prechter’s desk — FREE. Click here to download a free report packed with recent analysis and forecasts from Prechter’s Elliott Wave Theorist.