Month: February 2011

By James McKee

The crisis in the Middle East has exposed markets to a pressure not seen in decades via rising oil prices. Despite Libya being a relatively small provider of the world’s oil supply investors feared that the conflict seen recently would spread to other countries like Kuwait. This is a perfectly reasonable fear in light of the way in which conflict has spread so far. The USD, EUR and other major currencies have suffered massive downslides as oil has crept up in price due to Middle Eastern conflicts. If the conflicts do not subside the recent drop in the price of oil will not mean anything in light of future problems.

For many countries in Europe and the United States a hike in the price of oil means stunted growth and in possibly even a reversal in the form of job loss and decreased purchasing power. Oil is a component of every product sold in the United States in one form or another, if nothing else an increase in the price oil drives up the price of a product through transportation costs. The USD and the EUR will both drop in value if there continues to be a hike in the cost of oil.

The Chinese Yuan will have some opportunity to appreciate since China is not going to be as affected by the oil crisis in the Middle East as Western countries. There are oil reserves throughout Russia that China utilizes in addition to some they have begun to speculate on in Northern Africa where the Chinese have established a presence. Those on the forex currency exchange should follow the price of oil closely to make sure that they can stay ahead of the curve where a change in the price is concerned. Libya’s leader Gaddafi has openly stated he will not secede from power before he is killed, leading many to question how much longer this conflict will last.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.

By James Woolley

When you are running your own investment portfolio it can be a frustrating business. It is hard enough trying not to lose any money, particularly in a bear market, but it is even more frustrating when you have issues with your stock broker as well. So what kind of things are likely to annoy you?

Well one of the first grievances that comes to mind is when you do lots of research, find a company you wish to buy shares in, and then find that your broker is unable to process the transaction. With large companies this is rarely a problem, but with some small-cap stocks it is quite common to be referred to a dealer when you press the confirmation button.

Often it doesn’t matter if you have to wait a few more minutes for an actual person to place the trade on your behalf, but sometimes the price can move higher during this short interval. So you then have to buy these shares at a slightly higher price or cancel the transaction altogether if you are not happy with this new price.

It can also be frustrating when you desperately want to buy or sell shares but your stock broker is currently experiencing some downtime. This can be quite common when the markets rise or fall by a significant amount on any given day, or after a major economic announcement. In these instances you may be able to phone through to a live dealer, but this will often incur higher costs and you may have difficulty placing a trade if there is something wrong with the broker’s technology.

Another common problem may arise when you want to buy a certain amount of shares in a small or mid-cap company, but the transaction is denied because the deal is said to be too large. This is more of a market-maker problem than a broker problem. Nevertheless a good broker will try to negotiate this deal themselves and make sure that you are able to buy the required amount, whilst other brokers will simply refuse the transaction and you will have no other options. You simply have to buy smaller amounts of shares in your chosen company.

To be fair a lot of brokers are very good nowadays. They hardly have any downtime at all and they all have pretty good relationships with the market makers. However you can still encounter a few problems from time to time, even with the very best brokers.

About the Author

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By James McKee

Trouble continues to strike at the heart of European finance as Italy (a country already in trouble) begins to feel the problems being experienced in the Middle East. Italy was once the colonial occupier of Libya and as a result is the number one recipient of Libyan oil. Italy’s other long-standing ties to the country are also suffering due to the instability in Libya. Considering the fact that Italy is already teetering on the edge of requiring a massive bailout the Libyan debacle is just the start of what could be a catastrophic decline in Italian economic solvency that will have a negative effect on the Euro.

Italy is very dependent on Libyan oil due to their unique and long standing relationship. Cutting these ties and discontinuing this dependency could prove to be extraordinarily difficult for Italy who enjoys little to no revenue stream when compared to other countries of similar size. This fact has caused many to be concerned for Italy’s inevitable request for financial assistance from the EU and possibly from China. China has already bailed out Portugal and is considering shifting the aid they are giving to the United States to Europe instead.

China is concerned with their geographic back yard first at this point in time, an unstable Europe would harm China more in some ways than an unstable US. Italy has quite a few changes they need to make prior achieving any sort of financial stability. Countries such as Germany will not be able to pick up the slack forever and this could spell out absolute disaster for the Euro and the EU. Those on the forex currency exchange should keep a close eye on the decisions Italy makes to cope with the financial losses it will suffer from a drawn out Libyan conflict. If these problems continue for much longer the EU itself could be in a very bad position.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.

Here’s a look at what to expect in earnings and economic data for the week of February 28th, 2011. On Monday, look for earnings from Quiksilver Resources, Salix Pharmaceuticals, Warnaco Group, Range Resources and Sotheby’s. You can also be on the lookout for a number of economic data reports including Personal Income, Personal Spending, Personal Consumption Expenditures and Personal Home Sales. Tuesday you can expect earnings from AutoZone, L-1 Identity Solutions, Boyd Gaming Corp, Hovnanian Enterprises, Domino’s Pizza, McDermott International, The St Joe Co, and Dendreon Corp. In economic data, be on the lookout for the ISM Manufacturing Index and Total Vehicle Sales. Mid-Week, Joy Global, BJ’s Wholesale Club, Boise, Foot Locker, Staples and Costco Wholesale Corp all report their earnings and the Fed Beige Book and the ADP Employment Change reports are also due out. On Thursday, look for earnings from Kroger Co, HJ Heinz Co, Novell Inc, and Big Lots Inc. In economic data, Initial Jobless Claims and Nonfarm Productivity are also due out. Finally, to close out the week, no earnings reports of note are due out, however there is plenty of economic data with Nonfarm Payrolls, Unemployment rate and factory orders.

By James McKee

The Middle Eastern nation of Libya has proven itself to be the worst off in a series of political revolutions throughout the region. Egypt and Tunisia have already seen regime changes brought on by massive public demonstrations that have ignited the Arab world with a desire to end their undesirable living conditions. This series of conflicts has spelled out an out of control oil price due to a complete shutdown of Libyan oil exports. Italy’s close ties to Libya and importation of Libyan oil has resulted in more serious financial consequences for Italy than other countries in the Western world.

The Euro has been suffering as a result not only of one of their members’ ties to Libya, but also skyrocketing oil prices. The EUR stands to drop even further as the Libyan conflict heats up, there have already been thousands killed for the protests that have occurred so far. Libyan revolutionaries have captured half of the country so far, so it seems highly unlikely that this conflict will end anytime soon. While it is true that a shortage in oil affects all Western currencies there are some that will fall faster than others.

The Euro and USD will fall the fastest; Europe has the most direct ties to Libya while the US is the world’s most voracious consumer of everything…including oil. Once the oil prices skyrocket US goods will become more expensive almost immediate due to increased costs across the board. Those on the Forex currency exchange should keep a close eye on Libya as well as the cost of crude oil that is vital to price of all Western currencies. The nation of Libya could just be the third in a series of Middle Eastern regime collapses as time goes on. There are signs of civil unrest occurring in Saudi Arabia already.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.

Being contained by 1.3861 resistance, EURUSD pulled back from 1.3837, suggesting that lengthier consolidation of uptrend from 1.3428 is underway. Deeper decline towards the lower border of the price channel on 4-hour chart could be seen. As long as the channel support holds, we’d expect uptrend to resume, and another rise towards 1.4000 is still possible. However, a clear break below the channel support will indicate that sideways consolidation in a range between 1.3428 and 1.3861 is being formed, then next target would be at 1.3450-1.3500 area.

Daily Forex Forecast

By Taro Hideyoshi

The critical piece of trading system is how to get out of a losing trade. Traders who do not cut their losses cannot be successful in long term.

The most important thing about stops that traders must keep in mind is to define the stops before enter a trade. This is of course not a coincidence that every famous trader has this trading rule in their trading system.

For the turtles, they did not place their stop with the brokers since they did not want to reveal their trading strategies. As they traded future contracts commodities, they used either limit orders or market orders instead.

No trade of turtles could incur more than 2% risk of equity. Because the turtles used N-based stops while N of price movement represented 1% of account equity, therefore the maximum stop allowed 2% risk would be 2N.

According to the entry rule of turtles, that a unit would be added into positions every 0.5N, the stops would be placed at 2N from the most recently added unit to minimize the total position risk.

Example

Crude Oil: N = 1.20, 55-days breakout = 28.30

In this case turtles would enter the first unit at 28.30. Then if price moved to 30.10 the positions of turtles would be as follow.

First Unit: entry [28.30] stop [27.70]

Second Unit: entry [28.90] stop [27.70]

Third Unit: entry [29.50 stop [27.70]

Fourth Unit: entry[ 30.10 stop [27.70]

The turtles were also told of an alternate stop strategy called the whipsaw. This strategy resulted in better profitability but incurred more losses, which resulted in lower win/loss ratio.

For this strategy, the stops were placed at 0.5N for 0.5% account risk. If a given unit was stopped out, it would be re-entered when the market reached the original entry price. Using of the whipsaw did not require moving the stops when a unit added. The maximum risk would not exceed 2% because the maximum unit is four.

Example

Crude Oil: N = 1.20, 55-days breakout = 28.30

In this case turtles would enter the first unit at 28.30. Then if price moved to 30.10 the positions of turtles would be as follow.

First Unit: entry [28.30] stop [27.70]

Second Unit: entry [28.90] stop [28.30]

Third Unit: entry [29.50] stop [28.90]

Fourth Unit: entry [30.10] stop [29.50]

Since the N in N-based stops was adjusted according to the volatility of markets, this resulted in better diversification and risk management.

About the Author

Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management. Please go to MetaStock Trading System.

By Cedric Welsch

Currency values keep rising and falling all over the world. Due to this, currency exchange may either earn a profit or incur a loss to an investor. Currency trading happens in a distributed foreign exchange market named as Forex. This is the biggest selling market in the whole world with an estimated selling volume per day of more than $3 trillion .Millions of people, companies and institutions, in a daily basis invest in this market to make huge profits although in some cases, they incur very huge losses.

Currency trading is a very unusual happening in the foreign exchange market. It is in fact like no other trade in the financial markets and in the world. To start with, trading is made over the telephone and computers rather than on the floor of an exchange. Its operations are carried out for 24 hours through out the week except the weekends. This market is very much affected by some economic factors, but some non economic factors such as wars and drought have also influenced the trading.

There are many participants in the currency trading market. International companies and foreign tourists visiting a particular country are the smaller participants. The big players are referred to as the speculators. These types of investors engage in this currency trading for the major purpose of earning profits. This is done in such a way that when the market is rising, they sell them. The biggest examples of speculators are investment, commercial and central banks.

Currency trading is somehow tricky and intricate. It carries with it various risks, therefore one should be vigilant and gather enough information about the whole trade before settling down to invest in it. In this trading, anything can happen so one ought to be prepared for losses even in the well operating businesses. Speculating in this market require proper evaluation and being very attentive to every detail.

There are many devices that can aid in currency trading. To begin with, there are consultants that can advice on how to invest in them, other devices that can help in this trading are the online calculators, and also the robots that do all the evaluations and invest for that same reason. However, the use of robots is greatly prohibited due to insecurities and lack of advisory services. The most secure method to invest is by getting the basic knowledge yourself, after which track the development for a substantial period of time and then make a move to invest in the currency trading.

About the Author

Any good investor must read forex news online regularly, just as you check forex trading reviews on a regular basis.

By Taro Hideyoshi

The tactics is about miscellaneous guidelines to cover the rest of trading the turtle system rules. Besides the other six pieces of turtle trading system, there are some remaining important details that can make difference in profitability of trading.

One thing of tactics is how to enter orders. Turtles were told to place limit orders instead of market orders since the limit orders offer a chance for better fills and less slippage than do market orders.

The idea behind using limit orders is to place order at the end of the bounce of prices. It takes some skill to be able to determine the best point to place a limit order but with practice, traders should be able to get better.

There will be some times that market moves very quickly, called fast market. During fast market conditions, placing a limit order might not get filled. Turtles were advised not to panic and wait before placing an order. They would wait until some indication of at least a temporary price reversal before placing orders which often resulted in much better than achieved with a market order.

There will also be some times that signals come at once. Traders should buy the strongest and sell short the weakest. As turtles, they used various measures to determine strength and weakness.

Some would consider from how many N the price had advanced since the breakout, and buy the market that had moved the most. Others would subtract the price 3 months ago from the current price and then divide by the current N to normalize across markets. The strongest was the highest and the weakest was the lowest.

That’s it for turtle trading rules. The keys of success trading are consistency and discipline because by knowing these rules is not enough to make you succeed.

About the Author

Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management. Please go to MetaStock Trading System.

By James Woolley

If you are involved in the forex industry in any way, you will know that there are a number of different forex events held throughout the year. Some are free to attend, while others require some form of payment. So are they worth attending or are they simply a waste of time?

Well it all depends on what type of event it is. If it is an event held by a forex broker or some other finance company that you are involved with, then the benefits won’t be that great. They may be free to attend for valued customers and you may get some free food and drink, but you are unlikely to learn very much.

It is mainly a way for the company in question to get to know their customers a little better and to find out what they can actually do better themselves to give their traders a better trading experience. For you it is a chance to talk to senior employees and find out what goes on behind the scenes, but that’s about it really.

The better events are those that include some professional forex traders or fund managers as guest speakers. These events can be free to attend but if they are then you know that they will be pitching you with an offer to buy one of their products at the end of the event. In fact you may find that the whole event turns out to be one big sales pitch, in which case they may be a complete waste of time.

The better events are those that generally require an upfront fee, but do not try and sell you anything during the actual event. All you are paying for is the actual forex training that you receive from the various speakers.

These types of events can be really useful because they often feature some full time traders. Plus if they are held during the week, then they will also include plenty of live trading so you can see some of the strategies being put to the test in real time.

This type of education can be invaluable because I always think the best way to learn how to become a profitable forex trader yourself is to learn from someone who does this for a living. Unfortunately these types of seminars are quite rare, and even if you do see one or two being advertised, they may be held in another country or at least several hours away.

Anyway the point is that a lot of forex trading events are not really worth going to because you will either learn very little or you will be hit with a long sales pitch. However the good ones that are run by professional traders who have nothing to sell will of course be well worth attending. You will generally have to pay an admission fee, which can be quite substantial, but they may still turn out to be good value for money if you pick up some useful trading tips and strategies.

About the Author

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