Month: June 2011

By Forex Mansion

In London, every day, approximately 1.1 trillion dollars changes hands on the currency exchange market. More than 36% of all currency trading takes place in the UK. Some of the biggest offline forex trading houses, such as Barclay’s, Royal Bank of Scotland (RBS), and HSBC, are located in London’s Canary Wharf. What everyone wants to know is how I grab a share of this massive money-making market.

For starters, you don’t have to actually go to Canary Wharf. You don’t even have to go to London. You don’t have to go anywhere. The modern forex market is online, international, and around-the-clock. What you do need is strategy. Forex is a mix of gut instinct and cold analytics. A trader needs a clear-cut plan. A trader cannot mix up long-term investing with day trading or one geopolitical arena with another. Consistency and confidence are the traits required to make a profit in the long term. Every trader needs to find the strategy that best suits him. A more technical personality might find himself studying charts, while another might be reading news articles and staying up to date with the latest economic and political developments.

One of the best ways to ease into the world of forex is opening an online practice account. Many online trading firms will let you open an account with fake money for practice. The account will gain and loose money in respect to real changes in the market, but you won’t loose even a dime out of pocket. Additionally, there are many online training seminars where new traders can watch videos, read articles, or even take classes about forex trading.

There are two umbrella strategies in forex: long term and day trading. A day trader will have to make sure that he is in synch with the time zones of the markets will they’re active. For example, a day trader in New York who’s interested in the US-Europe market will trade between 8:00AM and 12:00PM Eastern Standard Time in order to take advantage of the overlap of those markets. A forex trader in the UK, in this respect, holds a certain geographical advantage by being “in the middle.” The long term investor will be less concerned with time zone overlaps because, as is the nature of long term investing, he is less concerned with the immediate up-to-the-minute changes that occur during said times.

Even though forex is an around-the-clock market, the online forex trader doesn’t have to be. A forex trader who tries to be work the hours of the market is more likely to turn his keyboard into a pillow than to turn a profit. Any good trader knows when to stop – which brings us to our next point.

One of the most important lessons in forex trading is setting limits, i.e. knowing when to stop. The flip side of this coin is called acceptable losses. A good trader also knows how to loose money. The trick of the trade is to balance between the monetary limitations and the discipline required to accept certain losses for the potential gain that may follow. On one hand a trader never risks too large a percentage of his account, while on the other hand, never freaks out when a small percentage looks like it might disappear.

An online forex trader who exhibits the discipline required and follows a consistent strategy can grab a share of Canary Wharf profits without ever leaving his house.

For more information about foreign exchange currency and stocks day trading, specifically Forex in UK, visit http://www.forexmansion.com .

About the Author

This highly informative article at Forexinuk.com will show you how to grab your share of forex in the UK – currently the world’s largest forex market.

Being contained by 1.3969 support, EURUSD rebounded from 1.4073. Resistance is now at the downtrend line on 4-hour chart. As long as the trend line resistance holds, the bounce from 1.4073 is treated as consolidation of downtrend from 1.4696, and one more fall to re-test 1.3969 support is possible. However, a clear break above the trend line resistance will indicate that a cycle bottom had been formed, and the fall from 1.4696 had completed at 1.4073 already, then the following upward move could bring price to 1.4500-1.4600 area.

Forex Signals

By Cedric Welsch

A foreign currency pair simply refers to the quotation of the value of one currency relative to that of another. The currency used as the base or reference point is known as the base currency. The tender quoted relative to the base is known as the quote or counter tender.

By industry convention, pairs are written using abbreviations formulated by the International Organization for Standardization (ISO) according to standard ISO 4217. This standard requires the base tender to be written first and then the counter tender, the two units being separated with a slash.

A EUR/USD 1.3250 quotation means that 1.0000 Euro (the base) is exchanged for 1.3250 US dollars (the counter). Another way of expressing the exact same value of these two currencies would be to use the US dollar as the base; in which case the notation would be USD/EUR 0.7547 indicating that 1.0000 US dollar is valued at 0.7547 Euros.

To emphasize, regardless of whether the transaction is quoted as EUR/USD 1.3250 or USD/EUR 0.7547, the value of each of these currencies with respect to each other remains the same. However, standardizing the terminology helps facilitates communications and helps avoid unnecessary confusion.

All transactions in the foreign exchange market involve the simultaneous buying of one tender and the selling of another tender. This, of course, is a truism since the tender purchased in a forex trade is itself a tender (or money) and that product is purchased with money.

Traders buy and sell individual currencies. They buy one tender in exchange for another. However, again as a matter of industry convention, these same transactions are often described as the buying of a pair. This terminology is used for the sake of brevity and convenience.

For example, if a forex trader buys a base tender in exchange for the quote tender, that same transaction is described as the trader buying the pair. Specifically, if a trade is quoted as EUR/USD, the trader buys Euros and sells US dollars or, alternatively, simply as buying the EUR/USD pair. Conversely, a trader selling the EUR/USD pair sells EUR and buys USD.

In conclusion, the foreign currency pairs most traded globally in the forex market are the EUR/USD, USD/JPY, USD/CHF, GBP/USD, AUD/USD and USD/CAD. The value of foreign exchange trades involving these six pairs generally account for at least 80% of the total foreign exchange market. The seven currencies are for that reason known as the majors.

About the Author

The wondrous thing about hearing trade forex news consistently is that you get exposed to statistics. Never mind getting non-factual opinions from inexperienced traders, get a grip on a good forex review.

By CountingPips.com

The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures speculators increased their short positions against the US dollar for a third consecutive week. Non-commercial futures positions, those taken by hedge funds and large speculators, were overall net short the US dollar by $25.14 billion against other major currencies as of June 14th, according to a report published by Reuters. The data is a rise from the total short position of $22.98 billion registered on June 7th, according to the CFTC COT data and calculations by Reuters which calculates the dollar positions against the euro, British pound, Japanese yen, Australian will dollar, Canadian dollar and the Swiss franc.

This week’s notable changes were Mexican peso positions decreasing to their lowest level since September 2010 while New Zealand dollar positions rose to their highest level since November 2010.

EuroFx: Currency speculators slightly cut their net long positions for the euro against the U.S. dollar as of June 14th. Euro futures positions edged lower to a total of 49,894 long contracts following a total of 51,836 long positions on June 7th.

The COT report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.

GBP: British pound sterling positions improved for a third consecutive week as of June 14th and turned over to the long side for the first time since May 10th. Pound contracts increased to a total of 11,226 net long positions as of June 14th following a total of 1,700 short contracts on June 7th.

JPY: The Japanese yen net contracts rose for a second consecutive week to a total of 24,768 net long contracts reported on June 14th following a total of 17,631 net long contracts on June 7th. This is the highest total for yen positions since late March.

CHF: Swiss franc long positions decreased for a second straight week as of June 14th. Franc positions fell to a total of 13,287 net long contracts following a net of 16,865 long contracts on June 7th.

CAD: The Canadian dollar positions rebounded last week after falling to their lowest level since September of 2010 on June 7th. CAD positions increased to a total of 18,855 long contracts on June 14th following a total of 13,522 long contracts on June 7th.

AUD: The Australian dollar long positions rose higher for a fourth consecutive week. AUD contracts increased to a total net amount of 67,670 long contracts as of June 14th. AUD positions had totaled 65,205 net long contracts on June 7th.

NZD: New Zealand dollar futures positions rose for a fourth consecutive week to the highest level all year. NZD contracts advanced to a total of 19,218 long positions as of June 14th from a total of 16,004 long contracts on June 7th and to the highest level for kiwi speculative positions since November 2010.

MXN: Mexican peso net long contracts decreased sharply and for a third straight week to the lowest level since September 2010. MXN contracts fell to 48,163 net long contracts as of June 14th from a total of 90,198 long contracts as of June 7th.

COT Data Summary as of June 14, 2011
Large Speculators Net Positions vs. the US Dollar

EUR: +49894
GBP: +11226
JPY: +24768
CHF: +13287
CAD: +18855
AUD: +67670
NZD: +19218
MXN: +48163

1.6000 Significant Pivot Area For Cable

The current debt problems in Greece have seen a stronger dollar and therefore a weaker pound. The UK labour report and retail figures also disappointed and cable has been under pressure this week.

The pound is one of the weakest currencies when referencing the relative strength correlation charts

Here are the main technicals going into next week:

– GBP/USD long term trend line has broken to the downside.  Price has retraced to the trend line break area.

– Cable formed a daily inside bar on Friday 18th June.

– Confluence of 50 percent retrace and price pivot level at 1.6300 could see resistance as could the 61.8 percent retrace combined with trend line confluence at 1.6365.

– The 1.6500 round number is also a significant level.

– Potential support at 1.6000.  The line chart below shows how well the level has been respected since 2009.

Visit the authors blog for further Forex Technical Analysis

The past week in monetary policy saw a range of tightening measures announce by emerging market central banks.  Of those that increased interest rates were: Mauritius +25bps to 5.50%, Chile +25bps to 5.25%, India +25bps to 7.50%, and Colombia +25bps to 4.25%.  Meanwhile those that reviewed policy but held rates unchanged were: Japan 0.10%, Sri Lanka 7.00%, Morocco 3.25%, Iceland 4.25%, Philippines 4.50%, Switzerland 0.25%, and Botswana 9.50%.  Aside from interest rates the People’s Bank of China raised its required reserve ratio by another 50 basis points to an average 21.5%, likewise the Philippines central bank raised its reserve requirements by 100 basis points.

So in total the week saw 6 monetary policy tightening measures from emerging market economies (Mauritius, China, Chile, India, Philippines, and Colombia).  The common themes among those that tightened were comments around upside inflation risks, with still high commodity prices, low or no excess capacity (output gaps), and still relatively high levels of economic growth (aggregate demand).  But another common theme was the balance between economic growth and inflation, with most of the central banks (emerging markets) viewing inflation as the greater challenge, tempered against almost universally recognized global risks to domestic growth, e.g. Euro Zone debt issues. 


Next week the following Central Banks meet to review monetary policy settings: Hungary: Magyar Nemzeti Bank – 20 June (expected to hold at 6.00%), Norway: Norges Bank – 22 June (expected to hold at 2.25%), US Federal Reserve’s FOMC – 22 June (expected to hold at 0.25%), Czech National Bank – 23 June (expected to hold at 0.75%), and the Central Bank of the Republic of Turkey – 23 June (expected to hold at 6.25%).  Aside from those monetary policy meetings, the Reserve Bank of Australia (21 June) and the Bank of England (22 June) will release the minutes of their most recent monetary policy committee meetings.

Source: www.CentralBankNews.info

Article source: http://www.centralbanknews.info/2011/06/monetary-policy-week-in-review-18-june.html

The Central Bank of Colombia increased its benchmark monetary policy interest rate by 25 basis points to 4.25% from 4.00% previously.  The Bank said (translated): "Credit growth continued to accelerate. Both business and household lending real growth rates are tracking significantly higher than GDP growth. This situation occurs in a context where much of real interest rates are at historically low levels." and that "The increase in the rate of intervention aims to maintain inflation within the target range this year and next and help prevent future financial imbalances."

By Adam Hewison – I guess the most common expression I’m hearing is “kick the can down the road”. It would seem as though politicians the world over are pretty much the same. None of them wants to face the truth that there is no more money. So what do they do they, “kick the can down the road”.

And once again the taxpayers have to come up with the money. Lending more money to Greece is the height of insanity in my opinion simply because How can they possibly pay back the first tranches of money that was already has been lent to them? But that’s what’s happened today Merkle and Sarkozy made concessions and basically declared that “happy days are here again” are they really? I was talking to a good friend of mine this morning who is one of the smartest people I know and I asked him point-blank, what do you think of the global and US economy? Here is what he said to me. “It is a time to be cautious and guarded” they were his exact words. I’ll let you think about that.

So what can we as investors do to protect ourselves and hopefully profit in uncertain times? Well, for starters we need to understand the market conditions we are in the best we can. Second we need to identify where the money is still moving and in which direction. Adam Hewison has put together a great free video summing up the current conditions and trends of the major markets. The video is brief, to the point and very actionable…best of all its free. take a look here:

Here’s a brief summary:

S&P 500: -60. The market action on on Thursday was fairly neutral the Bulls and Bears in a standoff. The market is barely higher for the week and we would see watch the low today at 1268 basis the cash market. If we start making new lows later in the day that would not be a good sign. Major downside support is at 1250. Last week’s close 1270.98.

Silver:-70. I would watch this market very carefully as I feel that it is probably at the lower end of its range. We would use the Donchian channels as support. We may bounce around for another couple of weeks but come July I think we’ll see this market on the move. Market is oversold and expect to see a bounce from current levels. Near term resistance at 36 .00. Support at $34.00.

Gold: +100. All systems are go for gold and we expect this market to do better. The Donchian channel has resistance at 1,351.12 today. Major support at $1,500.

Crude Oil: -100. The trend in crude oil is clearly down with all of our Trade Triangles in a negative position. As the market is oversold currently we would expect some sort of recovery bounce from current levels. I would wait for our Trade Triangle technology to kick in on the positive side before taking a long position.

The Dollar Index: -65. As we discussed yesterday in our 1 PM update we felt that the dollar index was at the high end of its range. As our indicators are still negative longer-term for the dollar today’s downturn confirmed our earlier analysis. Minor support at 74.00. Major support at 73.00.

Reuters/Jefferies CRB Commodity Index: -60. All indicators are now negative for this index however we are at the lower end of the Donchian channel and the market is oversold. We would not rule out some sort of bounce from current levels. Market still appears to be in a broad trading range.

Be sure to watch the video here:

All you need to do to watch the video is grab your free log-in information, just click here. You will only need to do this once to access Adams daily updates AND seminars from market legends Chuck LeBeau, Jack Schwager, Ron Ianieri, John Murphy, Larry Williams, Mark Douglas, George Fontanills, Mark Cook and more…FREE! Its a great free tool and I can’t believe Adam is just giving it away.

More Facebook Drama

by Justin Dove, Investment U Research
Friday, June 17, 2011

It’s no secret that Facebook is the most anticipated IPO since Google (NYSE: GOOG) went public in 2004.

CNBC’s Kate Kelly heightened that anticipation with her article on Monday. Kelly claimed that Facebook was likely to go public in the first quarter of 2012 and that the valuation could top $100 billion, no typo.

Part of her reasoning for early 2012 was the “500 rule.” It’s a rule that is a part of the 1934 Securities Exchange Act. It basically mandates that if any company reaches 500 private shareholders, the company must publicize the financial records. Most companies that reach this point just go public because they are releasing financials to the public anyway.

While there is talk of the SEC extending this rule to 1,000 investors, in all likelihood Facebook will be going public sooner rather than later. As Facebook COO Sheryl Sandberg said last month, Facebook going public is “inevitable.”

But will it be worth the value?

A study by Performics found that 59 percent of respondents called LinkedIn (NYSE: LNKD) the most important social network they belong to. Interestingly enough though, the same study showed that 20 percent of the respondents claimed to visit LinkedIn each day, while 70 percent logged in to Facebook daily.

Inside Facebook reported last week that Facebook lost nearly six million of its U.S. users in May despite growing in smaller countries such as India and Mexico. A flurry of media outlets picked up on this story and similarly reported a slowing of Facebook’s growth.

Facebook themselves denied the report to BBC, “From time to time, we see stories about Facebook losing users in some regions. Some of these reports use data extracted from our advertising tool, which provides broad estimates on the reach of Facebook ads and isn’t designed to be a source for tracking the overall growth of Facebook.”

Basically what they are saying here is that mobile device application doesn’t contain advertising and isn’t considered part of the reach of Facebook advertising. Since this is a fast growing segment of Facebook’s usage in the United States, it obviously skewed the numbers.

Questions remain as to how Facebook will be able to monetize their services enough to be sufficiently profitable. But one thing we can gather from this week’s drama is that Facebook still has a huge untapped resource in blending advertising or some form of monetization into its growing mobile application usage.

Good investing,

Justin Dove

The University of Michigan’s (UoM) preliminary consumer sentiment report, published this afternoon, underlined recent talk of growing pessimism in the American economy by domestic consumers. The report, which is a survey of about 500 consumers, asks respondents to rate the level of present and future economic conditions in the US.

With expectations for a mild decline, the sudden drop of almost 3 points in the survey highlights the analysis of recent weeks. A soft start to the 2012 presidential election campaign began this week with the first major Republican debate that focused on criticism of Obama’s economic policies. The sudden focus on the economy by this gradual, but momentum-building campaign season was also fraught with the distraction of Rep. Anthony Wiener’s (D-NY) resignation Thursday.

An intense week of critical views and heightened awareness by US citizens about the state of their nation has generated a modicum of frugality and consumer pessimism, now reflected in the UoM preliminary report. With the summer expected to be sluggish, as global manufacturing plummets, this pessimism may not let up anytime soon.