Month: August 2011

By Jon Jacoba

Learning how to day trade can take varying lengths of time to conquer, depending on the talent and dedication of the individual trying to be taught how to trade. That being said, I am often questioned if it is possible to successfully day trade on a part-time basis. Naturally, in the learning phase I strongly recommend not quitting your day job because you might find that you do not enjoy day trading or you may not have the attitude or mindset to day trade.

On the other hand, there are those people who want to day trade permanently on a part-time basis, and this is actually a different demeanour. I think an intensely skilled individual could be quite satisfactory trading on a part time basis. While the ES e-mini trades 23+ hours each day, the prime trading times are when the exchange is open and actively trading. If you happen to have a job that needs you to work 8 to 5, you will miss out what is possibly the best trading. While there is some activity after hours, it can frequently be slow with little volume to speak of.

Another trading chance is the pre-session hours from six AM Central standard Time till the market opens. I frequently trade this time period and find lucrative trades. So for a part time trader, the pre-session hours offer some real chances. Naturally, trading the pre-session hours needs waking up awfully early and some people more amenable to this requirement than others.

But the real problem, I suspect, with part-time trading isn’t getting plenty of screen time. To become a good trader, especially in the scalping style, a trader should be comprehensively familiar with the contract he is trading. Familiarity begets skill, so it is vital to get plenty of time forex demo trading or basically trading little contract numbers to reach a certain point where your skill base is above competent. I know of no other way to improve a trader’s results than to spend time trading which ever contract the trader has decided on. In a part time trading situation, I fear it would probably take a really long time to get to a point where the trader has the confidence and abilities to be totally effective. That is’s not to say it can’t be done, only to identify that it would probably take an incredible amount of dedication an additional effort to achieve success trading part-time.

But there are possible choices, I know several currency exchange traders who work a 3rd shift job in order that they can trade the morning ES e-mini session. I consider these guys full-time traders, though I speculate how they do it because they certainly must suffer from sleep deprivation. On the other hand, this would be a good way to be taught how to trade if you are considering a transition from a full-time job to full-time trading.

I feel a bit like the point I am making an attempt to make is a bit ambiguous. A highly gifted individual could trade part-time very successfully if she had an extraordinary quantity of zeal and above average talents as a trader. On the other hand, someone who doesn’t want to put a full effort into learning to trade will generally be disappointed if he or she tries to trade with an indifferent effort and part time. Some of the finest traders in the world trade the ES e-mini contract and the exchange is certainly no place for anything apart from your best. I suspect my best answer to the part time trading question is this: part time trading is great while you are attempting to learn to trade, but might not be the optimum answer on a permanent basis. The reason i believe this is the skill set wanted to trade; traders need recurring sharpening of the day trading skill set to stay current. Trading is kind of like exercise, if you exercise every day you stay in reasonably good condition, but when you take a couple of weeks off your return to exercise can be hard and you wonder where your stamina went.

About the Author

To become a successful forex trader takes learning the right techniques and practicing them over time. Now with forexbite.com you can do it easily. It is also recommended that you use forex demo account to practice before placing real money.

By David Adams

Setting stops that give you, as an e-mini trader, adequate protection against catastrophic loss and profit targets that maximize your return is an important step in your e-mini trading education. Needless to say, there is a wide variety of opinion on methodology on this topic. To be sure, there are even traders who trade without stops. Trading without stops is a risky and unnecessarily dangerous approach to trading.

Some of the stop loss methodologies (and profit target methodologies) generally are based on an indicator or a particular chart formation. They may include:

• Support and resistance lines bracketing the entry price…
• A fixed distance based upon the Average True Range
• A distance equal to 2 standard deviations from the Bollinger bands.
• A standard distance the e-mini trader always uses, regardless of circumstance.
• A distance based upon previous swing highs than swing lows.

Whatever your methodology, it’s important to use a well tested and sound system. Personally, I like to utilize the Average True Range and a multiple of that range to set my stops. By using this particular system, I can set a reasonable stop loss based upon the actual range of the previous bars and feel confident that I have given myself ample room for the trade to develop.

It’s not uncommon to see individual’s trade very tight stops, with limited success. Of course, many Internet e-mini trading educators claim they trade only very tight stops in their advertising; but a casual visit to many of these educators trading rooms shows otherwise. It is not reasonable to expect your trade to move in a straight line and in the direction of your trade each time you place a trade. Retracement inside each bar is common and it is very easy to get stopped out on a simple retracement when you have your stops it exceedingly tight. In short, tight stops are a good way to part with your hard earned cash. Though trading with tight stops assures you’ll never have a major loss, the random movement of the market will often take you out of your trade before it can develop properly.

I suppose I could be accused of setting excessively wide stops, especially during periods of volatility. There have been a number of widely publicized studies (Murphy, et al) that has shown definitively that the wider stops you can tolerate the greater your chance for profitable trading. It’s not uncommon for me to trade 15-20 point stops, which I call an emergency stop. I also set a mental stop at an intermediate level in these wide stops where I make a decision as to whether I am in a simple retracement or simply gotten the trade wrong. If the trade is a bad trade, I use my mental stop and exit the trade. In short, I prefer wide stops to tight stops.

In summary, I have mentioned a number of methods for developing a methodology for establishing stop/loss points and profit targets. I have stated my disdain for tight stops because they often result in a premature exit from a potentially profitable trade. Further, I have stated by proclivity for wide stops because of the greater potential for profit.

About the Author

Real Live Trading Doesn’t Lie. Spend several days in my trading room and see if you can benefit from a fresh and unique view on trading e-mini contracts. Sign up for your free trading experience by clicking here

By Jon Jacoba

To effectively trade the forex marketplace you will need a currency trading technique that is flexible, effective, and simple to fully grasp and implement. A lot of merchants end up employing trading tactics which are the explicit reverse; they use approaches or systems which are inflexible, ineffective, and really complex and confusing. The reasons which investors use those unnecessarily tough buying and selling approaches to industry currency generally need to do with slick marketing strategies by currency internet websites or outlandish statements of producing big cash with comparatively little endeavors on the dealer’s behalf. A lot mechanised forex trading robots and forex indicator-based methods are unsuccessful because these folks try to describes the industry in strict conditions that do not allow for any individual discretion or conclusion crafting. Due to the energetic and ever-changing nature of the forex industry, this kind of trading systems and strategies could often malfunction at the time of the long-run.

Currency tactics include the mix of indicators and price designs for the derivation of tradeable alerts. There are additionally fx trading techniques being founded on basic factors, but all short expression trading approaches need to incorporate most specialized component. In this section we aim to explain in detail the various facets of currency trading tactics. Once you get to the names and emails strategies can be classified into quite a few forms. Having said that right here we will glimpse into it from a a lot more practical stance.

Forex fundamental merchants consider currencies, and their international locations, enjoy manufacturers and use financial bulletins to acquire an idea of the forex’s true worth. Information buying and selling and Carry trading are among the most typical currency approaches.

The forex hold trade is a approach in that a dealer trades a currency which is supplying lower curiosity rates and buys a forex which provides a greater curiosity price. In various words, you borrow at a low fee, and after that lend at a greater price. The trader using the tactic captures the big difference in between the two rates. Once extremely leveraging the commerce, also a small big difference in between two rates can make the industry very profitable. Together with capturing the charge difference, traders additionally should usually see the worth of the greater forex increase as income flows into the higher-yielding forex, that bids up its value.

About the Author

In the fx market you have to know forex strategies. Get your forex exchange plan in place. Learn the best forex strategies that will give your trade superior results than others trying to execute simpler tactics.

The past week in monetary policy was rocked by the turmoil in global sentiment in the wake of the US sovereign credit rating downgrade, and heightened concerns about contagion in the European sovereign debt crisis.  In all, 11 central banks reviewed monetary policy rates, with the following banks adjusting rates: Qatar -50bps to 4.50%, Mozambique -50bps to 16.00%, and Belarus +200bps to 22.00%.  Meanwhile the following central banks held interest rates unchanged: Rwanda 6.00%, Indonesia 6.75%, US 0.25%, Hong Kong 0.50%, Norway 2.25%, Serbia 11.75%, South Korea 3.25%, and Peru 4.25%.

Aside from interest rate adjustments the week saw further moves from the Swiss National Bank to attempt to cap gains in the Swiss franc, which saw heavy safe-haven buying earlier in the week as panic gripped the market.  Similarly the Central Bank of Turkey also announced a set of moves to support the Turkish Lira.  Elsewhere, the US Federal Reserve issued a statement following the Standard & Poor’s credit rating downgrade, and the European Central Bank issued a statement following disruptive activity in the European bond markets, essentially saying that it would expand its SMP to include Spanish and Italian bonds.

Indeed, the US sovereign rating downgrade and ensuing financial market panic was mentioned in virtually all of the central bank monetary policy statements through the week, causing central banks to act with caution, and take a more reserved stance.  While largely a symbolic move, the credit rating downgrade was seen largely as a rebuke of US politicians, rather than capacity to meet debt obligations.  Aside from Standard & Poor’s, Moody’s affirmed it’s AAA rating for the US, and Fitch Ratings said it expects to finish its review of US sovereign credit ratings by the end of August.

Even though the downgrade was largely symbolic, the immediate flow-on effects were a widespread, yet short-lived panic; however that panic was largely limited to equities, as US treasuries actually rallied during the week due to investor flight-to-safety.  The European sovereign debt crisis developments were perhaps the greater, and more tangible risk area that was highlighted during the week.  For now, it appears the ECB has the capacity and the willingness to help prevent any further contagion of the sovereign debt crisis, and should prove instrumental in the transition to the implementation of the EFSF, as countries prepare and implement longer-term fiscal sustainability plans.

Aside from those two key risk areas, central banks were also worried about the usual things such as inflation and economic growth.  Some of the key quotes and sound-bites from the central banks that made announcements over the past week are listed below:

• US FOMC (held rate at 0 to 0.25%):  “The Committee currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.”
• HKMA (held rate at 0.50%): “I don’t think the ratings downgrade should impact the US government bond interest rate. International investors will continue to view US government debt as the safest and the most liquid tool for investment and risk-averse purposes,”… and “growth momentum in the US will be slow in the second half, but the risk of a double dip recession is not very high.”
• Norges Bank (held rate at 2.25%): “The decision must especially be seen against the background of the recent flare-up in financial market turbulence and clear signs of weaker growth internationally,”… and “An overall assessment of the outlook and the balance of risk suggests that the key policy rate be left unchanged at this meeting,”
• Bank of Mozambique (increased rate 50bps to 16.00%): “The deliberations of the board took into consideration the objectives of economic growth, inflation forecasts for short and medium term and the important challenges that persist in some sectors, with significant weight in the growth of GDP”.
• National Bank of Belarus (increased rate 200bps to 22.00%): “Along with general economic measures undertaken by the government, this tightening will help stabilize the external economic situation and limit inflation,”… “as positive trends in the economy and financial markets develop, the Natsionalnyi Bank will return to its policy of gradually lowering the refinancing rate”.
• Bank Indonesia (held rate at 6.75%): “Bank Indonesia views that the current BI rate level is still consistent with efforts to maintain macroeconomic and financial stability as well as to support stronger economic growth. Bank Indonesia is confident that the impact of the recent turmoil in the global financial markets because of the U.S. credit rating downgrade to the domestic financial market is limited, and can be contained with continuous monitoring of market development and coordination with the government”
• Central Reserve Bank of Peru (held rate at 4.25%): “Some current and advanced indicators of activity show lower growth than in previous months.  Moreover, indicators of global activity show signs of weakness and increased uncertainty due to the downgrade of the U.S. debt and the persistence of risks associated with the fiscal situation of some industrialized countries.”

Looking to the central bank calendar, next week is set to be relatively quiet on the monetary policy front, with just Iceland and Chile scheduled to review monetary policy settings.  Also on the radar is the Reserve Bank of Australia’s August board meeting minutes, due for release on the 16th of August, and the Bank of England monetary policy committee meeting minutes due out on the 17th of August.

• ISK – Iceland (Central Bank of Iceland) – expected to hold at 4.25% on the 17th of August
• CLP – Chile (Central Bank of Chile) – expected to hold at 5.25% on the 18th of August

Source: www.CentralBankNews.info

Article source: http://www.centralbanknews.info/2011/08/monetary-policy-week-in-review-13.html

The Central Reserve Bank of Peru maintained its monetary policy reference rate unchanged at 4.25%.  The Bank commented in its statement: “This decision takes into account the slowdown observed in global economic activity.  Future adjustments in the reference rate will depend on new information on the evolution of inflation and its determinants.”  The Bank also said: “Some current and advanced indicators of activity show lower growth than in previous months.  Moreover, indicators of global activity show signs of weakness and increased uncertainty due to the downgrade of the U.S. debt and the persistence of risks associated with the fiscal situation of some industrialized countries.”

The National Bank of the Republic of Belarus raised its refinancing rate by 200 basis points to 22.00% from 20.00% previously.  The Nacionalny Bank Respubliki Belarus said: “Along with general economic measures undertaken by the government, this tightening will help stabilize the external economic situation and limit inflation,”.  The Bank also commented that “as positive trends in the economy and financial markets develop, the Natsionalnyi Bank will return to its policy of gradually lowering the refinancing rate”.

 The move brings the total increase in the refinancing rate for 2011 to 1150 basis points (from 10.50%), the Bank previously also increased the interest rate by 200 basis points on the 13th of July, 22nd of June, and 1st of June.  Belarus reported consumer price inflation of 36.2% in the year to June, according to the National Statistic Committee, meanwhile the government is forecasting 2011 inflation of as much as 39%.  The USD-Belarussian ruble exchange rate has double on the black market, rising to as much as 7,000 per dollar (approx. 6,000 in July).

Recently the Belarusian president, Alexander Lukashenko, replaced central bank chief, Pyotr Prokopovich; who had been on leave following health issues, with Nadezhda Ermakova.  Nadezhda Ermakova was formerly head of Belarus’s largest lender, Belarusbank.  Yuri Alymov had been acting central bank chairman.  Belarus has recently signed emergency loan deals with Russia, worth at least $3 billion, and has requested loans of up to $8 billion from the IMF, as it deals with an economic and currency crisis.

www.CentralBankNews.info

Aug. 12 (Bloomberg) — Robert Shapiro, chairman of Sonecon LLC, and Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, debate whether the Dodd-Frank financial regulation law is a success. U.S. Analyst Christopher Payne moderates this episode of Bloomberg Government’s “BGOV Debate.” (Source: Bloomberg)

Aug. 12 (Bloomberg) — Donald Straszheim, senior managing director at International Strategy & Investment Group, discusses the European sovereign debt crisis and the outlook for emerging-market economies. Straszheim speaks from Hong Kong with Linzie Janis on Bloomberg Television’s “First Look.” (Source: Bloomberg)

Aug. 12 (Bloomberg) — Myles Bradshaw, a money manager at Pacific Investment Management Co., discusses France’s credit rating and default risk, the European sovereign debt crisis and European Central Bank policy. He speaks from London with Maryam Nemazee on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

Aug. 12 (Bloomberg) — Rahul Bajoria, an economist in Singapore at Barclays Plc, talks about India’s economy and central bank monetary policy. India’s food inflation accelerated to a three-month high, maintaining pressure on the central bank to increase interest rates amid the risk of a global downturn. Bajoria speaks with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)