Month: November 2011

By James Smith

The Federal Reserve’s recent unwillingness to come to the aid of the US economy by way of quantitative easing three has taken many by surprise. Even in the wake of a double dip recession chairman Ben Bernanke seems confident that no further action can be taken. It would only encourage more inflation and make the US dollar even less appealing as the world’s reserve currency. Given that China and other countries have threatened to undermine the US dollar’s current status as such, this is a move that provides some reassurance for these countries. On the other hand there is a good deal of concern about the liquidity of banks and other financial institutions within the United States, and this has created some concern throughout the online forex exchange where the US dollar is concerned.

A lack of inflation is always a good thing for the value of a currency, but an outright refusal by the central bank to intervene in any way is concerning. Such measures could be a sign that the chairman is anticipating the entrance of a Republican president, which would definitely signal a move away from intervention. While Democrats do indeed make every attempt to intervene in both the economy and private enterprise, Republicans are far more known for staying out of the way. While it might seem harsh, the Republican ideals with regard to taxation and economic intervention do have their merits, and while a Republican has been in the Presidential office the US dollar has tended to fair somewhat better. Even though the United States is the world’s largest and most robust economy, it requires maintenance in a number of different capacities.

The current financial situation necessitates the motivation and efforts not only of world leaders, but also of the people they represent. Such changes are not likely due to the often entitled attitude of Western nations, and it is this very attitude which has landed them in their current predicament. Spending your way out of debt is as ludicrous for an entire nation as it is for a single citizen, and until the economy gives way completely this will remain an un-tested fact yet again. Current austerity measures being imposed in Greece are being ignored by populace in terms of seeking economic viability, and are instead being viewed as an attempt to deprive them of their human rights. It is this very sense of entitlement that has brought about the budget crisis in the first place.

About the Author

The 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 stay up to date with the latest forex quotes

www.cri-report.com – The research scope of this report covers the major European tire markets. And the major research objects include conclude those countries with which have the highest production and sales volume of tires. They are Germany, France, Spain, Russia, Italy, Czech Republic, Poland, Portugal, Britain and Hungary.

European tire market accounts for 30% of the global tire market shares, with taking an important position in the global tire market. The headquarters of three large multinational tire enterprises are set up in Europe. Michelin of France, Continental AG and Pirelli Tire Tyre are all the global leading multinational groups with tire R&D centers and factories all over the world. Because most European countries are developed countries, the car ownership per capita of which is among the first ranks in the world, many favorable conditions are created provided for the production and consumption of tires.

The report takes the automobile industry, tire production and consumption of tires, data and operations of tire enterprises of different countries as its contents and makes to make a detailed analysis on current situation and prospect of European tire industry. The research contents conclude: automobile industry, tire production, tire consumption, introduction of tire enterprises of major European countries, market forecast, etc.

From the analysis on automobile industry in European countries, it can be found that though European automobile industry has experienced a downturn since the outbreak of international financial crisis, it still occupies has an important position in the world market, and tire manufacture and consumption is closely connected with the automobile industry. The analysis on production value and output of European tires provides specific regional distribution information of the industry and grasps the situation of the tire industry of European countries. The prediction on demand of the tire market can be made by making use of comprehensive statistics of production and consumption consumer markets of automobile and tire industries; the tire demand coefficient can be estimated according to the tire assembly market and replacement market to make a further prediction combining with the annual data of tires and cars.

The automobile industry and tire production originated from Europe, while many traditional automobile industrial countries have still been the leaders of the industry so far; as for no matter the volume of tire production and marketing sales volume or the automobile industry, Germany and France are both far ahead of other European countries and Spanish tire industry benefits from the development of its developed domestic automobile assembly industry. Meanwhile, there is also a transfer tendency of the tire industry in Europe. The high labor cost of developed countries in West Europe has led to the transfer of factories of some automobile and tire manufacturing enterprises to East Europe and Asia, where have low the labor cost is relatively low and among which Czech Public, Poland, Hungary and other Central and East European countries are superior in the tire manufacturing industry. The market concentration of European tire manufacturing industry continues increasing, and most domestic local tire manufacturing enterprises in most countries have been purchased by multinational enterprises.

In the end, this report makes a prediction on development tendency of European tire industry in 2011-2015.

From this report, readers can acquire following and more information:
-production of European tire industry
-consumption of European tire industry
-operations of European automobile industry
-operations of the tire industry of major European countries
-major European tire enterprises and their operations
-prediction on development tendency of European tire industry

The following persons are suggested to buy this report:
-tire manufacturing enterprises
-tire trade enterprises
-auto manufacturing enterprises
-research institutes which concern about European tire industry
-investors who concern about European tire industry

To get more details, please go to http://www.cri-report.com/tyres/87-research-report-on-europe-tire-industry-2011-2012.html

About the Author

www.cri-report.com

By Taro Hideyoshi

There are a number of channel trading systems commercially and non-commercially available. Some have shown good profits and are based on exact mathematical rules. Others involve some judgment in trading and cannot be programmed.

In this articles, we will get to know two of channel trading systems, Keltner Channel and Bollinger Bands

Keltner Channel

The keltner channel named after Chester Keltner who might be considered as one of the earliest system traders. He introduced a system call the 10-day Moving Average Rule in his book “How to Make Money in Commodities” which was published in 1960. It is a simple system that uses a constant width channel to identify buy/sell signals.

The rule of Keltner Channel are:

1. Calculate the daily average price (high+low+close)/3
2. Calculate a 10-day average of the daily average price
3. Calculate a 10-day average of the daily range
4. The daily average range is added or subtracted from the 10-day moving average to form a channel
5. Buy when the market penetrates the upper band and sell when the market breaks the long band

Bollinger Bands

The bollinger bands, developed by John Bollinger, is based on using two standard deviations as a band above and below a moving average. The concept is to buy when the market penetrates the upper band and sell when the market penetrates the lower band. The width of bollinger bands is based on market’s volatility. If volatility increases, the bands will be wider. If volatility decreases, the bands will be narrower.

The bollinger bands are great for immediately sizing up a market. A quick glance at a price chart will tell you trend, volatility and overbought/oversold conditions. A market above one standard deviation is overbought. If shove two standard deviation, it is extremely overbought. The exact opposite for oversold.

The market is usually traded in this manner:

1. If the market is oversold, keep looking for patterns on which to buy.
2. If the market is overbought, keep looking for patterns on which to sell.

As market are in a trading channel mass of the time, the focus will be trading back and forth across these channels.

There are many other channel trading systems. For example, Donchian Channels or Turtle system which is a breakout from a highest high or lowest law of a set number of days. Some of these systems can be programmed. Others require some judgment.

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.

You would also find the list of recommended books for trading & investing at The Investing Books.

By Mike P. Kulej

Popularity of Forex trading is bringing hundreds, if not thousands, of new traders into the markets every day. Most of these new participants are introduced to currencies because they purchased a trading book, course or some other tool which promises to forecast which direction market will go in the future. All what’s left do is to place trades and reap rewards.

Unfortunately, even the best methods do not work all the time. Some loses are inevitable and even expected. Some can last for a prolonged time period. During these times traders, newbies and experienced alike, start doubting their trading systems and search for a new angle. Internet allows access to numerous sources of information. Trouble is, there can easily be an information overload, causing total confusion. Trader can not decide which direction to trade, loses confidence in his abilities and his decision making process becomes erratic.

There are ways to trade without guessing or even caring which way the market will go over some period of time. One of them is using straddles. A “straddle” is placing both buy and sell orders above and below current price. When this happens, trader is said to be “straddling” the market. Trader also doesn’t have a directional bias, just expects a move either way. Most straddle trading methods will have all other elements of trading in place: stop/loss for both legs of the straddle, target price or the length of trade.

There are entire systems based on this style of trading. Some of them do nothing but place straddle orders all the time. Traders never care which way the markets will go, as long as they move. These kind of systems call for updating the orders every predetermined time interval. For example, once a day. This means that old orders/trades must be canceled/closed every day at the same time. That is when new orders are placed. People looking for mechanical trading strategies might find this approach suitable, since the same thing is done over and over again without any in depth analysis.

Another way of using straddles involves fundamental announcements. A lot of these events cause rapid price movement, yet the direction of moves after number releases is notoriously difficult to predict. Particularly popular among traders are FED interest rate announcements and unemployment data release. These are also times when a great deal if indecision is present, resulting in both legs of straddle being stopped out. In spite of its popularity, this is perhaps the worst way of using straddles.

More promising approach is capitalizing on range contraction. This can be done on most time frames 4H and higher. For example, if daily trading ranges of given currency pair start to get smaller and smaller, it is likely that a larger move will follow. The longer the contraction period, the larger potential move after it. If one has hard time deciding which way to trade, it would be very easy to place a straddle order. Very simple way to implement this strategy is to place the orders just above previous bar’s high and under the low. Stop loss could be about half of last bar range, with a target of something like twice the value of stop, or maybe close the position at the end of the time value used. For the weekly bar close would be at the end of the week, daily bars would dictate closing position at the end of the day.

These opportunities happen all the time, depending on time frame. Current example is a monthly chart of EUR-GBP. Ranges of last 3 bars have been getting smaller, which might present an opportunity for a successful straddle trade. The buy order can be placed at 0.8035 and sell at 0.7840. Protective stop of 80 pips for each order is about right. Profit target of 150 pips is in line with risk. Alternative exit is at the end of July, regardless of profit or loss.

Trading straddles is very easy to implement and can be profitable. Like any trading strategy, there is a potential for loss. Should one decide to use them on regular bases, a mechanism for precise levels of stop/loss and profit must be incorporated. All out straddle based trading systems can be especially attractive to traders who don’t have to time to spend all day in front of computer.

About the Author

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on www.spectrumforex.com. Spectrum Forex LLC offers numerous services to individual traders. With questions and comments e-mail him at [email protected].

By James Smith

The Forex market is one of the very most challenging places to make a buck, and even the most successful traders in the business will lose with some frequency. The degree is something that many can curb, but the occurrence in its entirety, and accepting this fact is your first step in moving forward. Being wrong sometimes is a given, but how much you lose for your mistake is completely within your control, and you should decide how much you are willing to wager before you enter into any trade. For most this is going to involve a risk of not more than two percent of their overall account on any one trade, and while this is a hindrance at longer time frames with day trading, for scalpers is a necessity.

Taking advantage of a scalping strategy will involve a good deal of your time and attention; this is a type of trading that you must sit with. If you are not prepared to actively monitor your trades this is not the system for you, and you had better accept that now. Tools of the trade for scalping the online forex exchange include Fibonacci levels, support and resistance levels, and daily pivot points for the day in which you are trading. It is by establishing these three levels that you will be able to determine where the high odd trading opportunities are located. Without these tools in place you are shooting in the dark, and while other systems might work out alright this is one that has been tried and true time and again.

The first thing you need to do when scalping is choose the currency pair you wish to trade, the best way to do this is to choose a pair that has high volatility, but not so high that you will be stopped out at every turn. For most this usually means the GBP/JPY pair, which is also known as the dragon. After you have chosen a pair other than the dragon it is important to establish whether the trend is ascending, descending, or sideways for the pair in question at the time you decide to trade. This is established through swing highs and trend lows that are active in conjunction with trend moving down or up overall. A swing high or low is a temporary reversal in the overall trend, and its strength is determined by the number of days it reversed for prior to continuing up or down.

About the Author

The 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 stay up to date with the latest forex quotes.

By Mike P. Kulej

About the Author

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on www.spectrumforex.com. Spectrum Forex LLC offers numerous services to individual traders. With questions and comments e-mail him at [email protected].

By David Adams

The failure rate of new e-mini traders is disturbing. According to various sources, 90% of all new traders are out of the market within 3 months, their trading account balances exhausted. There can be little doubt that e-mini trading presents a challenging skill set to learn and execute, but there are a number of factors that are well within the a new e-mini trader’s reach that he or she can control.

In my experience, a good deal of failure centers around three important factors that directly impact every new trader’s career. They are:

• System
• Communication
• Experience

There are a wide variety of trading systems out there from which traders can choose. Some of the programs are very large, some are famous. There is no correlation, in my thinking and experience, between popular systems that can run more than $7-10000 and widely advertized and other systems which are based on sound trading methodology. I’ve already written several articles on finding a good trading system, so I will not burden this article with that lengthy topic.

1. Learn the System- If there is one thing I see over and over is new e-mini traders trading real money and have, at best, developed a very limited skill level with the material and system he or she has paid for with their hard earned money. I don’t just don’t get that thinking, but it is a rare student who starts simulator trading with me one on one that has properly prepared themselves to trade by learning the basic information of the system they are about to trade. They know some trades. They may know some of the interesting parts of a trading system, but they seldom know the details; and success in trading is in the details. The end result of this thinking is that I end up spending a good amount of time explaining how charts and bars work when trading, when we could have been working on the business of learning to trade, not wasting time trying to hammer out the lingo and teaching the student material that is well documented in the written and video sections of a quality course. Poor preparation is industry wide, and I read in the forums about systems I know well, and can trade effectively on my own, being bashed by individuals who “just couldn’t seem to get it” right and the concluded the system is undesirable. I generally know what really happened. Don’t study the material half-hearted and expect to learn the “meat and potato’s” of the system in the trading room. Be over prepared.
2. Communication- I have scads of new traders and potential traders come into the room and not ask a question, just sit and listen. The most successful traders I have mentored were individuals who were fully engaged in the trading process and when the didn’t understand something, or some trade, they promptly asked why I am doing this and what did I see on the chart. My preference is for small trade rooms that allow the room to interact. Again, I have written an article on this subject, but when all members of the room can speak to each other, there is a mutual learning process goes on, and their interaction, in my opinion, is often more helpful than the information I may impart. In short, when you ask questions you let people see where you need help and may get some suggestions how to remedy this or that. Communicating creates a synergy in the room that allows everyone to learn.
3. Experience- When a new student first starts in the trading room, they generally lack any meaningful e-mini trading experience. Simulators are great places to gain trading experience under the right conditions. In order for a simulator to be an effective trading tool, the new e-mini trader must trade the simulator exactly as he or she plans to trade their real money. Invariably, I notice traders trading 300 contracts on a trade, just to see how it would work. You will probably not trade 300 contracts in your life, probably not even 100 contracts; but these playful dalliances with non-reality are very damaging to the discipline and emotional control a consistently profitable e-mini trader most employ. In short, simulated trading programs are great if you trade with them exactly as you plan to trade with real money, but deviation from your specific trading mindset and methodology on the simulation is highly counterproductive.

In summary, I have stated the three most common mistakes new e-mini traders make. Some spend their money on a course, then never bother to develop some mastery of the information. Many traders sit and try to learn as “mutes,” and never get the benefit of room wide interaction. And finally, it is very important to use your simulator in the proper fashion. When you are consistent on the simulator, you are ready to go to the market.

About the Author

Real Live Trading Doesn’t Lie. Spend 3 days with me, in my trading room, and see if you are one of the many that can profit from a fresh and unique view on trading e-mini contracts. Sign up for your free trading experience by clicking here.

By Mike P. Kulej

All of us who trade financial markets continue our education. We do it by reading books, periodicals, attending trading seminars and conferences. Just about all of us have a favorite trading book or author. Most of these people are, or have been, professional traders passing their experiences to others.

Professional traders come in few categories. Some are independent, trading mostly their own accounts or small pools of money. Others come with a pedigree of trading for money management companies. In this category we can find hedge fund traders, CTA’s and other money managers for large, commercial pools. Last but not least are bank traders, who trade bank’s money, not just market makers.

It is difficult to obtain any reliable information about independent traders results. Banks often do not disclose trading results, or they don’t single out currency operations from other earnings. Only hedge funds and other money management institutions disclose results, as they should, since that is how they attract new clients. These are generally the only reliable figures for trading public to have access to and compare own achievements.

Currency traders don’t have a performance measuring yardstick, like stocks, which can be viewed in relation to indexes, like DOW 30, S&P 500, NIKKEI and others. Some programs, which specialize in single currency, can possibly relate to an index of given currency, like Dollar Index, but by and large most trading takes place across broader spectrum of Forex. That’s why comparison of results is done simply in percentages of total returns.

Barclay’s of England compiles Barclay Currency Trading Index. Index comprises of results achieved by a wide range of professional, Forex only trading programs and is reported monthly. As of this writing, in early October 2008, there are 145 entities included in the index. These are both spot and futures trading currency funds. Index is equally weighted and is a good proxy of Forex trading pros.

The results are not what most of us would expect. In fact, they are less than inspiring.
Year to date in 2008 the returns are meager 1.02%. That’s right, only one percent. This follows 2.59% in 2007. The years before were even worse, 2006 showing a loss 0.12% and 2005 also negative 1.21%. In fact, in last 10 years there was only one period when the index showed gains of more that 10%. This was in 2003 when the reported return stood at 11.08%. Pretty bleak picture.

We have all seen or heard all kinds of outrages claims made by promoters of Forex products. A lot of them promise easy money with minimum or no work. Reality is much harsher. Results reported by institutional professionals should be clear indication that trading is much more difficult than it appears or is presented.

That is not to say making money trading currencies is impossible for an individual. One can be successful even significantly better than Barclay Currency Trading Index. It takes patience and discipline, sound trading model and strong money management, but with time, there is no reason why a devoted trader shouldn’t outperform this index on regular bases.

About the Author

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on www.spectrumforex.com. Spectrum Forex LLC offers numerous services to individual traders. He also publishes trading blog www.fxmadness.com. With questions and comments e-mail him at [email protected].

By Warren Seah

The different systems being put together by developers as well as profit potential has been the driven force behind the rising popularity of forex trading. The most accepted forex trading software, Metatrader Trading Platform, makes use of these systems that are referred to as Expert Advisor or, simply, robots; one of which is the trailing stop EA.

New forex traders, as well professional investors, would find the Expert Advisor on the Metatrader platform of great use in executing successful trades. Alternatively referred to as a forex robot, the Metatrader Expert Advisor is a tool that carries out manual tasks more efficiently; even more competently than a human would. This tool gives forex traders, both newbies and pros, added advantage in trading. One of the benefits of the expert advisor is that, once programmed, the tool carries out the usual trading activities without unnecessary emotions to interfere in trading decision-making as is the case with human traders. The EA can be set up effectively without any problem whatsoever as the expert advisor makes it possible to supervise easily using the predetermined trailing stop strategies. The EA makes it easier to use market to trail a trader’s position. The trailing stop EA will observe a trader’s position and, at the close of every candle, move the stop loss level as is required and desirable.

It is a good thing for a trader to control the level of risk using the initial stop loss order, and the use of trailing stop EA in the profit management automation is just as good. Some forex traders make the mistake of exposing their trading decisions to emotional impulses by choosing to be the one to decide when to exit a trade rather than automating the trailing process. This is a bad action because once a trade starts, the trader could lose control of his emotions in his attempt to minimize losses and maximize profits. A trader may also be tempted to delay exit from a trade because of craving to make more profits, or to exit a trade rather too early out of fear.

But when a trader uses the trailing stop EA, all these decisions that can be easily influenced by human emotions are left to the chosen EA to make. Doing this would give the trader peace of mind being aware than the EA would be able to decide when to exit a trade according to the conditions stipulated in order to maximize profit or minimize loss.

The success rate of the EA, however, depends on the level of research carried out before arriving at the strategy behind it. Before using a trailing stop strategy in the live trading account, it is advisable for a trader to become familiar with the effects of these diverse trailing strategies as failure to do that could lead to undesirable results.

About the Author

Warren Seah

What if you just couldn’t trade forex effectively with a day time job?

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Don’t give up hope, it’s NOT impossible. Trailing Stop EA will expand your trading capabilities to greater trading success learn more by clicking the link.

By David Adams

If you have traded for any period of time, you start noticing where other e-mini traders are setting up to take trades. Sometimes I am very impressed with the positioning some traders utilize to enter trades; sometimes not so much. Of course, in my personal trading (and I am sure that most traders feel this way) I have specific trades that have been successful for me; on the other hand, I have several trades that many claim to be solid trades that I just cannot seem to execute properly.

But there is one particular trade that I see on a regular basis, and is usually executed by smaller e-mini traders, judging from the time and sales dialog box. This trade is often referred to as a “bounce” trade and often occurs along important or significant lines of support and resistance. I generally see this trade over the lunch hour and during periods of low volume trading.

The trade is a relatively simple one. Often times, when the price has moved through a significant support/resistance line, it is not uncommon to the price action retrace back to the recently pierced support/resistance line and then resume in its original direction. I cannot quote with any degree of accuracy the success/failure rate on this trade, though I have seen many small e-mini traders take substantial losses when trying to execute this trade.

The bounce trade can often require an e-mini trader to take an entry position in the opposite direction that the market is currently moving; and this entry is usually against this trend. Not an auspicious way to start a trade, to say the least. But lacking any major active e-mini traders (since the volume is generally low) the price oftentimes has a tendency to back up to the just pierced support/resistance line and then bounce 5 or 6 ticks back in the direction of the original price movement. For small traders, this 5 or 6 tick gain is just what the doctor ordered.

But there are a number of problems that should be considered with the trade, and careful consideration and care should be utilized before implementing this trade, because:

• The bounce trade is often against the trend, which significantly lowers your chance for success.
• The bounce trade is generally executed over lunchtime (when small traders are active and their trading has an disproportionately large effect on market price.) But trading during low volume periods can be, at best, a difficult proposition. Market orders that would normally have little effect on price can, because of the low volume, create more dramatic price movement than most traders would normally suspect.
• This build up of small traders add at a print distinct price level creates a situation that can become a position of danger, especially if a bona fide floor trader who takes an interest in moving the market in the opposite direction of the expected bounce. What started as a simple 5 or 6 tick scalp can leave a small trader pressing the limits of his stop/loss position.

After watching this trade play out for nearly 25 years of my career, the results are by and large unsatisfactory. While this trade seems innocuous enough, the market moved by primarily small traders is especially susceptible to volatility in the opposite direction by larger traders who would like to take advantage of the smaller traders who are fully committed to their bounce straight. Any substantial volume in the opposite direction of the small traders can drive the price dramatically against these traders. As the smaller trader’s bailout of their positions, the price action moving in the opposite direction of the small trader’s original position is enhanced as they abandon their original bounce trade entry because the risk of getting stopped out becomes a very real possibility.

Oftentimes, it is very easy to spot on your trading DOM the small traders stacked up on a certain price that the traders hope the price action will retrace to and provide them with a nice gain of five or six ticks. While this trade can be successful under certain market conditions, it is my opinion that the risks of the bounce trade far outweigh the potential profit. I avoid the trade, and oftentimes watch with interest the plight of the small traders. Sometimes they come out okay; more often than not they have a very rough go of it.

In summary, we have discussed a trade that most traders see on a very regular basis. It’s called a bounce trade and usually entails trading off a known support/resistance line and hoping that the price action will stop on the alignment in question and reverse direction. That’s a mighty tall order for a consistently successful trade. I have to also reiterate that this trade often occurs during low volume periods of time like the lunch stand down period, or just a lull in the normal volume patterns during the trading day. Finally, I have commented that this trade can sometimes work quite well, but if the market moves against the traders in the bounce trade the results can be quick and disastrous. For that reason, I avoid recommending the bounce trade as a regular part of your trading arsenal.

About the Author

Real Live Trading Doesn’t Lie. Spend 3 days with me, in my trading room, and see if you are one of the many that can profit from a fresh and unique view on trading e-mini contracts. Sign up for your free trading experience by clicking here.