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December 31, 2011

Be a Forex Winner

Filed under: Forex News — Tags: , — admin @ 3:09 am

All traders participating in the market share the same goal; to be consistently profitable. However, to the dismay of many, being a consistently profitable forex winner is something that eludes them. Many new traders enter the market with little knowledge of how to be consistent. Novice traders quickly realize the markets are not an easy environment to succeed in and often find difficulty in producing a consistent profit.

Being an inconsistent forex winner often leads to the trader making elementary mistakes such as risking to high and over leveraging their trading accounts. Most inconsistently profitable traders experience the emotional highs and lows often associated with trading. For example; a trader may have a string of winning trades and become deluded, often thinking they are ‘on a roll’ and can’t lose. Greed then enters their mind and they either risk to high or over leverage, usually resulting in them being bought back down to earth with a bang! All those profits they made while they were ‘on their roll’ have quickly disappeared and they are now back to where they started or even worse in drawdown.

The truth is anyone can place a winning trade or even a string of winning trades. There’s no skill involved (unless clicking a mouse is considered a skill). The problem lies with turning those few winning trades into consistently winning trades. Obviously you can’t win every trade you take; however with discipline and following a few simple rules you can become a consistent forex winner.

How to gain consistently in your trading –

Following the 5 simple guidelines below will greatly help you turn your trading from erratic to consistent:

  1. Honest and realistic expectations: Many novice traders have the mindset of overnight riches which are detrimental to successful trading. A trader must be honest with themselves in understanding that time and patience are key to becoming a forex winner. Consistency can’t be gained overnight.
  1. Become knowledgeable in a few basic price action chart patterns: Most professional traders use price action to analyze the markets and place trades. There is no need to overcomplicate your charts with complex indicators. Remember to K.I.S.S – Keep it simple stupid!
  1. Make a trading plan: Ever consistent forex winner will have a trading plan that they adhere to with discipline. There is nothing more detrimental to a trader’s career than aimlessly trotting through the markets. A trading plan will help the trader stay on the right track to becoming a consistent forex winner.
  1. Money Management & Risk : Reward: These two concepts are paid little attention to by most inconsistent traders. A sound money management plan is critical to a consistently rising equity curve. R:R is equally as critical. Your reward for placing a trade should be at least 2x what you are risking. For example; there is nothing worse than risking $1000 to only make $500. Poor R:R requires the trader to have a very high win rate, meaning 1 or 2 losses can quickly wipe out 5 or 6 previous winners.
  1. Focus on a few currency pairs: There is no need to trade every single currency pair your broker makes available to you. It’s much wiser to have strong knowledge in a few pairs as opposed to being ‘a jack of all and master of none’!

Following these 5 simple steps will greatly help your chances of joining the 5% club of forex winners. It’s important to remember consistency is not gained overnight; time and patience are key to successful consistency in the markets.

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Back To Where We Started: Euro (EUR)

Filed under: Business — Tags: , , — admin @ 12:27 am

Well for all of the recent fear emanating form the Euro zone because of the debt crisis and the recent sell-off that has occurred, the Euro is right back to where we started 2011.  As Yogi Berra would say, “deja vu all over again!”

But seriously, despite the wild ride that has occurred we are right back to where we have started.  But, we have had the benefit of another year to deal with the problems and allow the crisis to begin to work itself out.  This means that we are likely to see this type of activity going forward as the short-term funding problems of the indebted nations will carry volatility forward for some time to come.

So have we reached the bottom for the Euro?  Unlikely but we could be in a scenario where a ratcheting down of the EUR/USD pair takes place, with the possibility of testing 1.20 in bad times and the possibility of re-visiting 1.40 if the global economy starts to improve.

But as the saying goes, its going to get worse before it gets better so my feeling is that we will see 1.20 before we see 1.40.

What 2012 holds for the forex market is anyone’s guess but I can guarnatee there will be plenty of opportunities!

Happy New Year to all!

December 30, 2011

Central Bank of Taiwan Holds Interest Rate at 1.875%

Filed under: Forex News — Tags: , , , , , , — admin @ 3:09 am

The Central Bank of the Republic of China (Taiwan) held its discount rate unchanged at 1.875% and the collateralized loan rate at 2.250% and the unsecured loans rate at 4.125%.  Bank Governor, Perng Fai-nan, said: ”Overall, Taiwan’s economy continues to register moderate growth amid global economic uncertainties, while the 2012 price trends still require close monitoring. In addition, interest rates are at low levels. Against this backdrop, the Board judges that the current policy stance is conducive to economic and financial stability and will support economic growth in Taiwan.”

Taiwan’s central bank last raised the discount rate 12.5 basis points to 1.875% at its July meeting this year, also raising 12.5 basis points in March.  The Bank also recently raised the minimum liquidity requirements ratios.  Taiwan reported annual consumer price inflation of 1.01% in November, steady against earlier readings this year of 1.32% in July, 1.93% in June, 1.7% in May, and 1.3% in April, meanwhile the government is forecasting 2011 inflation of 2.1%.  

The Taiwan economy grew 3.37% year on year in the September quarter (5.02% in Q2 2011, and 6.2% in Q1 2011); slower than 2010′s 10.9% economic growth rate, according to the Directorate General of Budget, Accounting and Statistics.  Taiwan’s currency, the Taiwanese Dollar (TWD), has weakened about 5% against the US dollar this year, and the USDTWD exchange rate last traded around 30.30.

Dollar Continues Uptrend; EURJPY Testing 100

Filed under: Technical Analysis — Tags: , , , , — admin @ 3:05 am

Some people will never learn anything because they understand everything too soon. ~ Alexander Pope  Good morning. It’s been a bad year for the euro and it ain’t over yet, as there are only two more days until 2012 and the euro has breached below $1.30 and reached 100.30 against the Japanese yen – the lowest Read More

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Article Source | Post tags: AUDNZD, Australian Dollar, breakout trading, Canadian Dollar, Dollar, EURJPY, Euro, Euro-zone crisis, EURUSD, Japanese Yen, New Zealand Dollar, usd index, USDCAD

British Pound (GBP) Breaks Down!

Filed under: Business — Tags: , , , — admin @ 12:27 am

I have recently been talking about the range-bound nature in the markets of late and how good trading opportunities are available to trade between those ranges.  Most notably, I highlighted the British pound (GBP/USD) as one such opportunity.

Well there is also another opportunity that is available, and occurs when the range breaks out or breaks down.  This occurred yesterday when the US dollar strengthened and just about all other currencies sold off as a result.

The bottom of the range was at 1.5575 off of the previous swing low and that level broke down easily  As you can see from the chart, once that level was breached it was off to the races.  Now that level has become resistance, and could provide further opportunities for short entries as that level gets tested.

December 29, 2011

Management Talk Awareness Week

Filed under: Forex Strategies — Tags: , , , — admin @ 4:44 pm

We are nearly at the end of 2011 and another year of mayhem behind. We will be judging our 2011 Non-Predictions and trying to dream up some new ones for 2012 in the next fortnight or so but this week we have been able to get some long needed admin done. With it came a realisation that even if the financial industry is suffering the creative management community has been in full swing dreaming up new terms and phrases to camouflage the blindingly obvious. The evolution of ‘management speak’ means some phrases die and some survive and flourish. TMM really don’t know what determines the success of one term or phrase over another other than, as with the arts, adoption and patronage by the most respected in the field. TMM hope that this year’s rash of newcomers all die off naturally but we would like to help with a shove into their deserved obscurity.

TMM have noticed that every cause nowadays needs an “Awareness” campaign and though we feel that “doing” is of much greater importance than “awaring”, we will go along with the fashion and launch a Management Talk Awareness Week with the list of phrases and terms we have found most irksome this year.

So here are TMM’s top ten annoying phrases of 2011 (even if some are older) that we would like to see the back of.

10 – Internalise – As in “What you have all failed to internalise is that there has been a paradigm shift. As a result you are all now behind the curve when it comes to the multi-lateral interoperability needed to realise the supra-organisational mission statement”. Even though there is an awful lot to detest in that statement “Internalise” is the word we most object to. It appears to just mean learn or remember but as telling someone to learn or remember something appears instructive, suggesting they internalise it will sound more empathetic, but at the severe cost of sounding like a clone-monkey.

9 – Hi, I hope all is well – With the birth of the email there came an awkward period when the formality of letters, with their “Dear Sir / Yours sincerely” had to be detuned to fit in with the new immediacy and informality. After a stuttering start the world passed through an embarrassed joint squirm and settled on “Hi” for anything other than legal representations. But 2011 has seen a pernicious ingress of a new form of insincerity with the addition of “I hope all is well” to the “Hi”. Rather than questioning either the validity or sincerity of that statement, we would just ask that the bulk senders of such missives consider where they are sent to, as for many recipients things are blindingly obviously not well. We suggest the only time this greeting is appropriate is when addressed to bore-hole companies.

8 – Weaponise price opacity – As the scarcity of new Himalayan Pink Salt in the financial market takes its toll on the bottom lines of financial institutions it is becoming more important for them to make sure that they maximise the profitability of existing basic products. Opacity of price is critical in this process but weaponising it? Wow.

7 – Ideation – What happened to good old “have a think” or “come up with some ideas”? Even running things up flag poles is less irksome than “ideation” which sounds as though it should involve radioactive iodine.

6 – Stakeholder Community – Not a Transylvanian village but the new plural of stakeholder. Theoretically a stakeholder is anyone who can affect or is impacted by your decisions and so could be a lowly minion in your company, but deference only ever seems to be made to “stakeholders” when they are either your bosses, investors or regulators. Please let’s call them who they really are.

5 – Socialise – When issues got out of hand in the old days you would normally either just tell the boss or perhaps “take it upstairs”. But now a cunning adaptation of the old mantra of “My profit, our loss” has invoked a caring sharing attitude to screw-ups by “socialising” them. As in “I think we should socialise this issue with senior management and the stakeholder community”.

4 – Complementary – Odd one this, and it’s really down to our own stupidity, but we have regularly opened emails this year expecting some nice free service only to re-read it and find it’s not “complimentary” but something expensive and homeopathic. We expect the marketing world to soon be jumping on this and emailing multitudes of complementary not-at-all-free offers. Such as Ryan-Air offering “Complementary Flights” which sound as though they are free but are actually expensive and just “complement” what a decent service should be by being dreadful. Or have they done that already? “Complementary” should be banned from subject lines so that the vaguely dyslexic amongst us shouldn’t be taken advantage of.

3 – Bandwidth – The adoption of IT geeky words into mainstream fashion is nothing new but the latest over-usage of “Bandwidth” by management is particularly grating. Just as “spending more time with my family” has become the acceptable expression of “Just been fired/stiffed/shafted/backstabbed/found out but have photos” so has “I’m sorry I can’t action that, I don’t have the bandwidth” become the generic replacement for “I don’t have the time/resources/authority or inclination”. But the saddest part is the way it’s used under the false allusion that “bandwidth” is new and fashionable. Our grandmothers, thanks to broadband adverts and home routers, know what bandwidth is so please, unless you are the type of person who still uses “groovy” in the boardroom, please drop “bandwidth”.

2 – Geosourcing – Why you lose your job to someone in a different part of the world. “The support function has been geosourced” or “How’s the front office geosourcing project going?” It’s the sharp end of a simple belief of ours that if there is someone able and willing to do your job for less than you, you are toast. But the use of “geo”, which has connotations of environmental friendliness married to “source”, which conjures images of babbling fresh springs in the mountains, results in a super-eco word which actually means “You’re fired”.

1 – Reaching out – TMM first came across 2011’s winning term in July and since then it has spread like wildfire, which has us looking like Irish Riverdancers as we try to stamp it out as fast as we can. The origins and epidemiology of this disease has us suspecting it’s the product of some Class of 2011 Management School somewhere. It really is complete and utter rubbish. If you are about to call an investor for some documents you don’t “reach out to the client”, you phone or mail them. If you want to know why a trade hasn’t settled you don’t “Reach out to Bangalore” you “call back-office”. So let’s just kill that one right now before someone gets accused of molestation.

And with that we open up “Management Talk Awareness Week”. We are sure you all have your own experiences to share and we look forward to the comments column acting as a joint cognitive pan-cohesual empathy forum leading to textualisation of common goal and achievement recognition programs.

Happy New Year


If this post helped you, please help them. TMM’s Xmas Charity Appeal:

My Best and Worst Trades of 2011

Filed under: Forex News — Tags: , , , — admin @ 3:09 am

By The Sizemore Letter

For all of the gut-wrenching volatility, 2011 was actually a pretty good year if you managed to avoid financials and materials stocks.  Defensive stocks—particularly those that pay dividends—actually did quite well.

My best pick of the year, ironically, was a financial stock—credit-card giant Visa (NYSE: $V), the winner of InvestorPlace’s “10 Stocks for 2011” contest.  At time of writing, Visa was up a full 46 percent for the year, not including dividends.  (To see my follow-up pick for 2012, see “10 Stocks for 2012”).

In Visa, I saw a company supported by powerful macro trends—the shift to a global cashless economy and the rise of the emerging market consumer—whose stock price was temporarily depressed due to regulatory fears.  When the heavy hand of government proved to be a little less heavy, Visa exploded to the upside and has yet to slow down.

If only they could all be that way…

We now come to my biggest failure of 2011: Research in Motion (Nasdaq: $RIMM).

RIMM is down 51 percent from my recommendation price at time of writing.  When I originally recommended this stock, I knew the company had “issues.”  You don’t find companies as cheap as RIMM that don’t have at least a little something wrong with them.  Still, I thought—and still think—that the bearishness was ridiculously overdone.

I dedicated a fair bit of the last issue of the Sizemore Investment Letter to illustrating how ridiculously cheap RIMM was, and yet the stock has gotten significantly cheaper in just the past three weeks.  In the latest of a long string of disappointments, management announced that its new line of phones would not be out until late 2012 instead of the first quarter and cited the availability of key component parts as the reason for the delay.

Normally, I would understand how an announcement like that would send the share price down 11 percent in one day.  But given that the company trades for just 4 times already-revised-downward earnings and trades for 0.33 times sales and 0.68 times book value, it’s shocking that bad news still has any effect.  At current prices, RIMM could be cut up and sold for spare parts at a profit.  It really defies comprehension given that the company’s subscriber base continues to grow (now up to 75 million).

I continue to believe that RIMM has a bright future as a services company regardless of what happens with its handsets.  And I haven’t given up on its handsets either.  Even a mild improvement in the company’s fortunes could translate into a 200 percent gain or more.   But in 2011, none of this mattered.  RIMM was a classic value trap…and I walked right into it.

If I am to learn a lesson from this misadventure, it is that a cheap stock can always get cheaper—and that it pays to cut your losses early.

If you liked this article by Sizemore Insights, you’d probably enjoy The Sizemore Investment Letter, our premium members-only newsletter. Click here for more information.

Forex Market Outlook 12/28/11

Filed under: Business — Tags: , , , — admin @ 12:27 am

End of the year trade is in full effect and lower volumes than normal has not increased volatility very much as can sometimes happen.  This has provided some low risk opportunities as prices have vacillated back and forth between the tight ranges.

There is not a lot of news in the global economy today, particularly from an economic data release perspective.  In fact, most of the news expected for today’s US session has already been released with the exception of mortgage applications which are due out later this morning but unlikely to have a material effect on the markets.

One of the more interesting stories in the global markets is that the price of oil has been rising and is back over $100/barrel.  This is due to some potential unrest coming out of Iran, who is using this opportunity to make some noise by threatening the international supply of oil.  This situation is more bark than bite at the moment, but you never know how quickly these things can escalate.  In any event, higher oil prices have been supportive of a stronger Canadian dollar.  For those unaware, the Canadian dollar is positively correlated to the price of oil.

The economic data released today came from Japan and was basically negative across the board.  Household spending, retail trade figures, and industrial production figures all came in lower than expected.  CPI data also showed that deflation is going to continue, but the unemployment rate remained steady at 4.5%.

So the economic data in Japan is not good and much of the blame is going to be blamed on a stronger Yen.  This has prompted Japan to seek bi-lateral deals for their currency reserves with the likes of China and India thereby effectively making funds available for trade.  While this story hasn’t received a lot of press, it is important as it removes the US dollar as an intermediary and is a blow to the Dollar as the world’s reserve currency status.  If more countries seek bilateral currency agreements then the use of the US dollar becomes less important.  For all of the talk about currency manipulation, most of the world outside of the US believes that the US Fed is the biggest currency manipulator around the globe.  It is no surprise that the US admonished Japan today for their direct currency interventions to stem Yen gains over the past year.  This could be a story that plays out over the course of the 2012, so stay tuned and read between the lines of this one!

This caused Asian markets to sell off overnight and the Yen to strengthen, though year-end complacency means that the moves were very minor.

Markets reversed course however once the European session began as the debt auction in Italy went off much better than expected.  6-month bills were auctioned at rates roughly half of what they were paying just last month.  This is a huge step in the right direction and means that funding costs are significantly lower.  Longer-term debt will be issued tomorrow and if borrowing costs resemble what happened today, then this bodes well for risk appetite heading into the New Year.  Some are saying that this has occurred because of the ECB loans given a few weeks ago that have essentially allowed the banks to set up carry trades for sovereign debt.  This will increase demand and allow yields to drop which is what the indebted nations need right now.

In Switzerland, the KOF leading indicators index came in lower than expected, posting a gain of .01 vs. an expectation of .23.  This cause the franc to strengthen a bit, but again, holiday trading is means these are non-factors.

In the US, mortgage applications will be due out later but will not be a factor either.  Short-term traders should continue to trade the ranges, and longer-term traders should be thinking about what they would like to be in for the New Year.

The economic data is starting to look better, including retail sales figures due to the holidays so if Europe can get the debt crisis under control and if US politics can provide some sensible solutions, then 2012 could be a very god year for risk assets.

Cheap money due to US Fed policy could make its way to both stocks and commodities and while that would normally be inflationary, the inflation could be masked by lower home prices and wages due to elevated unemployment.

So there is a lot to think about for the New Year but by coming up with a plan of action, you could put yourself ahead of the game!




December 28, 2011

USDCHF had formed a cycle bottom at 0.9244

Filed under: Forex News — Tags: , , , , — admin @ 3:09 am

USDCHF had formed a cycle bottom at 0.9244 on 4-hour chart. Now the rise from 0.9244 would possibly be resumption of uptrend from 0.8569 (Oct 27 low), further rise to test 0.9546 resistance would likely be seen later today, a break above this level will confirm resumption of the uptrend. Key support is at 0.9244, only break below this level could indicate that the uptrend from 0.8569 has competed at 0.9546 already, then the following downward move could bring price back to 0.8700-0.8800 area.


Daily Forex Forecast

Short-Term Trading Tactic- British Pound (GBP)

Filed under: Business — Tags: , , , , — admin @ 12:27 am

As forex traders, we are constantly looking for any edge we can get in the marketplace.  Using the charts is one way that traders look for predictive behavior in the price action of any currency pair.  But sometimes, there are more simplistic tactics that can provide equal results.

Case in point, today’s action on GBP/USD.  This is one of the most simplistic “plays” in the market and can sometimes provide low-risk opportunities.  Today’s market action is called “No news is good news”.  This was one of the first tactics I learned when I made the transition to forex and it can be used over and over again.

Earlier this morning, the British pound rose some 80 pips from yesterday’s low volume session.  One might think that there was some “good news” driving the Pound higher, or perhaps there was some bad news about the other currency in the pair. Since the US market hadn’t opened yet, one might naturally conclude that there was good news in the UK then.

Not only was there not good news, there was NO news at all as the UK markets are closed today.  But the forex market trades 24-hours around the clock.  Without the possibility of bad news, the market saw the opportunity as good news and therefore pushed the Pound higher.  In other words, with the threat of negativity removed, you could have had an easier move higher!

Sometimes we see this type of action with the changing of the trading sessions.  Have you ever noticed, especially lately, that the markets seem to drift higher once the European market closes?  This happens because the risk coming from Europe is great right now so if we make it through a European session without negative news, the market sees it as a positive!

Of course it is still import to use support and resistance levels, and in the Pound earlier today that support level was at 1.56 providing a low-risk, high return short-term trade.  So trade the path to least resistance and you may see moves similar to this one today!

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