Thursday, 27 October 2016

How to use the Stochastic

Stochastic is based on indicators that help us state where the trend may be over.
By definition, a stochastic is an oscillator that measures conditions of overbought and oversold market. Both lines are similar to the MACD lines.
Stochastic has a scale from 0 to 100.
When the indicator is at a level above 80 on the scale, it means that the market is overbought and when the indicator is below 20, it means that the market is oversold.
As a rule, we buy when the indicator is below 20 and sell when it's over 80.

Tuesday, 25 October 2016

Are you concerned (Part 2)?

Why is it a problem? If you can not overcome them, concerns may become a major obstacle to success and can lead to many other problems. For example: have you ever changed impulsively your stop levels or take profits, only to check if your initial levels were correct? So you lose contact with your plan because you leave the worries of losing and the worries that you're not right are taking control over you.
Fear and anxiety redirect our concentration on the situation and could lead to impulsive or irrational decisions. Even worse, to stay and to worry about something without taking any actions is counterproductive and a waste of time.

BBH forecast that EUR/USD will go to 0.83 dollars, while GBP/USD - to 1.00 dollar or even lower

EUR/USD fell below the important support of 1.1040 dollars, this level has now become resistance.
The bank remains bearish long-term to the couple as according to them a further reduction could send the GBP/USD to parity or even below. This month, the single currency fell by 2.4 percent against the US dollar and increased by 2.8% against the British pound, and October can be the fifth consecutive month of growth of EUR/GBP (+ 12% since the beginning of Brexit). The length of this uptrend is comparable only to the period August 2012 - February 2013, when the couple grew seven consecutive months.
The recovery of EUR/USD from the declines in January was interrupted in the middle of last week with a break below 1.1040 dollars and now the pair descended to levels of late July, trading not far from achieved immediately after the British referendum drop around 1.0915 dollars, say analysts.
A break below this level could send the pair to test the support at 1.0800-20 dollars, and if EUR/GBP rise to 0.90 pounds, analysts expect GBP/USD to return to 1.20 dollars.
In the long term, analysts of the bank are in anticipation of reducing the EUR/USD to historic lows around 0.83 dollars, and the GBP/USD to fall below 1.00 dollar.

Monday, 24 October 2016

Scotiabank: GBP/USD entered the dead zone and does not give any signals

According to bank's analysts the short-term technical picture for the GBP/USD looks neutral and the pair seems to have entered a dead zone and does not give any signals.
However, it seems that correction up is exhausted and the Bank remain long-term bearish.
Repeated testing this week on the support of 1.2255-60 dollars seems a key area that could determine the fate of the dynamics of the GBP/USD in near future, they added.
If the pair hold above this level, it is entirely possible that it would test the area of 1.23 dollars. Otherwise, it is expected the pair to fall below 1.2250 dollars, which make the picture bearish.

BTMU: USD/JPY remains in range to the US elections

Analysts at Bank of Tokyo-Mitsubishi UFJ have a neutral view on USD/JPY, as they look to the next week and expect the pair to move between ¥102.50 and ¥104.50, while consider possible a risk of appreciation of the exchange rate.
Trading on the USD/JPY remains stable. All major markets, the yen bonds and the Exchange's Nikkei are stable, indicating low volatility and turnover in the past two weeks, analysts say.
Next week the yen will be bought by exporters, analysts said.
Their operations may increase at the end of the month, while the yen will likely be sold by Japanese investors who can keepthe pair to the lower border of the range of the rise in the exchange rate of USD/JPY, they added.
The dollar is unlikely to be strong on the eve of the US presidential election, experts write.

Friday, 21 October 2016

Are you concerned?

To be concerned it is to feel anxious or uncomfortable, often (but not always) because of the participation of a negative event or result. However, we are all people and we need to avoid the immediate pain.
For forex traders, the main sources of psychological pain usually include loss of capital. With these problems, our concerns can complicate with care for high margin loss or forgetfulness of important factors during the analysis. As you can imagine, the list with concerns can last more.
Worries are not a bad thing, but they reveal our weaknesses. And once you've studied them, you can overcome them and become a better trader. I'll give you some tips on how to cope.

Wednesday, 19 October 2016

Bank of America Merrill Lynch: Speculators buy dollars

Interest in the dollar continues for several weeks in a row, as the main driver of this process remains demand from hedge funds. The positioning of market participants compared to last year remained neutral, but the difference between the behavior of hedge funds and "real money" investors is obvious, analysts say.
Their models predict further growth of the US currency, but the main issue remains the participation in this process of "real money", which generate the bulk of capital flows.
The results of a research of analysts of the bank suggest that "real money" adhere to the moderately optimistic outlook for the dollar, however, do not rush to increase their long positions.

Free webinar: "Trading continuations with a simple pattern"

On October 20 there will be a very useful free "Trading continuations with a simple pattern".
The Pro trader Paul Wallace will provide a basic demo of how to trade the continuation of a trend with one simple strategy.
Time: 7pm-8pm Cost: Free Place: Online
 Don't the other interesting and useful webinar, which will be held in October:
October 27: "Volatility Trading - Get ready for a bumpy ride";
 For more information and registration, visit here.

Tuesday, 18 October 2016

Morgan Stanley: GBP/USD could rise to 1.2650

According to analysts' forecasts of the bank the British currency should begin to recover from current levels, GBP/USD has all chances to go up to 1.2650 dollars amid rumors that the government is studying alternative methods for Brexit.
According to the Financial Times UK can continue to pay billions to save the reach of the City to markets of united Europe and Theresa Mae assures that the export competitiveness of automakers in the country will not suffer as a result of negotiations for Brexit.
Investors take extremely aggressive short positions in pounds, making the growth of this currency in the short term unlikely, analysts said. In addition, the assumption on the likely impact of the pound on the policy of Bank of England may limit the potential for a further reduction of British currency in the short term, analysts conclude.


The European currency has opened the new week pretty good, gaining against the US competitor about 30 points. Mostly, the true cause of a hitch in the development of further downward rally lies in the absence of fundamental support needed for the implementation of downwards idea. Market participants continue to discuss the prospects of the European program of quantitative easing. There is reason to believe that at the December meeting, the ECB may decide to extend the QE program by 6 months. With regard to its volume, according to the baseline scenario, the limit of purchases will be stored on the same mark of 80 billion euro. Additional support for the euro was the data on consumer prices of the Eurozone. As expected, the growth of inflation in the EU on the basis of last month amounted to 0.4% m/m against the previous 0.1% m/m. In annual terms, the index remained unchanged at 0.4%. On one hand, a good report on the CPI reduces the likelihood of new stimulus by the ECB, on the other hand, the growth rate may be associated with reduction of the cost of oil, which at any moment risking to fall below $50 per barrel. Another factor in the increased demand for euro acted as a weakening of the US currency, which led to a decrease in the yield spread between the dollar and euro bonds. Today on the focus is US CPI data. In the case of growth of the indicator, the euro could come under serious pressure, leading EUR/USD below 1.0950.

Friday, 14 October 2016

Fundamental Analysis (Part 2)

Fundamental analysis helps you determine whether a company is good or bad choice for investment. Imagine that you are a venture investor or a bank and you have to decide whether a company deserves a loan or investment. How can you determine if this company deserves your capital?

Here are questions that can help you make a decision:

Does the company make long term gains?
Are the profits increasing or decreasing?
Is the company a leader in its sector?
The sector expands or shrinking?
Can a company pay its bills adequately?

Thursday, 13 October 2016

Fundamental analysis (Part 1)

The fundamental analysis is based on investing. It helps you to determine the status of a company exploring a number of factors such as income, profitability, liquidity and other factors. Of these "foundations" investors calculate whether the stock price of a company are over or undervalued.
Fundamental analysis can be applied as an individual commodity, and in the context of large companies. Explores questions such as: Is the company is competitive in its industry? This industry expands you or shrinks in comparison to other sectors?
Companies with strong fundamentals tend to rise, as fundamentally weak companies will see their share prices to fall. This makes fundamental analysis especially valuable for the long-term investors.

Wednesday, 12 October 2016

A trend in the growth of the dollar without odd noise

Yesterday was not generous in macroeconomic statistics, so market participants continued to move within formed trend of the last week, buying the dollar on expectations of a rate hike at the end of the year. While economists and Fed officials have long pointed out this option as primary, markets almost did not believe in such a possibility. Thus, in the coming weeks and months, we may be witnessing a new wave of raise in the dollar.
It may well turn into the formed movement from July 2014 to March 2015, when the markets began to seriously consider the possibility of rate hikes in the US and laid on a sharp slope of the yield curve. Now there is such a change in the slope of the curve.
But this movement may not be as dramatic and become merely a repetition of the situation from late last year. Then the dollar index gained 7% since the publication of FOMC protocols in October to the actual increase in December. However, later the dollar was not under force to grow, since the fall of emerging stock markets and raw materials has forced the Fed to rethink their plans for the rates.
During the year, the US economy hasn't become more stable, employers are not rushed to hire new staff and raise salaries significantly, and consumers - to spend. Almost exactly the same repeats the trend for oil: it raised from August to mid-October, after the dollar.
The situation may be repeated this year, and in the accuracy: on Wednesday FOMC minutes will be published, which, like the previous year, can make markets increase the likelihood of a December increase from 60 to 100 percent.

Tuesday, 11 October 2016

It doesn't worth selling pounds on raising

Last week, the focus was on the British pound. It became under pressure after the announcement of the British Prime Minister Theresa on May Oct. 2 about the beginning of Brexit in April 2017. At the same time the UK has no plans to put the interests of the financial sector at the heart of the negotiations with Brussels. The statement by the President of France on the hard approach to the UK from the European Union exit added even more negativism. Even the status of the British pound as the world's reserve currency may be questioned.
Most notable was the flash crash of the pound on the night from Thursday to Friday. Within two minutes the pair GBP/USD fell by 6% to 1.1841, which is a minimum for thirty years. On some trading sections the British pound fell to $ 1.1378. Soon after that, the decline was partly purchased. There are several versions of what happened. Most likely, this was due to the actions of hedge funds or trading robots.
Currently, there are no buyers of the pound. It is necessary to recognize and understand that fact. The pair is best to be left in peace, if the short positions are already closed. If the sale is still open, you can keep them, since it is likely the reduce to be repeated to this year lows.

Monday, 10 October 2016

USD relies on aggressive rhetoric of the US Federal Reserve

The new week began for the dollar successfully. Recovering from failed to meet expectations on the employment report in the US, the currency once again is in demand amid lingering hopes for a Fed rate increase in December. Against this background, EUR/USD slippedagain under the 1.12 mark, checking out the area of ​​1.1150.
In September, there were created 156 thousand jobs against the forecast of 172 thousand. However, the release upset the market participants not too much, and they are still hoping that the regulator will start tightening policy until the end of the year. If we analyze the NFP figures for the previous three months, the average growth in the value is around 192 thousand jobs. More than decent result, especially given the continuing growth in wages. In addition, it is worth noting an increase in business activity in manufacturing and services in the country, as well as signs of increasing inflationary pressures.
Theoretically, all this creates conditions for raising the cost of lending. The probability of such a scenario in December, at the moment is about 70%. However, before the December meeting, there are still a lot of tests, which may affect this forecast. This week on focus will be the Fed's minutes on Wednesday. Also, the market will give considerable importance to data on consumer confidence and retail sales in the United States.
So, in spite of the growing confidence in raising rates and the growing optimism of the players, any significant negative signal may trigger a revision of expectations for 2017. For example, if part of the rhetoric of the Fed minutes will be not sufficiently aggressive or even wear a "pigeon" character, USD will be under pressure, and the probability of a December policy tightening will return to 50%.

Friday, 7 October 2016

How to use the Parabolic SAR

Parabolic SAR (Stop And Reversal) is based on indicators that helps us to determine when the trend is low. The indicator puts points on the graph that shows possible reversals in price. On the picture we can clearly see how the points are moved in reverse motion. It is useful for long unidirectional movements. Parabolic SAR is probably the easiest to use indicator.
As a rule, when the points are under candles - we buy, when they are above the candles - we sell.

Thursday, 6 October 2016

Strong dollar, weak dollar - Consequences

The US dollar is often the standard by which other currencies are measured. A strong dollar means that the currency can buy more foreign products and services. This may be good for consumers and international travelers because they want to buy more (eg electronics) and the places they visit are cheaper.
The negative side is that US companies, which sell products and services to foreign customers, experience difficulties because the products and services cost more. This means that US producers doesn't have an advantage in the global market.
This could lead to relocation of US Business in other countries with lower costs, so that they remain competitive in the market. In other words, a strong dollar means job loss in America.
Weak dollar means that the currency buys less foreign products or services. Import prices jump. Consumers have to pay more for imports and foreign travelers may cancel their holidays because it is more expensive when the dollar is weak.
Weak dollar also means that exports become more competitive in the global market. Maybe maintaining or increasing jobs.

Wednesday, 5 October 2016

Free webinar: "Finally: Q4 Trading Kick-off"

On October 06 there will be a very useful free "Finally: Q4 Trading Kick-off".
The Pro trader Paul Wallace will discuss with us his game plan for the final months of 2016.
Time: 7pm-8pm Cost: Free Place: Online
Don't the other interesting and useful webinar, which will be held in October:
October 13: "Harness the power of a Virtual Private Server & MT4";
October 20: "Trading continuations with a simple pattern".
For more information and registration, visit here.

Monday, 3 October 2016

The euro moved up against the dollar by reducing the fears around Deutsche Bank

Euro compensated the fall against the dollar on Friday, after the European currency slipped to US to a minimum of nine weeks due to reduced fears about the state of the German Deutsche Bank (DE: DBKGn).
In addition, the ensuing peace of investors put pressure on the robust yen and the Swiss franc.
Traded in the US Deutsche Bank shares rose by 12.2 percent to 15.36 GMT, after falling to a record low the day before. The root cause of the bank crisis - a fine by the US Department of Justice, the amount of which may reach $14 billion, which the Bank disputes.
Assumptions about reducing fine supported the euro after the currency fell to $1.1153 in early trading session in the US. By reducing anxiety about the Deutsche Bank the dollar peaked in nine days to reliable franc at 0.9752.

GBP/USD up on positive UK data

On Friday, the pound was up against the US dollar after the economic growth of the United Kingdom in the second quarter were revised higher than expected, and an encouraging report on the UK balance of payments surplus tempered concerns about the potential adverse effects до Brexit.
In the European morning trade the pair reached 1.2986, the session high, rising by 0.17%, GBP/USD  subsequently consolidated at 1.2976.
The pair is likely to receive support at 1.2912, the low of September 23 and at one-month low and resistance at 1.3125, the high of September 22.
UK Office for National Statistics said that GDP grew by 0.7% in the second quarter compared with the previous estimate of 0.6%, although the projected growth was 0.6%.
In annual terms, GDP grew by 2.1% in the second quarter compared with the previous estimate of 1.9%, but lower than the expected 2.2%.
A separate report showed that the deficit of the current account balance of payments increased during the last quarter only to 28.7 billion pounds from 27.0 billion pounds in the first quarter, the figure was revised from a previous estimate of growth to 32.6 billion pounds. Analysts had expected the deficit in the second quarter to increase to 30.5 billion pounds.