Forex vs Gambling. Is there a difference? (2)

Let's take a card game for example. The rules are quite simple. It is dealt one card to a banker (casino) and one to the player (real person) and all you have to do is bet on one of the two cards.
Since both the banker and the player have the same chance of success, it seems that chances are 50/50. But in fact, it is not.
Casinos change the rules by adding a small commission or lowering the payout if the banker turns a higher card, the scales slightly tilted to the casino. It may be a slight advantage, somewhere at 1-5 percent, but it is enough for the casino to make a profit after a large number of games played.
To become a successful trader, you have to trade like the casino by using your advantages.

Forex vs Gambling. Is there a difference? (1)

Why are you trading? Let me guess: because you want to make bags of money and you can buy everything you want?
This is a very good reason, but it will most likely lead to extreme greed and will destroy your account. Instead, you can bet your money in Vegas: losing money, at least with fun.
You have to remember that what distinguishes forex trading from gambling is the ability to tilt the balance in your favor.
Casinos are always profitable, although it is a business where the outcome of any card played, a dice or spin slot is unknown. They understand the concept of probabilities and make games that tilt the scales in their favor. It is true that there are lucky ones who leave with a huge amount of money, but the casino is done so that at the end of the day there are more loosers than winners.

What can we learn from poker?

It can be said that poker players have qualities that can fit into the world of forex trading. Risk management is one of them.
In a poker game, the player strives to increase his balance by making calculated bets based on his cards. Like in Forex, the goal is to increase your capital by risking some of it.
In both cases, the trader needs to know what risk he can take to stay in the game. If he does with "all in", he will either raise his account several times or leave the table early, betting everything in the trading can lead to a blank account.
Apart from the importance of how much you risk, it is important to know when to risk. Poker players wait for good hands to risk. The same is valid for forex.

Forex and Poker

Here's what a friend told me about the common between forex and poker, he's been dealing with both for quite some time. I hope that it will not be difficult to deal with poker terms.
"Most profits come from selected initial cards. When I first started with poker, gamble each hand, thinking that the blinds will have a great impact. Over time I realized that they would fold more times, but more importantly, you will not lose money by playing every hand. I did not realize how much money I lost in entry with small stakes. Once summed can see that it's best just to play with good initial cards.
Poker is probability and skill. Luck has little influence. A strong initial hand can lose its edge after the flop. This is the reason to see the same faces at the final table, though, everyone knows the rules and what are the best initial hands.
After a few years of watching graphics, I know that good deals are less frequent. They are like good starting hands and you have to be aggressive with them. But you do not know how your good hand will lose on the flop. You have to play the deal correctly as you always think about closing the deal even if the reversed card reinforces your hand. I have seen many people bet everything in good hands, but you know they will lose when the flop opens."

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Yamada: Bearish perspectives for the yen

The yen has seen a certain increase against the dollar and other major currencies, and the issue that worries all investors at the moment is - will the currency appreciate.
In the medium term, the yen should continue with its weakness, at least such is the opinion of strategist Shushuke Yamada, a currency strategist at Bank of America Merrill Lynch.
Inflation in Japan is still very low and prospects for Japan's central bank to raise interest rates soon are small, according to the expert.
In the medium term, however, the yen can continue with strong performance, according to the US bank analyst. The tension between the United States and North Korea has not yet come to an end, which can resume at any moment.
Traditionally, the yen is perceived by market participants as an "island of salvation", the latter having a tendency to buy yen and yen-denominated assets, as geopolitical tensions grow.
These risks, however, are expected to start to wane over time, and this may lead to a subsequent depreciation of the Japanese currency, Yamada also said, quoted by Bloomberg. As a potential period for weakening of the yen, Yamada points to the final quarter of this year.

Buy gold and head to the bunkers...

The time to buy gold is better than ever. On the one hand, the dollar is weak compared to other major currencies, which is good for the "yellow metal" and, on the other hand, the crisis between the US and North Korea is unlikely to end.
By combining the unpredictability of Donald Trump and the North Korean leader, it is definitely possible to get an "explosive combination".
When, to this, we add the signs of a serious weakness of the US indices - and what is left to investors, except to buy gold and head to the bunkers?
Gold is just one step away from the psychological limit of $1,300, which, according to the majority of analysts, could open doors for further strong growth, with an initial $1400 goal.

BoFA: Shorten the pound

The pound enjoys a serious lack of popularity among all investor groups. But sales of pounds can only begin, according to experts from the financial institution Bank of America Corp.
All types of clients - corporate, hedge funds, mutual funds, and others - have sold pounds over the past two weeks, according to a data from the financial institution.
According to Bank of America analyzes, pension and insurance funds will reduce their positions in GBP-denominated assets. They are likely to re-orient to the euro over the next few months. So, according to the US bank, there are good times for the euro and not so good for the pound.

The Trump Rally shows signs to an end

The Trump rally, or the rise in US indices after Donald Trump's election victory in November, shows signs of an end.
What's more, analysts are predicting it can end in a very bad way. Particularly close to September - the worst historical month for US indices.
The results of US companies for the second quarter are already history, and although good, they can hardly be a factor to feed the rise in US indices, commented market observers.
Investors are likely to become more and more tense given the fact that the current rise in indices was the second longest in history.

The ECB is still worried about low inflation

The European Central Bank is still worried about the low level of inflation in the eurozone despite the substantial improvement in its condition.
From the protocols of the bank meeting held on July 20, it is clear that, according to ECB officials, market participants are too aggressive in their expectations of the recent end of the stimulus.
This was affected the value of the euro, which in the last few weeks increased significantly compared to other major currencies.
Although inflation in the eurozone is growing at a good pace, with the latter accounting for 1.3%, this is still below the 2% target of the ECB, a level that is considered healthy for the economy.

Is it time to buy gold?

The price of gold has risen over the last two months near the psychological limit of $1,300 per ounce. The latest rise was linked to increased tensions between the United States and North Korea.
Tensions have fallen, but the price of gold does not ...
So, logically, the question arises - isn't it time to buy gold? A similar moment may be the potential breakthrough at the key level of $1,300, which keeps at this point the further appreciation of the noble metal.
In addition, US indices show serious signs of weakness after testing their recent peaks. Such an action would open their way to further decline, which in turn would have a very good impact on the price of gold.

The broken correlation between Dow and GE gives a bearish signal?

Bearish signal is given by the broken relationship between US indices and the direction of movement of General Electric, one of the components of the Dow Jones index. The industrial conglomerate is among the most closely watched by the analysts.
Technical analyst Tom McClellan pointed late on Wednesday that there is a distorted correlation between the direction of movement of the blue chip index and General Electric, which is traditionally considered a "bearish signal".
As can be seen from the graph below, the two assets usually move in the same direction. On 20 April, however, this interconnection was broken. Since then, GE shares have fallen by 17%, while the Dow index rises by 7%.

Draghi worried about the power of the euro?

The head of the ECB, Mario Draghi, is worried about the strength of the single currency against the dollar and other major currencies. Since the beginning of the year, the euro has risen by 12% against the dollar.
Thus, Draghi expressed same fears, repeatedly given by the previous ECB chief, Jean-Claude Trichet, that the strong euro could seriously hurt growth prospects for the eurozone economy.
In addition, the strong European currency puts a pole in the wheel of inflation. And inflation is one of the main threats to the growth of the eurozone economy.

Oil is cheaper after data from China

The price of oil fell on the first day of the new week after a slowdown in the production of refinery activity in China. This has raised serious concerns about the recovery of world demand for "black gold."
The Brent with delivery in the next month is traded at $52 a barrel, or with a 10-cent lower than its last closing levels at the end of last week.
US crude oil traded down by 0.1 percent down to $48.78 a barrel.
Chinese refineries produced 0.4% more oil in July, compared with last year at a level of 45.5 million. Or, the processing was 10.71 million barrels per day, according to China's national statistics.
This is the smallest production on a daily basis since September.

Buffet against hedge funds - 9 years later

Nine years ago, Warren Buffett agreed to make a bet called "one million dollar bet". In it, the billionaire will be betting with his opponents from the $3.5 billion Protege Partners hedge fund to beat their sophisticated investment schemes and active selection of companies with a simple investment in a S&P 500 index fund (Vanguard S&P 500).
It was a long time ago - almost nine years ago, and to the end of the bet remain about six months, given that it ends on December 31 this year.
How are things to date?
Buffett leads, with lots. It must be a real miracle to lose the bet. After nine years, the hedge fund portfolio rose by 22 percent, while the Vanguard Admiral Shares S&P 500 Index Fund added 85.4 percent to its value. That is almost four times more.
The yield on the index fund was higher than that of the hedge fund in seven of the past nine years.

The US companies with the highest growth in their results for 13 year

US companies are delivering better reports on their earnings and revenue than expected. They do this at the highest pace since 13 years.
Does this, however, lead to an increase in indices? Not exactly ... Although it is generally believed that the results of companies are the source of index growth.
Company profits rose by 9% yoy, exceeding the average growth expectations of 3%. Sales grew by 5% yoy. 55% of companies with sales on international markets have exceeded expectations in terms of profits and sales, compared with 30% for companies represented only in the United States.
In fact, there is the first case since the 2000s when investors saw no "prize" for better results, according to Bank of America Merrill Lynch.
This is a "potentially dangerous" anomaly we have not seen since 17 years, according to analysts from Bank of America Merrill Lynch.
This lack of reaction may be another sign of the late stage of the upward cycle we are in, according to Savita Subramanian, a bank analyst.
This does not mean that the situation is too negative at the moment. It seems, however, that this growth in the companies' results was apparently already in the levels.

The gold with a two-month peak

Gold reached a two-month high, reaching the highest value of $1 283.80 per ounce.
At the core of the rise was the increased tensions between the United States and North Korea. That is, the appreciation of the precious metal was predominantly determined by the search for a safe haven on the part of the investors.
Where the dollar will move to will largely depend on the direction of trading in the US currency, according to analyst Vince Lance of Echobay partners.
But if gold continues to appreciate, in the midst of appreciation of the dollar, it will certainly be possible to say that its demand has been predetermined by the search for security. And such an appreciation, according to Lansky, will not be fundamentally justified and will rather be short-term.
Can gold continue to rise to $1,900?
According to the expert, this is possible, but there are several key factors that predict such an increase and which were present at its previous appreciation to this limit.
We need a substantial change in the market situation to see the explosion in the price of gold to similar values.

Shares are cheaper, the dollar and gold are rising after Trump's threats

Global stocks fell and gold rose after US President Donald Trump said in connection with North Korea's provocations that they would be welcomed with fire.
The dollar appreciated against other major currencies as a result of increased uncertainty.
The S&P 500 index ended with minimum daily values ​​yesterday, following Trump's comments.
Trump's comments came after earlier yesterday from the capital of North Korea said they were ready to give Washington a cruel lesson of available strategic nuclear power in any US military action.
Serious increase also registered the volatility index. After the previous day VIX ended at a level below 10 points, it grew heavily yesterday, ending at its highest levels for a month.
The dollar rose by 0.5% against the euro to 1.1730 dollars for one euro.
Gold added about 1% to its value, following increased geopolitical tension, rising at trading levels of more than $1,273.

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Oil ended the week with increase

Trading on Friday recorded an increase in oil prices amid signs of a slowdown in the growth of shale oil production in the United States. However, during the week, oil fell slightly against the backdrop of renewed concerns about the level of implementation of the agreement to reduce production by OPEC countries.
At the close of trading on Friday, September futures for WTI rose by $0.55, or approximately 1.1%, ending Friday's session at $49.58 a barrel.
By the close of Friday trading on the London Commodity Exchange ICE Futures Exchange, October futures for Brent crude rose by $0.41, or approximately 0.8% to $52.42 a barrel.

Gold down after NFP

Gold prices fell on Friday after a good report on employment in the US, which resurrected forecasts for another increase in the Fed's interest rate before the end of this year.
August gold futures settled at $1258.28 at the New York Exchange COMEX. For the week, gold fell by 0.8% for the first time in four recent weeks.
The forecast for a faster increase in the interest rate leads to a decrease in the price of gold, which is traded in dollars. With an increase in the cost of credit, companies' stocks become more attractive.
For this year, gold prices have risen by about 9%, in part because of forecasts that the Fed will tighten monetary policy gradually.

Another ten years of growth for the US markets?

US stocks can enjoy a good performance over the next decade, according to a leading strategist at the Bank of America Merrill Lynch.
In an interview with CNBC, Mary Ann Bartels says the market is in a secondary bullish trend and most likely are ahead of 10 years of rise.
Bartels believes, however, that the index direction will not only be upwards.
According to her, there will still be bearish markets, but the question will be whether we are witnessing bearish markets or just correction. According to Bartels, there are no signs of a fundamental and technical point of view for the bearish market.

ANZ: The bearish attitudes to the dollar are overexposed

The US dollar received a serious "slap" this year, with the dollar index down by 9% since the beginning of the year. Not all analysts, however, are so negative towards the dollar.
The political uncertainty surrounding the Trump administration is cited by ANZ analysts as the main reason for the "excessive depreciation of the dollar" over other major currencies.
Leverage funds currently have a net short position in the dollar, which has taken the levels of "green money" far beyond the foundation, analysts said.
The weakness of the underlying reserve currency became a reality, despite the rise in Fed's interest rates, which outstripped other central banks around the world. In addition, the Fed's balance sheet is expected to start shrinking relatively soon, which will be another factor that will work to support the US dollar.

The dollar went up after the release of the US employment report

On Friday, the dollar moved up against other major currencies after a positive employment report allowed investors to forget about the continuing political tension in Washington.
On Friday, the US Department of Labor released a report on employment outside the agricultural sector, according to which 209,000 jobs were created in the US, which significantly exceeded the forecasts of experts of 183,000 jobs. The adjusted value showed that 231 thousand jobs were created in the US economy in June (the preliminary value was 222 thousand jobs).
After the value of 4.4% the unemployment rate in July fell to 4.3%, according to forecasts after a value of 4.4% in the previous month.
The average hourly wage in the US increased by 0.3% in line with the forecast and against an increase of 0.2% a month earlier.