Yellen: The gradual rise in interest rates will continue (2)

Yellen's comments are becoming reality in an environment of fierce disputes among economists and members of the monetary policy committee about how the rise in interest rates will affect on low inflation.
The level of consumer price growth is still far below the target of 2%, which is considered healthy for the economy.
According to Yellen, there is now a 30% probability that inflation will fluctuate between one and three percent, which could radically change the policy pursued by the reserve.
In fact, Yellen's message was very controversial, but was perceived by market participants as a complete lack of certainty as to what Fed's interest rate inflation and policy would be.

Yellen: The gradual rise in interest rates will continue (1)

Janet Yellen did not surprise the market by saying what everyone was expecting from her. Particulary, the gradual rise in interest rates will continue despite weak inflation.
Yellen's comments continue to indicate problems in predicting inflation in the future, which may be an obstacle to normalizing interest rate policy from the Federal reserve.
It is possible that the Fed has applied incorrect inflation models and failed to take into account key labor market facts, said Yellen.
And while there is still no clear evidence of accelerating inflation to strengthen the position of a gradual rise in interest rates, the central bank must be open to similar action, the most influential business lady said.
The current low inflation most likely reflects factors that will drop over time, Yellen said in a 37-page report.
Without further gradual increases in federal interest, according to her, over time, there is a risk that the labor market will gradually overheat, creating inflationary problems in the future that will be difficult to overcome without bringing a recession.

Investment guru: The bitcoin will be the biggest bubble in our lives

Investment legend Mike Novogratz launches a new 500 million dollar asset-backed hedge fund to invest in crypto-currencies. Novogarz will add 150 million personal savings to these funds, and will raise another $350 million in January.
The Galaxy Digital Assets Fund will have assets of $1 billion and will become the largest hedge fund investing in crypto-currencies, according to acquaintances.
For Novogarz, this will be a return to the world of investments after the serious losses he registers for Fortress and his retirement for 2 years.
The bitcoin will be the biggest bubble in our lives, Novotarz said in an interview with Bloomberg on crypto-currencies. According to him, the prices of crypto-currencies will rise far from what they should be. A lot of money can be made on their way up, the expert added.
We can only recall that this month the bitcoin reached a new historical record of $5,000. There was a serious correction of over 30%, which led him to levels of about $3,000.
Currently, however, the bitcoin is trying to raise over $4,000 again.
Novogratz's fund is expected to have a broad mandate, including as a market maker, arbitrage, and stakes in new coins that are on the market.
Most institutional investors stay away from crypto-currencies because of skepticism and because these markets are too volatile. It is possible, however, that the first of the big players on the market to take advantage of it.

Draghi: Be careful with the expensive euro

The head of the ECB, Mario Draghi, once again expressed his fears of the appreciation of the euro. Speaking on Monday, Draghi said the recent volatility in the euro exchange rate is a serious source of uncertainty and requires serious monitoring.
The euro rose from 1.05 at the beginning of the year, to about 1.19 dollars, at the moment. Further growth of the single currency against the dollar and other major currencies will seriously burden the "old continent".
Draghi told the European Parliament that the economic situation of the eurozone is stable and broad-based.
Further clarification on the ECB's future policy on incentives and record low interest rates is expected to be given at the next meeting of the Bank's Monetary Policy Committee on 26 October.
It is then that investors expect specific deadlines to end the program of incentives and the gradual normalization of interest rates in the euro area.
At the moment, the ECB buys back bonds worth 60 billion euros per month.
Speculation on ending incentives and normalizing interest rates was largely the basis for the appreciation of the single currency.
However, after the strong rise in the euro, the single currency seems to be in a correction mode, and it is now back below the threshold of 1.1900 on the first day of this week.
Draghi's comments helped further depreciation of the euro, which dropped to about $1.1850.

Laszlo Birinyi: I do not see an end to the current bullish market

The investment legend, Laszlo Birinyi, who has correctly predicted the bullish market over the last eight years, at any moment, does not see what will prevent stocks from continuing to rise.
He believes that the bearish investors ignore the large amount of free funds that go to the market and will likely continue to support the growth of the indices.
Birini rightly predicted mid-year that the broad US S&P 500 will reach 2 500 points. We can only recall that the index ended only 5 points from the level at the end of last week.
Instead of looking at the high financial estimates of the companies, cited by many experts, as potential reasons for a stock price correction, Birinyi directs its attention to the massive market-driven cash flow. According to him, this will be the factor that will continue to support the markets.

What should investors do in a record-breaking environment for indexes? (2)

The situation looks pretty much in the last phase of the bullish cycles, when everyone says the market can grow to infinity, and buyers of the last "plan" become individual investors.
Think about it, would you shorten the S&P 500 index right now? Probably not ... And why? Because you shortened it most likely to 2,200 points, then again to 2,300, then to 2,400 and now to 2,500 you give up.
What, however, has changed to opt out? Generally speaking, you are tired and you have decided that there is no point in shortening the index anymore. And it is very possible, even if you start considering to buy it. For example, if it returns by 5%...
It may be good, and it may be a bad idea! Time will tell. History shows, however, that there are no endless cycles of growth without any corrections.

What should investors do in a record-breaking environment for indexes? (1)

US indices are at record highs. Is this the cause of joy or concern? Rather for the second one.
Investors are interested in the future profitability of their investments, not the historical ones.
In a hurricane world, missile launches from North Korea and political uncertainty in Washington, the markets seem calm ... Even too calm. It seems as if nothing can get them out of their tracks.
Any decrease of 1 or 2% is rapidly recovering and is followed by new records. And so... The last time the indices drop by 2% and then fall with new 2% and new 2%.
Of course, when will the last time be is the biggest uncertainty in the equation.
However, in an environment where more and more experts are beginning to argue that there is still nothing terrible about US investors, they should definitely be afraid.

Gold with two and a half weeks minimum

Gold struck two and a half weeks minimum on Monday as the dollar rose before the Fed's interest rate talks. The depreciation of the metal became a reality in the midst of new records for US indices.
Gold fell by 0.6 percent to 1 311.51 dollars per ounce after on Monday reached the lowest value of $1 309.63 per ounce, a level unseen since August 31.
Otherwise, speculators have raised their net long positions in gold for the ninth consecutive week to their highest level since September 12th. This is a worrying counter-indicator, according to "bearish people" in terms of the price of gold investors.
For other metals, silver fell by 1.3% and platinum lost 0.3%. Palladium fell by nearly 1%.

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J. Dimon: The Bitcoin is a fraud and it will not end well

During the Delivering Alpha conference, organized by CNBC and Institutional Investor, for the seventh consecutive year in New York, investors heard something that would definitely remain in their minds. And not by anyone, but by JPMorgan Chase's Chief Executive Officer Jamie Dimon.
Briefly, Dimon criticized the bitcoin, naming it a "fraud".
The expert said a bubble was formed at the crypto-currency, which eventually would "burst", which would trigger a real market crash.
Moreover, Dimon compared the madness around the bitcoin with that of the tulips in the 17th century when the prices of bulbs reached incredibly high levels. It was also the first bubble in history. And its burst initiated serious economic consequences.

Why the dollar will rise? (3)

This is in an environment of expected normalization of the interest rate policy of other central banks around the world. At its meeting on Thursday, the British Central Bank hinted at a very recent rise in interest rates. The ECB is also expected to do so at its next meeting in October. As we all know, expectations are traded on the financial markets.
The point is that a weak dollar is likely to start generating an accelerated rise in US inflation. And this will cause investors to start expecting the Fed to continue raising interest rates.
Finally, investor expectations are overestimated against the US dollar. According to 44% of market participants, the dollar will continue to fall cheaper. And this is one of the most serious indicators that the dollar may rise.

Why the dollar will rise? (2)

For most of last year, the dollar and raw materials were moving in the same direction. This means that the dollar was weakening, but raw materials were cheaper. An example is the sharp oil depreciation.
In fact, the US currency is weak compared to the rest of the world. Compared to the euro, the dollar has fallen by 14% since the beginning of the year. 9.8% against the Canadian dollar, 8.1% against the British pound and 16% against the Japanese yen.
So it can be stated that something is happening in the US, which makes the dollar weaken.
And the answer to the question - what makes the dollar cheaper is simple. Fed interest policy.
Although the Fed raised its interest rates twice this year, against the background of its twofold increase over the previous two years, the reserve is expected to be much less aggressive in the future.

Why the dollar will rise? (1)

Is the weakness of the dollar for the Fed a problem? Under given conditions, the weaker currency should initiate inflationary pressure as foreign goods become more expensive in local markets. In practice, local currency can no longer buy so many foreign goods.
The question is - is the dollar weaker, or the other currencies become stronger?
Currency analyzes are always "slippery" due to the fact that there are two sides to the equation. The dollar is weaker than the euro, but the question is which of the two sides would prevail - whether the weakness of the dollar or the strength of the euro?
A simpler way to answer this question we'll find looking at a basket of other currencies.

The funds increase their hedging positions

Fund managers did not enjoy the growth of US indices, bringing them to new record highs. In fact, they have increased their hedging activity on their portfolios at the fastest pace since 14 months, according to Bank of America Merrill Lynch.
73% of Bloomber survey respondents indicate that they have undertaken some insurance portfolio insurance from a potential strong correction for the indexes.
This, at first glance, seems imperceptible when judging by the level of trading on the Volatility Index - VIX. The survey was conducted between September 1 and 7, among people, managing assets worth $629 billion.
A particularly significant warning was made, not by anyone, but by the famous investor John Husman. He predicts a drop in shares of 60%. According to him, there is now a general overvaluation of indices and stocks.
Husman is not the only one who warns of excessive asset valuation. Other leading experts who think we can see a serious correction include Tom Forrester from Forester Capital Management. According to him, the collapse in one sector will trigger the so-called domino effect of the whole market.

Working with experts

Robots are very popular in forex trading. Even in the MT4 and MT5 platforms there are built-in ones. How reliable and profitable are they? Perhaps when working with small volumes, they have a long-term profitability. But traders suffer from fast-onset syndrome, "today, and at all costs." They begin to change the settings, increase the risk, and there is a violation of the expert's work. The other point is the filters that brokers put. In general, the expert is written for an ideal market, without distortion of the picture through slippage or requating. Something that hinders a lot for full-fledged bot work.
And most importantly, the robot is written for certain market characteristics, a pattern of behavior. And the market often changes its model, demonstrating complex character. The robot can generate profits for a whole week, and for an hour to lose everything.
We reserve the right to continue trying!!!

Addiction to forex trading (3)

My experience so far says that dependent people can hardly overcome the problem themselves. In some cases, it is simply impossible.
Some would say to follow certain rules in deals, others to keep a diary, and third to take a rest. The latter is the right one for me, but rest under changed conditions. Do not just say, "Ok, I will not trade, I'll do it." Human instincts and inner desires are much stronger in most cases by the will. So, you have to outsmart them. I only think of one way and it is to go to a place where you do not have proper trading conditions (no computer) and you also have to have the right conditions for other activities - sports and anything else to distract you from forex.

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Addiction to forex trading (2)

Is there a passion or is it just addiction? You realize that addiction to a certain activity happens when a person is completely dependent on it. This behavior is usually shown by people who are constantly looking for the activity no matter what negative consequences it have brought to them. What is worse is that people who are addicted can not stop the activity even though it ruins their lives.
How would you recognize if you are already dependent on forex trading rather than simply taken over by it. Ask the following questions:
Do I often trade even after I told myself to stop?
Does Forex trading create problems with my relationships with other people?
Does Forex trading has created me financial problems?
Has anyone ever told me I trade too much and that I have to stop?
Have I tried to get my losses back by increasing my deal size?
Is there a case when I trade just because I'm bored?
I am sure that once you answer these questions, you will be able to realize whether you are dependent or not.

Addiction to forex trading (1)

To be honest, most of us are attracted to the world of forex trading because of the potential profit of big money, with the ability to exercise the brain and the will. For some, the second comes in the background, as it is more preferable to make money.
There are times when traders just want to take the money, which blurs their judgment on the forex market. Exactly then, trading has the potential to become addictive, potentially damaging both the brain and the soul.
Imagine it, let me tell you a story of a trader who ended up emptying a whole account for the third time in a row. However, he is persistently looking for a new real account. He even thought about getting closer to companies to manage their money with the belief that his passion for trading magically will turn into profits.
To make matters worse, this day trader has a family to endure. No matter how much money he has lost, he does not go back to study the market or reform his trading plan. Instead, he takes from family savings to open a new real account.

Forex vs Gambling. Is there a difference? (3)

First of all, you need to familiarize yourself with the behavior of the market, with patterns and trends that can be recognized. So they become potential trading opportunities. You need to review the action platform at levels of resistance and support, indicators and economic events. In addition to reviewing them, it is crucial that you record the data in a specific order that gives you a view of the market from another angle and apply your knowledge of the market to your trade.
Once you have assembled the theory in your head, you take notes as you can not remember everything, and you have the discipline, order is at risk management. You can tilt even more scales in the long run to your advantage if you limit the size of your transactions.
And for cherry on the cake, you can track other traders. The web is full of content for economic news and technical analysis. Taking a second opinion, you can make sure you do not fall into a trap.