Those trading in the forex market rely on the same two basic forms of analysis that are used in the stock market: fundamental analysis and technical analysis. The uses of technical analysis in forex are much the same: price is assumed to reflect all news, and the charts are the objects of analysis. But unlike companies, countries have no balance sheets, so how can fundamental analysis be conducted on a currency?
Since fundamental analysis is about looking at the intrinsic value of an investment, its application in forex requires looking at the economic conditions that affect the valuation of a nation's currency. Listed below are some of the major fundamental factors that play a role in the movement of a currency.
Retail Sales
Building Permits
Industrial Production
New & Existing Home Sales
Producer Price Index (PPI)
Consumer Price Index (CPI)
Gross Domestic Product (GDP)
Purchasing Managers' Index (PMI)
Monetary & Interest Rate Policy Changes
Employment Change & Unemployment Claims
Since economic indicators gauge a country's economic state, changes in the conditions reported will therefore directly affect the price and volume of a country's currency. It is important to keep in mind that the indicators listed above are not the only things that affect a currency's price. There are third-party reports, technical factors, and many other things that also can drastically affect a currency's valuation. It is important to take the time to not only look at the numbers, but also understand what they mean and how they affect a nation's economy. When properly used, these indicators can be an invaluable resource for any currency trader.
http://www.TradingFX.com
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Thursday, December 3, 2009
Sunday, August 30, 2009
Forex Trader's Weekly Bullet Points
USD - Anticipate a break from the recent consolidation
GBP - Bearish outlook after technical breakdown
EUR - Traders assuming moves lower in September
JPY - Should push lower due to record unemployment
CAD - Could be range bound with GDP and Unemployment
CHF - Slowly losing its safe haven status
AUD - Continues to strengthen against counterparts
NZD - Economy shrinking for 6 consecutive quarters
Download TradingFX Pip Range Bar Charts:
https://secureforexprocessing.com/fxtfx/
GBP - Bearish outlook after technical breakdown
EUR - Traders assuming moves lower in September
JPY - Should push lower due to record unemployment
CAD - Could be range bound with GDP and Unemployment
CHF - Slowly losing its safe haven status
AUD - Continues to strengthen against counterparts
NZD - Economy shrinking for 6 consecutive quarters
Download TradingFX Pip Range Bar Charts:
https://secureforexprocessing.com/fxtfx/
Monday, August 17, 2009
GBP Moves Lower Ahead of UK CPI Release
The British Pound was one of the weakest major currencies today, losing 1.7% against the Japanese Yen and 1.2% versus the Us Dollar.
The move lower comes just prior to the release of the UK’s consumer price index (CPI) reading for the month of July, which is forecasted to fall for the first time in six months at a rate of -0.3%. The annual rate of growth, which is more closely watched by the Bank of England, is forecasted to fall to 1.5%, the lowest since November 2004, from 1.8%, keeping inflation within the central bank’s acceptable range of 1% to 3%, but below the 2% target. If CPI falls more than projected, the British Pound could pull back dramatically since the markets will anticipate that the BOE will expand their easing efforts before year-end. However, if CPI holds strong, the currency could see a sharp rally higher.
Download TradingFX Pip Range Bar Charts: https://secureforexprocessing.com/fxtfx/
The move lower comes just prior to the release of the UK’s consumer price index (CPI) reading for the month of July, which is forecasted to fall for the first time in six months at a rate of -0.3%. The annual rate of growth, which is more closely watched by the Bank of England, is forecasted to fall to 1.5%, the lowest since November 2004, from 1.8%, keeping inflation within the central bank’s acceptable range of 1% to 3%, but below the 2% target. If CPI falls more than projected, the British Pound could pull back dramatically since the markets will anticipate that the BOE will expand their easing efforts before year-end. However, if CPI holds strong, the currency could see a sharp rally higher.
Download TradingFX Pip Range Bar Charts: https://secureforexprocessing.com/fxtfx/
Sunday, August 16, 2009
Forex Trader's Weekly Bullet Points
USD - Are we seeing the market turn traders have been waiting for?
GBP - Still pulling back from QE News & the UK CPI may push it lower
EUR - Trading sideways waiting to see continued economic recovery strength
JPY - Trend is mixed with conflicting econ news & key GDP report upcoming
CAD - Under pressure as oil fluctuates & sentiment sours, intervention discussed
CHF - Continues to see range bound price activity
AUD - Could gain strength as RBA sees reasons for higher rates
NZD - Potentially set its 2009 high on the S&P's strength and turnaround
http://www.TradingFX.com
GBP - Still pulling back from QE News & the UK CPI may push it lower
EUR - Trading sideways waiting to see continued economic recovery strength
JPY - Trend is mixed with conflicting econ news & key GDP report upcoming
CAD - Under pressure as oil fluctuates & sentiment sours, intervention discussed
CHF - Continues to see range bound price activity
AUD - Could gain strength as RBA sees reasons for higher rates
NZD - Potentially set its 2009 high on the S&P's strength and turnaround
http://www.TradingFX.com
USD drops to lowest level since September
The greenback retreats as investors look for higher returns in more risky assets amid improved economic news
The U.S. dollar Monday fell against a basket of currencies to its lowest since September as a rally in stocks and encouraging economic data from around the world eroded the greenback's safe-haven appeal.
On Wall Street, the broader S&P 500 stock index topped the psychologically important 1,000 level for the first time in nine months. European shares ended at nine-month highs and oil rallies 3% to above $71 a barrel.
Positive manufacturing reports from the United States, Europe and China lifted hopes about the global economy and boosted risk appetite. That drove the euro to a 2009 high and sterling and the Australian and New Zealand dollars to their highest since autumn versus the U.S. currency. he bulls in the equity markets are winning the war so far and that has determined the direction for the U.S. dollar.
So long as equity market interest remains positive, then the U.S. dollar will most likely remain on the back foot. The ICE Futures dollar index, a gauge of the U.S. currency's performance against six other major currencies, fell 1% to 77.583, having fallen to 77.451, its lowest since Sept. 29. The euro hit its highest this year at $1.4445 and was last at $1.4416, up 1.2% on the day, according to Reuters data.
The U.S. currency has come under heavy pressure in recent weeks as positive economic releases and earnings news dried up safe-haven demand and fueled a rally in stocks, commodities and higher-yielding currencies. The increase in risk appetite also pushed the yen sharply lower.
TradingFX Pip Range Bar Charts Download Link: https://secureforexprocessing.com/fxtfx/
Reuters contributed to this article
The U.S. dollar Monday fell against a basket of currencies to its lowest since September as a rally in stocks and encouraging economic data from around the world eroded the greenback's safe-haven appeal.
On Wall Street, the broader S&P 500 stock index topped the psychologically important 1,000 level for the first time in nine months. European shares ended at nine-month highs and oil rallies 3% to above $71 a barrel.
Positive manufacturing reports from the United States, Europe and China lifted hopes about the global economy and boosted risk appetite. That drove the euro to a 2009 high and sterling and the Australian and New Zealand dollars to their highest since autumn versus the U.S. currency. he bulls in the equity markets are winning the war so far and that has determined the direction for the U.S. dollar.
So long as equity market interest remains positive, then the U.S. dollar will most likely remain on the back foot. The ICE Futures dollar index, a gauge of the U.S. currency's performance against six other major currencies, fell 1% to 77.583, having fallen to 77.451, its lowest since Sept. 29. The euro hit its highest this year at $1.4445 and was last at $1.4416, up 1.2% on the day, according to Reuters data.
The U.S. currency has come under heavy pressure in recent weeks as positive economic releases and earnings news dried up safe-haven demand and fueled a rally in stocks, commodities and higher-yielding currencies. The increase in risk appetite also pushed the yen sharply lower.
TradingFX Pip Range Bar Charts Download Link: https://secureforexprocessing.com/fxtfx/
Reuters contributed to this article
Saturday, August 15, 2009
Economic Recovery Hopes
US Manufacturing shrank again in July but slower than in June. The Institute for Supply Management said its index of factory activity rose to 48.9 in July from 44.8 in the prior month. That was above economists' expectations. A reading below 50 indicates contraction.
The July ISM data is in keeping with a recovery picking up some momentum, even if the overall index has yet to make its way out of the contraction zone (below 50). Earlier, a UK purchasing managers' index showed British manufacturing activity grew last month for the first time since March 2008, while an equivalent survey on the euro zone showed the factory sector edged closer to recovery. Adding to the positive sentiment was data out of China showing a measure of manufacturing rose to a one-year high, powered by domestic spending that helped offset anemic exports.
Among commodity-linked currencies, the Australian dollar, the New Zealand dollar and the Canadian dollar all moved higher. Traders said the Aussie was being supported by expectations that the Reserve Bank of Australia may drop a key reference on monetary policy easing at its meeting on Tuesday while keeping the cash rate unchanged at 3%. Traders continue to think a further rate cut is unlikely, and expect the RBA to be one of the first banks to start tightening rates with a 50 (basis points) hike next March.
TradingFX Free 3 Day Guest Pass Access: http://tradingfx.com/joinnow.htm
Reuters contributed to this article.
The July ISM data is in keeping with a recovery picking up some momentum, even if the overall index has yet to make its way out of the contraction zone (below 50). Earlier, a UK purchasing managers' index showed British manufacturing activity grew last month for the first time since March 2008, while an equivalent survey on the euro zone showed the factory sector edged closer to recovery. Adding to the positive sentiment was data out of China showing a measure of manufacturing rose to a one-year high, powered by domestic spending that helped offset anemic exports.
Among commodity-linked currencies, the Australian dollar, the New Zealand dollar and the Canadian dollar all moved higher. Traders said the Aussie was being supported by expectations that the Reserve Bank of Australia may drop a key reference on monetary policy easing at its meeting on Tuesday while keeping the cash rate unchanged at 3%. Traders continue to think a further rate cut is unlikely, and expect the RBA to be one of the first banks to start tightening rates with a 50 (basis points) hike next March.
TradingFX Free 3 Day Guest Pass Access: http://tradingfx.com/joinnow.htm
Reuters contributed to this article.
Monday, July 20, 2009
Candian CPI Falls the Most Since 1955
USD/CAD – Canadian CPI fell to -0.3% in June which was the most since 1955 and a sign that deflation risks still exist for the country. Looking at the breakdown we see that clothing prices fell 2.8% during the month which could be a sign that domestic demand is weak. However, the core reading only saw a slight decrease to 1.9% from 2.0%, while the monthly headline print rose by 0.3%. The sharp fall in energy costs are still filtering through the economy, but as long as the core reading remains firm, the BoC can refrain from quantitative easing measures. However, there is concern that the central bank will over react and start tightening too soon, if prices start to rise again.
EUR/USD – The Euro-Zone Trade balance report showed a surplus for a second month as falling imports outpaced exports. The net gain of 1.9 billion was lower than the month prior’s 2.7 billion, but beat estimates of 0.0. Exports fell for a third straight month which may be a sign that the impact from global stimulus efforts are starting to dissipate and could Limit the scope of a recovery. The ECB has just begun its covered bond purchase program and may remain on hold until they can assess its impact.
TFX Charting Software Download: https://secureforexprocessing.com/fxtfx/
Free TFX Virtual Trade Floor Guest Pass: http://tradingfx.webs.com/joinnow.htm
http://www.piprangebars.com/
EUR/USD – The Euro-Zone Trade balance report showed a surplus for a second month as falling imports outpaced exports. The net gain of 1.9 billion was lower than the month prior’s 2.7 billion, but beat estimates of 0.0. Exports fell for a third straight month which may be a sign that the impact from global stimulus efforts are starting to dissipate and could Limit the scope of a recovery. The ECB has just begun its covered bond purchase program and may remain on hold until they can assess its impact.
TFX Charting Software Download: https://secureforexprocessing.com/fxtfx/
Free TFX Virtual Trade Floor Guest Pass: http://tradingfx.webs.com/joinnow.htm
http://www.piprangebars.com/
Saturday, July 18, 2009
Forex Re-Engagement Trade Presentation
TFX Charting Software Download: https://secureforexprocessing.com/fxtfx/
Free TFX Virtual Trade Floor Guest Pass: http://tradingfx.webs.com/joinnow.htm
Thursday, July 16, 2009
The Rules of Trading
by Derek Schimming
Patience & Discipline – Always be patient and trade with discipline, plus never think the market owes you something. Embrace the fact that some of your trades are going to lose money. It is how you handle the mistakes, that is the key to long term trading success.
Set a Stop Loss – Establish an amount per trade and per day, and stick to it. NO QUESTION! Goals - Set daily & weekly goals, and stick to them. Start with a small goal and raise the amount each month after you have consistently achieved your target. Increase the size of your trades and do not expect the market to allow for bigger trades.
Trade Smart - Do not look for trades, let them find you. You do not have to be in a trade, so be selective and wait for the better looking trade opportunities. It all goes back to patience and discipline, knowing the trend and not forcing the issue.
Consistency – Trading success is all about consistency, base hits and scoring 1 goal at a time. You should NEVER be looking to make that homerun or trying to score 4 goals at once by finding that one massive trade. You should strive to be consistent, because consistency will afford you the ability to be fortunate and land the BIG game winner from time to time. Making 5 base hits will always add up to more than just 1 homerun, and taking consistent shots on goal will in fact win the game.
Know the Trend – The trend really is your friend and can compensate for a slightly poor entry. Even if you plan to trade contra to the trend, you need to know that you are doing so and trade accordingly.
Step Back - Take a look at what is actually happening by looking at longer term views and work your way in for more detail.
Be Early – It is better to enter a trade early with potential and being wrong, then to be right and enter the trade late but with no more potential. When you can identify the trend correctly and you seek proper trading tools and entry techniques, you can trade with confidence and enter your trades at the correct times.
Add to Your Winning Positions – You should look for the opportunity to add to any winning position. However any addition must be handled like a new trade and pure entry. So ask yourself; “If I wasn’t already in my current position, would I enter this new trade right here and right now?”
Never Add to a Losing Trade – Just Don’t Do It! The best way to never have the desire to add to a losing position is to never sit in a losing trade beyond your stop discipline. Do not use losing strategies like “doubling down” or “dollar cost averaging” because they only set you up for trading failure. Establish your Stop Loss order, be firm and hold to it regardless!
Never Chase Any Trade – If you miss the entry do not worry, there will always be another trading opportunity.
Recognize What is Actually Happening – Learn to understand and identify the 4 market stages and the 7 market events which comprise those stages, plus their 4 distinct psychological states. The market always follows the Gaussian Curve, so you should know where you are in the cycle at all times and identify the stage and trend before you enter a trade.
Learn to Anticipate – Anticipate the possibilities and ONLY act upon reality!
http://www.youtube.com/user/TradingFXcom
Patience & Discipline – Always be patient and trade with discipline, plus never think the market owes you something. Embrace the fact that some of your trades are going to lose money. It is how you handle the mistakes, that is the key to long term trading success.
Set a Stop Loss – Establish an amount per trade and per day, and stick to it. NO QUESTION! Goals - Set daily & weekly goals, and stick to them. Start with a small goal and raise the amount each month after you have consistently achieved your target. Increase the size of your trades and do not expect the market to allow for bigger trades.
Trade Smart - Do not look for trades, let them find you. You do not have to be in a trade, so be selective and wait for the better looking trade opportunities. It all goes back to patience and discipline, knowing the trend and not forcing the issue.
Consistency – Trading success is all about consistency, base hits and scoring 1 goal at a time. You should NEVER be looking to make that homerun or trying to score 4 goals at once by finding that one massive trade. You should strive to be consistent, because consistency will afford you the ability to be fortunate and land the BIG game winner from time to time. Making 5 base hits will always add up to more than just 1 homerun, and taking consistent shots on goal will in fact win the game.
Know the Trend – The trend really is your friend and can compensate for a slightly poor entry. Even if you plan to trade contra to the trend, you need to know that you are doing so and trade accordingly.
Step Back - Take a look at what is actually happening by looking at longer term views and work your way in for more detail.
Be Early – It is better to enter a trade early with potential and being wrong, then to be right and enter the trade late but with no more potential. When you can identify the trend correctly and you seek proper trading tools and entry techniques, you can trade with confidence and enter your trades at the correct times.
Add to Your Winning Positions – You should look for the opportunity to add to any winning position. However any addition must be handled like a new trade and pure entry. So ask yourself; “If I wasn’t already in my current position, would I enter this new trade right here and right now?”
Never Add to a Losing Trade – Just Don’t Do It! The best way to never have the desire to add to a losing position is to never sit in a losing trade beyond your stop discipline. Do not use losing strategies like “doubling down” or “dollar cost averaging” because they only set you up for trading failure. Establish your Stop Loss order, be firm and hold to it regardless!
Never Chase Any Trade – If you miss the entry do not worry, there will always be another trading opportunity.
Recognize What is Actually Happening – Learn to understand and identify the 4 market stages and the 7 market events which comprise those stages, plus their 4 distinct psychological states. The market always follows the Gaussian Curve, so you should know where you are in the cycle at all times and identify the stage and trend before you enter a trade.
Learn to Anticipate – Anticipate the possibilities and ONLY act upon reality!
http://www.youtube.com/user/TradingFXcom
Tuesday, July 14, 2009
Dollar Mixed on Economic Data & Strong Earnings
The dollar was mixed Tuesday after the Labor Department reported a sharp rise in wholesale prices and retail sales, while investor confidence in Germany slipped in July after an eight-month rise.
Meanwhile, investors turned more optimistic about the U.S. economy after Goldman Sachs Group Inc. and Johnson & Johnson Inc. posted better-than-expected earnings. Signs of an incipient economic recovery have driven investors to pull out of the dollar and shift into riskier assets.
Investors were uneasy after a report showed wholesale prices rising far more than expected last month and the most since November 2007, due partly to higher energy prices.
A separate report showed retail sales posted their largest gain in five months in June, much of that increase from higher gas prices. Prices for gas have fallen sharply since mid-June amid increasing concerns about energy demand, so the higher sales figures may not be sustainable.
In Germany, Europe's biggest economy, the ZEW institute said its monthly index, which measures investors' outlook for the next six months, slipped to 39.5 points this month from 44.8 in June, as worries over bank lending clouded optimism over improving industrial data. Economists had expected a slight increase, or at worst a smaller dip, in the overall index.
www.PipRangeBars.com
Meanwhile, investors turned more optimistic about the U.S. economy after Goldman Sachs Group Inc. and Johnson & Johnson Inc. posted better-than-expected earnings. Signs of an incipient economic recovery have driven investors to pull out of the dollar and shift into riskier assets.
Investors were uneasy after a report showed wholesale prices rising far more than expected last month and the most since November 2007, due partly to higher energy prices.
A separate report showed retail sales posted their largest gain in five months in June, much of that increase from higher gas prices. Prices for gas have fallen sharply since mid-June amid increasing concerns about energy demand, so the higher sales figures may not be sustainable.
In Germany, Europe's biggest economy, the ZEW institute said its monthly index, which measures investors' outlook for the next six months, slipped to 39.5 points this month from 44.8 in June, as worries over bank lending clouded optimism over improving industrial data. Economists had expected a slight increase, or at worst a smaller dip, in the overall index.
www.PipRangeBars.com
Monday, July 13, 2009
Forex Trader's Weekly Bullet Points
USD - Needs a Reason to Break its recent Consolidation
GBP - Has Additional Trading Risk Prior to the Q2 GDP Release
EUR - Will Likely Stay in its Volitile Trading Range this Week
JPY - Could Move Higher if Carry Trades Follow Equities Lower
CAD - Current Consolidation Held in Check with Oil Prices
CHF - Markets are Anticipating further SNB Intervention
AUD - Traders will Weigh Future Policy Outlook
NZD - Remains Weak as Trade's Risk Tolerance Declines
http://www.PipRangeBars.com
GBP - Has Additional Trading Risk Prior to the Q2 GDP Release
EUR - Will Likely Stay in its Volitile Trading Range this Week
JPY - Could Move Higher if Carry Trades Follow Equities Lower
CAD - Current Consolidation Held in Check with Oil Prices
CHF - Markets are Anticipating further SNB Intervention
AUD - Traders will Weigh Future Policy Outlook
NZD - Remains Weak as Trade's Risk Tolerance Declines
http://www.PipRangeBars.com
Wednesday, July 8, 2009
TFX Currency Strength Index "CCYX"
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Presenting The Unique TFX Currency Strength Index. Identify Divergence & Convergence plus Confirm Momentum & Trends. A Revolutionary Pip Range Bar Charting Software Tool for Forex Traders
Monday, July 6, 2009
Quote of the Week
"Your job as a trader is not to predict or forecast what is going to happen, but to anticipate the possibilities and react to reality.
I know it sounds simple, however many traders are far too busy predicting and forecasting to actually identify or trade what is REALLY happening."
Derek Schimming
TradingFX Co-Founder & Lead Trader
http://www.piprangebars.com/
I know it sounds simple, however many traders are far too busy predicting and forecasting to actually identify or trade what is REALLY happening."
Derek Schimming
TradingFX Co-Founder & Lead Trader
http://www.piprangebars.com/
Sunday, July 5, 2009
Forex Trader's Weekly Bullet Points
USD - Range bound, with risk aversion creating bullish potential
GBP - Will remain under pressure ahead of BofE rate decision
EUR - Volatility likely before Central Bank reports rate decision
JPY - Could strengthen as the appetite for risk decreases
CHF - May decline if bulls give up the fight against intervention
CAD - Should weaken further as labor market loses confidence
AUD - Has greater risk as investors weigh future policy outlook
NZD - Selling pressure ahead if the equity markets turn lower
http://www.youtube.com/user/TradingFXcom
GBP - Will remain under pressure ahead of BofE rate decision
EUR - Volatility likely before Central Bank reports rate decision
JPY - Could strengthen as the appetite for risk decreases
CHF - May decline if bulls give up the fight against intervention
CAD - Should weaken further as labor market loses confidence
AUD - Has greater risk as investors weigh future policy outlook
NZD - Selling pressure ahead if the equity markets turn lower
http://www.youtube.com/user/TradingFXcom
Saturday, June 27, 2009
Japanese Yen Strengthens As Risk Appetite Wanes
The Japanese Yen may continue to strengthen against its major counterparts over the following week as market participants curb their appetite for higher risk/reward investments, and the low-yielding currency should benefit from safe-haven flows as investors weigh the outlook for a global recovery. The World Bank lowered its growth forecast from March and projects the world economy to contract at an annual pace of 2.9% this year amid an initial forecast for a 1.7% drop in global growth, and the dour outlook held by the bank suggests rising energy costs paired with deteriorating trade conditions are likely to hamper the prospects for future growth. At the same time, the Organization for Economic Cooperation and Development predicts the global recovery to be ‘slow and fragile,’ with the economic downturn expected to have a lasting impact on the world economy as the group anticipates a permanent increase in the cost of capital. The comments foreshadow a weakening outlook for future growth as businesses face rising input costs paired with fading demands from home and abroad, and fears of a protracted recession could lead the Yen higher as investors turn risk adverse.
Thursday, June 25, 2009
Dollar mixed as Fed starts to remove supports
Dollar falls against Euro, advances verses Pound as the US Fed Reserve scales back emergency lending programs
The dollar was mixed against major currencies Thursday as new jobless claims jumped unexpectedly, while the Federal Reserve took the first step toward removing the numerous emergency lending programs it launched last fall at the height of the financial crisis.
The third successful Treasury auction of the week helped boost confidence that Washington will be able to raise enough money to fund its economic recovery programs.
The dollar rallied Wednesday after the Fed left its key bank lending rate unchanged, while the European Central Bank lent record funds to banks to jump-start credit markets.
The Fed was widely expected to keep its key interest rate near zero at the conclusion of its two-day meeting. It pledged again to keep it there for "an extended period," and predicted inflation will remain "subdued for some time." This new language sought to ease Wall Street's concerns that the Fed's aggressive actions to revive the economy will spur inflation later on.
Cutting interest rates, or leaving them at record lows, can hurt the dollar as investors seek to invest in countries whose bonds yield higher returns. Unconventional methods of increasing the money supply have also prompted some fears of inflation down the road, which could eat away at the value of the greenback.
On Thursday, the Labor Department said new jobless claims jumped unexpectedly last week, while the number of people continuing to receive unemployment aid rose more than expected. The figures indicate that jobs remain scarce even as the economy shows some signs of recovering.
Meanwhile, the Fed said it will allow one program intended to support money market mutual funds to lapse by Oct. 31, and is reducing the amount it will lend to banks under two others.
The Fed also is extending through Feb. 1, 2010, five other programs scheduled to expire Oct. 31. That includes swap lines with 14 central banks that enable them to provide dollars to their financial systems in exchange for giving the Fed foreign currencies.
The changes are the first by the central bank designed to scale back its efforts to support the financial system. The Fed pumped trillions of dollars into commercial and investment banks through an alphabet-soup of emergency programs as the banks hoarded cash and refused to lend to each other and consumers late last year.
The Associated Press contributed to this article.
The dollar was mixed against major currencies Thursday as new jobless claims jumped unexpectedly, while the Federal Reserve took the first step toward removing the numerous emergency lending programs it launched last fall at the height of the financial crisis.
The third successful Treasury auction of the week helped boost confidence that Washington will be able to raise enough money to fund its economic recovery programs.
The dollar rallied Wednesday after the Fed left its key bank lending rate unchanged, while the European Central Bank lent record funds to banks to jump-start credit markets.
The Fed was widely expected to keep its key interest rate near zero at the conclusion of its two-day meeting. It pledged again to keep it there for "an extended period," and predicted inflation will remain "subdued for some time." This new language sought to ease Wall Street's concerns that the Fed's aggressive actions to revive the economy will spur inflation later on.
Cutting interest rates, or leaving them at record lows, can hurt the dollar as investors seek to invest in countries whose bonds yield higher returns. Unconventional methods of increasing the money supply have also prompted some fears of inflation down the road, which could eat away at the value of the greenback.
On Thursday, the Labor Department said new jobless claims jumped unexpectedly last week, while the number of people continuing to receive unemployment aid rose more than expected. The figures indicate that jobs remain scarce even as the economy shows some signs of recovering.
Meanwhile, the Fed said it will allow one program intended to support money market mutual funds to lapse by Oct. 31, and is reducing the amount it will lend to banks under two others.
The Fed also is extending through Feb. 1, 2010, five other programs scheduled to expire Oct. 31. That includes swap lines with 14 central banks that enable them to provide dollars to their financial systems in exchange for giving the Fed foreign currencies.
The changes are the first by the central bank designed to scale back its efforts to support the financial system. The Fed pumped trillions of dollars into commercial and investment banks through an alphabet-soup of emergency programs as the banks hoarded cash and refused to lend to each other and consumers late last year.
The Associated Press contributed to this article.
Tuesday, June 2, 2009
Review: TradingFX's New Pip Range Bar Charts
Is this the future of candlestick charts and can you make money using them?
Reading a chart is one of the first things that people learn when they first start trading. I often realise how much traders take for granted when I show a friend or family member a candlestick chart of something like oil. All the different colours and blocks can seem meaningless initially until you explain that each candlestick represents all the action within a certain time period.
Unlike line charts, which are usually just based on the closing value, candlestick charts display so much more. In one bar you can see the high, low, open and close of a particular period of time.
Candlestick charts only really started to make an appearance in the 1990s as traders such as Steve Nison highlighted their benefits after extensive research in Japan. Candlestick charts are now de rigueur, but like all innovations, it doesn’t take long for the status quo to become upset when a new method appears on the horizon.
Over the last month I have been tracking a service which offers innovative charts that could really upset the apple cart if they take off in popularity.
Pip range bar charts
Traditional candlesticks are time-based, which means that each bar represents a set segment of time. On a page you might have one days action with each candlestick representing the high, low, open and close of every five minutes. The longer term trader might look at a chart with each candlestick representing 4 hours worth of action. The candlestick could be length if there was a lot of action in that period of time, or small if the price didn’t move much. Importantly the next candlestick wouldn’t form until the time was up.
But why do we construct charts based on time? Why should each bar represent 5 minutes action? Why not have each bar represent a certain number of pips and only move on to the next one when that pip limit has been reached? This is the question Trading FX asked and their innovative pip range bar charts are the answer.
Unlike traditional time-based charting, each bar represents action, not time. They have a variety of options available, but I’ll use the 8 pip range bar chart for the moment.
On the 8 pip range bar chart, each bar has a maximum range of 8 pips. Once the price has moved 8 pips, a new bar will form. If you have a fast moving market, you might get new bars forming every few seconds as the market moves 8 pips very quickly. In a slow moving market, it might take several minutes for the market to move 8 pips and therefore form a new bar.
It’s probably useful to do a recap and summary of the difference between time and pip range bar charts.
Time-based charting:
Each bar/ candlestick represents the action from a set period of time. The size of the candlestick will vary depending on the amount of action during that period. The disadvantage is that freak spikes can distort your charts and make your page hard to read.
Pip range charting:
Each bar/candlestick represents 8 pips worth of movement. In a fast moving market, a quick 80 move will result in 10 candlesticks being printed in a short space of time.
Example pip range bar chart
Below you can see a pip range bar chart in the upper window, with a time-based chart beneath it. In the pip range bar chart, each bar represents 8 pips worth of movement, while in the lower window you have a more traditional 3 minute chart with each bar representing 3 minutes of time. You can see how the pip range bar chart is much more smooth with no untidy spikes.
The Trading FX Service
The whole TradingFX.com service is more than just the pip range bar charts though. TFX is a trading community which uses the charts as its centre point, but there other things you can benefit from as part of your membership.
Your first port of call will probably be a free trial membership which provides you with Temporary access to the Live Trading floor. This live trading room uses the same Omnovia chat room software that Phil Newton uses with his Trading-Strategies website.
The live trading floor displays the pip range bar charts for four currencies with a special focus on one currency in particular (usually EUR/ USD). This means that all members can access the live pip range bar charts without having to download any software themselves. The live trading floor also displays the currency strength chart which I’ll explain in a little more detail later.
The disadvantage is that you can only view the default chart displays that the moderator is showing. This could actually be a real benefit as you get started, because it is easy to get lost in any new software when you first get hold of it. By spending some time watching how other people use the software, you get a better idea of its capabilities.
The chat room moderators are all based in the US, but TFX users come from all over the world. It also helps that there are some insomniacs amongst the moderators so there is usually someone in the room to help you out pretty much 24 hours a day. The idea is that there is at least one moderator to hold the fort during one of the major Forex trading sessions (Asian,London, US).
The moderators help you understand the suggested TFX trading strategies as well as outlining reasons for and against various trades. There is a nice community feel to TFX with moderators being patient with new members and existing members helping each other out. Derek, the lead trainer, also recently organised a trading buddy system.
Example live trading room
In the screenshot example below, you can see a typical live trading room. There are pip-based charts for four of the main currencies with the currency strength chart displayed in the middle. Apologies if you can’t see this, TFX had trouble converting it to a white background for me. Below all the charts you can see the text chat area. As well as using text chat, the moderators will often use the microphone throughout the session.
Reading a chart is one of the first things that people learn when they first start trading. I often realise how much traders take for granted when I show a friend or family member a candlestick chart of something like oil. All the different colours and blocks can seem meaningless initially until you explain that each candlestick represents all the action within a certain time period.
Unlike line charts, which are usually just based on the closing value, candlestick charts display so much more. In one bar you can see the high, low, open and close of a particular period of time.
Candlestick charts only really started to make an appearance in the 1990s as traders such as Steve Nison highlighted their benefits after extensive research in Japan. Candlestick charts are now de rigueur, but like all innovations, it doesn’t take long for the status quo to become upset when a new method appears on the horizon.
Over the last month I have been tracking a service which offers innovative charts that could really upset the apple cart if they take off in popularity.
Pip range bar charts
Traditional candlesticks are time-based, which means that each bar represents a set segment of time. On a page you might have one days action with each candlestick representing the high, low, open and close of every five minutes. The longer term trader might look at a chart with each candlestick representing 4 hours worth of action. The candlestick could be length if there was a lot of action in that period of time, or small if the price didn’t move much. Importantly the next candlestick wouldn’t form until the time was up.
But why do we construct charts based on time? Why should each bar represent 5 minutes action? Why not have each bar represent a certain number of pips and only move on to the next one when that pip limit has been reached? This is the question Trading FX asked and their innovative pip range bar charts are the answer.
Unlike traditional time-based charting, each bar represents action, not time. They have a variety of options available, but I’ll use the 8 pip range bar chart for the moment.
On the 8 pip range bar chart, each bar has a maximum range of 8 pips. Once the price has moved 8 pips, a new bar will form. If you have a fast moving market, you might get new bars forming every few seconds as the market moves 8 pips very quickly. In a slow moving market, it might take several minutes for the market to move 8 pips and therefore form a new bar.
It’s probably useful to do a recap and summary of the difference between time and pip range bar charts.
Time-based charting:
Each bar/ candlestick represents the action from a set period of time. The size of the candlestick will vary depending on the amount of action during that period. The disadvantage is that freak spikes can distort your charts and make your page hard to read.
Pip range charting:
Each bar/candlestick represents 8 pips worth of movement. In a fast moving market, a quick 80 move will result in 10 candlesticks being printed in a short space of time.
Example pip range bar chart
Below you can see a pip range bar chart in the upper window, with a time-based chart beneath it. In the pip range bar chart, each bar represents 8 pips worth of movement, while in the lower window you have a more traditional 3 minute chart with each bar representing 3 minutes of time. You can see how the pip range bar chart is much more smooth with no untidy spikes.
The Trading FX Service
The whole TradingFX.com service is more than just the pip range bar charts though. TFX is a trading community which uses the charts as its centre point, but there other things you can benefit from as part of your membership.
Your first port of call will probably be a free trial membership which provides you with Temporary access to the Live Trading floor. This live trading room uses the same Omnovia chat room software that Phil Newton uses with his Trading-Strategies website.
The live trading floor displays the pip range bar charts for four currencies with a special focus on one currency in particular (usually EUR/ USD). This means that all members can access the live pip range bar charts without having to download any software themselves. The live trading floor also displays the currency strength chart which I’ll explain in a little more detail later.
The disadvantage is that you can only view the default chart displays that the moderator is showing. This could actually be a real benefit as you get started, because it is easy to get lost in any new software when you first get hold of it. By spending some time watching how other people use the software, you get a better idea of its capabilities.
The chat room moderators are all based in the US, but TFX users come from all over the world. It also helps that there are some insomniacs amongst the moderators so there is usually someone in the room to help you out pretty much 24 hours a day. The idea is that there is at least one moderator to hold the fort during one of the major Forex trading sessions (Asian,London, US).
The moderators help you understand the suggested TFX trading strategies as well as outlining reasons for and against various trades. There is a nice community feel to TFX with moderators being patient with new members and existing members helping each other out. Derek, the lead trainer, also recently organised a trading buddy system.
Example live trading room
In the screenshot example below, you can see a typical live trading room. There are pip-based charts for four of the main currencies with the currency strength chart displayed in the middle. Apologies if you can’t see this, TFX had trouble converting it to a white background for me. Below all the charts you can see the text chat area. As well as using text chat, the moderators will often use the microphone throughout the session.
The Primary Cross Over system
TFX do state that the pip range bar charts are meant to be used as a confirming tool to your existing strategies, but for those who want to learn from the ground up, there are some off-the-peg strategies suggested that make use of the pip range bar charts.
The bar charts themselves come with a number of bespoke indicators that have been especially formulated to work with the pip range bar charts such as a special MACD indicator. This reformulated MACD shows momentum with a score of +/- 7 or 8 indicating overbought and oversold conditions.
The primary crossover system takes a four-pronged attack.
1. The first input is the trend as represented by the pip range bar charts. The advantage of the charts is that as each bar is the same length, your charts are less noisy, potentially allowing you to spot the trend momentum with more clarity.
2. The second input is the reformulated MACD crossing down from an overbought position or crossing up from an oversold position.
3. The third input is two moving averages crossing over.
4. The fourth input is price action around key areas such as support and resistance.
For further confirmation you can check out how the trade is setting up in different pip ranges.
In general the 8 pip chart is used for entries, while the 15 pip chart is your guide.
Another key feature of your Trading FX website is the currency strength chart which is used as an extra trade filter.
When trading a Forex pair like EUR/USD, you are trading the euro as the base currency and the dollar as the quote currency. The euro will also be trading against a whole host of other currencies as will the dollar, so it might make sense to double-check that the move you have just spotted on one currency pair isn’t just an isolated event.
The bottom line
Members can have full access the Pip Range bar charts on their personal PCs to do a variety of technical studies and unique display configurations. At the same time they can also access the trading rooms to discuss trades with the team, interact with the moderators, take classes and share ideas.
With the software you can set things up to your own liking or use default templates to spot the primary cross over trades better.
You don’t have to purchase the software and this is potentially a good thing depending on your budget. To join the service you need to pay a one off membership fee then monthly payments thereafter. Access to the software comes on top of all this so your costs could mount up.
Thankfully you don’t have to jump in at the deep end, you can start with a free trial of the live trading floor and feel your way from there. If you decide to join, it’s probably still better to start slowly and watch how the moderators use the software on the live trading floor before splashing out yourself.
Overall, there’s a lot to like about TFX. The moderators are extremely helpful and patient with group numbers small enough to warrant individual attention. The pip range bar charts are a fantastic innovation, I found them to be a very useful tool, as did other traders in the room.
There are lots of helpful training videos on the website, but I did get the feeling that TFX would be more suited to someone with a reasonable amount of experience rather than complete beginners. Some of the moderators use the pip range bar charts in conjunction with their own time-based chart studies. This is potentially a very powerful trading set up, but one which may confuse the complete beginner.
The software and live trading room are not cheap, but thankfully you have the ability to sample the service for free. There are regular webinars.
While in the room, there were a number of fellow traders who were using the software to great effect. Each person seemed to have their own spin on the strategies which is great, but may disappoint those looking for set strategies to follow. The instructional videos at the Youtube page are a great help, but some written documentation would also be useful.
Overall, I like what TFX have done and there’s clearly a lot of time and effort put into the new charting. TFX have something different here and I hope it goes from strength to strength. I recommend WRP readers take a look, especially if you already have a modicum of experience.
CONTACT DETAILS:
Reprinted from:
What Really Profits?
An Independent Review of Trading Systems, Stock Market Tipsters & Investment Strategies
Written By: David Evans
March 2009 Issue
What Really Profits?
An Independent Review of Trading Systems, Stock Market Tipsters & Investment Strategies
Written By: David Evans
March 2009 Issue
Wednesday, May 20, 2009
Japan's Shrinking Economy & Strong Yen
If Japan's economy has hit bottom, it's pretty far down. The world's second-largest economy marked its worst-ever quarter of GDP, with a contraction of 4%, government figures revealed. That's far worse than the U.S., where the economy shrunk 1.6% last quarter, or Europe, which saw a 2.5% hit.
Japan has suffered from a strong yen, which has crippled its exporters, who are finding it difficult to drum up demand overseas for their goods. Companies' capital spending dropped 10.4% as they declined to invest in new factories or equipment. Deflation has hit as wages drop, unemployment proliferates, and households ruthlessly cut their budgets. In addition, the Japanese consumer has retreated even further into frugality, with consumer spending dropping 1.1%.
The biggest problem is in private spending, always an issue in Japan, where it's considered inappropriate to spend lavishly. Now that the traditional lifetime guarantee of a steady, well-paid corporate job no longer exists, consumers are afraid to spend money on themselves. "I believe that a worsening of conditions in the corporate sector is starting to have an impact on households," said the prime minister, Taro Aso, speaking to parliament after the GDP figures were released.
Aso's government is spending $160 billion to stimulate the economy. Measures include cash payments to residents and tax incentives to buy eco-friendly cars, among other programs. In response to the stimulus checks that are arriving in the mail, many businesses are running "stimulus specials" for 12,000 yen ($120), the amount of the checks per adult. (Children received $200 from the government.)
But many Japanese consumers will likely save the money instead. All but the youngest workers remember the country's "Lost Decade" in the 90s, and few want to live through the privations of a long recession without money in the bank.
Reuters contributed to this article.
http://www.tradingfx.com/
http://www.youtube.com/user/TradingFXcom
Japan has suffered from a strong yen, which has crippled its exporters, who are finding it difficult to drum up demand overseas for their goods. Companies' capital spending dropped 10.4% as they declined to invest in new factories or equipment. Deflation has hit as wages drop, unemployment proliferates, and households ruthlessly cut their budgets. In addition, the Japanese consumer has retreated even further into frugality, with consumer spending dropping 1.1%.
The biggest problem is in private spending, always an issue in Japan, where it's considered inappropriate to spend lavishly. Now that the traditional lifetime guarantee of a steady, well-paid corporate job no longer exists, consumers are afraid to spend money on themselves. "I believe that a worsening of conditions in the corporate sector is starting to have an impact on households," said the prime minister, Taro Aso, speaking to parliament after the GDP figures were released.
Aso's government is spending $160 billion to stimulate the economy. Measures include cash payments to residents and tax incentives to buy eco-friendly cars, among other programs. In response to the stimulus checks that are arriving in the mail, many businesses are running "stimulus specials" for 12,000 yen ($120), the amount of the checks per adult. (Children received $200 from the government.)
But many Japanese consumers will likely save the money instead. All but the youngest workers remember the country's "Lost Decade" in the 90s, and few want to live through the privations of a long recession without money in the bank.
Reuters contributed to this article.
http://www.tradingfx.com/
http://www.youtube.com/user/TradingFXcom
Monday, May 18, 2009
PRIMARY TFX CROSSOVER FOREX TRADE
FOR MORE INFO & FREE GUEST PASS: Info@TradingFX.com
The Primary TFX Crossover Trade Presentation
Using The Revolutionary TFX Pip Range Bar Charts
Sunday, May 17, 2009
Euro/US Dollar Volatility
The coming week promises no shortage of Euro/US Dollar volatility, and economic sentiment could take a further turn for the worse on key PMI data. Much has been made of the fact that Euro Zone Purchasing Managers Index reports have shown clear signs of economic recovery. Yet the “hard data” in Industrial Production and other timely data releases have not shown commensurate improvement. It will subsequently be important to watch whether the recent pickup in investor sentiment is warranted and sustainable. Consensus forecasts call for a noteworthy jump in the German ZEW business survey’s “Economic Sentiment” index—implying that business conditions are steadily improving. Of course, that data could just as easily reflect the effects of a fairly substantial rally in global equity markets. A worse-than-expected result would likely deflate domestic indices and force a commensurate drop in the EUR/USD.
Later Purchasing Managers Index data likewise remains important, and disappointments in said releases could also herald a turn in financial market sentiment. Recent Euro Zone Industrial Production figures showed record year-over-year drops in domestic activity. Such data stands in stark contrast to improving trends in PMI indices, and one of these pieces of data must shift. Unless we see sustained improvement in PMI figures and commensurate gains in Industrial Production, recent signs of economic recovery will amount to little.
Later Purchasing Managers Index data likewise remains important, and disappointments in said releases could also herald a turn in financial market sentiment. Recent Euro Zone Industrial Production figures showed record year-over-year drops in domestic activity. Such data stands in stark contrast to improving trends in PMI indices, and one of these pieces of data must shift. Unless we see sustained improvement in PMI figures and commensurate gains in Industrial Production, recent signs of economic recovery will amount to little.
Saturday, May 16, 2009
Outlook for US Dollar
Following up on a period of fundamental abundance with dramatic market events (the Fed Stress Test) and high-level economic indicators (non-farm payrolls), the dollar was put through its staid phase this past week. A round of indicators that included the April retail sales and May University of Michigan consumer confidence survey have put the focus back on the supposed ‘green shoots’ that so many policy officials and market commentators have noted recently. This will be the primary concern for dollar traders next week: is the United States leading the gradual economic recovery? However, this broad and speculative fundamental driver will only be able to guide price action if it is not interrupted by a more immediate concern – like a sharp rise or plunge in risk appetite.
Working with the anticipation that there will be no unforeseen event that sweeps over the market and stirs sentiment, we will have a series of indicators and meetings that could guide the measured race for establishing the leader of the global economic recovery. As it stands, most of the major, industrial powerhouses are mired in recession; and the immediate outlook is far from promising. However, the currency market is a relative one and speculators are willing to look well into the future to discount the macro trends. So far, the US has shown signs that the pace of deterioration in employment, factory activity, consumer spending, confidence and the housing market are slowing. It should be noted that these trends are not positive, just less aggressive in their decline. We will see whether the Fed sees the same signs of hope with the minutes from the Federal Open Market Committee’s (FOMC) last policy meeting over April 28-29th. In previously released statements, the group has maintained its forecast for a contraction through the rest of the year and a slow recovery through the first half of 2010. If perhaps the central bankers are more encouraged by recent data, and they project perhaps a recovery sometime before the turn of the year, it would be a big vote for the US outpacing Japan, the UK and perhaps even the Euro Zone.
Working with the anticipation that there will be no unforeseen event that sweeps over the market and stirs sentiment, we will have a series of indicators and meetings that could guide the measured race for establishing the leader of the global economic recovery. As it stands, most of the major, industrial powerhouses are mired in recession; and the immediate outlook is far from promising. However, the currency market is a relative one and speculators are willing to look well into the future to discount the macro trends. So far, the US has shown signs that the pace of deterioration in employment, factory activity, consumer spending, confidence and the housing market are slowing. It should be noted that these trends are not positive, just less aggressive in their decline. We will see whether the Fed sees the same signs of hope with the minutes from the Federal Open Market Committee’s (FOMC) last policy meeting over April 28-29th. In previously released statements, the group has maintained its forecast for a contraction through the rest of the year and a slow recovery through the first half of 2010. If perhaps the central bankers are more encouraged by recent data, and they project perhaps a recovery sometime before the turn of the year, it would be a big vote for the US outpacing Japan, the UK and perhaps even the Euro Zone.
Friday, May 15, 2009
TradingFX
TradingFX provides a solid opportunity and a new way to access the currency markets. The revolutionary TFX Pip Range Bar Charts & Virtual Trading Floor give traders the power to trade the highly-lucrative Forex market anytime of the day or night. Our state-of-the-art charting program is based on pure price movement and not the standard time-frame based charting formula. PRBC allow for a precise charting strategy by removing the noise and enabling more accurate indications for entering and exiting trades.
TradingFX was designed and developed to meet the needs of traders in a unique and inventive way, plus we have created dynamic and exciting opportunities for entrepreneurs. Clients have access to our 24/5 Virtual Trading Floor to share strategies, ideas and information with other active participants while trading in a supportive environment. Traders also have unlimited access to advanced training classes and tailored one-on-one coaching sessions. Additionally, members have the ability to generate another stream of income through our Client Referral Program.
http://www.tradingfx.com/
http://www.youtube.com/user/TradingFXcom
TradingFX was designed and developed to meet the needs of traders in a unique and inventive way, plus we have created dynamic and exciting opportunities for entrepreneurs. Clients have access to our 24/5 Virtual Trading Floor to share strategies, ideas and information with other active participants while trading in a supportive environment. Traders also have unlimited access to advanced training classes and tailored one-on-one coaching sessions. Additionally, members have the ability to generate another stream of income through our Client Referral Program.
http://www.tradingfx.com/
http://www.youtube.com/user/TradingFXcom
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