This is interesting article here from Forbes : A Top-Notch Tool For Market Timing
This is a discussion on Something to read within the Forex Trading forums, part of the Trading Forum category; This is interesting article here from Forbes : A Top-Notch Tool For Market Timing...
3 Things Traders Should Know About the Dollar Outlook :
#1 – The Fed will most likely taper in September. Despite all of the attempts by FOMC voters this week to downplay the significance of Bernanke’s comments by saying that the decision to taper will be based on data, Fed President Stein was quite clear that September could be the month when changes are made. Stein said, the Fed should “be clear that in making a decision in, say, September, it will give primary weight to the largest stock of news that has accumulated since the inception of the program and will not be unduly influenced by whatever data releases arrive in the few weeks before the meeting.” This specific comment about September sparked speculation that it will be only 2 more months before the Fed starts to taper, which we agree is likely because the central bank will not want to suddenly reduce stimulus right before the holidays. While we have already seen the dollar trade higher on liquidation of dollar funded carry trades and re-pricing of FOMC expectations, there’s scope for further gains on next week’s economic reports.
#2 – The Sustainability of Dollar Gains Hinge on Next Week’s Data. A number of U.S. economic reports are scheduled for release next week including manufacturing and non-manufacturing ISM and the ever important non-farm payrolls report. A minor slowdown in job growth is expected to be offset by a drop in the unemployment rate. The closer the unemployment rate gets to the 7% mark mentioned by Bernanke and Stein, the greater the likelihood of a reduction in stimulus in September instead of December. As long as there aren’t any major disappointments in U.S. data, we expect the dollar to extends its gains in the coming week.
#3 – President Obama Looking to Replace Bernanke. Finally talk of a replacement for Bernanke could gain momentum in the coming weeks. According to the Wall Street Journal, Obama already has a short list of candidates that most likely includes Janet Yellen, Tim Geithner and Larry Summers. The role of Fed Chairman is a very important one as this person’s background, experience and monetary policy bias will play a role in how he or she handles the recovery and future crises. If Bernanke settles on a candidate that the market is less familiar with, the uncertainty could add pressure on equities and currencies.
The Truth about Currenex Brokers :
What is an ECN?
ECN is a term often used when referring to Currenex. ECN stands for Electronic Communication Network and it eliminates the function of a third party in the execution of orders. Without the intercession of a third party, market participants of any size can interact directly for Bid and Offer prices posted by other market participants. This leads to greater transparency and narrower spreads. ARCHIPELAGO, purchased by the NYSE in 2006, and ISLAND are two well known ECNs.
What is an ESP?
ESP™ means Executable Streaming Prices and is offered through the Currenex system. Currenex connects to multiple sources of liquidity, primarily banks, who offer "pools of liquidity". This expansiveness from the multiple pools of liquidity, available through Currenex’s ESP, provides better price discovery and narrower spreads for traders.
The prices that are offered via Currenex are executed directly within these various pools of liquidity. Whereas in the past, a trader would be required to obtain a Prime Brokerage relationship with one or more of the major liquidity providers which required a very high threshold and associated high expenses.
Not all Currenex Brokers are the same.
It is important to remember that a broker’s Currenex offering is only as good as the liquidity sources that are linked to the platform. The quantity and quality of liquidity sources can lead to dramatic differences in price spreads. For instance, a broker offering 1-2 banks versus a broker offering 8-10 banks will have a dramatic difference in pricing and liquidity.
If executing an order requires buying 1 million EURUSD and the market depth is only 200,000, then the trader would need to find other sources for the remaining 800,000. This may result in missed opportunities and/or increased prices due to the inefficiency of executing multiple transactions.
Finding a broker that offers "Tier 1 Liquidity" is essential to taking advantage of the Currenex trading system for seamless transparency and maximizing narrower spreads.
If a trader needs to execute a high volume trade, the more banks that are accessible, the more liquidity there is available. This leads to greater liquidity, lower price due to completion in one transaction and greatly narrowed spreads.
What is STP?
STP, or Straight Through Processing, is a term commonly used among Forex brokers.Many Forex brokers state they use "interbank pricing" but act as a counter party to their customers’ trades. They take the other side of the trade, going against the client’s best interest, and make money on a client’s losing trade.
Conversely, a true STP setup passes the order in an automated way to all liquidity sources. With a true STP broker, there is not the possibility of any adversarial relationship between the broker and client as the broker only generates revenue in the form of a commission per trade rather than the dealing desk model of capturing client losses.
Market Makers Vs. Electronic Communications Networks
The foreign exchange market (forex or FX) is an unregulated global market in which trading does not occur on an exchange and does not have a physical address of doing business. Unlike equities, which are traded through exchanges worldwide, such as the New York Stock Exchange or the London Stock Exchange, foreign exchange transactions take place over-the-counter (OTC) between agreeable buyers and sellers from all over the world. This network of market participants is not centralized, therefore, the exchange rate of any currency pair at any one time can vary from one broker to another.
How Market Makers Work
Market makers "make" or set both the bid and the ask prices on their systems and display them publicly on their quote screens. They stand prepared to make transactions at these prices with their customers, who range from banks to retail forex traders. In doing this, market makers provide some liquidity to the market. As counterparties to each forex transaction in terms of pricing, market makers must take the opposite side of your trade. In other words, whenever you sell, they must buy from you, and vice versa.
The exchange rates that market makers set, are based on their own best interests. On paper, the way they generate profits for the company through their market-making activities, is with the spread that is charged to their customers. The spread is the difference between the bid and the ask price, and is often fixed by each market maker. Usually, spreads are kept fairly reasonable as a result of the stiff competition between numerous market makers. As counterparties, many of them will then try to hedge, or cover, your order by passing it on to someone else. There are also times in which market makers may decide to hold your order and trade against you.
There are two main types of market makers: retail and institutional. Institutional market makers can be banks or other large corporations that usually offer a bid/ask quote to other banks, institutions, ECNs or even retail market makers. Retail market makers are usually companies dedicated to offering retail forex trading services to individual traders.
- The trading platform usually comes with free charting software and news feeds. (For related reading, see Forex: Demo Before You Dive In.)
- Some of them have more user-friendly trading platforms.
- Currency price movements can be less volatile, compared to currency prices quoted on ECNs, although this can be a disadvantage to scalpers.
- Market makers can present a clear conflict of interest in order execution, because they may trade against you.
- They may display worse bid/ask prices than what you could get from another market maker or ECN.
- It is possible for market makers to manipulate currency prices to run their customers' stops or not let customers' trades reach profit objectives. Market makers may also move their currency quotes 10 to 15 pips away from other market rates.
- A huge amount of slippage can occur when news is released. Market makers' quote display and order placing systems may also "freeze" during times of high market volatility.
- Many market makers frown on scalping practices and have a tendency to put scalpers on "manual execution," which means their orders may not get filled at the prices they want.
How ECNs Work
ECNs pass on prices from multiple market participants, such as banks and market makers, as well as other traders connected to the ECN, and display the best bid/ask quotes on their trading platforms based on these prices. ECN-type brokers also serve as counterparties to forex transactions, but they operate on a settlement, rather than pricing basis. Unlike fixed spreads, which are offered by some market makers, spreads of currency pairs vary on ECNs, depending on the pair's trading activities. During very active trading periods, you can sometimes get no ECN spread at all, particularly in very liquid currency pairs such as the majors (EUR/USD, USD/JPY, GBP/USD and USD/CHF) and some currency crosses.
Electronic networks make money by charging customers a fixed commission for each transaction. Authentic ECNs do not play any role in making or setting prices, therefore, the risks of price manipulation are reduced for retail traders. (For more insight, see Direct Access Trading Systems.)
Just like with market makers, there are also two main types of ECNs: retail and institutional. Institutional ECNs relay the best bid/ask from many institutional market makers such as banks, to other banks and institutions such as hedge funds or large corporations. Retail ECNs, on the other hand, offer quotes from a few banks and other traders on the ECN to the retail trader.
- You can usually get better bid/ask prices because they are derived from several sources.
- It is possible to trade on prices that have very little or no spread at certain times.
- Genuine ECN brokers will not trade against you, as they will pass on your orders to a bank or another customer on the opposite side of the transaction.
- Prices may be more volatile, which will be better for scalping purposes.
- Since you are able to offer a price between the bid and ask, you can take on the role as a market maker to other traders on the ECN.
- Many of them do not offer integrated charting and news feeds.
- Their trading platforms tend to be less user-friendly.
- It may be more difficult to calculate stop-loss and breakeven points in pips in advance, because of variable spreads between the bid and the ask prices.
- Traders have to pay commissions for each transaction.
The Bottom Line
The type of broker that you use can significantly impact your trading performance. If a broker does not execute your trades in a timely fashion at the price you want, what could have been a good trading opportunity can quickly turn into an unexpected loss; therefore, it is important that you carefully weigh the pros and cons of each broker before deciding which one to trade through.
The Six Habits Of Successful Private Companies :
1. They have a mission
Great companies know what they are and what they stand for. Study after study shows that employees are happier and more productive, and may even accept lower wages
2. They keep employees happy
As SAS Institute’s CEO and cofounder Jim Goodnight once said, “If you treat employees as if they make a difference to the company, they will make a difference.” SAS, the analytics software company in the Research Triangle area of North Carolina, achieved its 37th year of record revenue (up 4.2%) in 2012. Why? Something Goodnight and his cofounder John Sall hit upon long ago. They take care of people, and not with options. They passed on going public years ago, something unusual as a tech company that competes with IBM and Oracle.
3. They react quickly and adapt
Many of the biggest private companies are old: 42 of the top 220 are more than a century old. But heritage doesn’t mean stale. Founded more than a century ago, Hallmark has continued to stay out in front. In 1932, it signed a licensing agreement with Disney, one of the first such ventures for both companies. It started a line of Spanish language greeting cards in the early 1990s, before Hispanic marketing really took off. It diversified smartly into cable TV, embraced the Internet early with e-cards and introduced some of the first cards with sound chips. Even more recent new product offerings include video greetings and many new recordable storybooks.
4. They work the long term
Being privately held affords companies the freedom to invest in high-risk, high-reward projects that may not pay off for years. Kohler, the maker of kitchen and bathroom fixtures, got into China much earlier than its rivals and did so by itself, not through the quick-win of a joint venture.
5. They have a family plan
Close to half of America’s biggest private companies are owned by the founders or their relatives. The best ones have learned how to handle domestic squabbles. Marilyn Carlson Nelson of the Carlson Cos. outside of Minneapolis spent ten years running her family business, which includes 1000 hotels (Radisson) and 900 TGI Fridays. She persevered despite the fact that early on in her career her father fired her because he thought she wasn’t spending enough time with her 4 kids. And her son Curt sued her and the company because he didn’t get the CEO job.
6. They’re not islands
Being private does not mean going it alone. The best private companies recruit real outsiders for the board and put them in executive positions. They use outside advisory firms and consultants. They actively play a role in their local and global community, from the Rotary Club to Davos. Don’t mistake privacy for engagement. This can means corporate philanthropy, volunteer programs. The founder of smartphone case-maker OtterBox told us this: “[Having outside advisers] allows us to focus on other aspects of the company that are very important but that shareholders don’t immediately associate with the bottom line * such as culture. OtterBox company culture is critical to our ability to deliver a great product with top-notch service. We’re able to enhance culture through encouraging volunteering activities, profit sharing and having world-class facilities.”
Camarilla (Day-Trader) Pivot Points
From an equation once shrouded in mystery, a flavor of pivot points came to light that many short-term traders enjoy when plotted on the daily chart. The calculation of Camarilla Pivot Points produces considerably closer levels than other pivot variations might, leading to a more trading activity than other flavors of this popular support and resistance indicator.
This versatile indicator is thought to provide traders with not only a mannerism of managing risk, but also a mannerism of entering trades. In this article, we will outline each of these usages.
As we looked at in our article on Pivot Points, a simple mathematical calculation can help traders use the price data from the previous period to find support and resistance levels. The previous period can be defined as an hour, day, week, or month with quite a few variations in between. With Camarilla Pivots, short-term traders will commonly look at the daily variety.
When price approaches the 3rd level of support or resistance, many traders feel the chance of a reversal may be imminent. As such, those traders will often look to take profits at these levels if met while in a winning position. The picture below will show 2 reversals taking place within the same day on AUDUSD.
Reversals taking place at the S3 & R3 Camarilla Pivot :
Alternatively, many traders also feel that if the 4th level of support or resistance is hit the potential for a breakout may be increased. And if this is the case, those traders would want to contain the damage of incorrect trades if these levels get hit on losing positions, looking to place stops just outside of these prices.
Trading Cam Reversals
Since traders feel the propensity for a breakout may increase if the daily S3 or R3 pivot is hit, they may also look to place a trade in that direction. So, if R3 is hit, traders may look to sell while traders look to buy at S3.
This can be particularly helpful if being done in consideration of longer-term trends. As we looked at in our article on Pivot Points, traders can incorporate multiple time frame analysis in an effort to get a bigger picture view on the meaning of interactions with support or resistance levels.
If a trader observes a longer-term up trend that they would like to buy cheaply, they may wait until price reaches the daily S3 Camarilla Pivot to do so.
And the exact opposite can be true for longer-term downtrends, in which the trader looks to sell when price rises to the daily R3 Cam Pivot.
Trading Cam Breakouts
If price reaches the 4th level of support or resistance, something ‘big’ may be happening in the market that is being traded.
As such, some traders will look at intersections with the S4 and R4 levels as an opportunity for trading a breakout, much in the manner we had looked at in the article The Ballistics of Breakouts. The picture below illustrates such a setup:
Seminar on the Advantages of MetaTrader 5 and MetaTrader 5 Gateway to WSE Successfully Held in Warsaw
The Seminar on the Advantages of MetaTrader 5 and MetaTrader 5 Gateway to WSE was successfully held in Warsaw Marriott Hotel on June 27, 2013. The gateway to the Warsaw Stock Exchange attracted a great interest of a number of key Polish financial market players, especially WSE members. The seminar participants were not only interested in presentation of the gateway but also in upgrading from MetaTrader 4 to MetaTrader 5.
"The Polish financial market demonstrates steady growth. We see great potential for brokers in this region and intend to strengthen and expand our presence here", sums up Renat Fatkhullin, CEO of MetaQuotes Software Corp. - "We are pleased to have organized the seminar, seeing that our expectations have been adequate: we have reached an agreement with one brokerage company and are currently negotiating contracts with a number of other companies. We are committed to further development in this area and look forward to new achievements".
How Prices Move: The Equation For FOREX Price Movement
Markets Do NOT Move To a Scientific Formula
Firstly, let's get rid of this myth.
Many traders believe this and numerous vendors on the net perpetrate the myth of markets moving to a scientific law which appeals to the greed and naivety of traders.
Common sense tells us that markets don't move scientifically:
If markets moved scientifically, there'd be no market as we'd all know the price beforehand. Any free financial market including FOREX market by its very nature, involves uncertainty - that's what makes a market move - the fact that human nature is not in any way predictable. If you think about it, how can people who are emotional ever be predicted with certainty? They can't and this should be obvious to anyone with average intelligence but I see clever people who believe this myth. If you believe it, don't trade currency markets - because you will see your trading account get wiped out quickly.
Trading the Odds for Profit
While you are not trading certainties but that doesn't mean you can't make a lot of money, you can - by trading the odds.
With a sound trading method that runs profits and cuts losses quickly you can build significant long term wealth.
It is no coincidence that many of the world's top traders started out as either blackjack or poker players. The reason for this is - any good card player knows he won't win every hand but if they bet when the odds are in their favor and fold when there not, they will make a lot of money longer term.
Trading is simply an odds game.
If you know how to calculate the odds correctly, you can win and build significant long term wealth. Let's look at how to get the odds in your favor.
Price Movement – The fundamentals
Many traders like to trade off news stories and watch the fundamentals, it's popular but will trading news stories make traders money? Let's find out.
A currency trader, who makes trades based upon fundamental analysis, will look at the supply and demand situation relevant to the particular currency studied, and try and predict the impact of such factors as:
- The health of the economy
- Economic policy
- Interest rates
- Balance of payments
- Trade deficit
- Political factors
8 Oil Stocks With High Yields And Low Valuations
It has become more of a challenge to find stocks trading at attractive valuations. One group that recently caught my eye is the major integrated oil companies.
Most of the stocks in this group have underperformed the S&P 500 Index over the past year, many by a significant margin.
Moreover, several of the stocks discussed below have actually declined in 2013 while the S&P has gained about 16%. In addition to trading at more reasonable valuations than much of the market today, most of these stocks have the added benefit of paying relatively high dividends. Therefore, you get well paid from the dividends even if the stock prices continue to languish for a while longer.
Although they may be market laggards at the moment, I like the long-term prospects for the big oil companies. Demand for oil (and natural gas, which many of them produce in addition to oil) is likely to keep rising for the foreseeable future, particularly in the developing countries. And whether oil prices go up or down, the major oil companies always seem to find a way to grind out substantial profits.
Finally, the very fact that the oils often do move independently of the stock market as a whole makes them attractive investments. An oil stock or two can be a useful “anchor to windward” when a bear market eventually rolls around.
The stocks discussed below are all large international oil producers. They all trade at attractive valuations and pay generous dividends.
Is gold cheap enough to buy yet?
You're cheap. You're so cheap that your clothes went out of style in the Roosevelt administration. Teddy Roosevelt's administration. Cheap. When someone asks you for three cheers, you only give two.
So when you look at the price of gold and notice that it's nearly 35% off its record high, you're intrigued. Is it cheap enough to buy yet? While there are several ways to answer that question, the answer is probably "not quite yet."
Gold currently sells for about $1,220 an ounce, down sharply from its 2011 high of $1,895. Whether that's cheap or not is hard to say, because putting a price on the intrinsic value of gold isn't easy. Unlike stocks or bonds, gold doesn't pay any interest or have any earnings, which is how people evaluate many investments.
For patient stock-pickers, gold mining stocks may have some prospects. It's certainly better to buy them when they're beaten down than when they are on the rally. The question is whether or not they have been beaten down so much that they're candidates for reverting to the mean. Right now, the stocks may be cheap, but the metal itself might not be cheap enough yet.