The News / Hottest Related

Markets regained their footing, stopping the significant slide from the second half of last week. Joann Farley, the glue that keeps the XLT program running smoothly, joins Merlin for a look at some of the stellar calls that have been happening in the live trading rooms and offer her thoughts on where she thinks they are headed. Later, Joann welcomes a new group of students to Online Trading Academy with a tour of some of the free resources available to everyone, as well as some of the tools available only to Online Trading Academy students.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg



More...

China's gross domestic product gained 7.4 percent on year in the first quarter of 2014, the National Bureau of Statistics said on Wednesday. That topped expectations for 7.3 percent following the 7.7 percent gain in the previous three months. Among the sub-industries, primary industry added 3.5 percent on year, while secondary industry jumped 7.3 percent and tertiary industry climbed 7.8 percent.

Attachment 6601

More...

Merlin hosts a show solo and answers a bunch of listener questions. Several listeners sent in questions retarding patterns, so Merlin takes a look at Broadening formations on the QQQ and an inverse head and shoulders on the AUDUSD. Later, he tackles a question on the Dollar index and how it is applied to anticipate market moves. He also looks at the Yen for potential trading opportunities and directional analysis.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg



More...

Merlin and guests have talked many times on the shenanigans that 401k providers are pulling on investors, generally in the form of ridiculous fees. ProActive investing master, Paul Orme joins Merlin for a look at several recent lawsuits against these firms and their elevated fees. The duo talks about the importance of knowing your investments, and being active in their management. Just a 1.25% savings over the course of a workers career can add up to over $100,000! Take control now!

http://mediaserver.fxstreet.com/Repo...1105145132.jpg



More...

Economics professor at the International University of Geneva joins Merlin and John for a look at some of the problems plaguing Europe and the UK. Dr. Hollenbeck talks about the deflation paranoia, and why it’s not such a bad thing! He also offers listeners access to his extensive series of articles on macroeconomics.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg




More...

Markets continued their bounce on Monday, racing toward all time highs… again! Master trader and instructor Jeff Manson joins Merlin to offer his thoughts on where the markets may be headed in the short term. Jeff uses cycles to offer suggestions on market direction, and the hinge on Tuesday’s trading action! Jeff also offers us some insight into his upcoming “Hour with the Pro’s” this Thursday.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg




More...

Existing home sales in the U.S. showed a modest decrease in the month of March, according to a report released by the National Association of Realtors on Tuesday, although the annual rate of sales still came in above economist estimates. The report said existing home sales edged down 0.2 percent to a seasonally adjusted annual rate of 4.59 million in March from 4.60 million in February.

Attachment 6683

More...

Bank holidays around the world have made for some pretty boring FX trading over the last week, but Steve Misic thinks that will change soon. Merlin and Steve take a look at several currency pairs including the Euro, Yen, US Dollar and answer several listener questions. The duo share their experiences about their early days trading the currency markets and offer pointers on how to grasp it quicker. Steve also talks about his current XLT sessions and upcoming classes.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg



More...

Tillie Allison offers all listeners, tuning in live, a copy of her new DVD titled “How To Retire With More Money Than You Need”. The duo focus on this topic and discuss some of the simple steps one can take to increase rate of return and grow savings. Tillie bring up the topic of refinancing ones home and taking advantage of low rates, utilizing the extra money to accelerate retirement account growth. She also discusses the 3 different retirement objectives that are discussed in the ProActive Investor XLT program and the associated portfolio rates of return.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg


More...

New Zealand posted a merchandise trade surplus of NZ$920 million in March, Statistics New Zealand said on Tuesday - marking the highest surplus on record for that month.

More...

Consumer confidence from Germany and quarterly national accounts from the U.K. are due on Tuesday, headlining a busy day for the European economic news. At 2.00 am ET, Germany's GfK consumer confidence figures are due. The forward-looking consumer confidence index is seen at 8.5 in May, unchanged from April.

More...

Traders and investors in the Indian equity markets have been enjoying watching as prices have been breaking to all-time highs. Of course the big question in everyone’s mind is where will this bull run end and is there anything I can do to protect my capital when it does? While no one can predict exactly where this price movement will reverse since there is no supply level above to signal this, there are some tools that traders can use to identify when the bullish pressure has subsided and therefore marked the time for profit taking in your portfolio.

http://mediaserver.fxstreet.com/Repo...0430051632.jpg

One of the most common methods is to use a moving average on your chart. The average summarizes the past trend and momentum and when prices start breaking down below it, you have likely seen the end of your trend. There are two problems with using moving averages. First, they are lagging and give very late signals. Secondly, since they are lagging, you are likely to have given back some profits you have made in the previous trend before you exit.

http://mediaserver.fxstreet.com/Repo...0430051648.jpg

To reduce the lag and hopefully exit with more profits, many traders will look to advanced technical analysis tools such as the Fibonacci Extension tool. This uses the Fibonacci numerical sequence to project probable price points in the future where price may turn. The problem is that the price may only use these areas as pausing points rather than reversal areas and you could be exiting prematurely.

http://mediaserver.fxstreet.com/Repo...0430051707.jpg

Price is usually the best indicator. Using the definition of a trend can help you identify when the trend is reversing and action is needed on longer term trades and positions.

http://mediaserver.fxstreet.com/Repo...0430051722.jpg

Again you can see that using this method will not necessarily get you out with the greatest profit but it will protect your money against a large drawdown. Perhaps a combination of the above methods would be a better plan for your trading and investing. To learn more on how to identify market turning points and timing these turns, join us at one of our courses at Online Trading Academy today.


More...

John O’Donnell’s guest today is Dr. George Reisman. He is a Pepperdine University Professor Emeritus of Economics and author of Capitalism: A Treatise of Economics. He was a personal student of Ludwig von Mises under whom he obtained his doctorate in economics in 1963. His website is www.capitalism.net. The duo discuss on PTR today: economic inequality, including income and inheritance taxes, the nonsense of the 99% vs the 1%, and where Marx was wrong about capitalism and why the Fed cannot control the equity and real estate markets with interest rate manipulations

http://mediaserver.fxstreet.com/Repo...1105145132.jpg




More...

Chicago business activity increased at a substantially accelerated rate in the month of April, according to a report released by MNI Indicators on Wednesday, with the Chicago business barometer jumping to its highest level in six months. MNI Indicators said the Chicago business barometer surged up to 63.0 in April from 55.9 in March, with a reading above 50 indicating growth.

More...

Employment in the U.S. rose by much more than anticipated in the month of April, according to a report released by the Labor Department on Friday, with the report also showing a much bigger than expected drop in the unemployment rate.

Attachment 6780

More...

John O’Donnell and guest Scott McCormick are in the studio today. Scott is a CMT and an instructor at Online Trading Academy. The duo discuss price ratios today, market sector rotation, the 4 stage business cycle and how to integrate the OTA Supply vs Demand patented strategies for better entries/exits in capital markets.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg




More...

Australia posted a seasonally adjusted merchandise trade surplus of A$731 million in March, the Australian Bureau of Statistics said on Tuesday - down A$526 million or 42 percent on month.

More...

Futures’ trading has been around for hundreds of years. Even before Futures Exchanges existed trading was done by either a handshake or a forward contract. Producers and Processors of Commodities both have always needed a way to protect against price risk. The Producer, who owned the Commodity was concerned prices might drop before they delivered their product. Processors always worry that price might rise before they purchase the Commodity to process and later sell. Price risk is always a concern to these entities in the Futures markets.
These entities are comprised of Commercial traders who use a physical Commodity in their day to day business. Commercial traders do approximately 60% of the daily volume in the Futures markets. This makes Commercial traders the largest participant in the Futures markets, next is the Large Speculator and then the Small Speculator.
Commercials know everything there is to know about the Commodity they produce or process. They specialize in that particular market making them the expert on the Fundamentals. If anybody knows the Seasonal patterns of a Commodity it would be the Commercials who deal with this Commodity every day. They’re very well capitalized companies, both in cash and credit lines at major banks. The Exchanges put no restrictions on the number of contracts they can trade. Just these 3 components make the Commercial trader the smart money in the Futures markets and speculators usually lose when they bet against them.

The other significant player in the Futures markets is the large speculator. These are usually companies or individuals that manage funds for other investors. Some examples might be: Commodity Trading Advisor (CTA), Commodity Pool Operator (CPO), Hedge Funds, and Pension Funds and in some cases large individual traders. Like all speculators they are in the business to speculate and make money by correctly determining the markets next direction.

With so much money to invest they are generally going to be using trend following methods to make their buy and sell decisions. Like all speculators they are only given so much money to invest for others and it is possible they run out of buying power before a trend actually ends.

Also, the Futures Exchanges have restrictions on the number of contracts they can actually trade at any one time. Most large speculators know little about the fundamentals of the markets they trade because they are so diversified in other markets. These 3 components are actually a handicap when they enter the market and begin betting against Commercial traders.

But how do we as small speculators track the positions of these large participants?

A report that is released weekly at 15:30 Eastern Time by the Commodity Futures Trading Commission (CFTC) called the Commitment of Traders (COT) report is the answer. If you are using Trade Station you can see the results on your daily charts. Contact Trade Station and ask them how to insert the indicator called “COT Net Position”.

The COT report tracks the Open Interest, number of contracts yet to be offset and breaks the Open Interest down into Commercial and Speculator positions. Each week we can see how many long and short positions are held by each group of traders. We then subtract the long positions from the short positions and we get a net position for each group. The net long or short is what we will follow in the COT report each week.

By using our charting packages and other websites we can see when the speculators are betting against the commercial traders at extremes. Chart 1 will show us many important pieces of information about the COT report.
First let’s understand that the COT report is a tool to help identify when a trend may be ending and in some cases when another is about to start. The COT is not a timing tool and should not be used as such. Look to use the COT when prices have been trending for an extended period of time and price is coming into a supply/demand zone on a daily, weekly or monthly chart. Think of the COT report as an odds enhancer.

http://mediaserver.fxstreet.com/Repo...0506075612.jpg

Let’s review Chart 1 and discuss some of the important points about it.

The chart is of the Copper market. You can set your chart to daily, weekly or monthly to view a COT report, but intra-day charts will not work. The next thing you need to do is configure your screen to only see 12 months of data. My chart above is from May 2014 back to May of 2013. This is referred to as a 52 week look back period.
Next we need to identify what the lines mean. The red line represents the Commercial traders. The blue line represents the large speculators. Each week the COT report is released the chart will plot the net difference between the Commercials and Large Speculators positions. As of last week the red box on the right shows the Commercials had 26,090 more long positions than short positions. The blue box shows the large speculators had -19, 917 more short positions than long positions. Note: The CFTC also list the small speculator each week in the COT report, but they have no impact to speak of on market prices anymore so we just focus on the Commercials and larges speculators.

Just knowing the net positions by themselves does not tell us a lot about the positions held by these large participants. But using the 52 week look back period we can look and see if the current weeks COT report is at an extreme of the last 52 weeks of the report.

Starting from the right and working left we can see some of these extremes that happened in the past and how price reacted to these extremes. In April you see that the blue line is near the lowest point (yellow ellipse) than at any other time during the last 52 weeks. This means that the large speculators have been following the price down by selling in the downtrend to their most bearish position in the past 52 weeks. At the same time the red line, Commercial traders were at the highest level (blue ellipse) than at any time in the past 52 weeks. This means the Commercials have been buying into this price decline and absorbed all of the supply the large speculators had. Now look up at the chart and notice the blue arrow under the price low, the Commercials then caused the price to rally.
This same pattern can be seen by looking back and seeing what the price did when the large speculators had too many short positions (yellow ellipse) and the Commercials were buying from the large speculators and absorbing the supply (blue ellipse). Each time the two participants were at or near their 52 week extremes price changed direction. Speculators can bet against the Commercials and win for a while, but soon the Commercials step up to defend prices and take advantage of the price extremes.

Commercial buying was probably by processors of the industrial metal, locking in low prices for future delivery. Next we will look at what happens when the producers get aggressive and start selling into price rallies.

Around February 2014 we see the Commercials (green ellipse) holding the least amount of longs than at any other time in the past 52 weeks. They had a net short position. The large speculators (purple ellipse) held the largest net long position than any other time in the past 52 weeks at the same time. Again, betting against Commercial traders when they are at extremes is not a wise choice. The price chart shows a red arrow at the top of the chart. We see price fell from those highs due to Commercial selling.

In November 2013 we see the same pattern where the Commercials were selling and the large speculators were buying. Because the Commercials had more shorts than longs and at a 52 week extreme the price again fell.
Each week you will review the COT and your objective will be to find markets that the net positions are currently making new 52 week highs or lows. Then you know you have found a market that is poised to reverse a trend if one existed or possibly begin a new trend. Keep in mind, this is not a timing tool and it must be used in conjunction with our technical analysis to determine if there is a good trade or not.

If you learn to read the COT report you can find some interesting opportunities in the Futures markets. Don’t forget that you can learn to read the COT report and trade Exchange Traded Funds (ETF’s) on Commodities instead of the Futures contract.

“There are no mistakes in life, just lessons”

More...

John O’Donnell & Mark Thornton of Mises Institute discuss the state of the economy and jobs especially older adult workers staying on the job and “crowding out” younger aspirational workers. They discuss why inflation will continue to erode the quality of life for boomers, and why we need to abolish the fiat monetary model and return to the proven gold standard. They also discuss why austrian economists were able to call the housing bubble forming & the bust in 2006, and other traditional Economists did not even see the housing bubble form and never warned of the coming housing price crash and mortgage implosion in USA and Europe.


http://mediaserver.fxstreet.com/Repo...1105145132.jpg

More...

Roger Best is live in studio with Guest Host John O'Donnell. Roger is an instructor for Online Trading Academy. John and Roger discuss the financial markets while answering questions form a live studio audience. Come join the fun!

http://mediaserver.fxstreet.com/Repo...1105145132.jpg
More...

After reporting an unexpected increase in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report on Thursday showing that initial jobless claims pulled back by more than expected in the week ended May 3rd. The Labor Department said initial jobless claims fell to 319,000, a decrease of 26,000 from the previous week's revised level of 345,000.

Attachment 6867

More...

Guest host John O'Donnell chats with Dr. Mark Skousen. Mark was recently named one of the 20 most influential living economists. The duo discuss the new Wall Street Journal article Mark wrote on Gross Output replacing GDP as primary indicator. They also discuss Mark’s upcoming Freedom Fest in Las Vegas, and his High Income Alert Service for investors in dividend stocks.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg

More...

Japan saw a current account surplus of 116.4 billion yen in March, the Ministry of Finance said on Monday.

More...

4 weeks ago, Joanne was a guest on the show and talked about why she felt the market was headed for higher highs. Well, the markets have had a nice run since then! We talk to Joanne again to see if her opinion about market direction has changed, or if it’s still bullish. Merlin and Joanne also take a look at several listener questions including: WPZ, HOT, and the divergence between the Russell2000 and the Dow 30.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg

More...

Have you ever read a book on trading or investing? If you have read more than one of them, you will notice that they usually regurgitate the same old technical analysis. Most books and academics themselves follow the traditional route for technical analysis. The problem is that if that traditional method worked so well, you could be expected to read those books and make a lot of money.One of the common trading tools that is suggested in most trading books is the moving average. But have you ever read a book that says to buy below an upward sloping moving average? No they say you buy above an upward sloping average and sell below a downward sloping average. Look at the opportunities you would miss by doing that.

http://mediaserver.fxstreet.com/Repo...0513112528.jpg

When you enter the trend late, you increase your risk in the position as well as reduce the potential profits. This is counter to what
we want to accomplish.

http://mediaserver.fxstreet.com/Repo...0513112558.jpg

So we know there is more to being successful in trading than just reading a book. You need to discover how the professionals trade and how institutions make their decisions. By understanding and mimicking what the truly successful traders do, you have a better chance for success yourself.That is what we do at Online Trading Academy. We teach how the institutional traders think and make entry and exit choices. We have traders with experience teaching the courses. Most importantly, we are dedicated to building your skills that can make you a consistently profitable trader in any market.


More...

On past shows, Jasmine has shared highlights from the XLT and mastermind programs at Online Trading Academy. This time she joins Merlin for a breakdown of some current currency markets offering insightful analysis as well as key market levels. The duo address several listener questions as well, for an informative and technical show.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg

More...

President of Trade Pro Futures (www.tpfutures.com), Trey Lazzara joins Merlin for a look at the growing world of Automated Trading Systems. Both stress the importance of performing due diligence when selecting the system to invest in as they all have different targets, stop losses, and objectives. Merlin talks about why he chose the specific system that he invested in and why he passed over others with better performance. Trey also shares what he sees as the biggest problem facing traders, and offers a solution.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg


More...

Master Instructor Tillie Allison joins Merlin for a look at portfolio allocations and when to adjust. A listener sends in a question about his portfolio which he is rightfully worried about as it is very heavily weighted in one area and lacking risk protection for downside risk. The duo discuss this as well as a better balanced portfolio using a variety of different financial instruments. Tillie stresses the benefit of using Options to help increase rate of return while incurring minimal risk.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg

More...

Insider trading case may open Pandora's Box on forex markets

One of the biggest insider trading cases in Australian history puts the spotlight on the forex market. Ben Butler and Georgia Wilkins report.

http://images.smh.com.au/2014/05/16/...10-620x349.jpg

Transparency of the forex market could change under rules being introduced by the Australian Securities and Investments Commission.

------

It's the crime where no one is sure whether or not they are the victim.

Someone - most likely one of the globe-spanning banks that back the secretive retail forex market - must have been on the wrong end of a series of now notorious insider trades allegedly perpetrated by a pair of 20-something Australian university friends.

But, a week after 26-year-old NAB employee Lukas Kamay and his mate, 24-year-old Australian Bureau of Statistics worker Christopher Hill, faced court charged with offences that could see them jailed for 10 years, global financial institutions have yet to figure out which of them lost out in the multimillion-dollar trades.

Either that, or they're just not telling. Most of the alphabet soup of banks touted as liquidity providers by the two forex brokers used by Kamay, Pepperstone Financial and AxiTrader, declined to comment. However, it is believed a legal team at BNP Paribas is still investigating whether it was exposed to one of the trades.

The ambiguity around who lost out is perhaps to be expected in an industry that, despite its vast size and glossy marketing that targets retail investors, operates largely outside of the regulatory and media spotlight.

Every day, about $4.5 trillion churns through the global forex market - which, unlike the sharemarket, operates 24 hours a day. And Australia is a key part of this global circus, punching above its weight due to the strength of its economy and the high yield available to investors.

The dollar ranks fifth on the list of most traded currencies, and the Australian-US dollar is the fourth-most-traded currency pair in the world, according to the Reserve Bank.

It's a trade that has long been a trap for the unwary. In the early 1980s, farmers desperate for finance plunged into the forex market, snapping up low-interest loans denominated in Swiss francs.

But the loans, essentially a bet on the Aussie dollar remaining strong against the franc, went horribly wrong when the dollar plunged in 1985 and 1986, costing some borrowers their farms.

Industry figures say the foreign exchange market is secretive and unregulated by its very nature, as most transactions occur on an over-the-counter basis, through a dealer or broker, rather than a central exchange. This means that any information available to regulators and consumers is limited, particularly compared with other markets such as the sharemarket, where companies are required to release information to investors under continuous disclosure rules.

Complicating matters, what most retail clients see as forex does not actually involve buying and selling foreign currency; it is instead a bet with the broker as to the direction in which the currencies involved move.

Those brokers then hedge their exposure to trades through the big banks that provide their liquidity.

One source says the over-the-counter market, including foreign exchange, was ''self-regulated and always has been''.

Another was blunter, saying that ''they're all pirates in retail''.

Banking experts have stressed the difficulty in trying to regulate a market as big as forex.

''There are trillions of transactions in the foreign exchange market each day, so it is beyond the capacity of any individual regulator,'' George Gilligan, a senior research fellow at the University of New South Wales law school, says.

''If there is chronic loss of confidence again in capital markets, you run the risk of plunging into the vortex of another global financial crisis.''

But despite the risks, forex is extremely popular with day traders seeking a fresh thrill away from the equities markets.

And with most of the big brokers offering a mobile phone app, traders can win or lose while at the hairdresser or waiting for the bus.

According to documents filed with the court, Kamay did just that, using his iPhone to bet on movements of the Australian dollar just moments before the ABS put out key economic statistics.

Federal Police allege the 23 trades netted Kamay almost $7 million - making it one of the biggest insider trading cases in Australian history.

The insider trading busts have given the forex market more attention, even if it's not the kind of attention the industry had been seeking.

Before the dramatic arrests, Pepperstone had been gathering a few finance media headlines as a potential float on the Australian Securities Exchange, while Sky News viewers might occasionally have seen ads for a UK group called Knowledge to Action, which spruiks training courses designed to turn clients into gun forex traders.

Knowledge to Action's website features plenty of its tanned founder, Greg Secker, ''a multimillionaire by his mid 20s'', and success stories from graduates of its courses - including a Youtube video of a ''trader success day'' filmed on a yacht in Sydney Harbour.

However, a Knowledge to Action spokesman said forex was not a way to get rich quick.

''The guy who thinks he's going to be flying a helicopter in three months after paying $5000 to do a course is not our ideal candidate,'' he said.

Meanwhile, broker Halifax Investment Services promotes itself using a celebrity ''ambassador'', former Test cricket captain Mark ''Tubby'' Taylor.

According to Taylor, who also advertises Fujitsu airconditioners, Halifax is pretty much the greatest thing since sliced bread. ''They just offer me the best all-round solution for managing my investments,'' Taylor says in a promotional video on the Halifax website. It seems the US regulator in charge of foreign exchange markets, the Commodity Futures Trading Commission, disagrees.

Last month, after being taken to US Federal Court by the commission, Halifax agreed to a permanent injunction barring it from accepting American customers.

Following the global financial crisis, the US brought in strict new laws cracking down on the sale of exotic financial products to ordinary mum and dad investors.

While retail foreign exchange dealers are still allowed to operate, since September 2010 they have been required to register with the commission and comply with new rules, including holding $US20 million in net capital. The commission alleged that because Halifax allowed US residents to apply for an account, it was in breach of the rules. Halifax said it was happy with the outcome because it did not admit to any wrongdoing and had in any case recently bought a US company through which it could legally do business with Americans.

It's not the only Australian retail forex provider caught up in the commission's crackdown. Enfinium, which trades as Vantage FX, was dragged before the US courts in 2011 for allegedly offering to sign up retail customers - including those with annual incomes of less than $15,000.

In February 2012 it also agreed to a permanent injunction against signing up US customers, and paid the commission an $80,000 penalty. Halifax has also run into trouble with its local regulator, the Australian Securities and Investments Commission, which in April last year raised concerns of a laundry list of problems at the broker, including inadequate supervision of staff, inadequate breach reporting and deficiencies in complaint handling. Under an enforceable undertaking with ASIC, Halifax agreed to hire an independent consultant to overhaul its risk management procedures and assess the competence of its staff.

But regulation in the US appears tougher than in Australia, where retail forex houses are required to have net tangible assets of 10 per cent of their average revenue, half of which must be in cash.

It appears unlikely one of the forex providers Kamay used to carry out his alleged insider trades, AxiTrader, would meet the strict US standards. According to its latest financial accounts, as of June 30 last year, AxiCorp Financial Services, which trades as AxiTrader, had net capital - assets minus liabilities - of about $6.13 million.

Customers are also warned that AxiTrader may use client money to ''hedge our exposure to you … or hedge our exposure to other clients''. ''Your moneys may be co-mingled into one or more trust accounts with our other clients' moneys,'' AxiTrader says in its product disclosure statement. ''Should there be a deficit in the segregated trust accounts and in the unlikely event that we become insolvent before the topping up of the segregated trust accounts in deficit, you will be an unsecured creditor in relation to the balance of the moneys owing to you.''

This is contrary to standards set by the Australian CFD Forum, which represents the big contracts for difference providers, and says providers should hold client money in completely separate bank accounts.

AxiTrader, which also provides CFDs, opposed the standard, which was approved by the competition regulator on Thursday. In a submission to the Australian Competition and Consumer Commission, it said the move was motivated by the ''self-interest'' of the big CFD groups. Business Day chased AxiTrader all week in an attempt to find out what had happened in the Kamay case and whether the allegedly dodgy trades put other customers at risk.

Calls to the company and emails to its head of trading, Emanuel Georgouras, went unanswered until late on Thursday afternoon, when a man who refused to give his name phoned to say a statement from AxiTrader was on its way.

In it, AxiCorp chief risk officer Justin Friemann said the company's ''risk management practices were strictly applied during the relevant period and that all of the relevant trades were automatically fully hedged''.

''As a result, AxiCorp was not exposed to market movements. AxiCorp is subject to liquidity requirements under conditions of its Australian Financial Services Licence and at no stage were those conditions at risk.''

AxiTrader ''can confirm that, following internal assessments of a series of trades, AxiCorp reported suspicious activity to the Australian Federal Police, AUSTRAC and [ASIC],'' he said. ''Subsequent to making these reports, AxiCorp provided assistance and support as requested by the investigating authorities.''

The transparency of the forex market could change under new rules being introduced by ASIC. These will require institutions to report information on derivatives trading to relevant authorities and the public.

Last month the second phase of the rules was introduced, requiring financial entities with $50 billion notionally outstanding to disclose information to the regulator. The last phase will be introduced in October, requiring smaller entities to commit to the standards.

The G20 has also moved to improve the integrity of the foreign exchange market, with its spinoff, the Financial Stability Board, announcing in February its intention to review the setting of foreign exchange benchmarks. The review is chaired by Reserve Bank assistant governor Guy Debelle, and will report its findings at the G20 meeting in Brisbane in November.

David Lynch, chief executive of the Australian Financial Markets Association, welcomed the efforts to improve transparency. ''It's an appropriate forum to deal with these issues given the global nature of the market,'' he says.

And the corporate regulator is currently investigating potential manipulation of foreign exchange benchmarks in Australia, following similar action by authorities overseas.

Regulators have focused on the potential manipulation of benchmarks relating to the euro, US and Australian dollar.

ASIC announced the probe in March but has not specified the focus of its inquiries or which banks would be targeted. However, it is believed the regulator has widened the inquiry to take in other potential misconduct in the forex market. ASIC has also set up working groups to look at online retail forex, especially overseas players who hold an Australian financial services licence and target local investors.

If the big banks allegedly burnt by Kamay do manage to figure out which among them suffered a financial loss, they may be able to claw back the money.

Juliette Overland, at the University of Sydney business school, said such action would be possible under the Corporations Act. ''If this were to occur here, it would just add to the seriousness of the potential consequences for the parties in this case,'' she says. Overland says if the total profit made in the case is $7 million as alleged, it would be the largest amount ever made in an Australian insider trading case - far greater than the $2664 that Rene Rivkin was sent to jail over.

''Since the amount of money involved is considered a significant factor when sentencing is occurring, this could be expected to influence the severity of any sentence imposed, if the trader is ultimately found guilty of insider trading,'' she says.

Whatever the outcome for Kamay and Hill, it seems the forex market's days in the shadows may be coming to an end.

Singapore's gross domestic product added 4.9 percent on year in the first quarter of 2014, the Ministry of Trade and Industry said on Tuesday - unchanged from the previous three months.

More...

I have been writing recently (see articles here and here) about the factors that influence option prices.

Specifically, I’ve been talking about the things that affect the time value portion of an option’s price. Last time I described the effects of changes in “implied volatility,” which is another term for crowd expectations.Another major factor in the amount of time value in an option is the amount of time remaining until that option expires. The more time there is, the farther the stock could move in that time; and the farther into the money the option could get. So options with a lot of time remaining have a lot of time value, while those with little time remaining have less time value.Every option that today has very little time remaining, once had much more time remaining, and therefore more time value, than it has now.

So it must be true that options lose time value as time passes. In fact they do, and at a predictable rate. That rate is not the same every day. It starts out very slow and accelerates as time passes.

To understand why it must accelerate, think about this.At expiration, the underlying stock’s price will be at one and only one amount. All of the options that are in the money at that time (calls with strike prices below the closing price, and puts with strike prices above it) will have value. All others will be worthless.

Every option that is in the money at that time has a 100% chance of finishing in the money.
Every other option will have a 0% chance. Those are the only possibilities: 100% or zero percent.Right up until the moment of expiration, though, it wasn’t a 100% vs 0% situation.

As long as there was any time remaining during which the stock could move, the question as to whether any option would finish in the money was not absolutely certain.

The movement that could happen in the remaining time could still be decisive.But the closer the time gets to expiration, the smaller the amount of movement that is likely during that time. If a stock has moved an average of $1 a day over the past 30 days, the chances of its moving $5 today are pretty small. So if a given option would require that $5 move to get into the money, its time value will be very small.Let’s say that option, that is now about to expire, began life a year ago, and that the stock was the same price then as it is now ($5 away from the strike). Then, the chances of the stock moving $5 before expiration were much better – it had a year to do it.

The time was very valuable, because the movement that could happen in that time (a whole year) had a good chance of eventually placing the option in the money.With every passing day, the chance of that $5 movement decreases. At first, the difference is very small.

From day 365 to day 364, the difference in the probability of that $5 move barely changes, so the time value does the same. Several months later, the passing of a day will be a bigger deal. When there are 10 days to go for example, losing the next day will have a big impact on the chances of that $5 move.

We will have drawn one day closer to that moment when the probability will become zero. The difference between the chances on day 10 and day 9 are huge, where the difference between the chances on day 365 and 364 are trivial. So much more time value is lost with 10 days to go. Which was more than was lost with 11 days to go, and so on.The rate of loss of value due to time decay can be estimated quite precisely by the option pricing formula. It is one of the Greeks, or variables that describe option price changes.

It is called Theta. On our option chain, Theta is shown for every option. A Theta reading of .11 means that the option price will drop by eleven cents per share ($11.00 per contract) in the next day due to the passage of time. This is separate from any change that will occur due to the stock price moving. It is also separate from any option price change due to changes in crowd expectations about the stock (implied volatility).

In the last two weeks, we’ve discussed the effects on time value of crowd expectation, and of the time remaining until expiration. These are basic concepts that we build on in our option trading classes. They form part of the foundation that, with proper education, can help you to become a successful option trader.

More...

Chief currency strategist at DailyFX.com, John Kicklighter joins Merlin for a look at some of the events and data impacting currencies around the world. First comes the Euro, which has been flirting with a strong supply level, yet unable to break! John offers his thought on the ECB’s actions and why this is the line in the sand for the Euro. Later, the duo breaks down the current trajectory in the Pound and the Yen, both of which offer some great trading opportunities. Merlin also looks at some tools, such as the SSI, which helps traders
understand where the money is flowing in a variety of instruments

http://mediaserver.fxstreet.com/Repo...1105145132.jpg

More...

New York Times best selling author and financial expert, John Mauldin joins Merlin and John for a look at the current drivers of innovation and change in our country. Topics range from Debt to Jobs, Technology to Energy. Previously on the show, Mr. Mauldin has talked about the fact that Jobs WILL come, just not sure where from. In this episode of Power Trading Radio, he sheds some light onto where job growth may come from, providing some trading and investing opportunities for listeners. John also talks about his book "Code Red" which is available now at Amazon.Com

http://mediaserver.fxstreet.com/Repo...1105145132.jpg

More...

New traders often get confused when deciding what tools to use in order to analyze the markets and select trading opportunities. Looking at the selections available as well as the tools offered in today’s advanced trading software, it is easy for one to become overwhelmed. Fortunately, there is a simple and logistical way to sort through the market ebbs and flows and identify the highest probability, lowest risk trading opportunities.

When we are planning to trade, we need to start from the top. It does not matter if you are holding for 10 minutes, 10 days, or 10 weeks. The broad markets always have influence over the stocks making up their components. I have seen this hold true for markets in the U.S., India, London, Dubai, and Singapore. We need to establish the trend and potential turning points (supply & demand), of the broad market before we look to our individual stocks. Most stocks will move further and faster with the market’s trend than when they are fighting it.

Of course, there are always exceptions. However, even when the stock is trending opposite of the market, they will often reach supply and/or demand at nearly the same time.

Once we know what the market is likely to do during the timeframe we are trading, it is important to look at the stock to find the current trend. We want to know the direction of the trend, the strength of the trend, and the possible turning points in that trend (again supply and demand). By looking at the price and volume, a trader gains most of the knowledge they need to trade without the added use of any indicators. You can ascertain the trend direction and strength by observing the color, size, and shape of the candles themselves with volume as a supporting indicator. Looking at the past price action, a trader can also see the most probable turning points or entry and exit targets from supply and demand.

For those of you who are not familiar or comfortable with reading price and volume, I suggest you visit your local Online Trading Academy center and take one of our courses that will give you this knowledge. For added information regarding strength of the trend and confirming weakness at turning points, you can use a momentum indicator such as ADX or MACD. Even multiple moving averages offer a clue to a trader looking to determine trend strength. Just remember that you need to rely on price itself to make your entries and exits. Relying on the indicators makes you late as they are all lagging in their movement and signals.

When looking at the possible turning points of price, we can also look at the condition of oscillators like Stochastics, RCI, CCI and others. You have to use them in the correct manner however. Trying to take all buy and sell signals given by them will not only make your crazy, it will also drain your account. They are to be used to confirm decisions made on price action. Stocks will remain overbought or oversold for a long time in a strong trend. What you need to look for are clues that there is a change in sentiment and price action at a previously identified supply or demand zone.http://mediaserver.fxstreet.com/Repo...0527075515.jpg

Overall, your trading decisions need to be centered on identifying trends and supply and demand zones of the broad market and your stock. The technical indicators are decision support tools and may not even be necessary once you become adept at reading price.


More...

The Doctor is in the house for an episode dedicated to helping listeners overcome some of their trading challenges. Dr. Woody Johnson and Merlin offer solutions to several listener problems, including: fear of trading live, how to identify trading problems, inability to take losses and much more. Are you having trading issues? Tune in and find out if their solutions help you get past those obstacles. If not, send in your issues and they will discuss them on the next show.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg
More...

Coming off a whirlwind teaching tour, Master trader Russ Allen sits down with Merlin to talk about the new technology which allows him to teach traders online while watching each of their trading screens. This allows him to correct mistakes, and show proper trading techniques to traders who are in the comfort of their own homes, around the world. Later, Russ handles a couple listener questions about Implied volatility, and shows a couple tools to measure it. More importantly, he shares with listeners what IV means to a professional trader and why we should pay special attention to it. Merlin and Russ also discusses his upcoming Hour with the Pros, where he will be covering OCO and Bracket orders.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg


More...

May ended on a sweet note with all 4 major market indexes finishing up for the month. Will that continue in June? John O’Donnell joins Merlin for a big announcement about an upcoming event where Power Trading Radio will be broadcasting live with a ton of great speakers! John and Merlin also discuss the importance of metals and where the trading opportunities may lie.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg

More...

New orders for U.S. manufactured goods rose by more than expected in the month of April, according to a report released by the Commerce Department on Tuesday. The report said factory orders increased by 0.7 percent in April after jumping by an upwardly revised 1.5 percent in March.

Attachment 7465

More...

Back from a long motorcycle ride to teach in Kansas City, Brandon Wendell joins Merlin for a look at the global currency markets and listener questions! To start, Merlin looks at listener questions regarding Quicksilver and United Airlines, offering technical analysis for video viewers. Brandon takes a look at the US Dollar and its impact on the equity and commodity markets. This leads to a discussion of the Euro and its relative strength to a variety of other currencies. Finally, the duo offer suggestions on how to read volatility in the forex markets.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg

More...

With over 40 years of trading experience under his belt, President of Dohmen Capital Research, Bert Dohmen joins Merlin and John for a look at the current status of the markets. After creating a distinction between the market and the economy, Mr. Dohmen addresses several issues plaguing both and raising concern for another large correction in the near future. The trio talk about jobs, “Prelude to a Meltdown”, future market moves, FreedomFest and much more.

http://mediaserver.fxstreet.com/Repo...1105145132.jpg

More...