Market Overview by FXCC

[alayoua]

You can fool some of the people some of the time

 

You can fool some of the people some of the time, but you’ll never fool the markets all of the time

 

 

Can someone “do the math” as President Obama urged Congress? How do you re create the ten million jobs lost in the USA since 2007 with $447 billion of dollars? How do you pull these rabbits out of hats whilst keeping the debt ceiling under the radar, (which may be breached on Monday), the deficit reduced without taxing the ultra wealthy (many of whom sat in Congress last night air clapping) until the pips squeak? How do you justify the fact that the USA has already been through two rounds of punishing asset purchase schemes (quantitative easing) and huge bailouts that have so far left the USA economy completely hollowed out and at the point where no new jobs have been created in August, this in an economy that needs to create 250,000 a month to stand still? Finally, was a slight of hand conducted last night; will this jobs act be the next QE, or will it be QE 3.5 after the next round of asset purchase creates zilch, other than breathing space for the banking and political elite?

 

Moving aside the choreography and poise of the neuro linguistic programming, the Obama jobs act speech was everything many had expected, high on tub thumping rhetoric low on detail. The noble statement that armed service personnel should not have to “fight for jobs” once they return with post traumatic stress disorder from “fighting for their country” won applause. However, those who’ve spent two years in the unemployment queues in the USA may see things differently; ” hey man, at least you’ve been getting paid for the past two years on our illegal crusades, get to the back of the queue, we’re all out of sympathy in Hooverville..”… Read the full story

http://blog.fxcc.com/you-can-fool-some-of-the-people-some-of-the-time-but-youll-never-fool-the-markets-all-of-the-time

 

Source: FX Central Clearing Ltd. (FXCC BLOG)

[alayoua]

Update Daily Technical Levels from FXCC 09 Sep 2011

 

Update Daily Technical Levels from FXCC 09 Sep 2011

 

EUR/USD

Intraday Technical Levels:

 

Pivot: 1.3875

Preference: Short positions below 1.3875 with targets @ 1.375 & 1.3695 in extension.

Alternative Scenario: Above 1.3875 look for further upside with 1.3935 & 1.397 as targets.

Comment: the pair has broken below its support and remains on the downside as the RSI is badly directed.

 

USD/JPY

Intraday Technical Levels:

 

Pivot: 77.45

Preference: Long positions above 77.45 with targets @ 77.9 & 78 in extension.

Alternative Scenario: Below 77.45 look for further downside with 77.3 & 77.05 as targets.

Comment: the pair has broken above its resistance and remains on the upside.

 

GBP/USD

Intraday Technical Levels:

Pivot: 1.6025

Preference: Short positions below 1.6025 with targets @ 1.591 & 1.5875 in extension.

Alternative Scenario: Above 1.6025 look for further upside with 1.6075 & 1.614 as targets.

Comment: the pair has struck against its declining trend line and remains on the downside.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Daily Technical Levels from FXCC 12 Sep 2011

 

Daily Technical Levels from FXCC 12 Sep 2011

 

 

EUR/USD

Intraday Technical Levels:

Pivot: 1.3650.

Preference: SHORT positions @ 1.364 with 1.341 & 1.338 as next targets.

Alternative Scenario: The upside breakout of 1.365 will open the way to 1.372 & 1.3785.

Comment: the RSI is capped by a declining trend line, the pair stands below its new resistance and remains

under pressure.

 

USD/JPY

Intraday Technical Levels:

Pivot: 77.45.

Preference: SHORT positions @ 77.35 with 76.7 & 76.4 as next targets.

Alternative Scenario: The upside penetration of 77.45 will call for a rebound towards 77.65 & 77.9.

Comment: the pair has broken below an ascending channel support.

 

GBP/USD

Intraday Technical Levels:

Pivot: 1.5900.

Preference: SHORT positions @ 1.589 with 1.581 & 1.575 in sight.

Alternative Scenario: The upside penetration of 1.59 will call for a rebound towards 1.597 & 1.6.

Comment: the pair remains capped by a key declining trend line and in an intraday bearish channel.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Daily Technical Levels from FXCC 13 Sep 2011

 

Daily Technical Levels from FXCC – 13 Sep 2011

 

 

EUR/USD

Intraday Technical Levels:

Pivot: 1.3555.

Preference: LONG positions @ 1.3565 with 1.3785 & 1.388 in sight.

Alternative Scenario: The downside penetration of 1.3555 will call for 1.3495 & 1.341.

Comment: the RSI broke above a declining trend line.

 

USD/JPY

Intraday Technical Levels:

Pivot: 77.40.

Preference: SHORT positions @ 77.3 with 76.75 & 76.55 as next targets.

Alternative Scenario: The upside breakout of 77.4 will open the way to 77.65 & 77.85.

Comment: the upward potential is likely to be limited by the resistance at 77.4.

 

GBP/USD

Intraday Technical Levels:

 

Pivot: 1.5785.

Preference: LONG positions @ 1.5795 with 1.589 & 1.5925 as next targets.

Alternative Scenario: The downside penetration of 1.5785 will call for a slide towards 1.5695 & 1.566.

Comment: the pair remains capped by a key declining trend line but has broken above an intraday bearish channel resistance.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Update - Daily Technical Levels from FXCC 13 Sep 2011

 

Update - Daily Technical Levels from FXCC 13 Sep 2011

 

EUR/USD

Intraday Technical Levels:

 

Pivot: 1.3555

Preference: Long positions above 1.3555 with targets @ 1.3785 & 1.388 in extension.

Alternative Scenario: Below 1.3555 look for further downside with 1.3495 & 1.341 as targets.

Comment: the RSI is mixed with a bullish bias.

 

USD/JPY

Intraday Technical Levels:

 

Pivot: 77.4

Preference: Short positions below 77.4 with targets @ 76.75 & 76.55 in extension.

Alternative Scenario: Above 77.4 look for further upside with 77.65 & 77.85 as targets.

Comment: the break below 77.4 is a negative signal that has opened a path to 76.75.

 

GBP/USD

Intraday Technical Levels:

 

Pivot: 1.575

Preference: Long positions above 1.575 with targets @ 1.587 & 1.589 in extension.

Alternative Scenario: Below 1.575 look for further downside with 1.5695 & 1.5660 as targets.

Comment: the RSI calls for a rebound.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Disambiguation – Aka Forex Scalping

 

Disambiguation – Aka Forex Scalping

 

 

Scalping is the act of removing another person’s scalp or a portion of their scalp, either from a dead body or from a living person. The initial purpose of scalping was to provide a trophy of battle, or portable proof of a combatant’s prowess in war. Eventually, the act became motivated primarily for financial reasons; people received payment per scalp they acquired.

 

Scalping is often associated with frontier warfare in North America, and was practiced by Native Americans, colonists, and frontiersmen across centuries of violent conflict. Some Mexican (Sonora and Chihuahua) and American territories (Arizona) paid bounties for enemy Native American scalps. Contrary to popular belief, scalping was far from universal amongst Native Americans. Scalping was practiced by the ancient Scythians of Eurasia. Herodotus, the Greek historian, wrote of the Scythians in 440 BC;

 

“The Scythian soldier s****es the scalp clean of flesh and softening it by rubbing between their hands, uses it thenceforth as a napkin. The Scyth is proud of these scalps and hangs them from his bridle rein; the greater the number of such napkins that a man can show, the more highly is he esteemed among them. Many make themselves cloaks by sewing a quantity of these scalps together.” – credit Wikipedia.

 

If you’re of a certain age you’ll recall the cowboy western propaganda films of the 50′s-60′s in which the indigenous population of a nation were portrayed as violent non compliant insurgents armed with little except crude weapons to fight their colonial oppressors. Imperialists arrived using technology the indigenous population (Indies or Indians) had never seen before. The invading forces then claimed the Indians mineral rich land as their own by force whilst attempting ideological conversion on the Indies. It’s a blessed relief that in circa 200 years of civilised growth we’ve moved further on as a global society to not engage in such practices. Oh..er, moving on..

 

Similar to the erroneous myth that scalping originated in North America and not ancient Eurasia, the term “scalping” is one of the most over used and misused terms heard in the retail forex industry. Ask different sets of traders what “scalping” is and they’ll offer up a variety of theories. The origins of the term relate to the trader attempting to take a small pip profit including (or only aiming for) the ‘spread’. As such you’d require the best technological set up and a lightening quick feed to the exchange and preferably not wireless. You’d also require level 2 access/see the DOM, the depth of the market. You’d be able to see the orders, the difference between the bid and ask, and bam! you’re in, seconds later you’re out, profit banked.

 

Due to the advent of online trading the term “scalping” has recently ‘evolved’ to encompass trading off low time frames, typically one to five minutes, or tick charts. This version of scalping results in traders taking any number of trades during their two predominant sessions, morning and afternoon, London and New York. Taking between ten to a hundred trades plus on a single currency pair, depending on how the ‘surf is up’ in the forex market that day, is not unusual depending on the preferred technique… Read the full article

http://blog.fxcc.com/disambiguation-aka-forex-scalping

 

Source: FX Central Clearing Ltd. (FXCC BLOG)

[alayoua]

Daily Technical Levels from FXCC 14 Sep 2011

 

Daily Technical Levels from FXCC 14 Sep 2011

 

 

EUR/USD

Intraday Technical Levels:

 

Pivot: 1.3730.

Preference: SHORT positions @ 1.372 with 1.3555 & 1.3495 in sight.

Alternative Scenario: The upside penetration of 1.373 will call for 1.379 & 1.388.

Comment: the RSI lacks upward momentum. A resumption of the short-term bearish trend is expected.

 

USD/JPY

Intraday Technical Levels:

 

Pivot: 77.10.

Preference: SHORT positions @ 77 with targets @ 76.75 & 76.55.

Alternative Scenario: The upside breakout of 77.1 will open the way to 77.4 & 77.65.

Comment: the RSI lacks upward momentum.

 

GBP/USD

Intraday Technical Levels:

 

Pivot: 1.5820.

Preference: SHORT positions @ 1.581 with targets @ 1.5695 & 1.566.

Alternative Scenario: The upside breakout of 1.582 will open the way to 1.587 & 1.589.

Comment: the pair remains in an intraday bearish and the RSI is capped by a declining trend line.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Update Daily Technical Levels from FXCC 14 Sep 2011

 

Update Daily Technical Levels from FXCC 14 Sep 2011

 

EUR/USD

Intraday Technical Levels:

 

Pivot: 1.367

Preference: Long positions above 1.367 with targets @ 1.379 & 1.388 in extension.

Alternative Scenario: Below 1.367 look for further downside with 1.359 & 1.3555 as targets.

Comment: the break above 1.367 is a positive signal that has opened a path to 1.379.

 

USD/JPY

Intraday Technical Levels:

 

Pivot: 77.1

Preference: Short positions below 77.1 with targets @ 76.75 & 76.55 in extension.

Alternative Scenario: Above 77.1 look for further upside with 77.4 & 77.65 as targets.

Comment: a key declining trend line maintains downward pressure.

 

GBP/USD

Intraday Technical Levels:

 

Pivot: 1.576

Preference: Long positions above 1.576 with targets @ 1.587 & 1.589 in extension.

Alternative Scenario: Below 1.576 look for further downside with 1.5705 & 1.566 as targets.

Comment: the RSI has just broken above a bearish trend line.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Daily Technical Levels from FXCC 15 Sep 2011

 

Daily Technical Levels from FXCC 15 Sep 2011

 

 

EUR/USD

Intraday Technical Levels:

 

Pivot: 1.3625.

Preference: LONG positions @ 1.3635 with 1.379 & 1.384 as next targets.

Alternative Scenario: The downside breakout of 1.3625 will open the way to 1.3555 & 1.3495.

Comment: the pair has broken above a declining trend line and is now trading in a slightly ascending channel.

 

USD/JPY

Intraday Technical Levels:

 

Pivot: 77.00.

Preference: SHORT positions @ 76.9 with 76.55 & 76.4 in sight.

Alternative Scenario: The upside penetration of 77 will call for 77.25 & 77.4.

Comment: the RSI lacks upward momentum.

 

GBP/USD

Intraday Technical Levels:

 

Pivot: 1.5815.

Preference: SHORT positions @ 1.5805 with targets @ 1.5705 & 1.566.

Alternative Scenario: The upside penetration of 1.5815 will call for 1.587 & 1.589.

Comment: the pair remains in an intraday bearish channel and the RSI lacks upside momentum.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Have the masters of the universe lost their kryptonite

 

Happy Lehman day! Have the masters of the universe lost their kryptonite, or just their marbles?

 

On October 5th 2010 there was an audible gasp in the French courtroom at the historic Palais de Justice when the ‘rogue trader’ Jérôme Kerviel was convicted of a breach of trust, computer abuse and forgery. The 33-year-old was convicted of all three charges and was sentenced to five years’ imprisonment, with two years suspended.

 

It was not the ‘severity’ of the sentence that drew the gasps and sharp intake of breath, it was the damages, set at €4.9bl to Société Générale, this was the total sum of money his risky betting strategies cost his former employers in January 2008. The Brittany-born computer expert was described as a quiet cynical operator who exploited his technological knowhow and market understanding to fool his employers. Exposing the bank to uncovered trades worth €50bn, more than Société Générale’s total share capital at the time.

 

“The varied nature of his means of forgery and deceit were rivalled only by the dazzling reactivity, the constant cool-headedness and the deceptive serenity which he was able to exhibit on an everyday basis,” said the judge. On reflection it may have been more appropriate if the gasps had been replaced with laughter, whilst massive the symbolic damages award was preposterous, if the idea was to send out a message then to who and how? The lenient sentence alone would not serve as a deterrent.

 

Irrespective of his actions the bank was later part of an ECB bank bail out, despite which its share capital currently stands at only €14 billion. It could be argued that the ‘criminals’ who have lost circa €38 billion of their bank’s value this year are simply the usual suspect mixture of incompetents and blusterers of the banking fraternity and we’ve now come to accept this tight brotherhood will always escape punishment. However, small investors, pension fund managers and retirees might not be so accepting, they would no doubt put the current management of SocGen first in the queue for an appointment with Madame Guillotine ahead of Jérôme Kerviel.

 

Many commentators could be forgiven for treating with suspicion the allegations that have emerged this morning suggesting that another rogue trader has apparently run amok ultimately causing an unauthorised loss of circa $2 billion. As a result of this unspecified loss UBS, Switzerland’s biggest bank, may now be unprofitable in the third quarter. This is the bank that had to raise circa $45 billion from investors after the investment bank division recorded 57.1 billion Swiss francs ($65 billion) in cumulative pretax losses in three years through 2009. There will be inevitable calls for the investment arm of the bank to now shrink dramatically or close.

 

The sad irony and co-incidence is that this alleged fraud and loss has come on the third anniversary of Lehman bros filing for bankruptcy, this will no doubt raise doubts as to how comprehensive the supposed regulatory and self compliant improvements put in place since the banking collapse in 2008-2009 actually are. Whilst the Jérôme Kerviel ‘incident’ could be ‘excused’, given it occurred at the height of the banking crisis, this latest event has happened after back office regulations and compliance were now supposedly water tight.

 

This incident will actually have many in the mainstream media sharpening their pens to point out that no lessons have been learned since 2008 and to ask the question, “if this can happen after 2008 then how many other major investment banks have ‘sleeper cell’ rogue traders stalking their dealing rooms and floors?” To imagine that this latest ‘miscreant’ is the only rogue amongst the hundreds of thousands employed in the industry, is stretching belief to tensile breaking point.

http://blog.fxcc.com/happy-lehman-day-have-the-masters-of-the-universe-lost-their-kryptonite-or-just-their-marbles

 

Source: FX Central Clearing Ltd. (FXCC BLOG)

[alayoua]

Update Daily Technical Levels from FXCC 15 Sep 2011

 

Update Daily Technical Levels from FXCC 15 Sep 2011

 

EUR/USD Intraday Technical Levels:

 

Pivot: 1.37

Preference: Long positions above 1.37 with targets @ 1.384 & 1.388 in extension.

Alternative Scenario: Below 1.37 look for further downside with 1.365 & 1.3625 as targets.

Comment: the RSI is supported by a rising trend line.

 

USD/JPY Intraday Technical Levels:

 

Pivot: 76.8

Preference: Short positions below 76.8 with targets @ 76.4 & 75.95 in extension.

Alternative Scenario: Above 76.8 look for further upside with 77.1 & 77.25 as targets.

Comment: a key declining trend line maintains downward pressure.

 

GBP/USD Intraday Technical Levels:

Pivot: 1.578

Preference: Long positions above 1.578 with targets @ 1.584 & 1.5870 in extension.

Alternative Scenario: Below 1.578 look for further downside with 1.5735 & 1.5705 as targets.

Comment: the break above 1.578 is a positive signal that has opened a path to 1.584.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Daily Technical Levels from FXCC 16 Sep 2011

 

Daily Technical Levels from FXCC 16 Sep 2011

 

 

EUR/USD

Intraday Technical Levels:

 

Pivot: 1.3940.

Preference: SHORT positions @ 1.393 with 1.3765 & 1.3705 as next targets.

Alternative Scenario: The upside penetration of 1.394 will call for 1.3975 & 1.4015.

Comment: the 1.395 former support area is now acting as a resistance. The pair is capped by a declining trend line.

 

USD/JPY

Intraday Technical Levels:

 

Pivot: 76.60.

Preference: LONG positions @ 76.7 with targets @ 77.05 & 77.25.

Alternative Scenario: The downside penetration of 76.6 will call for 76.4 & 76.3.

Comment: the RSI is supported by a rising trend line & the pair has broken above a declining trend line.

 

GBP/USD

Intraday Technical Levels:

 

Pivot: 1.5870.

Preference: SHORT positions @ 1.586 with 1.5735 & 1.5705 as next targets

Alternative Scenario: The upside penetration of 1.587 will call for 1.5915 & 1.595.

Comment: the pair is capped by a declining trend line.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Delta one, this is control tower two calling

 

Delta one, this is control tower two calling, please respond…Over

 

One of the first and most crucial instructions novice pilots are given in how to communicate with the aircraft control tower is to keep communication brief, clear and relevant. “Think about what you are going to say before saying it. Mentally go over exactly what you will say before touching the radio and keep it in mind.” At Delta one desk in UBS, the currency trader Kweku Adoboli’s Facebook profile had a brief, clear and relevant plea to his friends: “Need a miracle.” Having become trapped, due to the instantaneous depreciation of the Swiss franc after the SNB’s ‘peg’ decision, he was now in a big hole and knew he had no escape ladder or tunnel. A sobering thought for any traders who profited from the sharp fall in the CHF franc last week; there can often be someone else on the other side of the trade, literary banking on the franc’s continual appreciation being a one way bet.

 

On Delta one desk Adoboli handled proprietary dealing clients trades, trading in a variety of securities assisting clients to speculate and hedge baskets of securities. If clients wished to short Swiss equities, (expecting the franc to rise), the desk would design a trade and use a combination of; equity swaps, futures and ETFs to hopefully achieve it. Derivatives should (in theory) mirror the securities they track, in effect insure against market moves and as such shouldn’t carry any extra risk for the bank.

 

This episode serves to remind us just what a tightrope the line between success and failure is at the highest trading levels. With all the quants, algorithms, theories, the finest technology and minds at your disposal our industry still comes down to the phrase credited to the brilliant and infamous trader Jesse Livermore; “you never know ’till you bet!”

 

There’ll be many amongst us who feel empathy with the trader, some of us may have wiped out our own trading accounts, (hopefully small accounts whilst learning our craft), and whilst the phrase “it’s all relative” hardly compares to wiping out €2billion we’ll recognise the feelings of pain, humiliation and hopelessness. Kweku Adoboli’s father is reported to be heartbroken after the news broke, his words bring home the human element of the loss, and before we all rush to condemn perhaps there is a simple explanation that UBS would rather not be broadcast, his huge losing trade was their losing trade, and the blame and accusation of systemic failure is ultimately theirs and not singularly his.

 

In an interview with Reuters, John Adoboli, a retired United Nations employee from Ghana, said he knew the financial sector was a high risk area, but he had no doubts about his son’s competence and integrity…. Read the full Story

http://blog.fxcc.com/delta-one-this-is-control-tower-two-calling-please-respond-over

 

Source: FX Central Clearing Ltd. (FXCC BLOG)

 

[alayoua]

Update - Daily Technical Levels from FXCC – 16 Sep 2011

 

Update - Daily Technical Levels from FXCC – 16 Sep 2011

 

EUR/USD Intraday Technical Levels:

 

Pivot: 1.384

Preference: Short positions below 1.384 with targets @ 1.3765 & 1.3705 in extension.

Alternative Scenario: Above 1.384 look for further upside with 1.3895 & 1.394 as targets.

Comment: the RSI broke below a bullish trend line.

 

USD/JPY Intraday Technical Levels:

 

Pivot: 76.6

Preference: Long positions above 76.6 with targets @ 77.05 & 77.25 in extension.

Alternative Scenario: Below 76.6 look for further downside with 76.4 & 76.3 as targets.

Comment: a support base at 76.6 has formed and has allowed for a temporary stabilisation.

 

GBP/USD Intraday Technical Levels:

Pivot: 1.5825

Preference: Short positions below 1.5825 with targets @ 1.5745 & 1.5705 in extension.

Alternative Scenario: Above 1.5825 look for further upside with 1.587 & 1.589 as targets.

Comment: the upward potential is likely to be limited by the resistance at 1.5825.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Daily Technical Levels from FXCC – 19 Sep 2011

 

Daily Technical Levels from FXCC – 19 Sep 2011

 

 

EUR/USD

Intraday Technical Levels:

 

Pivot: 1.3775.

Preference: SHORT positions @ 1.3765 with 1.359& 1.3555 as next targets.

Alternative Scenario:The upside penetration of 1.3775will call for 1.3835 & 1.3895.

Comment:the pair has broken below its support andremains under pressure.

 

USD/JPY

Intraday Technical Levels:

 

Pivot: 76.75.

Preference: LONG positions above 76.75 with targets@ 77.05 & 77.25.

Alternative Scenario: The downside breakout of 76.75will open the way to 76.6 & 76.4.

Comment: the RSI is supported by a rising trend line,the pair is on the upside and is approaching its resistance.

 

GBP/USD

Intraday Technical Levels:

 

Pivot: 1.5770.

Preference: SHORT positions @ 1.576 with targets@ 1.565 & 1.557.

Alternative Scenario: The upside penetration of 1.577will call for a rebound towards 1.5825 & 1.587.

Comment: the pair stands within a MT bearish channeland is challenging its previous low.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Is Forex Trading a Form of Gambling?

 

Is Forex Trading a Form of Gambling?

 

here’s been a subtle change on the high streets of the UK over recent years. Where previously betting shops were mysterious smoke filled denizens where the errant uncle, father or grandfather wasted a proportion of his wages each week, (in between visits to the local pub), they’re now clean, open inviting places offering a massive range of products.

 

Similar to the drinks industry, who realised over the past decade they could reach down and get the kids hooked as early as possible with the invention of sugary tasting alcopops, the betting industry has not been slow to adapt in their hunger to ensnare the next generation. Not only are the betting shops unrecognisable, now offering a laid back, leisurely, ambient environment in which to lose your money with ease across a vast array of sports markets, the major firms have also migrated to mobile devices, you can now throw away your fivers and tenners with ease across: iPod, Android or Blackberry devices, and similar to financial markets bet when the markets are in play.

 

Think Fernando Torres will get a penalty in the match versus Chelsea, after scoring one great goal and then missing the open goal of the season and that he’ll fluff the penalty, then begin to pull his bleached hair out, roll around the penalty area, sucking his thumb whilst crying like a baby screaming, “take me back to Athletico Madrid”? Then there’ll be a bookie that’ll gladly take your money off you in record time.

 

Those last two paragraphs read as rather arrogant, flippant and dismissive of a massive industry, any apologies will not be forthcoming as it’s quite deliberate. No doubt certain readers will point out the irony that forex trading is still gambling and suggest the methods used by brokers are not too dissimilar to that used by bookies and in some ways they’d be correct. However, there are subtle differences and one massive difference, the massive difference is that your ECN broker wants you to win, his success can only be perpetuated due to your continued success. There is no broker involved in sports betting, there’s a ‘bookie’ and he wants you to lose. They want you hooked, then they want your money, as much of it as possible. They make no efforts to increase your performance and profitability and only increase their supply of apps based technology in order to take your money off you, using smarter quicker methods, through your smartphone.

 

There may be a few horse race ‘form’ algorithms and certain on line bookies offer systems, the most sophisticated betting algorithms available are still ‘Martingale’ systems; keep on doubling up the bet until you get the winner, then quit and go back to your original level of risk. This system is taken to the extreme at dog tracks where the suggestion is that you stick to a trap number. Not quite Fibonacci retracement or Ichimoku cloud indicators which you can plot on a free charting package, all provided by a broker who wants you to be successful. There’s no seminars from the bookie, no video support, no blogs, strategies, techniques, or support articles, it really is a one way relationship based on the provision of addiction.

 

The advantages of forex betting or markets betting over traditional sports betting could form a long list, here’s just a few critical differences;

 

We only bet on two horse races; price either goes up or goes down.

 

We can stop our race; we simply exit the trade early and as a consequence we immediately reduce our risk.

 

We can change our jockeys and horses at any time during the race; if you think the other side of your pair trade is the better direction then you can take it at any stage of the race.

 

We can alter our bet in the race; if we’ve got direction right we can increase our position size. If we’ve got direction wrong we can hedge.

http://blog.fxcc.com/is-forex-trading-a-form-of-gambling

 

Source: FX Central Clearing Ltd. (FXCC BLOG)

[shabz]

Ask Nick Leeson or Kweku Adoboli that question.

 

http://indo-investasi.com/showthread.php/15013-Kweku-Adoboi-Nick-Leeson-all-over-again

[alayoua]

The Misnomer of Over Trading and How It Differs from Impulsive Trading.

 

The Misnomer of Over Trading and How It Differs from Impulsive Trading.

 

Overtrading – the excessive buying and selling of securities by an investor in order to increase the probability of successful trades. Can the phenomena of over-trading be explained away by the singular use of a one line description, does this one sentence fully cater for all the nuances and complexity involved?

 

It’s suggested by many trading experts that over trading can kill accounts just as quickly as either a lack of capitalisation, or lack of expertise and experience. Whilst undeniably a logical conclusion does this claim actually stand up to scrutiny? After all swing traders could immediately condemn the phenomena of day trading in all its forms and in particular scalping as over trading, without even delving into the technique used they’d presume the trader was over trading. But one man’s meat is another’s poison and over trading may be as misunderstood a concept as other myths that have been allowed to evolve unchallenged in the industry..

 

“I’m trading four pairs; the euro, cable, euro-yen and the Aussie off fifteen minute time frames. I’m taking up to fifty trades per day and my win/lose ratio is as bad as 7:1 some days, what d’ya think the correct or average amount of legitimate set ups I should be getting each day, am I over trading?”

 

This is a version of a question often posted on trading forums or on the “ask the expert” sections of broker websites. On first inspection the impulse is to suggest that yes, taking that amount of trades on that amount of pairs is over trading. However, a huge chasm exists between what could be considered over trading and impulsive trading, in fact the concept of over trading may not exist, or if it does it may have become a victim of trader mistranslation.

Let’s look at our example trader and analyse his technique further.. Read the full article

http://blog.fxcc.com/the-misnomer-of-over-trading-and-how-it-differs-from-impulsive-trading

 

Source: FX Central Clearing Ltd. (FXCC BLOG)

[alayoua]

Update - Daily Technical Levels from FXCC – 20 Sep 2011

 

Update - Daily Technical Levels from FXCC – 20 Sep 2011

 

EUR/USD Intraday Technical Levels:

 

Pivot: 1.365

Preference: Long positions above 1.365 with targets @ 1.375 & 1.3835 in extension.

Alternative Scenario: Below 1.365 look for further downside with 1.3595 & 1.3555 as targets.

Comment: the RSI is well directed, the contract is on the upside and is breaking above its resistance.

 

USD/JPY Intraday Technical Levels:

 

Pivot: 76.75

Preference: Short positions below 76.75 with targets @ 76.4 & 76.3 in extension.

Alternative Scenario: Above 76.75 look for further upside with 77.05 & 77.25 as targets.

Comment: the pair stands below its resistance and remains under pressure.

 

GBP/USD Intraday Technical Levels:

Pivot: 1.574

Preference: Short positions below 1.574 with targets @ 1.5675 & 1.563 in extension.

Alternative Scenario: Above 1.574 look for further upside with 1.5770 & 1.5825 as targets.

Comment: the pair is posting a rebound and is challenging its MT bearish channel upper boundary, the RSI calls for caution.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Daily Technical Levels from FXCC – 21Sep 2011

 

Daily Technical Levels from FXCC – 21Sep 2011

 

 

EUR/USD Intraday Technical Levels:

 

Pivot: 1.3750.

Preference: SHORT positions @ 1.374 with 1.365 &1.3595 as next targets.

Alternative Scenario:The upside penetration of 1.375will call for a rebound towards 1.3835 & 1.39.

Comment:the pair stands below its strong resistance(50% Fibonacci retracement of the previous downmove) and should face a weakness.

 

USD/JPY Intraday Technical Levels:

 

Pivot: 76.55.

Preference: SHORT positions @ 76.5 with targets@ 76.1 & 76.

Alternative Scenario: The upside penetration of 76.55will call for a rebound towards 76.75 & 77.

Comment: the RSI is capped by a declining trend line,the pair is under pressure.

 

GBP/USD Intraday Technical Levels:

 

Pivot: 1.5770.

Preference: SHORT positions @ 1.576 with 1.5675& 1.563 in sight.

Alternative Scenario: The upside breakout of 1.577will open the way to 1.5825 & 1.5865.

Comment: the pair has struck against its resistance andshould face a down move as the RSI is turning down.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Market Commentary 21 September

 

Market Commentary 21 September

 

 

Falling on your sword is just so last century

 

“He’s not the messiah, he’s a very naughty boy.. – Monty Python, Life Of Brian.”

 

There was a time when politicians made an effort to set the moral agenda. However, given the refusal of leading politicians (in all countries) to accept any responsibility for their actions it comes as no surprise when the CEOs of major companies display the same levels of arrogance and defiance when confronted with their failure…

 

The harshest punishment Oswald Gruebel, chief executive officer of UBS, may face is pressure to cut the levels of risk and shrink the investment bank when the board meets in Singapore today, less than a week after a $2.3 billion loss (and ‘conveniently’ rising) from unauthorised trading.

 

The CEO apparently received a “scolding” yesterday from the Government of Singapore Investment Corp., the company’s biggest investor, who expressed “disappointment and concern about the lapses” and urged UBS to “take firm action to restore confidence in the bank,” according to a statement from the sovereign wealth fund after its senior management met with Gruebel yesterday.

 

Gruebel, was anointed with the responsibility to rebuild Zurich-based UBS after the huge bank suffered record losses on their U.S. sub-prime mortgage securities which in turn led to a state rescue. “Saint Ossie” helped to restore Credit Suisse Group AG’s profits as a consequence of the rescue and bailout.

 

Christian Hamann, an analyst at Hamburger Sparkasse;

 

“This is a black eye for Gruebel and the bank. On the other hand, he’s done a few things quite well and successfully stabilised the bank, which may have earned him some credit that he hasn’t used up yet.”

 

Eurobonds are being ‘pushed’ once again by the European Commission President Jose Barroso; “the commission believes we should look also at that option. We are not saying it is immediate. This is a matter that must be discussed, but we should not exclude that option either.”

 

The Eurobond initiative would be sold jointly by the euro area’s seventeen nations, it remains an option due to the fact that the bailouts by governments and the European Central Bank failed to alleviate solvency concerns. Barroso said in an interview with Bloomberg that the commission, (the European Union’s executive branch), will present euro-bond options very soon.

 

The reality of Greek Prime Minister George Papandreou’s brain-wave is beginning to hit the general populous, the new property tax, summarily dumped on the electricity bill from this month onwards, is causing anguish and despair in equal measures, could it be the straw that finally breaks the Spartans’ backs? Greek subway, tram, train, bus and trolley workers will hold a 24-hour strike in Athens tomorrow in opposition to their government’s plans to cull the public sector, according to spokespeople at the Greek Transit Workers Union.

 

As an example of modern day politicians not accepting responsibility for their collective actions G.Pap is Emmy award winning. However, in his and his country’s current predicament he’s snookered. If Greece wants the next tranche of bailout funds, in order to pay civil servants and to take care of the mundane office jobs, such as filling the ATMs with freshly printed Euros, then his government has to prove compliance with the previous bailout and an ability, based on incredible austerity cuts, to meet further loan obligations whilst continuing to pay loan shark rates for a few billion here and there off the ‘markets’.

 

As the two day Fed policy meeting comes to an end today many commentators and analysts are predicting something BIG to be announced at the culmination of the meeting. Presumably this announcement can only be positive news and indices will no doubt react accordingly.

 

The Federal Reserve appears likely to try to push long-term borrowing costs lower by re-balancing its $2.8 trillion portfolio of bond holdings to weight it more heavily to longer-term securities. Fed officials believe that by shifting bond holdings this will encourage mortgage refinancing and push investors into riskier assets, such as corporate bonds and stocks, without flaming consumer price inflation.

 

Asian markets were mixed in over-night/early morning trade, the CSI responding well to further bullish Chinese export and growth data closing up 3.02%. China is one of the few countries to be targeted for growth by the IMF. The Nikkei closed up 0.23% principally due to disappointing export figures. Japan’s exports rose in the year to August but at less than half the pace expected as the global economic slowdown, a strong currency and Europe’s sovereign debt crisis put Japan’s recovery in doubt. Weak exports are also an ominous sign as the Federal Reserve prepares for more QE, which will inevitably push the yen even higher versus the dollar directly worsening trade conditions for major Japanese exporters and employers. The Hang Seng index closed down 1% perhaps indicating that growth expectation is mainly focused on mainland China.

 

European bourses are mainly down in morning trade, the DAX leading the falls currently down 1.15%. The CAC is down 0.94%, the ftse is down 0.45%. the STOXX is currently down 0.74%. Cable has suffered a sharp drop and spike in morning trade as a consequence of the MPC minutes revealing that further QE is now a consideration. Sterling has fallen sharply versus Yen the Euro and the Swissy. The Euro has made significant gains versus CHF, as has the USA dollar. Gold is up $7 an ounce and Brent crude is up $21 a barrel. The SPX daily future is currently predicting a positive open up circa 0.5%.

 

The data publications of interest this afternoon include;

 

12:00 US – MBA Mortgage Applications

15:00 US – Existing Home Sales Aug

19:15 US – FOMC Policy Announcement Sept 21.

 

The FOMC announcement expected at 19:15 undoubtedly takes centre stage given the persistent rumours of a revised QE programme to be launched. We can expect different language, avoiding the use of “QE” to describe the fresh infusion and ‘asset’ purchase, however, the result will be the same. How long this latest twist in the Fed’s sobriety will last is the $14,737,251,228,137.12 question ( the live USA debt clock figure at 10.47am gmt).

 

http://blog.fxcc.com

[alayoua]

Update - Daily Technical Levels from FXCC – 21 Sep 2011

 

Update - Daily Technical Levels from FXCC – 21 Sep 2011

 

EUR/USD Intraday Technical Levels:

 

Pivot: 1.3725

Preference: Short positions below 1.3725 with targets @ 1.3595 & 1.3555 in extension.

Alternative Scenario: Above 1.3725 look for further upside with 1.378 & 1.3835 as targets.

Comment: the RSI has broken below a rising trend line, the pair remains under pressure and is challenging its support.

 

USD/JPY Intraday Technical Levels:

 

Pivot: 76.55

Preference: Short positions below 76.55 with targets @ 76.1 & 76 in extension.

Alternative Scenario: Above 76.55 look for further upside with 76.75 & 77 as targets.

Comment: the RSI remains capped by a declining trend line, the pair stands below its resistance.

 

GBP/USD Intraday Technical Levels:

 

Pivot: 1.57

Preference: Short positions below 1.57 with targets @ 1.561 & 1.557 in extension.

Alternative Scenario: Above 1.57 look for further upside with 1.576 & 1.5825 as targets.

Comment: the pair has struck against its resistance and remains on the downside.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Daily Technical Levels from FXCC – 22Sep 2011

 

Daily Technical Levels from FXCC – 22Sep 2011

 

 

EUR/USD Intraday Technical Levels:

 

Pivot: 1.3610.

Preference: SHORT positions @ 1.36 with targets@ 1.3495 & 1.345.

Alternative Scenario:The upside penetration of 1.361will call for 1.37 & 1.38.

Comment:the pair remains on the downside and isapproaching its previous low.

 

USD/JPY Intraday Technical Levels:

 

Pivot: 77.00.

Preference: SHORT positions @ 76.95 with 76.5 &76.25 in sight.

Alternative Scenario: The upside penetration of 77 willcall for 77.25 & 77.4.

Comment: the pair has struck against its strong resistanceand should face a weakness.

 

GBP/USD Intraday Technical Levels:

 

Pivot: 1.5520.

Preference: SHORT positions @ 1.551 with 1.5425& 1.537 as next targets.

Alternative Scenario: The upside penetration of 1.552will call for a rebound towards 1.5575 & 1.5635.

Comment: the pair stands below its new resistance(former support) and remains on the downside.

 

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com

[alayoua]

Perfect Correlation in Forex Trading

 

Searching for +1, Perfect Correlation in Forex Trading

 

“Wow, has anyone else noticed that when the EUR/USD goes up the USD/CHF goes down?” is a ‘Eureka’ announcement often made by new traders when they first stumble upon basic correlation. In some respects it’s a good sign, it displays awareness.

 

However, as many forex traders will testify if it’s that easy we’d simply wait for one currency to spike and immediately take that perfect -1 negative correlation trade. It’d work for a while, then some funky algorithm at Blackrock would no doubt ‘front run’ the play taking out all our fun whilst hoovering up all the pips.

 

Surprisingly correlation is one of the least discussed topics on forums dedicated to forex trading and yet a thorough understanding of its mechanics and relevance should form part of any forex traders toolbox.

 

Correlation is a measure of the relation between two or more variables. The measurement scales used should be at least interval scales, but other correlation coefficients are available to handle other types of data. Correlation coefficients can range from -1.00 to +1.00. The value of -1.00 represents a perfect negative correlation while a value of +1.00 represents a perfect positive correlation. A value of 0.00 represents a lack of correlation.

 

Because currencies are priced in pairs, no single pair trades completely independent of the others. Once you are aware of these correlations and how they change, you can use them control your trading portfolio’s exposure.

 

The interdependence of currency pairs is straightforward to understand, here’s an example; if you trade Sterling versus yen (GBP/JPY) you are actually trading a derivative of the GBP/USD and USD/JPY pairs; therefore, GBP/JPY must be somewhat correlated to one if not both of these other currency pairs. The interdependence of currencies stems from more than the fact they are traded in pairs. Some currency pairs move in tandem, other currency pairs move in opposite directions, which is often the result of more complex forces.

 

Correlations change, which makes shadowing the changes in correlations important. Sentiment and global economic factors are increasingly dynamic and often change on a daily basis. Strong correlations today might not be in line with the longer-term correlation between two currency pairs. It’s therefore essential to consider the six-month trailing correlation. This provides a more focused perspective on the average six-month relationship between the two currency pairs, which tends to be more accurate. Correlations change for a variety of reasons; diverging monetary policies, a currency pair’s sensitivity to commodity prices, unique economic and political factors. Viewing correlation tables from minutes to weeks is also advisable for a comprehensive viewpoint and understanding.

 

How can we use correlations to manage our trading exposure, how can we use them to our advantage?

 

The most obvious answer is correlations can help us to avoid entering two positions that in effect cancel each other out. Knowing that EUR/USD and USD/CHF move in opposite directions nearly 100% of time (the -1 correlation) having trading positions of long EUR/USD and long USD/CHF is in some respects the same as having no position. A correlation table will illustrate that when the EUR/USD rallies, the USD/CHF will experience a sell-off.

 

Conversely, being long EUR/USD and long AUD/USD or NZD/USD is similar to doubling up on the same position given that the correlations are so strong. However, there may be valid reasons to hold trades of similarly correlated pairs, diversification being one.

http://blog.fxcc.com/searching-for-1-perfect-correlation-in-forex-trading

 

Source: FX Central Clearing Ltd. (FXCC BLOG)

[alayoua]

Update - Daily Technical Levels from FXCC – 22 Sep 2011

 

Update - Daily Technical Levels from FXCC – 22 Sep 2011

 

EUR/USD Intraday Technical Levels:

 

Pivot: 1.3575

Preference: Short positions below 1.3575 with targets @ 1.341 & 1.332 in extension.

Alternative Scenario: Above 1.3575 look for further upside with 1.37 & 1.38 as targets.

Comment: the pair stands below its resistance and remains under pressure.

 

USD/JPY Intraday Technical Levels:

 

Pivot: 76.7

Preference: Short positions below 76.7 with targets @ 76.25 & 76.1 in extension.

Alternative Scenario: Above 76.7 look for further upside with 77 & 77.25 as targets.

Comment: the pair is under pressure and is challenging its support.

 

GBP/USD Intraday Technical Levels:

 

Pivot: 1.552

Preference: Short positions below 1.552 with targets @ 1.537 & 1.5285 in extension.

Alternative Scenario: Above 1.552 look for further upside with 1.5575 & 1.5635 as targets.

Comment: the pair is breaking below its support and remains on the downside.

 

Daily Technical Levels from fxcc.com

Source: FX Central Clearing http://www.fxcc.com