Choosing the Right Forex Broker

Before choosing a broker, we hope you have you studied the previous articles in our forex school and concluded that you’re qualified to trade forex on a preliminary basis? Do you possess the determination and moral courage necessary to recognize and overcome emotional problems inherent in forex trading? Do you possess the drive and the intelligent focus necessary to concentrate all your energies on the one goal of success in whatever endeavor you take?

Forex HYIP programs - the tell tale signs of a forex scam

High yield investment programs or HYIP is when the con artist and his affiliates defraud investors through promises of return on investment as high as 80 percent per day. These scams have been proliferating in the Western World since the legendary exploits of Mr. Charles Ponzi and his ilk. Usually, the blatantly unrealistic promises of income are reinforced by claims of exclusivity, limited admissions and some kind of secret formula that will allow unlimited profits to investors.

Forex: How To Scalp Fundamentally

hile technical analysis is critical to currency trading - especially for pinpointing entries and exits - it is insufficient on its own for creating a comprehensive trading game plan. Market sentiment in FX is driven primarily by the economic and geopolitical news of the day. The key players in the currency market - Fortune 500 multinationals, the world's central banks, multibillion-dollar hedge funds and the top tier investment banks that service them - do not care if there is a double top in the EUR/JPY on the hourly candles. Instead, they formulate their trades by analyzing the most recent economic news and geopolitical developments, as well as the latest pronouncements from G-7 monetary authorities. Therefore, the proper approach to FX trading can be summarized as follows: trigger fundamentally, enter and exit technically. (You could go directly to our Forex Walkthrough which covers Beginner, Intermediate, and Advanced sections.)

Should I be trading outside my strategy?

I have a strategy which I’ve been trading/testing for a while now with pretty good results (still needs some fine tuning). I’ve been trading that strategy and only that one (I don’t have a lot of time for trading). I’ve been thinking recently damn I wish I went short on the AUD, GBP and EUR I would’ve made bucketloads of money (it’s always easy in hindsight isn’t it).

I did open a short position on the AUD a couple of weeks though it was taken out via stop loss quickly by volatility.

I’ve been so preoccupied with my statarb strategy that I haven’t really looked at trending positions. I’m not sure that is a bad thing, though it would’ve been nice to be short

FOREX Money Managers

I was doing some browsing last night and thought I’d look more into the FX Manager features which Oanda has. I managed to come across an interesting page on BarclayHedge listing the top currency traders for the past 12 and 36 months. After a little more digging I found some websites for these FOREX money managers, I was surprised to find one of them openly using Oanda FX Manager.

The original thread I found is here (I view the returns some of the thread participants discuss as rather extreme).

• Rove Capital
• Genoa Capital has some quite detailed information about their strategies.
• Zone Capital is an Aussie FOREX trader who isn’t currently on that list, though I’ve visited there before.
• Tri Global FX has an interesting question on their Managed Accounts page “Are you interested in our Capital Preservation Program?“

I’m somewhat curious in the feasibility of using FX Manager as a possible future venture. Some people (eg. see the thread posted above) will ask why would you want to trade other peoples money when you could make a fortune with your X00% annual returns. My belief (and I’m sure lots of smart people will back me up) X00% returns is over leveraged stupidity about to be wiped out. If I could make a consistent 40% I would be incredibly happy. I would need to look into what the certification requirements are in Australia.

Looking briefly at Zone Capital it would appear that it’s not too difficult to be able to take money from wealthy investors who qualify as a “Sophisticated Investor”, here’s what Law Central has to say on this page.

There is a special investment opportunity. But it is only open to the “big boys” – not mere members of the public.

If you are only a member of the public then you don’t get exposure to these special (unregulated) investment opportunities. The Australian government feels that you need protection. Members of the public can generally only invest in investments which are highly regulated. Examples of regulated investments are often contained in a Prospectus or a Product Disclosure Statement. These investments have to go through many hoops before they can be offered to the general public.

There is at least some protection and regulation for mums and dads.

However, many promoters don’t want to nickel and dime the small stuff with the mums and dads. They don’t want to go to all the trouble of dealing with a large out of date government regulator called ASIC (Australia Securities Investment Commission). They want to go to a smaller number of the “big boys”. The “big boys” are the Sophisticated Investors. They have a lot of money to invest or they earn a lot of money each year.

The Australian Government thinks that if you are that so wealthy then you don’t need the protection of things such as the Prospectus and Product Disclosure Statement.

However, before you can get the lofty status of Sophisticated Investor your accountant has to sign off on a complying Sophisticated Investor Certificate. You then show the Certificate to someone that wants to take your money.

November Forex Trading Performance in one word ORDINARY

I am regretting putting up my trading performance at the start of the month. No sooner did I publish it than I went into a big drawdown. I tried some trades later in the month though they turned out to be losers as well so I took a break from trading and had a fairly inactive last couple of weeks.

I’m rather disappointed with my November results at a bit more than -10%. It won’t discourage me, I like the strategy though it needs some better stop losses.

At present my strategy is still doing ok in the automated trading championships in 56th out of ~700 though the charts below are great at showing the reason it isn’t performing better, and also help to illustrate my November result.

MAE

MFE

Might be an idea to cap those losses at around -$2k

Tags: performance, report, strategy

Stephanie Pomboy Skewers the USD with Stiletto

Bit quiet on my trading front lately, busy with real work mostly and the few times I’ve looked at a trade it hasn’t been quite right.

I just read an interesting interview with an analyst called Stephanie Pomboy talking about the USD with Barrons though I read it courtesy of 1440 Wall Street.

A key quote for me looking at the USD:

If we rely on foreign creditors to lend us the money to sustain our lifestyles—and that’s what we do—we need to compensate them for that risk of lending to us. As the economy weakens and our credit quality should theoretically be deteriorating, the only way we can really attract that same capital is by offering a higher interest rate or making our assets cheaper to them, in this case by having our currency be weaker.

Thanks to 1440 Wall Street for the cool title and excerpts from the interview.

I’m not sure I’ll have a lot more to write about between now and the end of the year (I expect everything to wind down a bit), so I should probably take this opportunity to say I hope you enjoy the break and have a happy and profitable new year.

Shipping rates hit zero as trade sinks

I think my market predictions for 2009 are well and truly out.

I just read a story which scares me.

Freight rates for containers shipped from Asia to Europe have fallen to zero for the first time since records began, underscoring the dramatic collapse in trade since the world economy buckled in October.

Shipping rates hit zero as trade sinks - Telegraph.

Trading the slide in the US Dollar

Have been doing a bit of trading and it’s been quite good for me getting 60-150pip profits with relative ease.

This success has come by buying the tips in AUD/USD, EUR/USD and the bounces in the USD/CAD, essentially shorting the USD. I’ve been using Heiken Ashi charts on different timeframes to pick the changes in short term trend to hopefully get good entry points. I don’t have a lot of time to sit infront of the computer so not always perfect, though it’s been going ok thus far.

I’ve generally been using a trailing stop (a really cool feature Oanda has introduced) on approximately 1 days ATR. Not such a success in the photo below… oops.

Stop loss on the EUR/USD

My market predictions for 2011

Last year I was pretty confident in my predictions, this year my theme is pretty flat.

1. The US will hurt, a recovery probably won’t happen in 2009, certainly not in the first half of the year,
2. The UK will hurt as well.
3. Some oil rich countries will hurt.
4. I’m expecting a major plunge in the USD, though I’m still uncertain as to whether it will happen in 2009 or 2010.
5. Strength in EUR.
6. Weakness in GBP (relative to EUR).
7. Some strength in AUD.
8. Some small recoveries in Commodities.
9. Do I think we’ve seen the end of this financial meltdown? not a chance. More coverups and failures in 2009.
10. I’m expecting major problems in markets which have thus far managed to get away unscathed… Credit Card debt is an obvious though by no means the only one.
11. The IMF will be busy saving countries.
12. Caution will be a key theme of 2009.

I’m aware that they are pretty weak positions that I’m taking… a lot of fence sitting…. I think that will be most peoples position for most of 2009 hence no strong opinions.