Money Flow Trading Method along with Risk Management

http://traderfeed.blogspot.ca/2018/0...actice-of.html

FRIDAY, MARCH 09, 2018
A Surprising Best Practice of Successful Traders
https://3.bp.blogspot.com/--43QjrGvb...20/Mastery.jpg
Here's an interesting observation I've made about traders who are doing well recently versus those not doing so well:

It's not just the quality of the trades that distinguishes the successful trader, but the quality of the time during market hours when they are not trading.

The least successful traders are glued to screens throughout the day and have very little structured, quality time away from the screens.

The more successful traders take breaks during the day and keep themselves fresh and focused.

The most successful traders have a structured non-trading process during market hours. They are just as plan-oriented in their non-trading time as in their trading time. When markets are open and they are not trading, they have processes they follow to identify new opportunities and to maintain their performance zone.

Productively planning and structuring your non-trading time: that is an unappreciated best practice. The great traders are highly productive when they are *not* trading. A big step that can move your trading forward is to start keeping a report card where you grade the quality of your time during the trading day when you are nottrading.

On Monday at noon EST, I'll be joining Jigsaw Trading for a free webinar on three psychological techniques to improve trading psychology. In that session, I will go into detail about specific practices I see best traders engaging in during non-trading hours. Registration for the session can be foundhere; I hope to see you there!

Brett

https://goldswitzerland.com/central-...-get-it-right/

https://nftrh.com/2018/03/09/a-bulli...-gold-monthly/

SAN FRANCISCO, March 8, 2018 /PRNewswire/ -- A global leader in corporate and consumer foreign exchange solutions, OANDA recently released a new version of its trusted Exchange Rates API, which has been updated to include real-time currency rates. The rates available on the new API are updated every five seconds, providing a more accurate reflection of current market prices. In addition to providing live rates, the new API also offers 96 fixing rates daily - more than any other currency data feed on the market. Available at 15-minute intervals, each fixing rate provides bid, ask, and midpoint rates. Customers also have access to daily and period average rates aligned to their time zone and can now access open and close prices.

The new API aims to provide corporate treasurers and finance directors with a greater degree of visibility over the FX market, helping them mitigate risk, reduce currency exposure and improve cash flow. The API will also be of value to product managers and application developers who require reliable forex data to power their web services, pricing engines, and digital products. Simple to use, extensive API documentation is available on OANDA's website, including easy-to-follow instructions in order to ensure the seamless integration with ERP, TMS, billing software and more.

Vatsa Narasimha, President and Chief Executive Officer, OANDA Corporation, commented, "As an over-the-counter market, there is no central exchange for currency pricing, which can make it difficult to gauge accurate FX rates. However, because OANDA has been collecting FX data for more than 20 years, we are uniquely positioned to combine this knowledge with access to a full range of interbank liquidity, proprietary trading technology, and pricing algorithms in order to create an accurate market consensus across a wide range of FX instruments, including real-time foreign exchange rates. Trusted for accuracy and reliability, our rates are acknowledged by several tax authorities and governmental agencies around the world, and are widely considered to be the gold standard in exchange rate data."
The new API is already proving to be of value to OANDA clients. Keara Killian, Treasurer at AppNexus, a world-leading independent advertising technology company, explained, "Ad tech is becoming increasingly more sophisticated, and platforms must serve millions of buyers and sellers that transact in the billions of dollars. As such, we are always searching for opportunities to create efficiencies in the marketplace. In addition to connecting our platform to real-time FX market data, we leverage OANDA's API to enable currency options for our customers. As a result, our customers enjoy increased precision in our pricing models."

OANDA Exchange Rates API has long provided historical daily average rates to top audit firms, leading brands, and thousands of small and medium-sized companies around the world. These rates are used for financial reconciliation, tax and audit, as well as to power digital products, apps and pricing engines.

NOTES FOR EDITORS
About OANDA
A global leader in online multi-asset trading services,OANDAcombines award-winning technology and institutional-grade execution across a wide range of asset classes, enabling clients to trade global market indices, commodities, treasuries, precious metals and currencies on one of the world's fastest platforms. The company also offers OANDA Rates a set of corporate solutions that helpthe world's leading audit firms, taxation authorities and MNCsmitigate currency risk, improve efficiencies and optimize working capital. Established in 1996, OANDA has offices in the world's most active financial markets including New York, San Francisco, London, Singapore, Tokyo, Toronto and Sydney and is fully regulated by six major authorities. For more information, please visitoanda.comor follow us on Twitter, Facebook or YouTube.

https://www.zerohedge.com/news/2018-...i-exposed-your

SNIPPET:
Holder, who was President Obama's Attorney General, attempted to prosecute WikiLeaks and Assange personally over the publication of military documents and US diplomatic cables regarding Iraq and Afghanistan.

"Russia-theorists" - particularly neoconservatives and hawkish Democrats, have maintained that WikiLeaks is a "cutout" for Russian to engage in information warfare, and blame Moscow for the theft and publication of the leaked emails.

Assange added to his response to Holder, tweeting "Next time, not that there will be one, try following the constitution you swore to uphold," with a link to a 2014 article calling for Holder to drop the investigation against WikiLeaks or resign.


And that is exactly why you have detained me without charge for eight years in violation of two UN rulings and spent over 20 million pounds spying on me you hypocritical mother fuckers. Your entire international human rights programme is £10.6m you pathetic frauds. https://twitter.com/UKMissionGeneva/status/972057244593479680 …
7:28 AM - Mar 9, 2018

https://www.theburningplatform.com/2...d/#more-172356

According to the Bureau of Labor Statistics, the US economy added 313,000 jobs in the 28 days of February, causing a big jump in the Dow Jones average. Where does BLS find these jobs?

The BLS finds 61,000 in construction, which, if correct, suggests in view of falling new and existing home sales, that those building at this stage are going to experience financial difficulties.

Manufacturing conjured up 31,000, but in high tech areas such as computer and electronic products only 1,100 jobs were created. Communications equipment actually lost 100 jobs and electronic instruments lost 800 jobs.

50,300 jobs were created in retail trade, allegedly. This is inconsistent with store closings and what seem to be round-the-clock sales at online retailers. Is February the month people purchase cars, garden supplies, and clothing? The BLS seems to think so.

According to the BLS, 50,000 jobs were creared in professional and business services, of which about three-fifths were in administrative and waste services, almost all of which were in temporary help services. In other words, we are not talking about employment for architects and engineers.

Waitresses and bartenders did not supply the usual out-sized number of new jobs, adding only 11,500 new jobs.
Local government added 31,000 jobs, almost all of which were in education.

As my long-term readers know, my analyses of the monthly payroll jobs reports are a tradition on this site. I am doing less of them, as I am sure it bores you to hear again the same conclusion that we are being lied to about job creation. The jobs, of course, are not the higher paid jobs we were promised by globalists in exchange for moving offshore American industrial and manufacturing jobs. That promise was never anything more than a lie, even though it was the repeated assurance from Ivy League economists and Washington policymakers. The lie protected itself by wraping itself in the holy grail of “free trade.” Any economist or financial media presstitute who dared to point out that jobs offshoring is the antithesis of free trade was kaput. The economists were well paid for serving the jobs offshoring corporations.

As I explained yesterday, the economic information we are fed is false. It is intended to give us a non-existent, fake reality picture of the economy. https://www.paulcraigroberts.org/201...lieve-america/

For almost a decade the economic policy of the US, Europe, UK, Canada, Japan has been directed to the support of the financial speculation that caused the 2008 worldwide economic crisis. Nothing has been done for the populations of the countries who experienced the crisis. Indeed, many of these populations, such as the Greeks, have had their living standars forced down in order to protect the big banks. This proves beyond all doubt that in the “Great Western Democracies,” economic policy only serves the hyper-rich and the hyper-powerful. Citizens simply do not count. They are as nothing.

To give you a break from my analysis, I offer you below the analysis of my sometime coauhor Dave Kranzler, an experienced Wall Street participant who went good:
313k Jobs Added? Nice Try But It’s Fake News
by Dave Kranzler

March 9, 2018: The census bureau does the data-gathering and the Bureau of Labor Statistics feeds the questionable data sample through its statistical sausage grinder and spits out some type of grotesque scatological substance. You know an economic report is pure absurdity when the report exceeds Wall Street’s rose-colored estimate by 53%. That has to be, by far, an all-time record-high “beat.”

If you sift through some of the foul-smelling data, it turns out 365k of the alleged jobs were part-time, which means the labor market lost 52k full-time jobs. But alas, I loathe paying any credence to complete fiction by dissecting the “let’s pretend” report.

The numbers make no sense. Why? Because the alleged data does not fit the reality of the real economy. Retail sales, auto sales, home sales and restaurant sales have been declining for the past couple of months. So who would be doing the hiring? Someone pointed out that Coinbase has hired 500 people. But the retail industry has been laying off thousands this year. Given the latest industrial production and auto sales numbers, I highly doubt factories are doing anything with their workforce except reducing it.

And if the job market is “so strong,” how comes wages are flat? In fact, adjusted for real inflation, real wages are declining. If the job market was robust, wages would be soaring. Speaking of which, IF the labor market was what the Government wants us to believe it is, the FOMC would tripping all over itself to hike the Fed Funds rate. And the rate-hikes would be in chunks of 50-75 basis points – not the occasional 0.25% rise.

The Housing Market Is Starting To Fall Apart
Last week I summarized January existing home sales, which were released on Wednesday, Feb 21st. Existing home sales dropped 3.2% from December and nearly 5% from January 2017. Those statistics are based on the SAAR (Seasonally Adjusted Annualized Rate) calculus. Larry Yun, the National Association of Realtors chief salesman, continues to propagate the “low inventory” propaganda.

Hi BenjaminIs,

I always wanted to combine technicals and fundamentals. While on technicals there are millions of strategies, courses and information out there there is hardly anything on fundamentals. While fundamentals might not gives on the exact entries and exits it gives added probabilities one ones trades as one is in sync with the big guys. I have always wanted to learn more on this subject bringing technicals, fundamentals and sentiment together. I have subscribed to your thread and hope that by doing this I can bring more and more puzzle pieces together to finally get the full picture.

Best regards

Jester

Good Morning Jester

I will assist you by going back to the beginning of this thread that I started on December 3, 2016 and bring forward some of the more informative posts.

Post here at least once a day and I will answer any questions that you have. Please feel free to add your own thoughts and share your own skills and knowledge.


Benjaminis

http://finviz.com/forex.ashx

The above link is a great visual resource that I use. Enjoy !!!

Daily Visual Chart on EUR/USD

http://finviz.com/forex_charts.ashx?p=d1&t=EURUSD

FINVIZ - Charts on 2 Year , 5 Year , 10 Year and 30 Year US Bonds.

http://finviz.com/futures_charts.ashx?t=BONDS&p=d1

THE KEY US BOND CHART TO MONITOR !!!

http://finviz.com/futures_charts.ashx?t=ZN&p=d1

Benjaminis

FREE OFFER AT NO COST OTHER THAN YOUR TIME !!!

I will teach the first 6 traders that sign up here how to earn 5% NET a month or ROI of 5%

CONDITIONS:

(1) You must have been trading for at least one year.
(2) Your methods have not been profitable.
(3) You will invest one hour a day of your time.
(4) You will open up a $50,000 US Funds Demo Account with FXCM UK
(5) You will give me your user name and password so that I can check your results daily. (By PM)
(6) I will give you 30 days of my time and knowledge and at the end of the 30 days I will give you a grade out of 100 HOWEVER your real Grade will be if you show NET PROFIT or ROI of 5% or $2500.00.


The first 6 qualified persons that sign up and agree to the above conditions will be given my Private Email address so we can communicate. All QUESTIONS AND ANSWERS WILL BE PUBLISHED ON THIS THREAD IN ORDER TO HAVE FULL DISCLOSURE.

Thank You and have a Great Trading Day !!!


Benjaminis

Psychological Challenges of Speculative Trading

An Extract from the book of “Beat the Odds in Forex Trading” by Igor Toshchakov, published by Wiley

A successful trader’s career mainly depends on his or her psychological stability in stressful situations, which are common in the process of trading. Theoretical knowledge can be acquired by reading professional literature; practical skills and experience are acquired in the process of actual trading. The most difficult process is adjusting psychological stress, because in real life it is impossible to completely eliminate the stress factor influencing human activity. Underestimating the stress factor could play a mean trick on trader and even completely block their abilities to make reasonable decisions in real trading situations. The psychological stress of those trading in the FOREX (and any other) market is extremely high. Traders must work under permanent psychological pressure, making decisions in highly unpredictable and uncertain market situations.

Each trader goes through mistakes, failures, and losses in his or her own way, in accord with his or her personality and temper. Some might blame their failure on market’s “wrong behaviour”, which didn’t comply with the trader’s brilliant forecast and caused the failure of the magnificently planned speculative combination. Others blame themselves and their own inabilities to make right decisions in situations, which afterwards seem to be simple. It is an interesting fact that, in hindsight, traders usually find the decision that should have been made at the lost critical moment and can reasonably prove their point of view. Why can they find the right decision so easily and quickly in hindsight? Was the trader unable to do so at the right moment? I don’t think it can be simply explained by looking at yesterday’s situation from today’s point of view. I do not think it can be explained by the fact that classical technical analysis at allows for multiple explanations of almost any market situation. It is always possible to find an appropriate basic explanation for any market shift after the event takes place. In the heat of the moment, however, the trader was influence by stress, and that stress caused the error. This is proven by the fact that most novice traders show exceptionally good (and even phenomenal) results trading dummy accounts but can’t even come near those result when trading with real money.

Being permanently under stress, a trader can often make insufficiently considered, impulsive, and therefore, wrong decisions that result in losses or premature liquidation of profitable position, that is, in lost profit. Sometimes, after a few successive failures with various trades, traders become fearful of the market. They are in as state of psychological stupor, and even a simple market situation may cause panic. They cannot overcome their emotions or soberly evaluate the current situation, and they are unable to make any decision – reasonable or otherwise. In many cases when the market situation shifts against the trader’s position, they can only passively watch the growth of their losses, because they are unable to make any decision at all. Often, after the market stabilizes and traders have the opportunity to calmly analyse daily diagrams of currency fluctuations, they come to the conclusion that the main cause of failure was not the lack of knowledge or training but their own emotions. However, the situation cannot be reversed. Time has passed, money has been lost, even everything should be begun again.

Another problem that causes severe and even catastrophic consequences is the trader’s wilful thinking. In this case, treaders are sure that their forecast of market trends is solely correct. They feel the market cannot and should not give any surprises. They do not consider other options that could be helpful or they think of other options in a vague and uncertain form. Sometimes, traders consider a market shift against their positions. They acquire new contracts at a lower price in the hope that the market situation will come back, and all the positions will become highly profitable. Afterwards, as the situation worsens, they will be able to come out of the market without serious losses. Being sire they are right, traders lose the ability to critically evaluate the condition of the market and accordingly their own position in the market. In this case, they consider only those basic and technical features that justify their wishful thinking, and they discard the contradicting features. This wishful thinking costs them dearly and can lead to psychological frustration. The market’s “wrong behaviour” not only deprives traders of a certain amount of money and often ruins their trading account, but also undermines their self-esteem and their hopes of being a winner in the trading battle.

After such a loss, traders blame themselves, repeatedly going through the details of the unsuccessful trade. They blame the market for the “wrong behaviour” or themselves for errors in what then seems an absolutely clear situation. Sometimes, the trader-market relationship takes the form of a vendetta. Traders consider the market as their personal enemy, treat it in an unfriendly way (even with hate) and dream of immediate revenge. Doing so, they miss the fact ht at they are essentially blaming nature for changing sunny weather to rain. It is very important to be prepared beforehand for this change. Traders should always have close at hand one or few options in case of sudden change of the situation/weather, so that their foresight assures their good time or good profit.

The third main psychological problem is trader uncertainty, especially when traders are inexperienced in abilities and skills – specifically about each market position they hold. Immediately after each position is opened and a money contract is bought, treaders start questioning their choices. This is revealed most vividly in the case of a moderately active market at the moment of fluctuations close to the opening price of the position. Any moment (even insignificant) against their position causes traders to have an irresistible desire to sell the recently acquired contract to limit losses, until it is too late and the market does not shift too far away from their position opening price. On the other hand, an insignificant market shift in the desirable direction causes the same desire to eliminate the position, until it provides for any (even tiny) profit and before this profit does not turn into losses.

Sacred and trouble traders rush and race about. They open and liquidate their positions too often, and experience many small losses and gains. Within a short period of time, they turn intermittently into bulls or bears. As a result, they suffer losses on a dealer’s spread and/or commissions when there were no significant market changes, and all the market fluctuations were no more than just regular market “noise”. Such losses are typical for beginners and individual traders with small investment capital or little experience and insufficiently psychological preparation.

Not uncommon are cases of traders’ impulsive decisions on trading, without any plans or serious preliminary market analysis. The position is opened under an impulsive, invalid emotional reaction. Often, it can be explained by traders’ fear of losing a brilliant opportunity to earn money they think is being offered by the market at that moment. I have witnessed these attempts to jump onto the last carriage of a departing train, and such attempts have ruined a lot of traders. Many traders cannot calmly watch any kind of market movements. Some of my students have confirmed this reality. If they have no positions at the moment of more or less significant market movement, they consider it as a lost opportunity to gain profit. This can inflict a serious shock to them.

When they have no position, they seem unable to realize that each market movement can be considered both ways, and the opposite situation can quite possibly develop. Statistics show that, at each market movement, the chances to lose are much higher than to profit. How does it happen that reasonable people (who in everyday life, without any emotion, can watch a bank casher counting other people’s money) consider the fact of market movement as a threat to their own pockets? Why is other people’s money in the hands of a bank cashier not considered as a lost profit, whereas capital shift on the market and the corresponding quote fluctuations are causes of negative emotions? I think the answer is in the illusory simplicity of business itself, which is considered by many people as a good and simple opportunity to earn a lot of easy money. Similar notions are widely spread among novice currency traders. The soon traders abandon such ideas, the sooner they become professionally efficient traders.

The most difficult problem for every trader (regardless of their experiences) is to learn as quickly as possible how to recover quickly from losses, which are inevitable in this business. At the same time, they must learn to handle shocks and psychological damage inflicted by the losses, because there situations could negatively influence their future work.

The losses themselves and the fear of losing, both of which permanently torture traders, negatively influence their ability to make reasonable decisions in a complicated situation. These factors also undermine traders’ ability to follow their own rules about trade strategies and systems.

I have become personally acquainted with hundreds of traders and have watched their activities. I have taught many students, and have had my own experience as a trader at various steps of my career in the currency market. Therefore, I have come to the conclusion that the main causes of trader failures in speculative operations in the FOREX marker are without a doubt those associated with psychological trauma – the inability to control their own emotions and to find an adequate way to fight stress.


Benjaminis

Forex Market Hours

www.forexmarkethours.com

also

http://fxtrade.oanda.com/resources/fxmarkethours/

There are at least two reasons why you should track the major forex market trading hours:

 

1. The first hour after a major market opens is considered very important and often indicates how the session might develop.
2. In periods when market 'trading hours' overlap, liquidity tends to increase because more traders are participating in the FX market.

In case anyone here reading any of these articles or my comments has any questions please feel free to post your questions. No question is stupid and you can only learn by asking questions. I see now that there are 10 traders reading this and only myself is a member so it is simple and easy to register so that you can post anywhere in Forex Factory and also enter into a discussion with me on these important world changing issues if you care to. Have a good evening.




Benjaminis

1. Post 69
2. Cleanup
3. Quote
4. Dec 10, 2016 3:19pm

1. Fadhl
2. Joined Jan 2016 | Status: Member | 626 Posts

Quoting BenjaminIs
I am looking for 5 more people to learn how to net 5% a month if they qualify for my trading course. Thank You and Good Night !!!
Hi Benjamin: I may suggest that you share your knowledge publicly to allow readers to exchange with you and build some relationship with them. I think through this way, everyone is winning and you don't have the workload of assessing everyday how your trainees did. Personally, I can't afford one hour everyday, but I'm willing to learn at my pace.
This said, I would thank you for your offer.

1. Post 70
2. Cleanup
3. Quote
4. Dec 10, 2016 4:31pm | Edited at 5:26pm

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,638 Posts | Online Now

Quoting Fadhl
{quote} Hi Benjamin: I may suggest that you share your knowledge publicly to allow readers to exchange with you and build some relationship with them. I think through this way, everyone is winning and you don't have the workload of assessing everyday how your trainees did. Personally, I can't afford one hour everyday, but I'm willing to learn at my pace. This said, I would thank you for your offer.
I will post tomorrow how to go about opening a Demo Account with FXCM UK and if you would like to tell posters about this thread then of course he would make the thread more interesting for everyone. That is one of the reasons that I encourage people to register with Forex Factory so that they can post.

THE WHOLE POINT OF THIS THREAD IS TO HELP TRADERS LEARN FROM A PROFESSIONAL TRADER HOW TO TRADE AND WITHOUT RISK FINANCIALLY SHOW HOW TO LEARN THE RIGHTS HABITS where it is accepted that 95% of all Forex Currency Traders lose. You can learn how to get into the 5% category only if you can learn to first CONTROL your Ego , Greed and FEAR !!!

It is quite easy to open a $50,000 US Dollars Demo Account with FXCM UK. Just log on and click on the link to open a $50,000 US Funds Practice account and set it to currency in US Dollars and you get your User Name and your Password. DO NOT DO ANY TRADES until I explain to you the 16 Symbols that you need to set up on your Trading Platform. You can post questions on this thread. I will answer promptly. Thank You.

1. Post 87
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4. Dec 11, 2016 4:07pm | Edited at 4:17pm

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,639 Posts | Online Now

VERY IMPORTANT TO FOLLOW:

http://www.investing.com/rates-bonds...ear-bond-yield

As the 10 Year US Bonds go down in value the Yields go up and do the work of the FED whatever the FED does.

Look what happened since November 9, 2016 since the US Presidential elections.

http://www.investing.com/rates-bonds...ear-bond-yield

STRONG BUY ? Not if the Dow reverses with Risk Off. Look at the USD/JPY chart.

http://www.investing.com/currencies/usd-jpy

Hello all traders not registered to post on Forex Factory. It would be very helpful to have questions on I am sure this new subject matter so please register and post any questions that you may have. The only way to learn is to ask questions. Thanks for your interest.

Chart from Finviz for USD/JPY

https://finviz.com/forex_charts.ashx?t=USDJPY&tf=h1

US Dollar Index Finviz Chart

https://finviz.com/futures_charts.ashx?t=DX&p=h1

The Euro makes up 57.6% of the index. This is a FUTURES chart not the Spot Price.


Benjaminis

1. Dec 12, 2016 9:05am

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,640 Posts | Online Now

Here is the 5 minute chart from Finviz of USD/JPY.

http://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5

As you can see what happened overnight for the reasons already explained in previous posts this morning. If I had been awake as I usually am for sure I would have gone short one additional position of USD/JPY and taken my profits this morning. There is no way that you can lose by taking a profit. That position NOT TAKEN is my very short term trading position trading around my set Trade Plans to keep me involved until the direction goes one way or another.

By the way technical indicators are very important to my overall trading methods as I have designed my own standard template for my technical indicators which are used to show support and resistance. I use the 5 minute charts as well the 15 minute charts. I will get into the technical side of trading in later posts.

http://www.investing.com/currencies/usd-jpy

The last two posts that I did lead to a Trade Plan of shorting 3 positions of USD/JPY using capital of $3000 US Dollars and ONLY to be followed using a $50,000 US Funds Demo Account with FXCM UK. If you decide to take me up on my offer to teach proper Forex trading using my Money Flow Method and Risk Management and limited to only the first 6 people that post their name here on this thread as there is much work involved for me in doing this however I am convinced beyond any doubt that as long as the Forex Trader can control his/her EGO and Greed and the most destructive emotion , FEAR then using my method my goal is to assist the demo trader to earn a minimum profit in demo terms of course of $2500.00 or 5% of the trading account.

I repeat the conditions of my offer below.

It is common knowledge that 95% of all currency traders specifically the retail traders lose their money. There is a reason of course. I took over 3 years to learn my trade only Demo Trading and that was a great learning experience for me since FEAR was eliminated and Greed was not really much of any issue since I could not spend my demo dollars on the nice things in life. :-)

The EGO in my case was build up since over 75% of all my forex trades were winning ones and I averaged a ROI or return on demo investment of $50,000 US dollars of a minimum of 5% each and every month during the last year during 2005 of my demo trading. I would NEVER trade real funds unless my starting capital was $25,000 US and there is a reason behind that.

Risk Management is the MOST IMPORTANT part of my teaching. I am still looking for a maximum of 6 forex traders that would take 30 days to learn free of charge my Money Flow Method with proper Risk Management.

FREE OFFER AT NO COST OTHER THAN YOUR TIME !!!

I will teach the first 6 traders that sign up here how to earn 5% NET a month or ROI of 5%

FULL DISCLOSURE: I used to be an Introducing Broker with FXCM in New York back during 2007 and 2008. I had a real funds account for a client located in Hong Kong and I was managing $125,000 US Funds. I have no business arrangement with either FXCM in New York or FXCM UK in London.

I moved all my business to Ava Trade in Ireland and I am an introducing Broker with them however I have recently decided to bring all my business back to Canada so I am not active with Ava Trade at the moment. I am working on putting up a website early next year during 2017 and I will have a 24 hour by subscription service charging no more than $50.00 US a month for full access. I used to use the services of Trade The News in order to have full voice news during the 24 hour FX trading day. I today entered into an understanding with Ransquak to use their live platform under a subscription contract which my corporation will use.

If any of the 6 initial persons here take my 30 day trading course and go through the 30 day period then when my website is up and running next year the 6 here will get a lifetime subscription at no cost. I plan to trade for at least 10 more years since I really love what I do and enjoy sharing my knowledge and skills with others.


Benjaminis

1. Post 4,347
2. Cleanup
3. Quote
4. Feb 13, 2018 5:39am | Edited at 6:13am

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,642 Posts | Online Now

Party Time!
So now, it’s party time.


“Laissez les bons temps rouler,” as they say in New Orleans.

As predicted in our “headlines from the future” on Friday, look for $2 trillion deficits – 10% of GDP!

By 2027, we should have a federal debt near $40 trillion.

But that’s the easy part…

The actions of politicians are more or less predictable; the market’s reaction is not. Most likely, the unstoppable force of fed borrowing will collide with the immovable object of the bond market.

The feds are already scheduled to borrow more than $1 trillion over the course of the next year – even without a recession.

This coincides with the Fed unloading bonds at a $600 billion annual pace.

Let’s see: Much less demand for credit… and much more supply.

And no “Powell Put.”

For the moment, the new Fed chief, Jerome Powell, and his governors are staying home, catching up on their Bible reading. The party poopers have forsworn further bond purchases.

So no one is guaranteeing to buy the government’s paper.


Crescendo of Dumbness
Most likely, interest rates will rise… and speculators will begin front-running the Fed.

One of the most looney features of the Bernanke-Yellen leadership years was the “transparency” doctrine.

Unlike their predecessor Alan Greenpsan, who famously spoke in mumbo-jumbo, Ben Bernanke and Janet Yellen telegraphed their intentions to investors.

Unfortunately, neither Fed chief had experience in business… or markets. And they seemed to have no idea how they worked.

Real investing is a win-win proposition: You put your money into a real business. It makes real money. You share in the profits.

Speculating, on the other hand, is win-lose.

Speculators do not buy and sell based on their assessment of the intrinsic value of a given asset. Instead, they look across the table and try to guess what cards other speculators are holding… and what they will do with them.

They look for the “fool at the table” and try to anticipate what dumb mistake he will make.

For the last 10 years, the fool was easily identifiable. It was the Fed.

The U.S. central bank slashed interest rates to near zero to juice up the stock market.

Then under three separate QE programs, it bought more than $4 trillion worth of government bonds at some of the highest prices in history.

And in a breathtaking crescendo of dumbness, it signaled to speculators exactly what it intended to do ahead of time.


Piece of Cake
Naturally, the other players – hedge funds, Wall Street banks, pension funds, etc. – took advantage.

They bought stocks and bonds knowing they could unload them at higher prices.

Uncertainty is what keeps traders honest. They take chances. But they know their bets could go bad. So they are cautious… and often corrected.

But when the Fed – by far the largest player at the table – tells them in advance what it will do, uncertainty declines.

In this way, the Fed greatly reduced risk. And it was “Party On!” – from excess to more excess, with nothing to stop them.

Now, the Fed – clueless as ever – has once again made its intentions known. It’s going to raise interest rates and let the bond pile it built up during QE shrink… removing an important prop from the market.

How long will it take traders to put two and two together now?

Betting against it – by selling stocks and bonds – should be a piece of cake.
Regards,
https://ci6.googleusercontent.com/pr...-signature.png
Bill

Good Morning Everyone

I am going to tie this recent article written by Bill Bonner and shared here this morning and the predictive and factual article written by Professor Fekete on January 9, 2003.

http://www.gold-eagle.com/article/qu...ters-inflation

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Antal E. Fekete

January 9, 2003

That central bankers are the quartermasters of inflation is no longer a controversial assertion. That much was admitted by central banker Alan Greenspan in his speech before the Economic Club of New York on December 19, 2002 (see: www.federalreserve.gov/BoardDocs). He observed that as long as the gold standard was in charge of money-creation the price level was relatively stable. For example, in 1929 it was hardly different from that in 1800. But, after gold was banned and central bankers were put in charge in 1933, the consumer price index nearly doubled in two decades. And in the four decades after that prices quintupled. In other words, under the watch of the gold standard the dollar preserved its purchasing power for a period of one and one third of a century, but under the watch of the central bankers it managed to lose 90 percent of it in half of that time-period.

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The Specter of Deflation
Presently the specter of deflation is haunting the world, so much so that central banker Ben Bernanke felt obliged to address the problem in a speech before the National Economists Club in Washington, D.C., on November 21, 2002 (see: www.federalreserve.gov/BoardDocs). He presented a simplistic view of deflation defining it as a general decline in prices. Actually, it would be more accurate to say that deflation manifests itself through a general decline in prices andinterest rates. Mr. Bernanke identified the source of deflation as a collapse in aggregate demand -- a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers. Of course, this is the view of an unreconstructed Keynesian. But Keynesianism has been brain-dead for some three decades, so we ought to feel emancipated from its tyranny. We identify the source of deflation as reluctance of producers to take the loans that bankers try to push on them through ongoing interest-rate cuts. Uncharacteristically, producers are pessimistic about future profit opportunities. Instead of contracting new debt, they scramble to get out of the old, and try to retrench by reducing inventory.

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Guided Tour of the Star Chamber
Messrs. Greenspan and Bernanke claim that the Federal Reserve has the situation firmly in hand. If deflation were to develop, options for aggressive monetary policy response such as lowering interest rates are available. They admit that the zero lower bound on nominal interest rates presents a problem. Even if debtors were able to refinance loans at zero nominal interest, they may still feel excruciating economic pain caused by high and rising real rates due to the falling price level, as shown by their deteriorating balance sheet. However, Messrs. Greenspan and Bernanke reassure us that monetary policy will never lose its ability to stimulate aggregate demand and the economy, zero interest notwithstanding.

Mr. Bernanke gives us a guided tour of the Star Chamber, showing all the instruments of torture and explaining how they are to be used. The first of these is the printing press. Under a fiat money system the central bank generates inflation by this technology allowing it to create as many dollars as it wishes at essentially no cost. But it is not enough to create fiat money; you must also be able to put it into circulation or, at least, to make credible threats (sic!) to do so. Normally the Fed puts newly created fiat money into circulation through asset purchases. This particular torture instrument is used by the Fed to reduce the value of the dollar in terms of goods and services. Under a paper-money system a determined government and its central bank can always generate higher spending and induce positive inflation, we are told.

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Pushing on a String
If this has the result of pushing short-term interest rates to zero, the Fed will still not be at the end of its rope. It can further stimulate aggregate spending by expanding the menu of assets that it buys. If we do fall into deflation, we can take comfort in the thought that "the logic of the printing press" will ultimately assert itself. Sufficient injections of new money must eventually reverse a deflation.

So what may the Fed do if its target rate, the overnight federal funds rate, has fallen to zero? Why, it will change the target, that's what. It will stimulate spending by lowering interest rates further along the maturity spectrum. It will target the two-year rate by committing to make unlimited purchases of securities maturing in two years or less. But suppose that deflation is so stubborn that spending is not stimulated even as the two- year rate is pushed down to zero. Well, then change the target again, this time, say, to the ten-year rate, committing to make unlimited purchases of securities maturing in ten years or less. And so on, ad libitum. Mr. Bernanke says that lower rates over the entire maturity spectrum of public and private securities should strengthen aggregate demand "in the usual ways", and thus help end deflation.

This betrays our central bankers' ignorance of the nature of the beast. The Fed may be pushing on a string. People may refuse to spend the money in the "usual ways". It is one thing to print fiat dollars, and another to make people spend them. No problem, Mr. Bernanke says. If lowering yields on longer-term securities proved insufficient to re- start spending, the Fed might next consider offering fixed-term loans to banks at zero interest, with a wide-range of private assets (including, among others, corporate bonds, commercial paper, bank loans, and mortgages) deemed eligible as collateral.

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Operation Helicopter-Drop
But the banks may not use the loans at zero interest in the way intended by the Fed. They may not want to make further loans to their clients whose prospects to turn a profit are dim at best. The banks may find it far more attractive to invest in bonds for the capital gains guaranteed by the central bank's zero-interest policy. Business lethargy may not react to loans offered at ever lower rates. In this case Mr. Bernanke recommends the helicopter-drop of money, an idea first suggested by Milton Friedman. There must be a way to put fiat money into circulation, if not by hook then by crook! A broad-based tax- cut financed by open market purchases of securities by the Fed should do the trick. This "manna from heaven" should re-start spending. The Federal Reserve and other policymakers are far from helpless in the face of deflation, even if the rate of interest is already pushed all the way to zero.


Taking Risks out of Bond Speculation
All this talk is old hat, except for the fact that heretofore it hasn't been considered polite behavior for central bankers to flaunt their authority to create fiat money in unlimited quantities, and to boast their power to drive down the value of the dollar in terms of goods and services. More interesting than what these gentlemen say is what they don't say. They studiously avoid reference to the 100 trillion dollar behemoth: the interest-rate derivatives market, and to bond speculation. Derivatives are a tell-tale, revealing the big picture. Far from trying to prevent or to combat it, the Fed is promoting deflation. It does, in fact, act as the quartermaster of deflation. Every one of the torture instruments in the Star Chamber enumerated above is making deflation worse, not better.


What the $100 trillion derivatives market shows is that the main feature of deflation is the invisible but nonetheless real bull market in bonds. Nobody is talking about it, although the bull market in bonds that started in 1980 has been the largest of all bull markets of all kinds in all history. Fabulous fortunes have been made and will be made before it is over, thanks to the Fed that has taken the risk out of bond speculation.

The speeches of Messrs. Greenspan and Bernanke are the best example to demonstrate the charge. Speculators are told that the Fed is prepared to buy unlimited quantities of securities across the entire maturity spectrum. What is this if not an invitation to get aboard the bandwagon and share the ride to infinite riches? Come and get the bonds before we snap them up. Fear not, your investment is absolutely safe. Your friendly central banker has made bond speculation risk-free. He underwrites the unlimited capital gains you are going to make on your speculative bondholdings (or on your long positions on bond futures, or on your call options on bond futures). The figure $100 trillion shows the extent to which speculators have rallied to the call of the Pied Piper. It measures bets in the aggregate that speculators have made on ever-increasing bond prices or, what is the same to say, on ever falling interest rates.


Of course, interest rates will never go to zero. They just keep getting halved. The yield on long-term Treasury bonds was 16% in 1980. It has been halved to 8% and will be halved again to 4%, according to the script of Messrs. Greenspan and Bernanke. After that the target at successive halvings will be: 2%, 1%, 0.5%, 0.25%, 0.125%, 0.0625%, etc. As you see, it never gets to 0%.

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Falling Interest Rates Squeeze Profits
Paradoxically, falling interest rates squeeze profits. Conventional wisdom suggests otherwise: lower interest rates are considered salubrious to business. However, we ought to distinguish between a low interest rate structure and a falling one. Only the former is salubrious; the latter is lethal. Falling interest rates reveal that past investments in physical capital have been made at too high a rate of interest in view of lower rates presently available. Furthermore, even the low rates of today will appear too high tomorrow. This explains business lethargy. Expanding production would appear foolhardy as long as the decline in the rate of interest continued. Falling interest rates make the cost of servicing past investments soar. As bond prices rise, the present value of debt will rise as well. So does the cost of liquidating a liability. These increases hit the profit margin, regardless whether the fact is realized by the producers or not. If not realized, the outcome will be that much worse. As the firm is paying out phantom profits in dividends, it is undermining its own financial strength already weakened by the falling price level. At one point the firm will be unable to pay its bills and will be forced to seek bankruptcy protection. Then there is the matter of the domino-effect. Even perfectly healthy firms are hit by deflation: they may find it impossible to collect their receivables and go under after their debtors have -- all because of the falling interest rate structure.


Financial Vampirism
In the view presented here deflation is a huge wealth-transfer scheme from the producing sector to the financial sector, denuding the former of its capital, and enriching the latter with risk-free capital gains. Indeed, the beneficiaries of the falling interest-rate structure, making risk-free profits thanks to the zero-interest policy of the central bank, are the principals of the financial sector, chief among them those of the big money-center banks. Their obscene profits do not come out of thin air. Their wealth is not newly created wealth. It is existing wealth siphoned off the balance sheet of producing enterprise, forced into bankruptcy by the falling interest-rate structure. This is modern vampirism practiced by the financial sector, aided and abetted by the central bank, and its victim is the producing sector.
The bear market in stocks is not the cause but the effect of deflation. The cause is the artificial bull market in bonds financed by the central bank. If you ask the bond speculator about his obscene profits while the rest of the economy crumbles around him, he will shrug: "I play by the rules. And I did not make those rules either."


Bond Speculation Is No Zero-Sum Game
The proof of complicity of the banks in the bond-speculation-scheme is the $100 trillion derivative monster. No small-time speculators could create such a Moloch. It was created by the big money-center banks, for their own benefit, with complete disregard for the disastrous effect it has on the producers of goods and services. The total face value of outstanding bonds falls far short of the colossal figure of $100 trillion. It is against common sense, and an invitation to disaster, to allow speculative long positions to exceed total supply. Messrs. Greenspan and Bernanke have no comment on all this, except to confirm policies that are conducive to further increasing the debt behemoth and further whetting the appetite of the $100 trillion derivatives Moloch.

We are told that the sum of $100 trillion is "only a notional amount". However, the profits of the bond speculators are not notional. They are payable in cold cash. If indeed interest rates did go down, and the price of bonds did go up, say, one percent, then the speculators' profit would be $1 trillion in cash. Who is going to pay that?

Economists will tell you that the profit of one bond speculator is the loss of another. Don't buy that. It would be true only if speculation was a zero-sum game, and it was a case of stabilizing speculation. It is true that some speculative markets answer that description. An example is the commodity market trading agricultural goods. It fits the model of a zero-sum game. This is so because the risks involved in commodity trading are nature-given, having to do with the fickleness of the weather and the unpredictability of natural catastrophes such as a flood or a tornado. Human mortals are not privileged to see the future. Speculators in agricultural commodities make money by resisting the formation of price trends. But in markets where the risks are made (unmade!) by man such as the market for bonds and their derivatives, speculation is not a zero-sum game. There, speculators make money not by resisting price trends but by riding them. This is the case of destabilizing speculation.

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Power to Create Is Power to Destroy
The producers are sitting ducks in this speculative shoot-out. They have no choice. They must carry the risk of owning productive capital, without which there will be no consumer goods for Mr. Greenspan and Mr. Bernanke, or for you and me. This is an accurate description of the mechanism whereby the capital of the producing sector is surreptitiously siphoned off for the benefit of the financial sector as the rate of interest is driven down to zero. The producing sector is condemned to bankruptcy. It is a victim of plunder sanctioned by the Criminal Code. This is the essence of deflation: speculators aided and abetted by the central bank are allowed to bid bond prices sky-high, in complete disregard for the havoc that falling interest rates will wreak with the capital accounts of the producing sector, not to mention losses inflicted on stockholders. The $100 trillion derivatives market is a monument to the folly of man in delegating unlimited power to the central banker to create as much fiat money as he wishes. Former central banker Paul Volcker knows. He has been there. He is quoted as saying that "the truly unique power of a central bank is to create money and, ultimately, the power to create is the power to destroy." If the central banker has unlimited power to create, then he has unlimited power to destroy. And destroy he does, especially the savings of ordinary people.


Why Are Economists Silent?
I am aware that my warnings will be received with a great deal of skepticism. The central banker as the quartermaster-general of deflation? Arrant nonsense! Not only does the central bank has its own army of research economists, it also has the benefit of the knowledge and research of the entire profession. There can be no question that the central bank wields its awesome power while enjoying the best economic advice money can buy! Siphoning off wealth from the balance sheet of others is straight out of science fiction, my critics charge. The allegedly injured party, the producing sector, hasn't complained that its capital is open to pilferage. The media in reporting the crash of Swissair and United did not suggest foul play in plundering the airlines' balance sheets.

Yet you may dismiss my charges only at your own peril. The awareness is growing that not just the media, but the entire profession of monetary economists has been bought off by the central banking establishment in order to put the best possible spin on our fiat money system. In an interview on December 17, 2002, entitled "Our Dishonest and Corrupt Monetary System" (www.kitco.com), Dr. Larry Parks recalled that John Kenneth Galbraith, the Paul M. Warburg Professor Emeritus of Harvard University, had published a book in 1975 entitled Money, Whence It Came, Where It Went. In this book the professor wrote: "The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it." In other words, Galbraith is saying that when it comes to money, economists lie! Dr. Parks asks: why do they lie? They have tenure. Why don't they tell the truth? He concludes that the monetary economists, for the last fifty years or more, have been bought off. With Nobel-prizes, endowed chairs, research grants, board memberships, and other perks. Monetary economists have betrayed their Muse, to serve Mammon.


Off-Balance-Sheet Wizardry
That the profession of the accountants has been bought off by the financial sector came to light recently in the wake of the Wall Street accounting scandals. But in spite of the great publicity given to these scandals by the media, the problem has not been fixed. A few small-time crooks may have been apprehended, but none of the authors of the scheme whereby banks are allowed to cook their books has been charged. The truth is that banks can carry assets, such as bets in the derivatives markets, "off balance sheet". They do this in order to find shelter from the scrutiny of depositors, creditors, shareholders; more generally, from the scrutiny of taxpayers at large. Accountants, regulators, and bank inspectors know this, but that's a different matter. Apparently, they have been bribed, too. They are part of the conspiracy. This is how Dr. Parks describes the fraud:
"Fractional reserve lending is jargon for creating money out of nothing. That's what that means. In the case of derivatives, these are bets that the banks make. The banks today in the aggregate worldwide have made roughly $110 trillion worth of bets. That's all they are. Banks are making bets and creating money. One of the things that obscures this for everybody is that banks alone do not have to reveal their entire balance sheets, as all other public companies must do under Securities and Exchange Commission regulations. Banks have the option, with some of their assets, to put them in a basket that they call "held for investment". When they put assets in that basket (they could be stocks, bonds, or whatever), then those assets are held at historical costs, rather than at market value... Nobody else gets away with this except for them. The reason they get away with it is because they say, in effect: 'If we had to mark everything to market, there would be too much volatility in our earnings. We don't want you to find out.' All this is secret. It's called bank secrecy... There are winners and there are losers. The losers are the ordinary people who lose their pensions, their savings, their jobs. The winners are the financial guys... These guys have no downside... Do you know what the banks took out of the economy last year? Nearly $400 billion. The Wall Street firms who get transaction fees for moving the newly created money around took another roughly $250 billion. Between them they took out nearly three times the amount of money that the auto industry took out. But from the auto industry we got 20 million cars. What did we get from these guys? We got cancelled checks and bank statements. This is monstrous, don't you think?"


Playing with Fire
I am not predicting that interest rates will keep falling to zero and that the world economy will succumb to deflation. I just want to sound the alarm that it might, in view of the counter-productive monetary policy of central bankers. Other scenarios, no less frightening, are also possible. Paradoxically, the threat of zero-interest (deflation) and that of infinite-interest (hyperinflation) are separated only by the knee-jerk reaction of the marginal bond speculator. He may get scared by the threats of Mr. Bernanke to undermine the purchasing power of the dollar further. As he becomes persuaded by the "logic of the printing press", the marginal bond speculator may cut and run. Then other bond speculators, especially those abroad, could dump their U.S. Treasury bonds, too, and run for the exit. Quite possibly Mr. Bernanke thought that he was just "fine-tuning" the purchasing power of the dollar. Under this scenario he would destroy it. When the central banker threatens to reduce the value of the dollar in terms of goods and services, as Mr. Bernanke does, he is playing with fire. After dumping the bonds, people may dump the dollars, too. First the foreign and then the domestic holders. They need not be reminded that the central banker has the card to trump deflation -- by triggering hyperinflation. How desperate must the specter of deflation appear to Mr. Bernanke that he has seen it fit to flaunt his possession of that card!

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Congress, Not the Fed, Has the Solution
It is not too late for the U.S. Congress to act to fend off disaster. It should immediately take away the unlimited power from Messrs. Greenspan and Bernanke to create as much fiat money as they wish, and to drive down the value of the dollar in terms of goods and services. Not only are the present monetary arrangements blatantly unconstitutional, they are responsible for the destabilization of the rate of interest allowing it to swing from one extreme to the other, causing grievous economic damage along its path. The House of Representatives, to which the Constitution delegated the monetary powers, can rectify this by going back to constitutional money. It should stabilize interest rates without any further delay, and remove the threat of both zero and infinite interest, by opening the Mint to gold and silver. This is a Republic based on checks and balances. It has a government of limited and enumerated powers. Neither arm: not the legislative, not the executive, nor the judiciary may claim to have unlimited powers under the Constitution. Why should officers of the Federal Reserve be allowed to make such claims?
Free coinage, a right of the people enshrined in the U.S. Constitution, would remove the greatest threat this Republic has faced in its entire history up to now, greater even than that of foreign terrorists. This is the threat to destroy the capital of the producing sector, through the machinations of the financial sector, aided and abetted by the Federal Reserve.



Copyright 2003 by Antal E. Fekete

January 18, 2003

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CORRECTION
I am very grateful to James E. Schoenbeck for calling my attention to a mathematical error in the example I used in my latest article The Central Banker As the Quartermaster-General of Deflation. I also used the same example in earlier articles such as Wrecker's Ball of Swinging Interest Rates. Mr. Schoenbeck wrote me on January 8, 2003, as follows:
"Professor:
While I enjoyed reading your article, I take dramatic exception to your pricing of the hypothetical bond as interest rates decline. If the interest rate dropped from 16% to 0% overnight, the price on the 30-year bond with 16% coupon, $1,000 par, would go to $5,800. A nice increase, to be sure, but nowhere near the 1,000-fold capital gains of which you talk

While it is true that the value of a 30-year bond will almost double when the rate is halved from 16 to 8%, it is no longer true as it is halved further from 8 to 4%, from 4 to 2%, from 2 to 1%, etc. Below is a table showing how the value of a $1,000 investment in a 30-year bond goes up with each halving (after which the investor takes profits and rolls out to a new 30-year maturity)

16 to 8%$1,000 to $1,900- - - - - - - - - - - - - - -
8 to 4%$1,000 to $1,700or $1,900 to $3,200
4 to 2%$1,000 to $1,450or $3,200 to $4,684
2 to 1%$1,000 to $1,260or $4,684 to $5,855
1 to 0.5%$1,000 to $1,140or $5,855 to $6,675
0.5 to 0.25%$1,000 to $1,070or $6,675 to $7,142
0.25 to 0.125%$1,000 to $1,037or $7,142 to $7,406
0.125 to 0.0625%$1,000 to $1,019or $7,406 to $7,546
Wouldn't you agree that we are fast approaching a limit here? The value of the $1,000 investment will stay below $10,000 no matter how many times the rate of interest is cut into half, and will never be worth anything like $1,024,000 under any circumstances. Sorry... but making money is not that easy..."

James E. Schoenbeck
[email protected]
I concede that under the simple strategy of buying and holding the 30-year bond, or continually rolling it over to new 30-year bonds, the $1,000 investment cannot be doubled in value with each successive halvings of the rate of interest. But there are other more sophisticated strategies available involving strip bonds, and derivatives such as: bond futures, call and put options on bond futures, knock-out calls and knock-out puts, interest-rate swaps, and various combinations of these which bond speculators can use, and do use, in order to double their investment (or do even better) every time the rate of interest is halved. I quote from J. Taylor's Gold & Technology Stocks newsletter, January 7, 2003, issue (www.miningstocks.com):

"Michael B. O'Higgins was able to turn $1,000 into $415,302 by being in bonds, not stocks... If you invested $1,000 in the Dow in 1972, that investment would have been worth only $27,347 as of December 27, 2002. But had you invested $1,000 mostly in bonds during that time, your initial investment would have turned into $422,819." (Visit www.miningstocks.com for more information on this amazing but true story which can be fully documented. The point is that lenders make a killing during periods of falling interest rates at the expense of debtors.)



But even these fabulous profits could not explain the creation of the $100 trillion derivatives market coming, as it did, out of nowhere. Individual bond speculators could not possibly accomplish this feat. It was accomplished by the big money-center banks. They are responsible for the prolonged agonizing fall of the interest-rate structure, the flipside of which is the snowballing of the derivatives monster. They make up the bond market. They run it. They buy the bonds and interest-rate derivatives before the Fed can buy, since the Fed buys through services they can provide. If there has ever been socially devastating insider trading, then this is it.
My point is that Keynesian monetary policy takes the risk out of bond speculation. It makes it extremely profitable and a sure bet. This explains the persistent fall in interest rates, and the snowballing of the derivatives market, all of which spell deflation. Deflation is not merely falling prices; it is falling prices plus falling interest rates, squeezing the debtors. This deadly combination is not an Act of God. It is caused by unlimited speculation in bonds, with profits underwritten by the central bank.

Keynesian contra-cyclical monetary policy and "deflation control" is a disaster. Nostrums advocated by Milton Friedman and other monetarists are equally disastrous. Far from containing deflation, the central bank is causing it, through its counter-productive measures such as bond-buying programs widely advertised through speaking engagements such as those of Messrs. Greenspan and Bernanke, prompting more and more bond speculators to climb on the bandwagon to have a free ride to riches. Rather than relieving debt-implosion, this mindless monetary policy is, in fact, the one identifiable cause of it through the bankrupting of the producing sector.

Mr. Bernanke made a solemn vow to Milton Friedman at his 90th birthday party at the University of Chicago. He vowed that the Fed would not repeat the mistakes it had made in the 1930's in not whipping and chastizing deflation vigorously enough. This brings to mind the Biblical story of King Rehoboam, the son of King Solomon, who answered the people when they petitioned him to lighten their burden: "My father hath made your yoke heavy; I will add to your yoke. My father chastized you with whips; I will chastize you with scorpions." (First Book of Kings, 12:11.) May God save the producers of this country from the yoke and the scorpions of the Fed.
January18, 2003

Antal E. Fekete

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4. Feb 22, 2018 6:41am

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,643 Posts | Online Now

http://traderfeed.blogspot.ca/2018/0...hology-to.html

https://3.bp.blogspot.com/-2mTxc0vQT...rettQuote3.jpg
Here is a series of TraderFeed posts that look at valuable market indicators and the psychology of making best use of them:
* Identifying When Markets Are Changing



Lessons in Trading and Psychology - 1: Regime Changes
https://4.bp.blogspot.com/-mwORgVaDE...TICK020218.jpg
In this series of posts, we'll look at ways of integrating trading psychology and the process of trading. It is my hope that the series will illustrate the richness of the relationship between trading and psychology--a depth rarely captured in traditional writings on the topic.

Here we see a chart of SPY (blue line; 5 minute values) from December 15th through this past Friday, February 2nd. In red, we see a 2-hour moving average of NYSE TICK values over that same period. Recall that this measure captures the number of stocks trading on upticks minus the number trading on downticks at each moment of the trading day. The symbol is $TICK on the e-Signal platform and most others

Note that for a good part of the first half of the chart, the NYSE TICK values stayed above the zero line. As SPY moved higher, we saw evidence of buying strength: more stocks trading on upticks than downticks. Look, however, what happened in the second half of the chart. The distribution of TICK values shifted and we now saw more selling pressure than buying pressure--even as SPY moved to all time highs.

In other words, the psychology of the market changed--we shifted from a buying regime to a selling one--well before SPY made its recent correction. The change in the distribution of TICK values alerted us to market vulnerability.

Here is an analogy: suppose the economy of the U.S. is quite strong in large urban areas of the east and west coasts, but weak everywhere else. A company's sales continue to rise, but when management looks at the distribution of sales, they see that fewer and fewer regions are holding up the rest. An alert management would not be high-fiving over record earnings. They would be reducing production and shifting the product mix to prepare for potential economic downturn.

The psychological takeaway is that we need to drill down and look beneath the market surface and approach each fresh set of data with an open mind. On the day we made a peak in SPY, we had 599 stocks make fresh three month highs and 199 register new monthly lows. Two weeks before that, we had almost 900 new three month highs against 135 lows (data from Barchart.com). The open mind respects price action and market strength, but also is alert to cracks beneath the surface. Then, when price can no longer sustain new highs, volatility increases, and TICK readings become very negative, that alertness allows for a quick transition to the new regime.

You have to have the right information, and you have to have the right mindset of openness. That is an important way that trading and psychology come together to create success.
Further Reading:

NYSE TICK as a Useful Trading Tool

TraderFeed Home Page and Menu

* Using Volume to Understand Market Moves

* Trading Intraday Market Reversals

* Adjusting Your Trading for Market Volatility

* Tracking and Trading Cycles in the Market


TraderFeed Home Page and Index
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Posted by Brett Steenbarger, Ph.D.at 8:31 AM

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1. BenjaminIs
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From a Thread called Knowledge Is Power
Copy and Paste


We welcome constructive criticism and well founded discussion. Inflammatory, rude, repetitive, offensive, off-topic or otherwise disruptive messages designed intentionally to annoy, stimulate or antagonize the existing members or alter the flow of discussion are NOT welcome and will be reported to the moderator team.

I will also start a sister-thread as a digest and to store all the cream from this thread and also as storage for all indicators posted for ease of reference.

10 Trading Rules for Successful Traders
1. Limit your losses.
2. Let your profits run.
3. Keep position sizes within reason.
4. Know your risk-reward ration.
5. Be adequately capitalised.
6. Dont fight the trend.
7. Never add to losing positions. Dont average out.
8. Know market expectations.
9. Learn from your mistakes keep a trading journal.
10. Have a maximum loss or retracement in profits.


For beginners, please read this free Forex education material and learn to be a successful trader: www.BabyPips.com

And also you are advised to read these excellent books:
1. Day Trading the Currency Market: Technical and Fundamental Strategies To Profit from Market Swings (Wiley Trading) (Hardcover) - by Kathy Lien

2. Technical Analysis of the Currency Market: Classic Techniques for Profiting from Market Swings and Trader Sentiment (Wiley Trading) (Hardcover) By Boris Schlossberg

3.High Probability Trading Setups for the Currency Market By Boris Schlossberg, Kathy Lien


You can preview the 1st and 3rd books here:
http://books.google.com.my/books?id=...sec=frontcover

http://books.google.com.my/books?id=...+lien%22&psp=1

The Essence of the 3rd book is here:
1. Never let a winner turn into a loser
2. Logic wins, impulse kills
3. Never risk more than 2% per trade
4. Trigger fundamentally, enter and exit technically
5. Always pair strong with weak
6. Being right but being early simply mean you are wrong
7. Know the difference between scaling in and adding to a loser
8. What is mathematically optimal is psychologically impossible
9. Risk can be and is predetermined but reward is unpredictable
10. No excuses, ever

BEWARE:
Why Currency Trading Is Not For Everyone?
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for everyone. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. Remember, you could sustain a loss of some or all of your initial investment, which means that you should not invest money that you cannot afford to lose. If you have any doubts, it is advisable to seek advice from an independent financial advisor.

RISK WARNING: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your monetary objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your deposited funds and therefore you should not speculate with capital that you cannot afford to lose. You may be liable for losses that exceed the amount of margin that you post. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent advisor if you have any doubts. Past returns are not indicative of future results.