EurAnalysis

No offense taken here. And definitely no need to apologize.

Please stay around here. From my position as a poster here welcome aboard. Thanks for bringing some humor to our site along with great charts to our thread. Please stick around.

You hit the nail on the head. The time is not now however when the Us Dollar moves down more and Gold reaches $2500 by December 31, 2012 in my opinion. Not my humble opinion since I am still learning to be humble.

The day that I leave this earth as your friend. Take care and be well.

Thanks Bro.

I posted this exactly as it is early this morning. My aim and intention was to explain my Money Management and Risk Management strategy. Based on feedback I got through PM I do not feel I explained it as well as I could have. With that as background I have copied and will now paste my post. I will enter in BLOCK LETTERS my Additional comments.

Then I will share my NEW closing remarks on my observations based on feedback and my NEW post here now with my updated clarification.

MY ORIGINAL POST THIS MORNING...

I was looking at your post with Resistance Points at 1.2820 and I was thinking about the movements heading into the Europe open. I take note of your chart and thoughts. To continue on the technical side I am looking at IFR Markets Trade Position as a further Technical Guide which shows they went short at 1.2724 on January 6, 2012 at 16:27. Their TARGET is at 1.2600 and their Stop is at 1.2775.

They show Hourly High at 1.2813 on January 6, 2012 and before that their Hourly S/R, Lower Boli is 1.2760. The Session Low is 1.2697 on January 6 and the Daily Low of September 13, 2011 is 1.2680 with 1.2642 being the Daily Low of September 10 and 1.2625 being the Daily Low of August 31.

I NOW SHOW A LOW OF 1.26649 on my FXCM UK Platform at 7:29 PM EST GMT + 5 Hours on Sunday January 8, 2012. NEW COMMENTS...

I only posted all of this to show the points of reference that technical trader's are using.

At this exact moment I have no idea what will happen so I have a 100% open mind with no bias on the short term. There is a meeting on Monday, January 9, 2012 with Merkel and they will have something to say. I find usually Sunday nights are harder to trade as Asia does not really give a lead into what Europe will do unless Asia catches up with what happened on Friday in North America.

During the day I will watch for news items that might give me a hint of what might be going on that might affect the currencies.

I am sharing my mindset as I think about THINKING about my Trade Plan.

I put a few trades on in my Demo account on Friday morning to show a prospective client some trades at 1.27249 and 1.27157 and 1.27153. I will watch what happens and probably close them as soon as I can with a Maximum Stop Loss of 50 PIPS. That requires Discipline since otherwise I might risk further losses hoping it will go down. Knowing that is my Maximum Loss gives me Peace of Mind.

There is another point that I want to make here on demo accounts and real accounts. When I first started learning my trade I only traded demo accounts for 2 1/2 years. I had constant good results for most of that period yet I was not ready to risk one penny. I developed a mindset that trading demo funds or real funds was one and the same since I did not want to lose period. It was the mindset which still carries on today even when I use a demo account to show my skills. That in itself leads to an attitude that is healthy.

One of the most important thingsa in Forex Trading to learn is to control your risk and live to trade another day. One of the problems that I see trading small amounts of money is that it may lead to habits that would not occur trading a minimum account of $10,000 US.

All of my Demo accounts whether with Saxo Bank who had a $100,000 US Demo or Trade Station Two (FXCM) which has a $50,000 US funds Demo account lead me into certain different strategies that I still use today.

Since I just awoke and feel relaxed with no stress sitting here at my computer I will share my Money Management and Risk Management Strategy with everyone here.

Rather than explain it on the $50,000 Model which is the same as the $10,000 Model I will focus on the latter one for trading with Real Funds.

THERE IS A BIG DIFFERENCE TRADING $50,000 US Dollars VS $10,000 US Dollars in Real Funds using MY FORMULA which DOES WORK at least based on my REAL RETURNS of 5% a month and more.

I will refer to the $50,000 US funds Model just to set up the parameters.

I NEVER trade more than 20% of my capital Demo or Real funds.

That allows for Drawdowns without risking a Margin Call. My MAXIMUM LOSS allowed on any Trade Plan is 5% of my capital.

I NEVER SAID THAT I WOULD HAVE 20 OPEN POSITIONS of 100K and Capital Utilized of $10,000 US or 10 OPEN POSITIONS although I may HOWEVER my SECOND RULE controls my FIRST RULE. I NEVER RISK MORE THAN 5% OF MY TRADE CAPITAL ON ANY ONE TRADE PLAN...

THEREFORE that means that my MAXIMUM OPEN POSITIONS ARE 5 Open of 100K using Capital of $5000 on a $50,000 US Funds account. With a MAXIMUM PIP LOSS of 50 PIPS ON EACH POSITION the MAXIMUM LOSS IS $2500 US or 5% OF THE ACCOUNT IF ALL FIVE POSITIONS GO AGAINST ME 50 PIPS.

However I SCALE IN MY POSITIONS TO GET TO 5 Open Positions if I decide to PUT ON ALL 5.

Here is an EXAMPLE with EUR/USD now at 1.2678 and ON THE BASIS THAT I WOULD GO LONG NOW !!!

I would PUT ON MY FIRST POSITION AT 7:39 PM EST at 1.2679 LONG and MY STOP LOSS WOULD BE ENTERED AT 1.2629 for a Net Loss of $500 US or 1% of MY TOTAL CAPITAL of $50,000 US Dollars.

If It went to 1.2653 I MIGHT GO LONG a SECOND Position at this PRICE with my STOP at 1.2603. My TOTAL RISK IS ONLY 2% or $1000 US Dollars.

THAT IS IT PERIOD. However look at my Range here. As an EXAMPLE ONLY let us say I PUT on my SEcond Position at 1.2653 and it BOUNCES to 1.2678 MY FIRST POSITION I am now EVEN on BOTH TRADES while only Risking $1000 US or 2% on my Trade Plan. I Then PUT my STOP LOSS HIGHER from 1.2603 to 1.2673 and LOCK IN 20 PIPS on MY SECOND position. If it moves back to 1.2700 Then I Move My Stop to 1.2690 on my SECOND POSITION to LOCK IN 37 PIPS and my First Position is IN THE MONEY by 22 PIPS aqnd if I close BOTH MY Profit then is 22 PIPS PLUS 47 PIPS for a PROFIT of 69 PIPS or $690.00 US or OVER 1% FOR THE DAY or 20% for the month by extension of 1% a day and I only DID Two TRADES !!!

Now to a $10,000 US Dollars Account. I CAN ONLY SCALE IN TWO POSITIONS using my 20% RULE and Using My 5% RULE and A Loss of $500 on MY TRADE PLAN then I have LESS LEEWAY to PUT ON MORE POSITIONS...

IF anything is not clear please post your comments.

THIS IS NOT A DEBATE AS THIS WORKS FOR ME AND CAN WORK FOR ANYONE...

On a $10,000 US account that is $500 US and on a $50,000 US account it is $2500 US.

You can see right away that I have more leeway on a $50,000 account and I will explain why in a moment. This goes with my strategy of scaling in my purchases long or trades short.

With a $50,000 US funds account using capital of $1000 US and Leverage of 100 to1 which is what I have used since my First Forex Trade in September 2003. I use a maximum of 5 Open Positions with the MAXIMUM STOP LOSS at 50 PIPS.

With a $10,000 US Dollars account Demo or Real (MINDSET AGAIN) I can only scale in Two Positions of $100,000 US.

It takes more patience and discipline trading a $10,000 US account than a $50,000 US account. Why is this ?

Go to the beginning of this post when I started talking about only technicals. Say that was my Goal POSTS...

I HAVE ALREADY EXPLAINED THIS ABOVE I HOPE !!!

The Key is to be PATIENT and get a good entry only in the Direction of the Trend. I determine the trend based on my short term view which can be as little as one week it all depends on Fundamentals and what I decide is the PERCEPTION of the markets at the moment.

I do NOT RELY on the Technicals since I KNOW 100% that the MONEY FLOW has to change the Charts as each Asset Class adjusts to the NEW Money flow which happens most of ALL starting In Europe at around 2:00 in the morning just before the Europe open at 3:00 AM EST (GMT + 5)

Then North America joins up around 7:00 AM EST with the North American Open at 9:30 AM EST and finally Europe goes home at 11:30 AM EST however I use NOON as my time to catch some late movements. This is in itself another Trade Experience POINT that I make now about closing of positions in Europe which if there is many shorts then I expect a POP because of short covering and that might give me a 30 Window in putting on a New Short. That leads to a VERY IMPORTANT POINT about Good Entry and Scaling in a trade. Since I use a 50 PIP Maximum loss getting good entry allows me to stay away from 50 PIP losses most of the time. Sometimes I close a trade in minutes based on the circumstances. If I got a good entry at London close and I have a quick 15 to 20 PIP in the money move I will either take the profit or set my NEW STOP just above a 15 or 20 PIP profit level thus locking in my profit yet allowing it to go lower and then every 10 to 15 PIPS or so lowering my Stops.

That is why I ALWAYS win on more of 75% of ALL my FX trades.

With Good Money Management like I just described and Risk Management of 5% on any Trade Plan and of course the BEST TRADE PLAN is NOT TO TRADE for the sake of trading unless you have an edge or know your Entry Point and just as IMPORTANT your Exit Strategy.

50 PIPS on any one trade is my Risk and that gives Peace of Mind which is very IMPORTANT in trading Forex.

If you can win 75% of your Trades with Good Money Management and Good Risk Management you can make a good constant monthly Return On Investment (ROI)

The knowledge and my EDGE using Money Flow gives me my excellent results.

The KEY word is ME since everyone of us is different with different skills, knowledge and discipline. Trading Experience is also important and that is usually the longer you can survive hopefully the more chance you will have to win at Forex and Join the 5% Group.

I really hope some of you will consider what I have said here and have a completely open mind to winning methods.

There is a reason that most lose trading Forex on the Retail Level.

Have a GREAT SUNDAY and a Good Trading Week...

Be Careful there is many unknowns this week and events unfolding will give us better insight about that. Just be aware of the bigger picture and the Political and Economic events ahead of us.

Thanks for reading my post...


THAT IS IT FOR MY UPDATED COMMENTS !!!

ANYONE READING THIS CAN PRACTISE THIS STRATEGY BY OPENING FOR FREE A $50,000 US Funds Demo Account !!!

Good Evening...

http://www.forexfactory.com/images/m...ading_dark.gif

http://seekingalpha.com/article/2784...il_rt_mc&ifp=0

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We identify two main forces that have driven the euro-dollar exchange rate in recent months. The first is the divergent monetary policy trajectories. The Federal Reserve has been easing policy through the end of June, while the ECB Thursday delivered its second rate hike in the cycle that began in Q2. We expect the ECB to hike rates at least a couple of more times before the Federal Reserve raises its Fed funds target.
The second force is the European debt crisis, where the EU/IMF have failed to contain, let alone provide closure to the crisis that began eighteen months ago. These two forces have been reflected in one number: The two-year interest rate differential between the U.S. and Germany.

Before it became clear at the end of last August that the Fed was going to engage in QEII, the U.S. 2-year note yield was about 10 bp lower than Germany's. Even after QEII began, the differential had did not move very much. At the end of last year, the U.S. discount was 20 bp.
The big shift took place in both the euro and the 2-year differential starting in mid-January, when the ECB began preparing the market for rate hikes and U.S. economic data began disappointing.

The two-year differential widened to 132 bp by early May. In fact the day that the U.S. discount to Germany was the greatest coincided with the day that the euro peaked; May 4th. However, since then the spread, much like the euro-dollar exchange rate, has been chopping around in a range. The trajectory of ECB policy expectations is being counteracted by the safe haven flows driven by the intensification of the European debt crisis.

Excellent Kno, Very clear!

Hi Kno .. thanks for the example, just one thing I want to mention this strategy works good if you are in flow with the market or say there are volume in the market and you are following the volume ... this may not work in a market which is choppy or when there is no volume for a long time and later you find there is a critical news scheduled which may work as adverse for the open positions.

(Sorry if you have mentioned this earlier some where but I missed)

http://www.kingsviewfinancial.com/commwire.php

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.headNewsList {display: none;}.headNewsList h5 { display: none;}.clsInCat {display: inline;}The Commodity Wire

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January 7, 2012 in 'The Commodity Wire'

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'The Commodity Wire' by Al Abaroa'The Commodity Wire' by Al Abaroa


v:* {behavior:url(#default#VML);}o:* {behavior:url(#default#VML);}w:* {behavior:url(#default#VML);}.shape {behavior:url(#default#VML);}st1:*{behavior:url(#ieooui) }
Market Perspective: Since October, the S&P has erased more than 14.5% of its drawdown. The late rally left the index just under steady for the year by the final trading session of 2011. In my opinion, while this was a very impressive move, it was far from a clear cut trend. Prices surged out of the gate in October to go positive on the year, but since then it has produced a series of zigzags, all the while being contained in October’s range. I think this price action appears more corrective in nature, as if it is still consolidating from the 300+ point drop that occurred from May to October. This is the kind of volatile movement I had in mind back in the August 9, 2011 Wire, when I first penned, “The likely result may be large, choppy sideways price action”. Looking forward, at some point in the near future, I would expect an end to this wave 2 correction, followed by a continuation lower of last year’s summertime swoon. I read the following quote and I think it summarizes the school of thought perfectly. “Part of the job of the second wave retrace during the early legs of a bear market is to fool the majority into thinking that the first wave down was just a correction in an ongoing bull. Bear markets need buyers early on -- that way there's somebody selling later to keep prices heading lower.” I think that psychologically, investors are still clinging to the hope that the problems that led to the original slide are going to be resolved. This past summer’s selloff can be linked to the European contagion and the threat that it could spark a second global recession. Throughout the latter half of the year we witnessed a plethora of “meetings” in the Euro Zone. The market’s recovery was based on the belief that the contagion would be contained. The thing to remember is that all known news and events are already factored into the market’s price. It’s the change of such events that may have meaningful impact on the direction. As the New Year begins, hope is always on the table. I’m not necessarily calling for a full fledge bear to emerge, but the technicals have me concerned.

Loyal readers will know that I follow volatilities carefully. One glaringly obvious highlight is the recent contraction in the VIX. It now rests just above 20. This is a far cry from the 46.88 reading back in early October as the market bottomed. I believe this decline in volatility is something to pay close attention to. Reversals higher in the VIX, coupled with potential increases in Put-to-Call ratios may offer early clues that investors may be preparing for another trend lower. Another phenomenon that I’m keeping an eye on is the current divergence amongst the big 3 stock indices. The DJIA has managed to push above its October 27,2011 high. However, both the S&P and the NASDAQ are lagging below their respective October highs. I suggest watching to see if the S&P and NASDAQ can set new highs, confirming the Dow’s strength. If they fail to do so, they may ultimately end up proving that the Dow’s charge was in vain. Perhaps the bank heavy S&P has got it right, as Europe didn’t stay quiet for long. Concerns are now growing that both Hungarian and Polish debt may be in question. Yields on their debt climbed sharply this past Thursday. This was reflected in the Euro’s slide. The multi-nation currency broke below the 2011 low of 128.70 and may now leave the basement door open for a full retracement to the 2010 low at 118.74. The decline is helping push the Dollar Index up, testing its 2011 high at 81.63. A breakout here may allow for the Greenback to continue trending into the high 80’s. Should this occur, dollar denominated commodities may find the path of least resistance to be downhill. And to think, this is just the first week of the year. 2012 is well under way. Good trading to all and Happy New Year.

More commentary on the markets from Catherine Davey at The Squirrelist
www.thesquirrelist.com http://edm.axicorp.com.au/Squirrelist-440x106.gif

EUR
Bearish unless above 1.3080.

It’s hard to believe that some commentators can be calling a bottom in the euro. But that’s what I’ve been reading in the mainstream press in the last few days. Last week’s action confirmed the euro is happily sinking with no sign of finding support along the way. The next major support level is at the low of August 2010 at 1.2580. If that level does not hold then next support is at the peak of June 2010 at 1.2470, then the low of 2010 at 1.1870.

The euro would have to climb above the high of 1.3080 from January 3 to give any kind of hope of a rebound. There is also resistance at the lows of December 29 at 1.2860 and the peak of December 21 at 1.3200.

Sup: 1.2580 1.2470 1.1870
Res: 1.2860 1.3080 1.3200

Some Other Technical Points Of View To Be Aware Of.. Good Night... I am off to bed before the Europe Open near 2:00 AM EST GMT + 5 Hours

:clapping:

Good clear charts.

I do like the guy sliding down the trend line though.

 

1. Lack of Experience
2. Unreasonable Expectations
3. Absence of a Sound Trading Plan
4. Lack of Discipline
5. Failure to Include Stop-Loss and
   Take-Profit Instructions
6. Excessive Leverage
7. Holding Too Many Open Trades
8. Holding Losing Positions Too Long
9. Ignoring Rate Spread Fluctuations and
   the Impact Spreads Have on Profitability
10. Thinking About the "Big Win" More Than
    Effective Cash Management (AKA Greed)

http://www.bis.org/publ/work363.pdf

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2. Real Interest Rates
One of the main goals of financial repression is to keep nominal interest rates lower than would otherwise prevail. This effect, other things equal, reduces the governments’ interest expenses for a given stock of debt and contributes to deficit reduction. However, when financial repression produces negative real interest rates, this also reduces or liquidates existing debts. It is a transfer from creditors (savers) to borrowers (in the historical episode under study here--the government).

The financial repression tax has some interesting political-economy properties. Unlike income, consumption, or sales taxes, the "repression" tax rate (or rates) are determined by financial regulations and inflation performance that are opaque to the highly politicized realm of fiscal measures. Given that deficit reduction usually involves highly unpopular expenditure reductions and (or) tax increases of one form or another, the relatively "stealthier" financial repression tax may be a more politically palatable alternative to authorities faced with the need to reduce outstanding debts. As discussed in Obstfeld and Taylor (2004) and others, liberal capital- market regulations (the accompanying market-determined interest rates) and international capital mobility reached their heyday prior to World War I under the umbrella of the gold standard. World War I and the suspension of convertibility and international gold shipments it brought, and, more generally, a variety of restrictions on cross-border transactions were the first blows to the globalization of capital. Global capital markets recovered partially during the roaring twenties, but the Great Depression, followed by World War II, put the final nails in the coffin of laissez faire banking. It was in this environment that the Bretton Woods arrangement of fixed exchange rates and tightly controlled domestic and 14
international capital markets was conceived. 16 In that context, and taking into account the major economic dislocations, scarcities, etc. which prevailed at the closure of the second great war, we witness a combination of very low nominal interest rates and inflationary spurts of varying degrees across the advanced economies. The obvious result were real interest rates--whether on treasury bills (Figure 2), central bank discount rates (Figure 3), deposits (Figure 4), or loans (not shown)—that were markedly negative during 1945-1946.

For the next 35 years or so, real interest rates in both advanced and emerging economies would remain consistently lower than the eras of freer capital mobility before and after the financial repression era. In effect, real interest rates (Figures 2-4) were on average negative.17 Binding interest rate ceilings on deposits (which kept real ex post deposit rates even more negative than real ex-post rates on treasury bills, as shown in Figures 2 and 4) "induced" domestic savers to hold government bonds. What delayed the emergence of leakages in the search for higher yields (apart from prevailing capital controls) was that the incidence of negative returns on government bonds and on deposits was (more or less) a universal phenomenon at this time18. The frequency distributions of real rates for the period of financial repression (1945-1980) and the years following financial liberalization (roughly 1981-2009 for the advanced economies) shown in the three panels of Figure 5, highlight the universality of lower real interest rates prior to the 1980s and the high incidence of negative real interest rates.

Such negative (or low) real interest rates were consistently and substantially below the real rate of growth of GDP, this is consistent with the observation of Elmendorf and Mankiw (1999) when they state "An important factor behind the dramatic drop (in US public debt) between 1945 and 1975 is that the growth rate of GNP exceeded the interest rate on government debt for most of that period."

http://news.goldseek.com/Internation...1326041611.php

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We have just seen via a swap, loan arrangement, that the Fed will do anything necessary to prevent a collapse. We figured the Fed would do this, which tells us anything goes to keep the system in control and afloat. If the system goes down the elitists go down with it and their key to power is lost. As a result of these actions there is a deepening crisis of confidence. In spite of a $1 trillion Fed injection, 10-year Spanish and Italian bonds still yield close to 7%, thus, the jury is still out on how effective the Fed’s action will be.

As we said we should know by May if Europe is going to squeak by for the year, or whether Greece and others will default. Upsets, or defaults could again strengthen the US dollar, but if Europe gains momentum then the dollar will come under pressure, as inflation climbs in the US, UK and Europe. That also means pressure will push gold and silver higher as inflation becomes more and more evident.

As it has been for some time the antics in the EU and euro zone continue to grab attention, but now we have the spectra of war in Syria and Iran to capture our focus when things get nasty economically and financially - history tells us we are supposed to have a war.

You can now understand why the US president was anxious to exit Iraq and prepare for Iran. It is not the intention of Iran to become a dominant power in the Middle East although the US and Israel would like to have you believe that. If Iran has a war with the US, Israel and NATO they have no chance of survival unless Russia and China enter such a fray from Iran’s side. Whether that will happen remains to be seen.

Hi Sam E/U pair is retracing up from 1.266x, in your daily chart I can see some Fibonacci retracement is also placed in 1.269x - 1.267x zone .. so do you think today this pair will end up with a green candle and try reaching the upper channel? Thx.