Money Flow Trading Method along with Risk Management

Hello KeepCalmfx

Thanks for checking in with your results. Everything is going according to the way that it should be. Thank you for learning well.

Any thought that you want to share on how I might be more effective is welcome. The better that I do teaching you and others will help all of us reach our financial goals.


Benjaminis

Combined Account Statement
Statement Period:from Dec 20, 2016 10:58:44 AM through Dec 28, 2016 4:23:29 PM
User Name:Benjaminis
FXCMUK


Turks and Caicos Islands


Trade account #: 02726762Created at: Dec 20, 2016 10:58:44 AMStatus: ActiveMargin Call (as at end of statement period): NBase currency: USD
CLOSED TRADE LIST

Ticket #SymbolVolumeDateSoldBoughtGross P/LCommDividendsRolloverAdjNet P/LConditionCreated By
114999081US3010012/20/16 2:13 PM19,966.50 Mktd102736974001
12/23/16 11:56 AM 19,908.50580.000.000.00-34.000.00546.00Cd102736974001

115012159USD/JPY100,00012/20/16 9:26 PM117.635 Mktd102736974001
12/23/16 11:57 AM 117.225349.75-8.000.00-20.500.00321.25Cd102736974001

115012239US3010012/20/16 9:29 PM19,969.00 Mktd102736974001
12/23/16 11:57 AM 19,908.00610.000.000.00-28.000.00582.00Cd102736974001

115108306XAG/USD5,00012/22/16 1:00 AM 15.868 Mktd102736974001
12/28/16 11:21 AM15.983 575.000.000.00-200.000.00375.00Cd102736974001

115165879XAG/USD5,00012/22/16 11:39 PM 15.860 Mktd102736974001
12/28/16 11:21 AM15.981 605.000.000.00-150.000.00455.00Cd102736974001

115267331US3010012/27/16 6:13 PM19,935.50 Mktd102736974001
12/28/16 3:52 PM 19,835.501,000.000.000.000.000.001,000.00Cd102736974001

Total:3,719.75-8.000.00-432.500.003,279.25

Benjaminis: From the time that I opened my FXCM UK Demo Account on December 20, 2016 over the last 8 days, I did 6 trades and my NET PROFIT with 6 winning Forex trades was $3,279.25 US





Posted at statement period of time:3,719.75-8.000.00-432.500.00
OUTSTANDING ORDERS


Order #Expire DateTypeTicketSymbolVolumeDateB/SPricePeg OffsetMarket PriceCreated By
276846288 L115012150XAG/USD5,00012/20/16 9:26 PMS16.321 16.008d102736974001


OPEN/FLOATING POSITIONS
Ticket #SymbolVolumeDateSoldBoughtFloating P/LCommDividendsRolloverNet P/LConditionCreated By
115012150XAG/USD5,00012/20/16 9:26 PM 16.116-540.000.000.00-350.00-890.00Mktd102736974001
12/28/16 4:23 PM16.008
Total:-540.000.000.00-350.00-890.00
Posted at statement period of time:0.000.00-350.00


ACCOUNT ACTIVITY

Time PostedCodeDescriptionAccount #Ticket #AmountBalance
12/20/16 10:58 AMDeposDeposit02726762 50,000.0050,000.00
12/20/16 5:23 PMRolloverRollover Fee02726762114999081-6.0049,994.00
12/20/16 9:26 PMCommTrading Commission02726762115012159-4.0049,990.00
12/21/16 5:24 PMRolloverRollover Fee02726762115012159-20.5049,969.50
12/21/16 5:24 PMRolloverRollover Fee02726762115012239-22.0049,947.50
12/21/16 5:24 PMRolloverRollover Fee02726762114999081-22.0049,925.50
12/21/16 5:24 PMRolloverRollover Fee02726762115012150-150.0049,775.50
12/22/16 5:23 PMRolloverRollover Fee02726762115012239-6.0049,769.50
12/22/16 5:23 PMRolloverRollover Fee02726762114999081-6.0049,763.50
12/22/16 5:23 PMRolloverRollover Fee02726762115012150-50.0049,713.50
12/22/16 5:23 PMRolloverRollover Fee02726762115108306-50.0049,663.50
12/23/16 11:56 AMPnLProfit/Loss of Trade02726762114999081580.0050,243.50
12/23/16 11:57 AMPnLProfit/Loss of Trade02726762115012239610.0050,853.50
12/23/16 11:57 AMCommTrading Commission02726762115012159-4.0050,849.50
12/23/16 11:57 AMPnLProfit/Loss of Trade02726762115012159349.7551,199.25
12/23/16 5:17 PMRolloverRollover Fee02726762115165879-100.0051,099.25
12/23/16 5:17 PMRolloverRollover Fee02726762115108306-100.0050,999.25
12/23/16 5:17 PMRolloverRollover Fee02726762115012150-100.0050,899.25
12/27/16 5:23 PMRolloverRollover Fee02726762115012150-50.0050,849.25
12/27/16 5:23 PMRolloverRollover Fee02726762115108306-50.0050,799.25
12/27/16 5:23 PMRolloverRollover Fee02726762115165879-50.0050,749.25
12/28/16 11:21 AMPnLProfit/Loss of Trade02726762115165879605.0051,354.25
12/28/16 11:21 AMPnLProfit/Loss of Trade02726762115108306575.0051,929.25
12/28/16 3:52 PMPnLProfit/Loss of Trade027267621152673311,000.0052,929.25


Total:52,929.25


ACCOUNT SUMMARY

Beginning Balance0.00

CommTrading Commission-8.00

RolloverRollover Fee-782.50

PnLProfit/Loss of Trade3,719.75

DeposDeposit50,000.00

WithdWithdrawal0.00
OptionOptions Payout0.00
CommOptions Commission0.00
AdminFeeAdministrative Fee0.00
MngFeeManagement Fee0.00
PerfFeePerformance Fee0.00
VoidDeposit Rollback0.00
ASPCommASP Commission0.00
MargInterestInterest on Usable Margin0.00
SubscriptionFeeSubscription Fee0.00
RRebRollover Rebate0.00
Div_AdjDividend adjastment0.00

Ending Balance52,929.25

Floating P/L-540.00

Equity52,389.25

Necessary Margin900.00

Usable Margin51,489.25


Comments from Benjaminis:

I am holding Long 5000 Ounces of Silver at a cost of $16.116 and the price is $16.007 at the time of this report. So I have a Draw Down of 10.8 PIPS times 5 for $540.00 US Dollars and my Rollover fees are now $350 US so I have an unrealized loss of $890 US Dollars !!!

How am I doing ? Smile !!!


Notes:
"THIS IS A DEMO ACCOUNT WHICH IS TRADED WITH VIRTUAL FUNDS. NO REAL MONEY IS USED IN TRADING THIS ACCOUNT. Demo accounts are used primarily for education purposes, testing of strategies, and familiarizing traders with market movement and the FX Trading Station. There are inherent risks associated with online trading that may arise due to downtime, currency fluctuation and other risks associated with currency speculation. Only risk capital should be used when trading a real account."

As everyone can see as the Dow sold off MONEY (CASH) flowed to USD/JPY and it also returned to the 10 Year US Bonds as the 5 Minute Chart from Finviz shows.

5 Minute Chart US Bonds (Treasuries)

http://finviz.com/futures_charts.ashx?t=ZN&p=m5

So the YIELDS went down as the US Bonds went up and you have the ability now to understand how important it is to know this fact.

This TRUMPS (Pun Intended) Technical Indicators including Supply and Demand because when the Dow 30 (US30) goes back to 19,000 or lower next year that is 100% guaranteed to happen. Also now EUR/USD is under great pressure because of the MAJOR problem between the ECB and Italy as it relates to the probable eventual bankruptcy of the Oldest Bank in the World.

I have been very clear and now you see with your own eyes how Money Flow Method gives EVERYONE who uses it a big trading EDGE !!!


Benjaminis

Hourly Chart on EUR/USD

Finviz

http://finviz.com/forex_charts.ashx?t=EURUSD&tf=h1

https://www.theguardian.com/business...l-8bn-ecb-says

Snippet:

Monte dei Paschi shortfall 8bn, ECB says
Italian banks bailout cost rises as European Central Bank puts recapitalisation requirement higher than previously estimated
https://i.guim.co.uk/img/media/9a6f6...sm=12&fit=max&

Italian government is expected to give 6.5bn to Monte dei Paschi bank taking its stake to 70%. Photograph: Max Rossi/Reuters
Rob Davies

Tuesday 27 December 2016 11.44 GMTLast modified on Tuesday 27 December 2016 22.00 GMT


The cost of rescuing Monte dei Paschi has escalated after the European Central Bank told the struggling Italian lender that it required 8.8bn (7.5bn) to mend its finances.

The lender, Italys third-largest bank, has tried in vain to arrange a 5bn rescue package with private investors but the ECB said the sum would not have been enough.

Monte dei Paschi, whose history can be traced back to 1472, said it had asked the ECB to approve a precautionary recapitalisation, a type of state intervention that allows the institution receiving it to stay solvent.

The government is now expected to inject 6.5bn into the bank, according to reports, taking its stake in to about 70%. The remainder will come from institutional investors seeing their bonds converted into shares, ridding the bank of about 2bn in debt.

In a statement, Monte dei Paschi said the ECB had written to the Italian finance ministry warning that the banks liquidity position its ability to turn assets into hard cash had suffered a rapid deterioration.

This was partly down to a large number of loans made to people who cannot pay them back, among the factors that saw Monte dei Paschi come last out of 51 banks in stress tests to check lenders resilience to economic shocks.

The bank has quickly started talks with the competent authorities to understand the methodologies underlying the ECBs calculations and introduce the measures for a precautionary recapitalisation, it said in a statement.

Monte dei Paschi said the ECB had told it that the 8.8bn bailout figure was determined by the results of stress tests that the bank failed this summer. It also noted that the banks liquidity position had worsened between the end of November and 21 December.


The European commission said on Friday it would work with Rome to establish conditions for a bailout of Monte dei Paschi, likely to involve tapping a 20bn rescue pot approved by the Italian government last week.

But the proposals have not met with support from more hawkish official in the ECB. Jens Weidmann, the president of Germanys Bundesbank and a member of the ECBs governing council, said the Italian government ought to consider whether it should rescue the bank if it was in a bad financial state.

For the measures planned by the Italian government the bank has to be financially healthy at its core, he said in an article published in the German newspaper Bild. The money cannot be used to cover losses that are already expected. All this must be carefully examined.

Monte dei Paschi has struggled to recover from the 2008 banking crisis, when it paid Santander 9bn (7.6bn) for Banca Antonveneta. The deal doubled the size of the lender, transforming it into Italys third largest behind UniCredit and Intesa Sanpaolo.

Three years ago, Monte dei Paschis problems worsened and it was forced to ask the government for 4bn amid a scandal over loss-making derivatives contracts and alleged fraud. It will now go back to the government for funds after talks with private investors failed, with Qatars sovereign wealth fund thought to have scuppered the plan by refusing to take part. The Italian government already has a 4% stake in Monte dei Paschi.

Hourly Chart from Finviz on EURUSD

http://finviz.com/forex_charts.ashx?t=EURUSD&tf=h1

http://reports.autochartist.com/mr/a...&report_id=326

Snippet:

EUR/USD
23-Dec-20:00 -> 28-Dec-22:00Target Level: 1.0396
http://email.autochartist.com/mr/res...300&height=210
SLB)1.03964 hours low volatility level
RLA)1.04284 hours high volatility level
Target Period: 4 hours
Interval1 hour
Length40 Candles
Identified28-Dec-22:00
Possible bearish price movement towards the support 1.0396 within the next 4 hours.

Report Time: 28-Dec-2016 22:02 UTC
SymbolLatest PriceDaily Change
EURUSD1.041http://email.autochartist.com/mr/res...olor=%23008000 0.44%
USDJPY117.253http://email.autochartist.com/mr/res...olor=%23008000 0.17%
GBPUSD1.222http://email.autochartist.com/mr/res...olor=%23008000 0.38%
USDCHF1.028http://email.autochartist.com/mr/res...olor=%230B5B9C 0.05%
Dow19,833.68http://email.autochartist.com/mr/res...olor=%23008000 0.43%
Nasdaq4,925.81http://email.autochartist.com/mr/res...olor=%23008000 0.17%
S&P 5002,213.35http://email.autochartist.com/mr/res...olor=%230B5B9C 0.69%
FTSE7,015http://email.autochartist.com/mr/res...olor=%230B5B9C 0.32%
Nikkei19,408.02http://email.autochartist.com/mr/res...olor=%230B5B9C 0.13%
Market Reports are generated 3 times per day before the open of Tokyo, London and New York. These reports provide you with a snapshot of the technical outlook of the markets before the opening of the major financial centres.

Market movements show change in price from the same report 24 hours earlier.
Supporting RSI and Moving Averages are 34 candles
TP: Last Turning Point - used to identify Support (SL) and Resistance (RL) Levels
Supported by Downward sloping Moving Average

http://www.zerohedge.com/news/2016-1...ops+to+zero%29

Snippet:

Submitted by Paul Brodsky via Macro-Allocation.com,
We think the markets have it fundamentally wrong. US investors are anticipating a cyclical shift towards economic expansion via new tax incentives, business de-regulation and Keynesian government spending that promise to increase output, demand and asset prices. However, there is a far more influential driver of future asset prices – a structural shift that has begun but has yet to be acknowledged by economic and political authorities, and, judging by financial asset markets, by most investors. We expect weak equity markets and a strong treasury market beginning in 2017.

It’s the Dollar, Stupid.
The financial model used by advanced economies since 1971 is quickly losing its ability to support economic growth and rising asset prices.1 Western economic policy, which had previously relied heavily on credit creation from 1971 to 2008, was replaced in 2009 by monetary policy that relied heavily on base money creation through asset purchases. The structural shift in central bank focus from credit to monetary creation marked a paradigm shift in the decades-long finance-based economic model - from the leveraging phase to the de-leveraging phase.

The Fed shifted to relying on a communications policy in 2013, which focused on renewing the broad perception that by “normalizing” US interest rates the economy would again begin to react to credit incentives it could manage. It also emphasized the need for fiscal stimulus, which would ostensibly create demand and stimulate production growth. Last month the Fed hiked overnight rates for the second time in two years and the markets expect it to hike rate three times in 2017.

Fed rate hikes tighten credit conditions in the US and, given the continued execution of QE by other major global central banks, increase the exchange value of the dollar. A stronger dollar theoretically increases other economies’ exports into the US, provided that US consumers and businesses are able to maintain the same level of demand for foreign goods and services. This is an open question.

Donald Trump’s election raised hope that new tax incentives, business de-regulation and Keynesian government spending will create sufficient demand. The dollar and US financial markets have reacted in sympathy with stock prices rising and bond prices falling…despite the Fed’s renewed credit tightening. A strong dollar would tend to attract global wealth to the US, wealth that theoretically could find its way into US risk assets including US equities. Thus, US equity strength since the election reflects a strong dollar, which is based on the combination of Fed rate hikes and renewed hope for US government stimulus.
http://www.zerohedge.com/sites/defau...228_MAI1_0.jpg
This is not the first time the Fed has had to actively increase the exchange value of the dollar. Paul Volcker’s Fed had to hike overnight rates to 20% in 1980-81 so the dollar would be reaffirmed as a store of global value for US trading partners, including OPEC. We believe the Fed is doing the same today, in spite of its de-stimulative impact, because it wants to attract global capital to US banks and asset markets. Doing so would ensure USD hegemony, which would be necessary if/when global leverage leads to hyperinflation and multilateral trade and currency wars. Once substantial wealth is held in dollars and dollar-denominated assets, the US political dimension and the Fed, through the BIS and IMF, would be able to control the terms of a global monetary reset, which in turn would de-leverage balance sheets across currencies and economies in a controlled manner; in effect, a pre-packaged bankruptcy in real terms.

Nothing has changed structurally (or cyclically) since the US election. Global central banks are de-leveraging their banks through QE, with the exception of the Fed, which already did. Commercial bank liquidity and solvency is a precondition for a global monetary reset. The table is being set for more, not less, central bank intervention in the form of monetary inflation, and more intervention from the political dimension, which would choose which non-bank creditors (and debtors) will experience credit deflation.

The markets have it wrong
We believe fiscal measures like those being speculated about now in the US, even if successfully executed, would fail to generate meaningful new production and demand within the US and global economies. Financial markets are vulnerable to a reversal of their recent trends.
We cannot place specific figures or exact times when benchmark equity and fixed-income indexes will reverse current trends; however, we are increasingly confident that US and global economies have begun to experience necessary structural changes that directly impact: 1) incentives to produce and consume, 2) the fundamental manner in which the political dimension approaches monetary and fiscal policies, and 3) the way in which investors think about assets, liabilities, economics and capital markets.

The secular US fixed income bull market, which began in 1981 when the Fed embarked on what would become a forty five-year credit easing regime that benefitted, treasury, mortgage, corporate, municipal, small enterprise and consumer borrowers, and would eventually spread globally to other advanced and emerging bond markets; which allowed the US government to deficit-spend (eventually without the expectation of recourse) its way to unrivaled military might that defeated and then contained potential hostile threats abroad; which provided primary funding for bank and shadow bank lending that gave the US dollar and financial markets status as the ultimate sanctuary of global wealth; which provided a platform on which global bank and non-bank counterparties could swap contingent liabilities amounting to many times the size of underlying cash markets without fear of regulatory interference; and which provided speculators across other asset markets (including real estate) to continually sponsor unsustainable valuations, no longer produces capital or serves an economic purpose, and is almost over.

The secular US equity bull market, which not coincidentally also began in 1981 and served as the principal funding mechanism for great advances in digital technologies, communications, finance, logistics, health care, energy, retail, and other industries; which helped raise and maintain competitive trade advantages for the US and its allies; which expanded capital expenditures, productive output and consumer demand; which helped collateralize expansive public and private credit issuance and debt assumption, in turn creating a positive feedback loop that further increased nominal production, consumption and asset prices, and which created nominal wealth for US and non-US asset holders, is also in its evanescence.

Stock and bond markets in advanced, financially-oriented economies, have devolved more into political imperatives necessary to maintain social services and the perception of wealth, rather than serving as the traditional means to build and price wealth and capital. They no longer serve societies or global trade.
In over-leveraged economies, stock and bond markets become co-dependent. To sustain market prices, debt and equity require nominal output growth. To sustain market values, they require real output growth. The only way to increase nominal output growth and raise nominal equity prices in a highly leveraged economy with leveraged currency is to raise the quantity of credit, which must eventually reduce real output and asset values. The question before us is whether “eventually” is occurring now.

The primary reason we think stocks are peaking is scale. Aggregate market caps, valuations, revenues and earnings of public companies cannot be sustained by the level of real production in the underlying US and global economy. We think bonds are on the eve of reconciliation for the same basic reason: the scale of systemic leverage has already begun to reduce incentives to expand credit for capital formation, which, in turn, promotes debt deflation.

We expect debt deflation coincident with central bank monetary inflation, which would offset the deflation…on paper (like feet in the oven, head in the freezer producing a reasonable average). Before this occurs, we expect a financial or economic event that focuses public attention on the leverage problem.

Drilling Down
The incentive to invest in the stock market is to build wealth, which is accomplished by generating positive real (inflation-adjusted) returns. This presents a problem looking forward. Many of the companies the market rewards most in terms of market cap drive goods and service prices lower by innovating and connecting buyers and sellers (e.g. Amazon, Facebook).

Against this backdrop, the Fed’s economic mandate from Congress is to work towards stable prices and full employment. To do so, it has a specific annual inflation target of 2%. If the Fed is successful in this target, then it will reduce the purchasing power of US dollars by more than 64% over the next 25 years:
http://www.zerohedge.com/sites/defau...228_MAI2_0.jpg
As the table above makes clear, through its specific economic mandates and acceptance of the Fed’s 2% inflation target, the US Congress effectively promotes a decline in the value of ongoing savings earned and amassed by American labor. For investors, the policy also acts as a hurdle over which investor returns must rise to create positive real returns (i.e., wealth).

On one hand, commercial competition is naturally driving prices lower, making goods and services more economical for producers and consumers, and equity markets are inflating the asset values of businesses that deflate prices. On the other hand, the Fed is trying to drive goods, services and asset prices higher, which would drive the purchasing power value of savings lower.
http://www.zerohedge.com/sites/defau...228_MAI3_0.jpg
Since 1998, asset prices (portrayed by the Wilshire 5000 on the graph above) have been supported in great part by Fed liquidity and debt-driven buybacks while US economic activity, (portrayed by monetary velocity), has been in secular decline. It is tough to sustain 2% inflation for very long through financial maneuverings when domestic economic activity continues to weaken. Any further inflation the Fed might help create (as it hikes rates!?) will not be demand driven, but rather the result of more financial leverage.

It can’t persist much longer
The current excitement among US equity and credit investors over the promise of a best-case stimulative mix of deregulation, tax cuts, and Keynesian government spending has created a very optimistic market tone. The Fed has further intimated December’s rate hike was the start of a new regime of interest rate normalization. Together, these dynamics have caused treasury yields across the curve to rise. Rising treasury yields in past business cycles have further signaled economic recovery, which has seemed to confirm to most investors that economic and equity market optimism are warranted. We disagree.

Any fear of demand-driven goods and service inflation is un-warranted given 1) the already-leveraged nature of public and private sector balance sheets, 2) the need to perpetuate the relative strength of the dollar, and 3) the expectation of further Fed rate hikes. Even a successful multi-trillion dollar US government spending program that provides a few jobs and necessary American capital improvements could not provide sufficient consumer demand to overcome US and global balance sheet leverage and the attendant necessity to maintain US dollar strength to sustain the current monetary system.

The graph below plots the secular decline in long-duration treasuries against the year-over-year rate of US goods and service inflation. (The gap in 30-year treasuries is due to the elimination of Long Bond issuance from August 2001 to February 2006.) We believe the rise at the extreme right of the graph representing their most recent trends is not indicative of the next big move for long-duration treasuries.
http://www.zerohedge.com/sites/defau...228_MAI4_0.jpg
Given the need to maintain the US dollar as the fulcrum of the US monetary system, the most influential input for future treasury yields has become global output, which is in secular decline. This trend is logical, established and seems to be accelerating. It is logical because the secular post-War decline in global output growth was only interrupted by the emergence over the least twenty years of large new economies like the BRICs. The continuation of that secular downward trend would make sense once those emerging economies are established. The graphs below confirm that balance sheet leverage within emerging economies have surpassed those in developed economies and that, not surprisingly, global output growth is truly struggling. As a result, we expect one last spasm that takes long-term treasury yields to new lows.

http://www.zerohedge.com/sites/defau...228_MAI5_0.jpg
http://www.zerohedge.com/sites/defau...228_MAI6_0.jpg
Relevant Economics for Equity Investors
Investors will soon be forced to better understand the macro world around them. The perception of the deflation/inflation metric should determine near term and secular debt and equity market directions.

Prices are determined by supply/demand equilibriums – where the supply of goods, services, labor and assets meets the demand for each. This is theoretically true in classical economics. However, in the current flexible exchange rate monetary system administered by banking systems and the political dimension (i.e., a fiat regime), both supply and demand are determined by the prevailing quantity of credit available to producers of supply and the quantity of credit available to consumers who create demand. (Credit is simply a claim on base money, which is created by central banks.)

The most insipid structural problem threatening economic vitality and equity market returns is public and private sector leverage. High and rising debt-to-GDP ratios, which threaten economic liquidity, and high and rising debt-to-base money ratios, which threaten balance sheet solvency, must eventually be reconciled. Aging demographics within the world’s largest economies is accelerating the timing of the necessary reconciliation, which must occur through debt deflation, monetary inflation, or both.

Thus, investors seeking to create wealth by investing in broad equity markets face a fundamental structural problem caused by the irreconcilability of 1) naturally occurring commercial deflation, 2) economies and political systems that rely on inflation, and 3) the crowding out of consumption and investment by necessary debt service.
http://www.zerohedge.com/sites/defau...228_MAI7_0.jpg
Consider the 2% inflation target established by the Fed and accepted by most political economists. See table, page 4.) The target ostensibly limits the annual loss of purchasing power to 2%, and therefore it is generally thought that having such a target is in the best interest of American workers. Such an argument is inaccurate, naïve and disingenuous. As the graph on the previous page shows, the Fed was unable to cap goods and service inflation when energy prices spiked from limited supply in the 1970s, and unable to cap inflation at 2% throughout the credit-led secular bull market in corporate and property equity in the 1980s, 1990s and 2000s.

Goods and service inflation more recently has struggled to rise to 1.7%, where it stands today. A 2% inflation target has shifted from a target to preserve the purchasing power of the dollar to a target to ruin it. Nowhere in the public discussion has this been mentioned. As discussed above, we think the Fed’s “fear of inflation”, which is ostensibly driving the new rate hike regime, is a necessary public narrative that will let the Fed pursue its true objective – a stronger dollar and deflation amid a contracting real economy.

Even if US domestic economic activity were to somehow reverse its secular downtrend enough to warrant current equity valuations, it is difficult to conceive how much more asset prices could rise – especially in real terms. Simple math, anachronistic economic policies and poor demographics pose insurmountable barriers for creating wealth through public share ownership. (We further discussed the current negative implications of over-valuation and the negatively convex nature of equity markets in The Grift.)

Can the Establishment really be that wrong?
In classic economics, both employment and inflation are derived from production. Political economists, a moniker that defines the academic discipline from which the great majority of contemporary economists spring, argue that a fully-employed labor force suggests that rising labor inflation will lead to rising goods and service inflation. Thus, the Fed is trying to raise rates currently, citing the second Fed mandate - full employment - which threatens stable prices. The ultimate policy goal is to protect the US (and global) economy from shrinking.

According to logic and classic economics, there is nothing wrong with a shrinking economy. Why? Because an economy should shrink commensurate with a rise in leisure time. Seriously. An economy is theoretically supposed to serve its factors of production. The more economical it is, the more leisure time it produces for its participants. (We suspect economies are called “economies” because they were formed naturally as systems that actually economized.)

In such an economy, only theoretical today, deflation would be a good thing because it would increase the purchasing power value of savings produced from past labor. In fact, an increase in deflation (i.e., an increase in declining prices) would actually raise real (inflation-adjusted) GDP because the gain in the dollar’s purchasing power from deflation would offset the declining volume of goods and services (nominal GDP). (We suspect this fundamental economic truth is the reason Congress’s mandate to the Fed includes only stable prices and employment, and not economic growth.)

The graph below shows the decline in the American work force since 2000. It should not strike you as alarming, given 1) all the great new innovations and technologies replacing human capital and 2) the expansion of global human capital from emerging economies. Tell us again, we ask sarcastically, what “full employment” is?
http://www.zerohedge.com/sites/defau...228_MAI8_0.jpg
Market cap-weighted indexes notwithstanding, it may be worthwhile here to ask yourself again why an increase in the majority of US equity shares is generally perceived as a given as the US economy becomes more efficient.

Why it is all about the Dollar Now?
In today’s global monetary system, currencies are tranched liabilities of: 1) commercial banks that create deposits through the lending process; 2) central banks on the hook to collateralize member commercial banks that create deposits and credit without commensurate reserves or circulated currency (base money), and; 3) treasury ministries that ask constituent factors of production to have faith that its taxing authority and, as has been demonstrated throughout history, its ability to wage war to loot enough resources outside its taxing domain to protect its currency’s purchasing power value.

As liabilities without directly-linked offsetting assets, the purchasing power value of currencies are always susceptible to dilution. Dilution comes in the form of credit issued by banks (and, potentially, non-bank lenders) that is either not collateralized by assets or collateralized by assets that themselves are liabilities (like Treasury notes). The wider the gap separating the amount of un-collateralized credit denominated in a currency from that currency’s base money (bank reserves and currency in float) – the ratio that determines monetary leverage - the greater the amount of future monetary de-leveraging will have to occur. (De-leveraging must ultimately occur so that debtors can service or repay their obligations and so producers have incentive to continue to supply goods and services in exchange for that currency.)

We expect global monetary authorities to protect the dollar as long as they can and we expect them to fail. Stocks and bonds will react violently; stocks and weak credits falling, treasuries prices rising (at first). That failure will lead to hyperinflation – not driven by demand, but rather by central bank money printing. A new global monetary understanding will then emerge.

We expect weak equities and a strong treasury market in 2017, as they begin to discount this fundamental structural shift.

https://www.bullionstar.com/blogs/gold-market-charts/



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BullionStar Blogs
Gold Market Charts
Posted on 28 Dec 2016 by BullionStar
Gold Market Charts December 2016

This is the second in a new series of posts highlighting charts relating to some of the most important gold markets, gold exchanges and gold trends around the world. These include charts of the Chinese Gold Market, the flow of gold from West to East via the London and Swiss gold markets, and the holdings of gold-backed Exchange Traded Funds (ETFs). Please see the November 2016 chart post article for background on the charts chosen for this series.
All of the charts featured below originate from the GOLD CHARTS R US website. For BullionStar's gold and silver price charts, go to BullionStar Charts where, for example, you can measure a wide variety of financial assets in terms of gold and other precious metals.
Shanghai Gold Exchange (SGE) - Gold Withdrawals
Total physical gold withdrawals from the SGE in November 2016 reached a substantial 214.7 tonnes, over 40% higher than gold withdrawals from the Exchange during October. November was also the second highest monthly withdrawal total of the year, only surpassed by January's withdrawal numbers. Year-to-date to November, gold withdrawals from the SGE have reached 1,774 tonnes.
As a reminder, gold withdrawals from the Shanghai Gold Exchange are a suitable proxy for Chinese wholesale gold demand because all non-monetary gold imported into China has to be sold on the SGE, and most Chinese gold mining output as well as most Chinese scrap gold is also sold through the SGE as 'standard' gold.
November's strong Chinese gold demand occurred in an environment of falling international gold prices, which is to be expected since Chinese gold buyers generally buy at lower prices ('buy the dips'), and unlike Western buyers, the Chinese do not chase upward gold price momentum.

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Shanghai Gold Exchange - Gold Withdrawals (tonnes), 2008 - end November 2016

Chinese and Indian Gold Demand
A suitable proxy of Chinese and Indian gold demand can be constructed by adding Shanghai Gold Exchange withdrawals to Indian gold imports. Gold import figures into India are an acceptable proxy for Indian gold demand since Indian domestic gold mining is virtually non-existent.
On a combined basis, CHINDIA gold demand for October 2016 totalled 225 tonnes, which incredibly, pushed the cumulative gold demand from these two major gold markets above the 20,000 tonne mark for the nine-year period 2008 - 2016. Note that this latest version of the CHINDIA chart is to the end of October 2016.

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Chinese and Indian gold demand combined (tonnes), 2008 - end October 2016

Russian Gold Reserves
The Bank of Russia, Russia's central bank, is one of the most active buyers of gold on the planet, and has been pursuing a massive physical gold accumulation strategy since the early 2000s. In November 2016, the Bank of Russia added another 1 million ounces of gold (31.1 tonnes) to its gold reserve holdings. This follows a 40 tonne gold purchase by the Bank of Russia in October and makes November the second highest monthly addition of the year for the Russians.
With the October and November additions, the Bank of Russia is now well on target to realise its planned purchase of 200 tonnes of gold during 2016.

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Russian central bank gold reserves, cumulative (tonnes), 2006 - end November 2016

Transparent Gold Holdings - ETFs and Others
This chart features a large group of products and vehicles, such as ETFs, which hold physical gold and which regularly report their gold holdings, thereby providing a window into the cumulative position and changes in such gold holdings on a week to week basis. As a group, these vehicles continued to see a net outflow of gold during December, with the outflow trend that began in early November continuing.
As of 23 December, these tracked transparent products held a combined 2583.9 tonnes of gold, which was 134 tonnes less than their aggregated total holdings of 2717.9 tonnes on 23 November 2016. In a similar manner to November, the gold outflows in December occurred in an environment of a falling US dollar gold price.

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Weekly Transparent Gold Holdings, 2 year rolling period to 23 December 2016

Swiss Gold Imports and Gold Exports
November was a notable month for Swiss gold trade flows and it actually recorded the highest monthly gold trade flows of the year. The Swiss refining and financial sector imported 187 tonnes of gold and exported 188.8 tonnes during November. November gold imports were the second highest of the year, and only a few tonnes short of the 194 tonnes imported in February 2016. Switzerland's November gold exports were the highest monthly exports of the year.

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Swiss Gold Imports / Exports, monthly data, 2 year rolling to November 2016

During November, the UK (London) re-emerged as the main provider of gold to Switzerland, with the Swiss importing 48 tonnes of gold from London. This is the highest monthly gold import flow from the UK to Switzerland since last January. The second largest source of gold flowing into Switzerland during November was Hong Kong which provided 35 tonnes, with the UAE (Dubai) a distant third providing 16 tonnes, and the US sending just under 12 tonnes to the Swiss.

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Swiss Gold Imports, Month of November 2016

On the export side, Switzerland exported a sizeable 61.3 tonnes of gold to India during November as Indian demand improved on the back of the marriage season and jewellery industry restocking following the Diwali festival. Hong Kong received 44 tonnes from the Swiss, China was sent 30 tonnes, and remarkably France received over 10 tonnes of gold from Switzerland during November, nearly twice as much gold as was transported from Switzerland to the German market during the same period.

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Swiss Gold Exports, Month of November 2016

After exporting gold to the UK (London) for most of 2016, the tide reversed In November and Switzerland again became a substantial importer of gold from London receiving 48 tonnes. Although Switzerland also exported 5 tonnes of gold to the UK in November, Swiss net gold imports minus gold exports were still a sizeable 43 tonnes.
This reversal of trend was signaled in the October UK-Swiss gold trade data, when Swiss gold imports from the UK reappeared, and Swiss gold exports to the UK began ebbing. As stated in BullionStar's November commentary about the October UK-Swiss gold flow data:
"Is the recent tide of UK imports from Switzerland about to turn back to UK exports to Switzerland? The October data may provide some clues, but additional month's data is required before know whether a new trend is being established."
Now that November's data is in, it adds to the confirmation that the reversal of gold flows has indeed been established, so we should expect see continued exports of gold from London (UK) to Switzerland in December's Swiss data, which is released on about 23rd of January. The continued outflow of gold from the large ETFs which store their gold in London, e.g. SPDR Gold Trust and iShares Gold Trust, also points to further flows of gold from London to Switzerland as bullion banks distribute 400 oz gold bars previously held within the ETFs.

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Swiss Gold Import / Exports with UK, monthly data, 2012 - to November 2016

COMEX - Vaulted gold in New York approved vaults
The amount of gold held in COMEX approved vaults for which warrants have been issued against COMEX gold futures contracts (Registered gold) totalled approximately 50 tonnes as of the end of December 2016. This was about 15 tonnes less than the 65 tonnes which was in the registered category at the end of November.
The amount of eligible gold stored in the reporting vaults in the form of gold kilobars and 100 oz gold bars - which is acceptable by the COMEX for delivery against its gold futures contracts but for which warrant have not been issued - stayed relatively flat at 269 tonnes compared to the previous month's figure of 264 tonnes.
See the recent BullionStar blog "COMEX and ICE Gold Vault Reports both Overstate Eligible Gold Inventory" for more detail on Eligible vs Registered gold reported by COMEX.

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COMEX vaulted gold in New York (Registered and Eligible), 2002 - late December 2016

BullionStar
E-mail BullionStar on: [email protected]

Comments from Benjaminis:

I have posted the entire article having just cleaned up the spacing so that it easier to read. It is important if you can to print out the research since it will be most important to refer back to it when needed during 2017. What I do is to copy and paste the article that I placed here and email it to myself and then print it out. I am going out for a few hours and over my supper, I will read and study the information very carefully.

I see major pluses going into 2017 and that is only 5 days or less away. We should be back to normal trading by Sunday January 8, 2017.

Please post any questions or comments here on the thread so I can follow up later tonight. For those in Europe or other parts of the world who are trading with me please give me feedback when you read this on Thursday. You can call this your homework. It is all worth the efforts whenyou know it all works and your FUTURE is in front of you.


Thanks !!!

Hello Benjaminis ! Translated stop to breakeven zone, I think add to the position? If I can lay out a report

[Приложить] 2118919 [/ приложите]Article writing is very interesting, is translated correctly. But I think gold is rising, traders began before the New Year to insure assets other than Bitcoin and gold.

Excellent work, wayfarer

You are doing very well. Keep up the good work and make sure you take your profits when it suits you. My GOAL for everyone who could was to earn at least 5% on your FXCM UK Demo Account or $2500 US Dollars. You are well on your way to your goal and you are starting to understand more and more and that makes me happy for you.


Benjaminis

My LONG Silver is now in profit however to get to a Net Profit I still need to cover Rollover costs. Here is my position as of a few minutes ago when I ran the FXCM UK report !!!



Comm Trading Commission-8.00


Rollove rRollover Fee-832.50


PnLProfit/Loss of Trade 3,719.75

Deposit 50,000.00

Withdrawal 0.00

OptionOptions Payout0.00

CommOptions Commission0.00

AdminFeeAdministrative Fee0.00

MngFeeManagement Fee0.00

PerfFeePerformance Fee0.00

VoidDeposit Rollback0.00

ASPCommASP Commission0.00

MargInterestInterest on Usable Margin0.00

SubscriptionFeeSubscription Fee0.00

RRebRollover Rebate0.00

Div_AdjDividend adjastment0.00

Ending Balance 52,879.25

Floating P/ L255.00

Equity 53,134.25

Necessary Margin 900.00

Usable Margin 52,234.25

Gold is on the move for good reason.

Here is the 5 Minute Chart on Gold from Finviz.

http://finviz.com/futures_charts.ashx?t=GC&p=m5

MONEY continues to FLOW into the 10 Year US Bonds.

Here is the 5 Minute Chart on US 10 Year US Bond from Finviz.

http://finviz.com/futures_charts.ashx?t=ZN&p=m5

As the Dow sells off and the Asian markets sell off and I expect Europe to SELL OFF as well you can see money is being placed into the Yen.

Here is the 5 Minute Chart on the USD/JPY from Finviz.

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


Please share your thought with me. It has to be clear now to everyone that understands the great EDGE that we get because we know that with Risk Off the Money Flow reverses.


Benjamin

The Wrap Up - Well folks this has been an excellent day. I hope it was positive for you as well. I probably will get up in about 6 hours or maybe wake up in 4 hours to see if my Long Silver Position got closed. However by 6 AM EST , I will be able to reply to any questions !!!

Not much more to say for tonight except to the many many traders that come and read our thread. It would be a pleasure to communicate with you as I would think there may be some questions that you might want to ask me. If that is the case then just register with Forex Factory and then follow the thread and post here at your pleasure. Good Night ALL !!!


Benjaminis

http://www.hantecfx.com/what-drives-...ign=Gold+Price

Performance update since I joined this thread.
(Remainder I was in -60% loss on my live account before I started with Benjamin's Money Flow Trade Plan.)
I heavily focused on my live account after reaching a decent profit % in my demo within first week.
I hope you don't mind that Benjamin, as I will feel extremely confident in my trading skills when I will get my live account back to the initial sum.
This doesn't mean I won't continue trading on the demo and getting the 5% needed to succeed the challenge.

IN THE GRAPH YOU CAN SEE: the red box are my trades prior to Money Flow, the yellow box shows my trades after applying Money Flow.

Live account growth 19th - 29th of December 2016 - 24.8% with a maximum drawdown of 5.6%.

Best regards and happy new year to everyone!

Benjamin, look, check out: Account Balance at 29.12. - 9.07 GMT

Good day dttsomh

I thank you sincerely for your reply. I have no issues with you trading your active real funds account that you have shared here. The first thing that struck me is what I was talking about when I posted around the time that I started this Money Flow Method and Risk Management Thread. I explained why MOST if NOT ALL Retail Forex Traders lose. One fact was that they trade with too little capital and with more RISK not less. That is because as you have confirmed today is that you need to take profits quicker and do not have good runs mainly because you are not trading with any trend. There was a reason why I have become such an accomplished Forex trader. I went to my own self taught school for 3 years by only trading demo accounts with minimum capital of $50,000 US Dollars.

This allowed me to learn and trade with no fear or pressure and teach myself how to trade properly. Very early on I was able to win at least 75% of my demo trades. I could have started trading Forex after one year for sure because I was consistently making returns of over 10% a month. I decided not to trade real funds whether mine or other peoples. The reason for that is that I hate to lose money whether mine and for sure not another person that trusts me.

I would appreciate feedback from my excellent student Forex trader , dttsomh on this particular topic.

If you can make demo profits properly capitalized then using the methods that I have taught here in the last 26 days with good cooperation from those that have participated with as we can all see, good results. I would like those students that have improved their Forex trading skills in a very short period of time what are the main reasons why in your own words. That will help others here to understand better.

I will take a break now and arrange my breakfast.

It has been very positive and worthwhile being here posting on my thread on Forex Factory in the Commercial Content section. It was my idea to post in this section and not to charge anyone for my time and information so there would be no wrong ideas about my agenda. That is also why when I start next year on my corporate website anyone that I met here will have lifetime instruction from me when I start early next year on my website. I have also decided that there will be free content there so that anyone that wants to participate can. The others who subscribe for my full services and will have 24/7 access will only be charged no more than $50 US a month with no contracts needed. That way I can help many more Forex traders and they get to have a 24 hour Mentor.

I do not expect the Dow 30 to break 20,000 this year and perhaps NEVER !!! You can see what has been happening in Asia and now Europe and shortly the North American markets.

Enjoy your day and I look forward from hearing from all of you.

Best regards ,


Benjamin

Hi Benjamin

It would be nice if we could get into your head, the way you think, when placing a specific order/trade and why you move your stop losses, taking of a trade. Re-entering another one ect.

Your thoughts on the technical side of placing a trade with the strategy you use to do so.

Good day , wayfarer

Thanks for posting the charts and you and myself and others can see what is happened in chart form. Our EDGE is knowing why as that lets us trade with the trend. The Trend is always your friend. I have a question as relates to the charts that you have posted. What indicators are you using and have you used them before ? Have you used SAR and Fractal as yet ? They are very useful and I will spend time in the future explaining what kind of indicators Forex traders should use and why.

You are doing very very good as we can see from your results. I appreciate your cooperation and feedback as it helps me to teach better. Now that I have replied to the questions or comments from our Forex trading group as I said in my last post time time to go back to my other responsibilities like breakfast and reading the local newspapers while I keep my TV tuned to CNBC so I can hear commentary as I do other things. Later folks.

Hello KeepCalmfx , How are you doing ? See you later, thanks for doing good and interacting with me. We have an excellent group here and I invite others that can post to do so and become part of this thread if you care to.


Benjamin

Hello Benjamin

My first ever post on FF, i do follow Davit's forum as well (outstanding trading plan) but fundamentals is an area that i would develop better and this thread appears to be the ticket , i have speed read the first 29 pages but will go through again more thoroughly, keep up the good work.

Any places still available on your offer of mentor ship and the fxcm demo account?

mrmkg01

JPY is rolled back, suppose to 116,895