Money Flow Trading Method along with Risk Management

From Post 844

Quoting BenjaminIs
{quote} Hello KeepCalmFX and raveon and anyone else that can explain what you have learned. We have two answers now , mine and wayfarer. Some of the others are not online !!! We do nothing for the moment not until at least 2:15 PM after the FOMC Minutes are released in 8 minutes. Then I will return and suggest your first trade.


Here is what I have learned so far.

1stly by having a $50 000 demo account, you eliminate your chances to trade with Fear, when you trade with fear, you don’t think rationally and clearly, so by getting the fear out of the way, you can start to subconsciously form positive pathways in your brain that confirms every month by making a consistent profit that you can make a consistent profit each month indeed. So after 3 months to year trading on a demo account a certain strategy/way it becomes second nature, later you just see the perfect setup with the money flow, within the trading plan and you don’t think twice to enter. So I believe then you would be able to treat your live account as the Demo account you trained on. Just my opinion.
“You must have the desire, the interest and the DISCIPLINE to control your FEAR and your Greed otherwise you will lose” You must also control your EGO, if you have a few winners, then don’t think you know what the markets will do next, the next trade could be a loss, so you must have the disciple to stick to your trading plan, also don’t increase your position size now because you had a few good trades, the next loss may be just around the corner. The market is always write and the trend is your friend.
Through doing research you become aware of newsletters/blogs/sites/writers you can trust for their honest opinions, the facts, so the reality and not perception that people want you to believe or someone else’s perception because he is bias. Like Benjamin showed us a lot of times, with his experience he came across sites and bloggers/writers you can trust more than others, because it is the truth, not his/her own perception or the way he/she wants you to think. The money flow sets the trend.
Then you take the information and start with a trading plan.
After Benjamin’s research, he came to the conclusion that for the following 3 months the main trend would be as follow for the following instruments, it can change if new factors came into play (4 trade plans):

 

1. US30 – Short (100 units)
2. JPY- Short (100 units)
3. Silver- long (100 OZ)
4. Gold- Long (5000 OZ)

For the next 3 months the market will not go short/long every hour of the day, because the market ebb and flow.
So even though the main trend is short for the US30 for the next 3 months, the market will go long/retrace at times. (We must also keep up to date with news, because if there is a drastic change our trading plans might also change.)
So each day, we start trading, we must confirm if it is risk on – market going long or if it is risk off – market going short on the US30. (We don’t look at other charts to trade, except our trade plans.)
This you can see on a 1 hour, 4 hour chart.
If it is risk on, we stay out of the markets, if we have positions open that is fine, because we have a very good Risk Management in place.
As he also explained many times, “When the markets head down and we have Risk Off the money flows into US Dollars first and then the money is parked usually into US Bonds so the bonds go up and the yield goes down. Money also flows to USD/JPY”
We should preferably trade between 2 AM EST and 5 PM EST. Benjamin start at 2 AM EST because that is when Frankfurt opens one hour before Europe fully comes on line and the Money starts to Flow again since Japan has gone home. The real action is between 8:30 AM EST and 4:30 PM EST.
The duration of a trade can be as quickly as 15 minutes to one hour or in cases where we have a DRAWDOWN longer. He take +/- 25 trades a day if I can remember corectly.
We wait for big news like NFP to see what the markets does before entering a trade. Again patience is key. When we are in profit, +/- $250 we will move our stop loss to breakeven, there after move his SL every 25 pips in profit. If the market hits our positive SL then it is fine and we move to the next opportunity.
Our risk/reward is 1:3, we add our stop loss and take profit immediately after we place an order.
We can take the profit if we have a good profit, my personal opinion, $850 - $1000 is a good profit. Like Benjamin says : “"A Bird In Hand Is Worth Two In The Bush" and ”You Can Never Lose Money By Taking A Profit” So we are not greedy in letting our profits get eaten up as the market ebb and flow, we take our cut and wait patiently for a price signal to re- enter the market.
Sometimes, especially if you have not time to watch your chart every hour/4hours and can only view it daily, then by placing a 1:3 R/R ($1000 risk, $3000 reward), you can leave the markets to do its thing, because we now have an edge, because we know the direction of the main trend.
At no time can there be more than $10,000 US Dollars of the $50,000 US Dollars in the market. This formula is 20% of the trading capital.
There is no set rule that we need three positions on each Trade Plan. What we do is to make sure that the loss on any Trade Plan since we can be wrong is 6%.
So as Benjamin said, if we are trading US30 and we enter the first position and it does go up for a while against us of say - $ 500 then we enter our second position with same 1:3 R/R, usually if not always when it turns around the last position put on whether the second or third if need be is the most profitable one. This is where the charts are very helpful as we can see Support and Resistance and also here the SAR, FRACTAL and Awesome Indicator helps very much. More on these indicators on Post 705, 706, 708.

If you have your first position on and it moves into profit and it build momentum, this is when you can enter your 2nd position. And if you are in a drawdown of say $ 500 with your 1st position then you add the 2nd one and as the 2nd and 1st one is in profit you can add your final position with moving your SL to breakeven ect.
No one knows what the market will do, all we do is enter the market with our edge (Money flow) and Technical tools, and then we have the best probability of a successful trade and watch what happen. If you take a loss, then it is fine, not all of our trades will be winners, you will never have a system with 100% success rate.
I still have a lot to learn on the fundamental side/money flow and I also must still work on my fear of missing out, not to enter when I see a setup but wait for confirmation before I enter.

From Post 1178

Quoting BenjaminIs
{quote} piphunting Thank you for posting and thanks for your excellent chart. I included it on my TEST QUESTION Thread. What my objective is in asking this question of those that use charts and almost everyone uses charts of methods such as Supply and Demand. Support and Resistance. Elliot Wave. Pivot Points. All these have one thing in common. They give you insight into where Forex currency pairs or Commodity currency pairs will go. Trading Stocks , Equities is different from trading commodities leveraged at around 30 to 1 and the most leveraged...
With the money flow method it takes time and research to get to the big picture, the truth. Now all of the hours you have put into researching has paid off. Now that we have a sneak peak in the future, we know that the US 30 will fall and so will the JPY.

Now most of the work has been done and we just wait patiently for the price to get at a certain resistant levels to short in the trend's direction which is clearly down. Then the price will retrace again and we short again when we have our confirmation through technical analysis until something change then we re-evaluate our trading plan.

So before you enter any position you check for big news events, watch the US30, US Dollar index and US 10 Yr bond and they will tell you if we have risk on or risk off. When we have risk off you wait for confirmation to enter a position through doing technical analysis and then you must just act in placing a position with your SL and TP.

So now trading becomes so easy and very enjoyable.

Trading without fear really makes trading so much fun. The last 2 week has been the most fun I every had trading! And we also don't need to be greedy because the next trade is just around the corner.

From Post 1199

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 adviser.


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 behavior”, 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 willful thinking. In this case, traders 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.


Comments from Benjaminis: The above is important since as I have stated the most important person to make money trading Forex is "YOU"

Europe closes in 15 minutes so watch for Short Covering and the VOLUME goes down as only North America is on board and of course those HFT (High Frequency Traders) or Robo Traders. They are one CLICK AWAY (FLASH CRASH ANYONE)

From Post 1200

Quoting KeepCalmfx
{quote} This is probably a scalper or contra trend trader, trading against the trend or with. Trader trade the retracement, target 70 pips. Would have probably change after target to re-enter short? Not sure. But better probabilities in trading with trend. I use the Fractal and SAR, not so much Awesome oscillator. what other indicators do you have up your sleeve? lol {image}
According to some analysis: although defining trade parameters is important to traders in any market, it is particularly important in the currency market since over 80% of the volume is speculative in nature. This means that currencies can spend a very long time in a certain trading environment. Also, the currency market obeys technical analysis particularly well given its large scale and number of participants.


Too many traders have tried to pick the top within a trend, only to wind up with consistently unprofitable trades.

There are basically 2 types of trading environments, which means that at any point in time an instrument is either range trading or trending. The 1st step every trader needs to take is to define the current trading environment. The shortest time frame that traders should use in step one is daily, even if you are trading on a 5-minute time frame.


How to Trade Trend?

To trade trend the trader needs to answer 3 basic questions:

1. Trend detection - When is a trend in place?
2. Trade entry – How is a position initiated?
3. Trade exit – What constitutes trend exhaustion?

The use of Bollinger Band is a more accurate way to glean trend, though it is often used for range-bound markets.

What is trend really? The author will postulate that trend is actually a deviance in price. Typically, in all markets prices stay in a range somewhere between 70 and 80% of the time. Therefore, when prices decide to trend they in fact deviate from the norm. That is why Bollinger Band (“BB”) becomes one of the best tools to measure deviation in technical analysis. The BB formula contains the standard deviation (“SD”) calculation within it. BB measures the standard deviation of price away from its 20-period moving average. … Price action is captured within the 1SD – 2SD Bollinger bands.

THESE BB bands divide the price action into 3 separate areas. If prices are between the upper 1 standard deviation BB and the upper 2 standard deviation BB, they are in the buy zone. If a specific currency is trading between the lower 1 SD BB and the lower 2 SD, then its price is in the sell zone. Price candles that exists in the area between the 2nd BB bands are in effect in no-man’s-land as markets struggle to find direction.

With the BB bands approach, the trend detection rule is quite straightforward. The author considers the uptrend to have commenced once the price closes – not simply penetrates, but closes – in the buy zone. The idea behind this rule is that buyers must have enough conviction behind their actions to sustain a rally into the upper BB channel. If prices merely pierce the channel but cannot hold their value, then we do not have enough evidence of a clear up move in place.

The second component of the trade is perhaps the trickiest. Instead of simply entering the trade at market we will look for an opportunity to buy on any small dip into the no-man’s-land zone. IF the penetration of the buy zone is so powerful that prices reach the upper 2 SD BB, then we will wait for prices to retrace to the middle of the bands or to the 1 SD band. Why such hesitation? Shouldn’t we jump in the moment the trend becomes clear? No. Not if you want trade FX like a professional.

When it comes to trend trading in FX, the difference between professionals and amateurs is that while the pros are trend followers, the amateurs are trend chasers. The distinction may seem like nothing more than semantics, but in fact it’s often what separates those who earn money through trading from those who lose it.

Where would the trader abandon his position? At what point on the chart will be proven most likely wrong? If prices retreat all the way back to the lower 1 SD BB, then the trader should stop out. The probability that trend is over is very high. Note the difference in approach. In order for us to consider the trend valid, prices must not only touch but close through the upper 1 SD BB. As for our exit, a mere tag of the lower 1 SD BB will take us out of the trade. Why be so slow to enter and so quick to exit? Because, as I noted before, trend is not the common state of price, so price must really prove to the trader that it is making a directional move. Once price can’t hold trend, there is absolutely no reason for the trend t trader to stay around. His risks far outweigh potential rewards because he now faces 3 possible scenarios – consolidation, trend reversal, or trend continuation. 2 out of the 3 outcomes are unfavorable to his position and the last choice, which is advantageous, is usually the least likely under such circumstances.

Using the lower 1 SD BB provides ample room for the trend trader not to be falsely shaken out of the trade while the price meanders through the no-man’s-land zone before it decides whether it wants to continue its initial impulse higher.

Understanding the exits – the 3rd rule of the trade – may now be helpful to appreciating the 2nd rule of buying only when price retraces. It all has to do with risk and reward. Remember that in real life prices frequently fake out the trade. Just because price enters into the trend channel is no guarantee that it will remain there. If markers were highly predicable most traders would make money rather than losing it. The key to positioning in a trend-based setup is to minimize the amount of losses for the countless times you will inevitable be wrong, rather than to maximize the gains for the few times that you will be right. In trading, trends are the exception, not the rule, and in order to avoid being wiped out, traders need to try to always enter the market under the most advantageous of circumstances no matter what the market environment holds. Novice traders tend to succumb to the lure of the crowd and not restrain themselves from buying at the top or selling at the bottom. The more patient trader, however, who would wait for a retracement down to the upper 1 SDBB, would suffer only a smaller loss.

- Boris Schlosseberg, Technical Analysis of the Currency Market

From Post 1191

DO NOT FORGET THIS PLEASE !!!

What's the most most important thing a trader needs to know?

Answer: The most important skill you
have in trading is knowing exactly what
to do after a loss. What you do
next is what makes you great.

Let me take you through a little
progression.

If you know how to trade, you love it!
If you love trading, you know that losses
happen.

If your trade loses, you might think
it happened because you were wrong or
you made a mistake, or you just didn't
know what you were doing.

I have good news for you. None of that is true.
You were not wrong. You did not make a
mistake, nor did you fail to understand
what the market was doing.

When your trade loses, it's because the market's
timing was not there for you. Not only were
you not wrong to stop out of the trade, you
were exactly right!

What you do next is what defines you
as a trader.

Anyone can trade. Anyone can learn a strategy
and open and close a trade. What separates the
winners from the losers is what the trader does
after a loss.

- Jennifer Thornburg


As I said earlier today now my focus goes back to you the Forex Trader.

I share the following general rules that always work as long as you know them and have the DISCIPLINE to follow them.

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 capitalized.

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.



Some more useful information.

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

Excellent Chart From USD/JPY Thread

http://www.forexfactory.com/attachme...6&d=1484651455

With the above chart as background this is why and how what we learn and teach here works.


Benjaminis

I post this again so there is NO DOUBT on How To Trade Forex and Earn Money and Protect Your Capital.

Once again , I try hard for everyone to understand all the parts that would guarantee your success if you have the necessary skills and DISCIPLINE. I can not guarantee that you do however I will know for sure by your Forex Trading results. It is up to you not myself as I have done my part and at least three of our Forex Traders are learning well. The three that are working on it and participating. IT IS THAT SIMPLE and that has too be clear so JUST DO IT !!!


Benjaminis

I first want to talk about having an EDGE. Fundamentals by themselves is not an EDGE. However using Money Flow between Asset Classes from here on I will include in my basket of 100% of what a winning Forex Trader needs. I will not refer to it as a fundamental anymore since new people coming to this thread put my method as including Money Flow as a fundamental which it actually is however not in the same way as most people understand Fundamentals.

This week we will get to see Non Farm Payroll (N F P) and as any experienced Fundamental Forex Trader knows it usually is a fantasy number created by the BLS however next to a FED rate announcement it is the one number that can move markets hundreds of PIPS in seconds and minutes.

Whatever the number Trillions of Fiat Currencies and other Asset Classes will start to change values as we "SEE" the Money Flow. That is why I call it my EDGE and once you know it and understand it well then it becomes your EDGE as well.

Here are the 5 important things that any Forex Trader that belongs to the minority of constant profitable Forex Traders , which I have named , The 5% Club needs to have. Of course in my opinion, I would think that very few Professional Forex Traders use the EDGE. Of course when you know about it then anyone can use it.

Each of the following five important things which I have given a weighting of 20% to each makes up what a profitable Forex Trader needs to have in order of IMPORTANCE.

(1) The ability of the Forex Trader to control their FEAR and their GREED and their EGO. Perhaps the last one is the most important of the three since the MARKET is always right. Using Money Flow puts you with the Market instead of against it as your Forex Account keeps losing the value in it.

The reason that I teach Forex Traders whether experienced or new to Forex trading with a $50,000 US Dollars Demo Account is because that is how I learned my trade starting during 2003. By learning to trade with $50,000 US Dollars in Demo Funds, then I had no FEAR or GREED. However after 3 years of Forex Demo Trading I surely had EGO since month in and month out my Return On Investment (ROI) was constantly over 10% a month or 120% a year.

(2) Money Flow. I have now explained why.

(3) Risk Management. That is next to Money Flow the KEY element of my Forex Trading since when you blow your account whether you are trading with too little capital as the majority of Retail Traders are or because of a Black Swan event such as Brexit or Europe banking issue such as we have in Italy at the moment or the Swiss Central Bank as they did a few years ago say one thing and then next moment announce a major change in their policy and 500 PIP movements happen in seconds. The absolute MINIMUM Forex Account that I would and could trade with would be $10,000 US Dollars. I would be glad to answer questions as to why although most will understand. What if you do not have $10,000 US Dollars trade with ? Prove to yourself that you have the skills and the knowledge to trade with profits then you will have no problems finding funds to trade Forex with. After my 3 years of Forex Demo Trading, I went out and found 6 clients that first deposited initially $50,000 US Dollars and within 3 months along with the profits that I was generating in my first three months of Forex trading from March 2006 to June 2006, I was managing well over $100,000 US Dollars.

(4) Technical Indicators which includes all parts of it whether Support and Resistance or Supply and Demand or Pivot Points. I use when I do daily trades the 5 Minute Charts along with the 15 Minute Charts and 30 Minute Charts to go along with the 4 Hour Charts. When you toss a rock in the river the first ripple is the 5 Minute Chart and then on to the 30 Minute and the two others. I use other indicators aside from the standard ones which are SAR and Fractal and Awesome Oscillator. The most important one that I look at when I enter into a Forex Trade is Support and Resistance so if I am going long or short I enter either at the TOP or BOTTOM of the Chart that I am using. Of course my Risk Management protects me from Human Errors or EGO.

(5) Fundamentals. I am fairly sure most of those reading my words today or whenever they read it might be surprised how a Forex Trader such as myself who posts a tremendous amount of research can list fundamentals as number (5) in order of importance. It is the research that allows me to clearly understand the difference between PERCEPTION (Markets) and REALITY (Research) Then I know what will most likely happen in the future and I am better prepared to deal with it.

I hope that this post of my daily Morning Thoughts answers some of your questions both for the 12 Forex Traders using the $50,000 US Funds Demo account with FXCM UK or anyone else. There is no reason that an experienced trader reading this thread or anyone else to not open a $50,000 US Dollars FXCM UK account so they can use the knowledge that we share here to learn new things and try them without having any FEAR of LOSS !!!

As always , I look forward to feedback and thoughts and anything that you care to share with us on our Thread.

The Wrap Up - Nightly

Good Evening Ladies and Gentleman

This will be my last post for today and in many ways the most revealing. I should be back online for the Europe open at 3 AM EST or GMT + 5

I will look forward to reading your replies when I wake up.

PLEASE LISTEN TO THE VIDEO. It is about 31 minutes. Listening now before going to bed in about one hour or so.

Feedback is always helpful.

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

By EconMatters

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The entire Financial System is broke, EconMatters is downgrading the entire Global Credit Rating to Junk Status since none of the Rating`s agencies are doing their job right now, as governments all around the world have coerced them into not properly rating each country`s true debt condition and rating.


Look at how much each country (government) and central bank has levered up with doubling, quintupling, and in China`s case increasing their credit bubble by a factor of 30 times the pre financial crisis levels. The identifying markers of the coming debt Armageddon and global financial market crash are starting to surface and nobody is paying attention right now because markets are at all-time highs and everyone is high on the giddiness of their asset portfolios like Cocaine Bosses in Columbia before the inevitable Reckoning Day.

The entire Pension System, Bond Market, Stock Market, Central Bank Balance Sheet and Government Debt system is on the verge of systemic default, and is a fragile Ponzi Scheme right before the withdrawals start coming in, and the whole charade collapses in on itself.


The entire Global Financial System is built on Fraud, i.e., flawed and unrealistic assumptions that under no circumstances were rational, logical or financially sound policies. The entire Global Financial System is Broke, and nobody is paying attention - This Is The Real Big Short!

https://4.bp.blogspot.com/-APmERPH1P...ebt-to-gdp.png

https://3.bp.blogspot.com/-pMDeAp2vk...ance-sheet.png
https://2.bp.blogspot.com/-Qj6rU7wdy...ernal-debt.png
https://4.bp.blogspot.com/-7AVUFPrEl...nment-debt.png
EconMatters All Rights Reserved |

HEADS UP - BONUS - INCREDIBLE ARTICLE ON SILVER !!!

https://srsroccoreport.com/big-movem...paper-markets/

The Silver Market will experience a significant trend change in the future due the unraveling of the paper markets. Already we are witnessing a lot of political turmoil and havoc as President-elect Donald Trump gets ready to take over the White House in the next few days.

It’s also logical to assume the policy changes President-elect Trump wants to make will cause serious ramifications to the highly leveraged debt-based fiat monetary system… whether he realizes it or not.

Craig over at TFMetalsReport.com recently interviewed Paul Myclhresst about the huge problem the Chinese government is dealing with as they liquidate Dollars to prop up their banking and economic system. I highly recommend listening to that interview if you haven’t.

Thus, the continued liquidation of U.S. Dollar Reserves by China and other countries is probably the reason for the ongoing decline in International Reserves covered in Hugo Salinas Price’s newest article, The Further Decline In International Reserves:

https://srsroccoreport.com/wp-conten...AN-13-2017.png

Over the past 29 months, the decline in Reserves took place at a rate of about $42 billion dollars a month. At this rate, by the end of 2017 International Reserves will likely decline by another $504 billion dollars, to $10.31 Trillion, which will increase the decline from the peak in 2014 to 14.31%.

As we can see from Hugo’s chart above, countries continue to liquidate their official reserves (mostly U.S. Dollar reserves) to prop up their financial and economic systems. This is a very BAD SIGN… likely to get much worse in the future.

The Silver Market Will Experience A Huge Trend Change In The Future
The Global Silver Market will experience a huge trend change in the future, thus impacting the price in a BIG WAY. The are two critical reasons why this will occur:

1. Cracks In the Highly Leveraged Debt Based Fiat Monetary System will force investors into purchasing silver to protect wealth
2. The 17 consecutive years of annual silver deficits totaling 1.8 billion oz, suggests the easy to acquire silver is now in tight hands. Which means, when investors finally start to rush into silver, there will be very little available to be purchased, only at much higher prices

Let’s take a look at the Global Silver Market annual net balances from 1975 to 2016:

https://srsroccoreport.com/wp-conten...t-Balances.png

Let me explain this chart as it contains some interesting trend changes. First, the majority of annual net surpluses occurred from 1975-1987. This was after the U.S. and British Govt’s colluded to start the Gold & Silver Futures trading markets, which funneled investors funds into paper precious metals rather than physical.

You can read more details on this in my article, PRECIOUS METALS INVESTORS: Are You Ready For The Great Financial Enema.
This was also the same time when governments and big investors were dumping old silver coins onto the market that were no longer being used as currency. You will notice that in 1978 the net silver surplus was very low. This was due to the huge demand by investors as the price of silver skyrocketed. However, as the silver price was capped by the “Financial Doctors” at the Fed and CME Group in 1980, many investors dumped silver back into the market.


According to GFMS’s data, there was a 306 million oz (Moz) surplus of silver that year. And, as the silver price continued to decline in the 1980’s, more silver was dumped into the market, especially in 1983 (140 Moz) and 1984 (149 Moz).

I don’t want to get into too much detail from years 1987-1999, but annual net surpluses continued as governments such as China, Russia and India sold official silver stocks into the market. But, this all changed in 2000 when the Global Silver Market started to experience net deficits.

And… since 2000, the Global Silver Market has experienced 17 consecutive years of net silver deficits. According to GFMS and the Silver Institute, the world will suffer another 185.5 Moz net deficit in 2016.
So, how can the Global Silver Market suffer 17 years worth of consecutive silver deficits? Well, because there was over 2 billion oz of silver surpluses (1975-1999) put away for a rainy day:

https://srsroccoreport.com/wp-conten...-1975-2016.png

Of course these figures are best estimates and do come from an official source that may have the motivation to under-report the real situation, but we can clearly see that a lot of silver has moved out of the market and is now likely be held by extremely tight hands.

While the market is nothing more than one huge “Intervention”, these official figures reporting 17 years of consecutive net silver deficits means the silver market is poised for something extremely big. And, I am not saying that just because I am a silver investor. The PROOF is right in front of us. No need to hype something that is totally making the CASE for us.

The Gold & Silver Paper Markets Are In Serious Trouble
While many precious metals investors believe that market intervention and manipulation can continue indefinitely, we are already witnessing the collapse of International Reserves. Furthermore, if President-elect Trump is allowed to run the White House for a while, we are going to see serious financial dislocations due to trade wars and increased U.S. inflationary pressures.

In addition, GFMS and the Silver Institute forecast continued net annual silver deficits for the next several years (at least) as global silver production declines while demand continues to be strong. This will be just more FUEL for the SILVER MARKET FIRE ahead.

Again, this is not hype. What I am explaining here is the same setup as those characters portrayed in the movie the BIG SHORT, who were betting against the disaster called the Mortgage-Backed Securities industry. They knew it was a huge house of cards ready to implode… it was just a matter of time.
While the gold market will likely experience a huge run, I believe silver will outperform gold many times over. This is due to the fact that there is about the same amount of invest-able silver in the world as there is gold:

https://srsroccoreport.com/wp-conten...k-Holdings.png

According to the best sources I could come across, there is about 2.2 billion oz of investment gold and 2.5 billion oz of investment silver in the world today. Of course, there is likely more physical gold and silver we don’t know about, but it will not change the ratio all that much.


That being said, just a doubling of physical gold and silver demand will put a lot more pressure on the silver price than gold as big traders and hedge funds jump aboard for larger percentage gains.

As we begin to see fireworks going off in the United States as President-elect Trump stirs up the pot, 2017 will likely be the year things really start to fall apart.


If you haven’t read my article, PRECIOUS METALS INVESTORS: Are You Prepared For The Great Financial Enema, I provide more clues of the situation ahead.


Check back for new articles and updates at the SRSrocco Report. You can also follow us at Twitter, Facebook and Youtube below:

ANOTHER AMAZING TOPICAL HEADS UP ARTICLE THAT I SHARE NOW !!!

http://seekingalpha.com/article/4037...al-impact-loss

Technically Speaking: The Psychological Impact Of Loss
Jan. 17, 2017 10:04 PM ET

https://staticseekingalpha2.a.ssl.fa...png?1317659714


Lance Roberts
Follow(5,070 followers)


Real Investment Advice
For the third time in four weeks, the market was closed on Monday due to a holiday. Not only is this week shortened by a holiday, it is also coinciding with the annual Billionaires convention in Davos, Switzerland, and the Presidential inauguration on Friday. Increased volatility over the next couple of days will certainly not be surprising.

In this past weekend's missive, I discussed a variety of "extremes" being registered in many areas of the market and particularly in prices. To wit:
"I have often compared market prices to the equivalent of "stretching a rubber band." Prices can only deviate so far from the long-term trend line before a mean reverting event eventually takes place. Much like a "rubber band," prices can only be stretched so far before having to be relaxed to provide the ability to be stretched again.


The chart below shows the long-term trend in prices as compared to its underlying growth trend. The vertical dashed lines show the points where extreme overbought, extended conditions combined with extreme deviations in prices led to a mean-reverting event."

https://staticseekingalpha.a.ssl.fas...317_thumb1.png

"This is shown a bit clearer below which compares the deviation of the S&P 500 from the long-term growth trend. Currently, while only slightly below the peak of the 2000 "dot.com" bubble, the deviation is at levels that have ALWAYS coincided with a negative mean reverting event or very poor, and highly volatile, forward returns."

https://staticseekingalpha.a.ssl.fas...317_thumb1.png
I know... I know. As soon as I wrote that, I could almost hear the cries of the "perma bull" crowd exclaiming, "How many times have we heard that before!"
They would be right. The problem with the majority of analysis, in my opinion, is the mismatch between long-term analysis and short-term time frames. The problem with long-term price analysis is the failure to predict short-term price changes. However, short-term analysis leads to psychological wear, where analysts have spotted "Head and Shoulder" formations, "Hindenberg Omens," and "Puppy Monkey Baby" patterns that have failed to predict a market change.

Of course, like "crying wolf," when these short-term patterns and long-term prognostications fail to immediately validate themselves, they are summarily dismissed as being wrong or just "mumbo jumbo," which often leads to unwanted outcomes.

The primary problem is the "duration mismatch" between most technical analysis, which is typically very short term (minute, hourly, daily), and the outlook for investors, which is in years.

As a portfolio manager, what is important for me is the understand the longer-term "TREND" of market prices. By looking at weekly and monthly data, the trend of prices is revealed, allowing for a better match between portfolio goals and related market risks.


During "bull markets," prices are in a steady advance, with corrections to the longer-term bullish trend presenting buying opportunities. When prices become extended from the trend, such deviations provide opportunities to take profits and rebalance portfolios.

Conversely, during "bear markets," prices are in a steady decline, with corrections to the longer-term bearish trend presenting selling, hedging, and shorting opportunities. When prices become extended away from the bearish trend, such deviations should be used to take profits in short positions and portfolio hedges.

This idea is shown in the chart below.
https://staticseekingalpha.a.ssl.fas...617_thumb1.png
By using a 72-week moving average, the longer-term trend of prices is more clearly revealed. As stated, corrections to the longer-term trend during bull markets were buying opportunities, whereas during bear markets they were selling/shorting opportunities.
VERY IMPORTANTLY - Note that at the peak of the previous two markets, the change from a bullish to a bearish trend was denoted by the following price action:

1. A break of the long-term moving average.
2. A rally back to the long-term moving average.
3. A failure and a move lower in price than the most recent bottom.

While this occurred at the beginning of 2016, it was quickly reversed following rapid intervention by global Central Banks quickly intervening with a flood of liquidity. The markets have now resumed their bullish trend currently, but are pushing the limits of historical advances, as noted this past weekend.
https://staticseekingalpha.a.ssl.fas...917_thumb1.png


The Psychology Of Loss
The problem ultimately comes down to psychology.
Last year, I wrote an article about the fallacies of "buy and hold" investing which received a good bit of pushback from the community of advisors who tout that the only way to invest is to buy low-cost ETFs and hold them long term. As I penned:
"Let's assume an investor wants to compound their investments by 10% a year over a 5-year period.

https://staticseekingalpha.a.ssl.fas...und-011916.png

The "power of compounding" ONLY WORKS when you do not lose money. As shown, after three straight years of 10% returns, a drawdown of just 10% cuts the average annual compound growth rate by 50%. Furthermore, it then requires a 30% return to regain the average rate of return required. In reality, chasing returns is much less important to your long-term investment success than most believe."


Emotions and investment decisions are very poor bedfellows. Unfortunately, the majority of investors make emotional decisions, because in reality, very FEW actually have a well-thought out investment plan, including the advisors they work with. Retail investors generally buy an off-the-shelf portfolio allocation model that is heavily weighted in equities under the illusion that over a long enough period of time, they will somehow make money. Unfortunately, history has been a brutal teacher about the value of risk management.


Take a look at the chart below.
https://staticseekingalpha.a.ssl.fas...617_thumb1.png

The current extension of the market above the 200-DMA, combined with extremely low volatility readings and overbought conditions, have not been kind to investors over the last couple of years.

This overbullish, overextended market is also evidenced on a MONTHLY basis, with prices currently pushing a rare 3-standard deviation extensions above the 3-year moving average.
https://staticseekingalpha.a.ssl.fas...617_thumb1.png


Sure, this time could certainly be different. There is just a really high probability it will not be.

But such observations rarely deter individuals in the short term, as our emotionally driven "fear of missing out" and the now ingrained belief that the "Fed won't let the market fail" blinds us to a multitude of psychological traps. These "traps" are the biggest reason for underperformance by investors who participate in the financial markets over time.

1. Loss Aversion - The fear of loss leads to withdrawal of capital at the worst possible time. Also known as "panic selling."
2. Narrow Framing - Making decisions about one part of the portfolio without considering the effects on the total.
3. Anchoring - The process of remaining focused on what happened previously and not adapting to a changing market.
4. Mental Accounting - Separating performance of investments mentally to justify success and failure.
5. Lack of Diversification - Believing a portfolio is diversified, when in fact, it is a highly correlated pool of assets.
6. Herding - Following what everyone else is doing. Leads to "buy high/sell low."
7. Regret - Not performing a necessary action due to the regret of a previous failure.
8. Media Response - The media has a bias towards optimism to sell products from advertisers and attract view/readership.
9. Optimism - Overly optimistic assumptions tend to lead to rather dramatic reversions when met with reality.

The biggest of these problems for individuals is the "herding effect" and "loss aversion."


These two behaviors tend to function together, compounding the issues of investor mistakes over time. As markets are rising, individuals are led to believe that the current price trend will continue to last for an indefinite period. The longer the rising trend lasts, the more ingrained the belief becomes, until the last of "holdouts" finally "buys in" as the financial markets evolve into a "euphoric state."


As the markets decline, there is a slow realization that "this decline" is something more than a "buy the dip" opportunity. As losses mount, the anxiety of loss begins to mount until individuals seek to "avert further loss" by selling. As shown in the chart below, this behavioral trend runs counter-intuitive to the "buy low/sell high" investment rule.
https://staticseekingalpha.a.ssl.fas...016_thumb1.png


Despite all of the arm waving and pounding on the table by advisors touting long-term average returns, time in the market, etc., the psychological impact of loss is all too real. While "buy and hold" investing has its appeal during bullish trending markets, the "impact of loss" on individuals is a far greater emotional pull. This is why investors tend to do everything backwards by "buying high" (greed) and "selling low" (fear).


This is why managing "risk" always "wins" over the long term by reducing the emotional pull to "do something" at precisely the wrong time. The reality of loss tends to be more than most can stomach, and sentiments of "time in the market" will go mostly unheeded. This is, of course, why many of the coveted millennial investors have already rejected much of the Wall Street rhetoric after watching the devastation that wrecked their parents over the last 15 years.
You can do better.

http://ezinearticles.com/?Day-Tradin...-By&id=1398584


By Dr. Barry Burns | Submitted On August 10, 2008

http://img.ezinearticles.com/spriting/trans.gif
http://ezinearticles.com/members/mem...urns_36257.jpg
Most people looking to make money in the markets believe that the answer lies in finding some simple technical analysis strategies that will catapult them to profitability.


The truth is that trading is not as simple as beginners believe. It is a profession, and like any profession it requires a learning curve. Reading a book or getting a few simple "tips" is not going to turn you into a professional trader.


After studying for a length of time, it's not uncommon for students to begin their search for the "holy grail."


They search for more indicators, chart patterns, gurus, alert services or the latest secret day trading strategies and other things that will provide their answer to becoming successful.


But here's the fact. Success lies within you .. and it won't come easy.


In fact, one of my favorite success principles is this:
"Successful people do what unsuccessful people are unwilling to do."

Let's apply this to trading in the form of my list of "Day Trading Rules to Live By" ... all of which have to do more with you than with the market.

 

1. The consistency you need is in your mind, not in the market. Many in the market get frustrated because the market often behaves differently than they expect. You can't rely on the market to be consistent. It is largely a random walk. But there are times when the market does setup with a probability scenario that gives you an edge. Your job is be consistent in trading those probability setups and trade them every time they occur.
2. Trade like a cat. Most beginners over trade. It's one of the most common trading sins. Your job is to be better than other day traders in having the discipline to wait like a cat in the brush until just the right moment (your high probability setup) and then jump on the trade without hesitation.
3. Successful trading is simply a game of not making mistakes. Keep a list of your day trading rules posted on the wall or on your monitor and then follow those rules perfectly. You must be more disciplined than the average trader. Never depart from your rules no matter how good a trade "looks" or "feels" to you if it violates your objective and back-tested rules.
4. Only trade when you are in an optimal emotional state. Never trade when you are tired or are in an emotionally unstable situation (after a fight with a spouse or friend for example). Day trading is more like athletics than academics. Trading on such a short time frame requires you to be able to make split second decisions, and you're risking a lot of money when you do. Make sure your mind is sharp and your emotions are centered.
5. Keep a detailed trading log. Every day trading course I've seen has a trading log. Yet my experience in dealing with trading students demonstrates that less than 10% of them actually use it. This is a huge mistake. Not only should you log every trade, but you should also record how you felt and what you were thinking as you took the trade. In this way your logs will become a type of "biofeedback" mechanism for you. Personally, this was the difference that made all the difference for me.

These 5 day trading rules are not the type of rules that you were probably looking for. The masses want rules about indicators, price bars, where you get in and where you get out.


Granted, you definitely need clear objective rules about those things as well. Yet thousands of traders have those types of rules, and yet continue to fail because those rules are about market action.


They fail because they don't have, or don't follow, the more important rules the rules about their own action.

If you find yourself resisting the importance of these rules about your own behavior, realize that you are one of the masses who feels the same way. But since the masses fail at day trading, you must set yourself apart and do something different than them.


Following these 5 day trading rules are what the retail traders fail to do. Not because they can't do them, but because they are unwilling to do them. And remember, "Successful people do what unsuccessful people are unwilling to do."


Dr. Barry Burns is the owner of Top Dog Trading which teaches people how to avoid the long learning curve in day trading


He started his study of the markets under the direction of his father, Patrick F. Burns, who became independently wealthy through trading and had over 70 years of trading experience before passing away in 2005.

He has been the featured speaker at DayTradersUSA, and developed a 5 Day Course for WorldWideTrders.


Dr. Burns has been a headlining guest speaker for the Market Analysts of Southern California, given seminars around the country at many Wealth Expos as well as many Traders Expos, been interviewed on the Robin Dayne "Elite Masters of Trading" Radio Show, and is the former moderator of the FuturesTalk chat room.

He has a doctorate in Hypnotherapy and is a certified NLP practitioner, and therefore able to help people with the psychology of trading.
Article Source: http://ezinearticles.com/expert/Dr._Barry_Burns/37770


Comments From Benjaminis: Good Night Finally (SMILE)

Big Gap in VIX

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

whats the reason behind those? I noticed the GBP/JPY and Eur/GBP gaps over the weekend

VIX probably before the fall of the index rose. If bonds (2YR.) show growth, the Dow will fall. BenjaminIs , how you this option?

Good day

Hope everyone is doing well.

Here is the charts, I couldn't uploaded the USD/JPY on the investing.com chart

Good Morning

Many unknown issues before we get to see if we have Risk On or Risk Off. Asia was up and Europe is mixed however we still do not have any tone for the day. Oil is off and Gold is flat.

Here is a chart that I just looked at and will post here.

http://www.forexfactory.com/attachme...9&d=1484728181

All signs still point to the US 30 more likely to head down however we need to let the markets decide that.


Benjaminis

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

How do you know with certainty that Davos has not only jumped the shark, but has become a parody of itself? One answer: when you have a handful of semi, and not so semi, billionaires - perplexed by the populist backlash of the past year - sit down and discuss among each other how a "Squeezed and Angry" middle-class should be fixed.


As Davos puts it, "once the lynchpin of developed economies, its now threatened by job losses and stagnant wages, paving the way for the rise of populism.

In emerging markets, middle class growth rates are stalling. Have middle class problems been forgotten?" It asks rhetorically "What can be done?"

Apparently the answer is to have three people completely disconnected from the real world, sit down and provide "answers.":

In this session, starting at 0800 GMT, IMF Managing Director Christine Lagarde, Italian Finance Minister Pier Carlo Padoan and Founder, Chairman and Co-CIO of Bridgewater Associates, Ray Dalio, discuss what's needed to restore growth in the middle class and confidence in the future.

And then they wonder why the annual Davos echo chamber boondoggle has become not only a global farce, but a symbol of everything that is wrong with globalization today...


Watch it live below


Commentary from Benjaminis:

Larry Summers was the Treasury Secretary in the Clinton administration that led the charge to drop the Glass Steagal Act in place since 1933 and was one of the most destructive changes that led to the Melt Down in 2008 and now we have the situation of today. The more things change the more they stay the same except for where we are now.

https://www.nytimes.com/topic/subjec...agall-act-1933

Snippet:

Adapted from an article in the Law Library.
The Glass-Steagall Act, also known as the Banking Act of 1933 (48 Stat. 162), was passed by Congress in 1933 and prohibits commercial banks from engaging in the investment business.

It was enacted as an emergency response to the failure of nearly 5,000 banks during the Great Depression. The act was originally part of President Franklin D. Roosevelt’s New Deal program and became a permanent measure in 1945. It gave tighter regulation of national banks to the Federal Reserve System; prohibited bank sales of securities; and created the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits with a pool of money appropriated from banks.

Beginning in the 1900s, commercial banks established security affiliates that floated bond issues and underwrote corporate stock issues. (In underwriting, a bank guarantees to furnish a definite sum of money by a definite date to a business or government entity in return for an issue of bonds or stock.) The expansion of commercial banks into securities underwriting was substantial until the 1929 stock market crash and the subsequent Depression. In 1930, the Bank of the United States failed, reportedly because of activities of its security affiliates that created artificial conditions in the market. In 1933, all of the banks throughout the country were closed for a four-day period, and 4,000 banks closed permanently.

Read More...
As a result of the bank closings and the already devastated economy, public confidence in the U.S. financial structure was low. In order to restore the banking public's confidence that banks would follow reasonable banking practices, Congress created the Glass-Steagall Act. The act forced a separation of commercial and investment banks by preventing commercial banks from underwriting securities, with the exception of U.S. Treasury and federal agency securities, and municipal and state general-obligation securities. Likewise, investment banks may not engage in the business of receiving deposits.

Investment banking consists mostly of securities underwriting and related activities; making a market in securities; and setting up corporate mergers, acquisitions, and restructuring. Investment banking also includes services provided by brokers or dealers in transactions in the secondary market.

The Glass-Steagall Act restored public confidence in banking practices during the Great Depression. However, many historians believe that the commercial bank securities practices of the time had little actual effect on the already devastated economy and were not a major contributor to the Depression. Some legislators and bank reformers argued that the act was never necessary, or that it had become outdated and should be repealed.

Congress responded to these criticisms in passing the Gramm-Leach-Bilely Act of 1999, which made significant changes to Glass-Steagall. The 1999 law did not make sweeping changes in the types of business that may be conducted by an individual bank, broker-dealer or insurance company. Instead, the act repealed the Glass-Steagall Act's restrictions on bank and securities-firm affiliations. It also amended the Bank Holding Company Act to permit affiliations among financial services companies, including banks, securities firms and insurance companies. The new law sought financial modernization by removing the very barriers that Glass-Steagall had erected.

Comments from Benjaminis: Now you know what they did and why we again are in great financial difficulty. It is so clear now what the Criminal Bankers were up to. Larry Summers and Bill Clinton indeed.

http://www.actionforex.com/action-in...0170118279391/

Snippet:
Daily Report: Dollar Weak Despite Positive Fedspeaks, Sterling Strong on May

Dollar remains the weakest major currency over the week despite some positive comments from Fed officials. Fed Governor, Lael Brainard indicated that material increase in fiscal stimulus measures would lead to acceleration in rate hikes. Speaking for the Brookings Institution, Brainard suggested that "if fiscal policy changes lead to a more rapid elimination of slack, policy adjustment would, all else being equal, likely be more rapid than otherwise". She added that "based on recent spending indicators, we might expect progress to continue to be gradual and steady". Meanwhile, speaking for the National Retail Federation, New York Fed president William Dudley noted that the "risk that the Fed will snuff out the expansion anytime soon seems quite low because inflation is simply not a problem".

However, the greenback was clearly weighed down by president elect Donald Trump's warning on its strength. He said that the US might need to "get the dollar down" if a change in tax policy drives it higher, adding that "having a strong dollar has certain advantages, but it has a lot of disadvantages". Regarding the trade relations with China, Trump noted that "our companies can't compete with [China] now because our currency is too strong. And it's killing us". Overall, Trump will have his inauguration date later on Friday and he might outline his initial priorities in office. There are prospects of more volatility in the greenback.

Sterling is now the strongest major currency after lifted by prime minister Theresa May's speech on Brexit. May emphasized that the goal of her 12-point plan for Brexit is "a new, positive and constructive partnership between Britain and the European Union". Concerning the closely watched trade relations, she noted, "Brexit must mean control of the number of people who come to Britain from Europe. And that is what we will deliver... what I am proposing cannot mean membership of the single market". While providing details on neither the trade terms nor immigration control, May indicated that UK would seek a free-trade deal with the EU outside the single market, a new customs relationship that would allow Britain to negotiate trade deals around the world, but have "frictionless" cross-border trade, a "phased implementation process" at the end of the two-year period of negotiations, rather than a lengthy transitional deal, no more unrestricted immigration from the EU, and complete withdrawal from the European Court of Justice. Importantly, May confirmed that "the government will put the final deal... to a vote in both Houses of Parliament before it comes into force".

Bank of Canada will announce rate decision today. BoC is widely expected to keep benchmark interest rate unchanged at 0.50% and will likely be a non-event. Fed will also release the Beige Book economic report. On the data front, Australia Westpac consumer confidence rose 0.1% in January. German CPI was finalized at 0.7% mom, 1.7% yoy in December. UK will release job data today while Eurozone will release CPI final. US will release CPI, industrial production and NAHB housing index.

USD/CAD Daily Outlook
Daily Pivots: (S1) 1.3132; (P) 1.3159; (R1) 1.3201; More...
USD/CAD's fall from 1.3598 resumed after brief consolidation and intraday bias is back on the downside. As noted before, prior break of 1.3080 key support level could have completed a double top pattern (1.3588, 1.3598) and indicates reversal. That is, whole corrective rise from 1.2460 is finished. Further fall should be seen to retest 1.2460 low. However, considering bullish convergence condition in 4 hours MACD, break of 1.3189 minor resistance will dampen this bearish view and turn bias to the upside for retesting 1.3598.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. The second leg is likely finished at 1.3598 too after hitting 50% retracement of 1.4689 to 1.2460 at 1.3575. Break of 1.3080 would now likely resume the fall from 1.4689 through 1.2460 to 50% retracement of 0.9406 to 1.4689 at 1.2048. We'd start to look for reversal signal below 1.2460 again to complete the correction. In case of another rise, we'll look for topping sign at 61.8% retracement of 1.4689 to 1.2460 at 1.3838.

http://www.marketwatch.com/story/eur...teid=rss&rss=1

Snippet:
European stocks searched for firm direction Wednesday, as investors sifted through corporate updates, including better-than-anticipated results from ASML Holding NV.

The Stoxx Europe 600 SXXP, -0.19% was down less than 1 point at 362.28, drifting back from a modest gain of 0.3%. Sectors losing ground included consumer services, financials and industrials, while technology, consumer goods and health care shares moved higher.

The pan-European benchmark on Tuesday closed down by 0.2%, but came off session lows after U.K.’s Prime Minister Theresa May said British lawmakers will be able to vote on terms of a final Brexit deal negotiated between U.K. and European Union officials. Britain will leave the bloc’s single market, she said in a speech Tuesday in London, or make a so-called hard Brexit.

“Taken together this should help alleviate some of the harder Brexit concerns that overall sends a positive signal to reassure U.K. business and investors,” said James Woods, global investment analyst at Rivkin Securities, in a note. “However a healthy skepticism remains, given free trade agreements typically take more than two years the negotiate, that’s if the U.K. is able to reach such an agreement with the EU.”


Read: Why Theresa May is right to take a huge gamble on hard Brexit
And: May offers escape hatch to U.K. banks, car makers in Brexit speech

Among major indexes, Germany’s DAX 30 DAX, +0.10% moved up 0.2% to 11,561.28 on Wednesday and the U.K’s FTSE 100 UKX, +0.09% edged up 0.1% to 7,229.57. The London index on Tuesday slid 1.5%, its worst performance since June 27, according to FactSet data.


U.K. blue-chips sold off Tuesday as the pound soared nearly 3%, posting its biggest one-day gain since December 2008. On Wednesday, sterling GBPUSD, -0.8619% was buying $1.2311, down from $1.2378 late Tuesday.


Movers: Pearson PLC shares PSON, -26.79% plunged 24% after the publisher of educational materials warned of lower future dividends and profit, citing a slide in U.S. demand.

ASML Holding NV shares ASML, +5.01% climbed 4.6% after the Dutch chip-equipment maker’s quarterly profit and earnings forecast came in above expectations.

Gerresheimer AG shares GXI, +6.67% popped up 6.4% after Deutsche Bank upgraded the German drugs packaging firm to a buy rating from hold.
Novozymes A/S NZYMB, +2.49% rose 2.4% after the world’s largest maker of enzymes projected 2017 sales and profit growth and said it plans a share buy back up to 2 billion kroner. The company also plans to cut 198 jobs.

Deutsche Bank AG DBK, -0.62% DB, -3.23% was down 0.2%. The U.S. Department of Justice on Tuesday finalized its settlement with Germany’s largest lender over allegations the bank misled about residential mortgage-backed securities between 2006 and 2007. The bank will pay $3.1 billion and provide $4.1 billion in relief to underwater homeowners and others.


Other indexes: France’s CAC 40 PX1, -0.50% was down 0.5% at 4,834.65 and Spain’s IBEX 35 IBEX, -0.01% was fractionally higher at 9,395.40.
The euro EURUSD, -0.2520% changed hands at $1.0694, down from $1.07504 late Tuesday.

Economic data and other developments: Inflation in Germany was confirmed to have increased to 1.7% in December, the highest annual rate since July 2013, led by rising prices for fuel and heating oil, Destatis said Wednesday.


Eurozone inflation for December was confirmed at 1.1%.

The European Commission has asked Italy to reduce its 2017 budget deficit by about €3.4 billon ($3.64 billion) to avoid an excessive-deficit procedure that could include fines.

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