Choo Koon Lip

1. Stops Should be Technically Relevant
Stop loss levels should not be arbitrary – just because you’re willing to lose a maximum of 2% of your equity doesn’t mean that a 2% stop loss is a good idea. Instead, your stops should be technically relevant.

Place stops at price levels that represent a maximum deviation from the technical pattern you’re trading, not some random loss you’re limiting yourself too.

This can coincide with the maximum risk you’re willing to take; but doesn’t have to.

2. Stop Outs Should Be Material
Way too often, I see cases of traders who do a good job of honoring their stops (and closing their positions), only to leave money on the table when the trade rebounds.

The problem is that they’re being too strict with their stops. Remember, support prices are not absolute levels – a Forex pair can easily move a few pips below the support level set as a stop without being a “failed” pattern just yet.

You should see support / resistance as a price range instead of just an exact price level.

3. Stops Should Hold You Accountable
If you’re having trouble pulling the trigger when it’s time to sell a stop out, you need to be accountable to your stop loss orders.
One of the easiest ways to do that is to be explicit about them: consider posting your trading levels on a public forum like a blog or Twitter.

A more private solution is to keep a trading journal that clearly defines your stop loss price for any position. This requires you to review (and hold yourself accountable for) your trades that fell below those levels.

Forex brokers have recently been sponsoring major sport teams to have their brand displayed in front of millions of fans. Their primary goal is to promote their brand as well as hype up the industry as a whole.

1. MIG is a sponsor of the Mercedes F1 team with Michael Schumacher as one of their drivers

2. FXPro sponsors Fulham and Aston Villa, well-established English soccer teams, as well as AS Monace, one of France’s leading clubs.

3. FXDD sponsors the Red Bull F1 team, Alpari sponsors the New York Knicks basketball team and New York Ranger hockey team

4. Saxo Bank sponsors cycling tournaments

5. FXOpen sponsors Drift challenges …and the list goes on.

Car racing, in particular, Formula 1, seems to be the current trend for Forex brokers. There are some good synergies with Forex and F1: fast paced, risky, technical and there is an element of nationalism (like the World Cup) via the competition between drivers and teams of different nationalities – like Euro vs Yen. The demographics of the average Formula 1 fan are predominantly male aged 35-55 years old and upper-middle class. F1 sponsorships are expensive and the messages that these companies are trying to deliver are ‘we are a big company because we sponsor a F1 team’ and that Forex trading is akin to car racing.

Do you want to see what they spent on these sponsorships? Was it money well spent or just vanity marketing?

Personally I don’t believe in big sponsorship by the brokers, and I don’t use those who come in with such enormous sponsorship. Your trading commission / spread is paying for it.

With reference from Jeff Baskin

If we say that a few of the economic education study course resources which were taught in educational institutions as well as universities may not be proper, will you believe it? These days, let us go over a number of the flaws in these fiscal education program materials.

USD: Will the US federal government default on their financial debt?

In school textbooks, it had been described that US Bonds are risk free assets and the interest levels of the US Bonds are considered as danger free rate. Nonetheless, the truth is, is it as this kind of? Are US Bonds actually danger free?

The debt ceiling of US is now at USD 14.3 trillion, and the US financial debt will probably be at this stage by this yr August, which is up coming month. If US is just not in a position to lift this financial debt ceiling by then, there will be probabilities that US will default on their financial debt by next month, not able to repay their debts.

Even if US only default their financial debt by one particular day or one week or, the volume is not enormous, even so, the repercussion might be quite significant. It could trigger another “financial tsunami”, that can in turn, set off an additional monetary crisis.

USD: Republicans purposely make points hard for Democrats

We feel the US authorities will approve the boost while in the financial debt ceiling. The current deadlock is that the Republicans are purposely producing things challenging for your Democrats President Obama. However, in case the debt keeps on escalating, the US economy will by some means be impacted also to repay the financial debt will likely be a lot more demanding.

As of now in regular, each and specific US citizen has to bear the load of USD 46,483 from the US national financial debt. If we inform you now, that 50% with the people, whose regular annual household cash flow is less than USD 46,326, do you now feel that the chance of US defaulting their debt is absent?

USD: Is risk free rate truly risk free?

The rate of interest with the US financial debt is the cheapest within the total globe. That is simply because as of now, everybody believes that US will never default their debts. Existing the inflation price in US is 3.6%, but the returns on US Bonds is just 3% per annum. When the inflation is preserved at 3.6%, and you also have invested in US Bonds, you’d have lost 0.6% every year. If you are an investor, will you proceed to lend funds for the US and getting such low interest rate? Currently, the world-wide predicament is such the chance of inflation is large, China’s inflation rate has reached 5.5%, Singapore is at 4.5% while Vietnam is even larger, at 13.2%.

Why is it the inflation price retains rising? This is because while in the previous two years, the US retains on printing cash and as of now, US has printed USD 2.6 trillion! As US will be the global reserve currency, and bulk in the commodities are priced in opposition to the USD, if US continues to print funds, it’s going to then trigger the worldwide inflation rate to boost.

USD: US Bond market collapse might trigger another world-wide economic system crisis

We really feel that inside the yr 2012, US inflation rate may possibly boost approximately 4% or even higher, nonetheless the returns in US Bonds will nevertheless be stagnant at 3%. This will trigger the value of US Bonds to dip 20% to 40% and also the US Bond industry might collapse. As a result of this, US, could be forced to boost their rates of interest.

Presently, the US monetary scenario is extremely bad, unemployment rate reached 9.2%. If interest levels improve, that is certainly to say, housing loan rates of interest will even improve as well as the US citizens will probably be enduring one particular catastrophe following yet another.

23% with the international economic climate includes the US economic system and also the spendings of the US citizens constitutes to 70% in the US economic system. As these kinds of, US economy might be weakened.

Once the credit rating of US decreases, interest rates of US Bonds will boost and also the cost of US Bonds will drop. Therefore, US credit card debt crisis may well then trigger an additional world-wide financial crisis and result in USD to decline even further.

Due to the greater than expected numbers from Apple, risk fx rose in Asian periods and early European periods, which was boosted by calmer credit markets and surging equities. But, because the early morning continues, the investor optimism was getting to be a little faded with bourses buying and selling nicely off their opening highs. EUR/USD backed off 1.4200 soon after breaking through this degree in the earlier several hours with the day.

EUR/USD: Much better fundamentals in Germany

On fundamentals, the German PPI info was a little far better than anticipated. It had been at 0.1% when compared with 0.0% and the year on yr costs enhanced by 5.6%.Regardless of the reduced power charge and also the higher trade rate differentials and excluding the unstable power sector factory gate costs elevated 0.2% and 3.7% around the yr, the prices are at well above ECB’s 2% goal. As this kind of, this inflation info, will fairly most likely maintain the Frankfurt?fs policy makers within a hawkish mood within the in close proximity to potential which will therefore point out that ECB will carry back it’s tightening plan into the conclude in the 12 months once the sovereign financial debt fears begin to calm down.

In Uk, the MPC minutes revealed a familiar 7-2 break up with Martin Weale and Spencer Dale, continuing to press for any 25 bp increase as the lone dissenting dove Adam Posen argued for fifty Billion a lot more QE again. While in the general, even so the MPC members are nonetheless cautious because the mentioned the “recent developments had lowered the probability that a tightening in policy could be warranted inside the around term”. The MPC seen some modest growth in Q2 of the calendar year, 2011, nevertheless there will likely be some softening in Q3 and much more importantly, they didn’t see any evidence of inflation feeding into salaries, which in turn suggests that the BOE will continue being stationary while in the in close proximity to long term.

GBP/USD: Value boost on news

The price of GBP/USD however, enhanced around the information, not automatically due to the hawkish language from your MPC but rather as being a reduction that the members had been not a lot more dovish. GBP/USD recovered the 1.6100 figure and it could rally all the way approximately problem the 1.6150 region later on inside the day if the chance flow proves that it truly is conducive. Even so, as of now, GBP/USD stays while in the 1.6000 to 1.6200 range as trader seeking much more clarity around the state from the data in United kingdom.

Within the US, the calendar carries much more housing information with active houses anticipated to extend from 4.81 million to 4.92 million inside the previous month. As being the creating allow reports far better figures on 19 July 2011, there will likely be a superb likelihood that the quantity will beat expectations. If Current Houses figures bust through the 5.0 million mark, it might present a further boost to equities markets and assist to lift the danger fx to new every day highs of EUR/USD, that’s targeting 1.4250 area, although GBP/USD will probably be targeting 1.6200 area.

Recently, I was talking about price execution with some friends and I thought it will be great to share with all of you on MARKET Execution and INSTANT Execution.

Market Execution is only for ECN accounts typically.

You enter a price at 1.4199

Say the price now is at 1.4200, then it will be executed and entered at 1.4200.

If the price now is at 1.4198, then it will be executed and entered at 1.4198.So your price is secondary; market executed the actual price.

Instant Execution is what most brokers are offering.

You enter a price at 1.4199If the price now is at 1.4198, then it will be executed and entered at 1.4199 (your price, since you will need to pay more to broker – then broker earn more).

Say the price now is at 1.4200, then broker will requote you at 1.4200.

So your price is better for broker, they keep quiet. If price is not as good, they requote you.

These are my takes below:

1. Pro for MarketEx: NO requote

2. Con for Market Ex: You enter the price based on market.. sometime better price, sometime lousier price, depend what the market give you

3. Pro for InstantEx: You will get in at the price you want

4. Con for Instant Ex: Sometime the market give broker better price, you will get the price you want and broker keep excess pips. Sometime the market give broker lousier price, you will get a requote from the market.

It’s got been a really volatile session while in the forex markets throughout this morning’s European session as the forex market and also the equity markets dipped sharply once the London session is opened. But since the European session ongoing and assurance to your markets has long been furnished from the European officials, the EUR and also the equities began to recover from its before losses. At the moment, today’s focus continues to be on Europe and there are many causes as to why the EUR is so unstable. As of now, every pip move of EUR/USD is decided through the news headlines and also the rumours.

They are a number of the factors for the volatility of EUR

EUR: Unique summit scheduled by EU Leaders on EZ economic crisis

The EU leaders are operating very difficult to stabilise the foreign exchange markets and they’re holding conferences following conferences. On Friday, EU leaders will hold a particular summit to go over the debt crisis. Depending on the latest cost action about the EUR, all chat and no action is inadequate to stabilise the marketplace sentiment. Nevertheless, at least, this proves the European officials will not be sleeping and ignoring the situation.

EUR: Eurogroup functioning on to provide funding for Greece

Following the two days of Eurogroup meeting in Greece, it’s confirmed that there is going to be some concrete steps that will assist Greece within their financial debt crisis. Eurogroup nations have agreed to improve the versatility and the scope of the EFSF, which means, stretching the maturities with the loans and decreasing the rates of interest. Eurogroup also discussed main parameters of a new multi-annual adjustment programme for Greece, which could enhance sustainability with the Greece financial debt. All these methods are while in the correct direction despite personal sector involvement and rating company approval continues to be a large problem.

EUR: Fiscal package deal vote for Italy

Italy understands they could possibly be the following domino to fall and that’s why the Italian officials are searhing for new techniques to enhance the confidence with the investors. To accelerate a fiscal package deal vote is probably the approaches. Initially the vote was scheduled for that starting of August, nonetheless it could now consider spot inside the next two weeks due to the acceleration. As compared to Greece, the opposition party will not have a lot considerable problems using the fiscal bundle, other than that several amendments could be anticipated along with the package need to pass smoothly which might support to bolster confidence.

EUR: Luxembourg Finance Minister’s feedback

EUR also acquired some help through the Luxembourg Finance Minister, who said there will likely be no nation defaulting in the Eurozone. The accuracy was questioned due to the Greece and Italian credit score default swap spreads remaining at extremely high ranges, but in an industry wherever traders are hanging on every single term from European officials, Frieden’s self-confidence was adequate to enhance the EUR.

EUR: ECB Purchasing Italian Bonds?

There was also a rumor the ECB could possibly be acquiring Italian bonds – that is fully unsubstantiated but even now managed to contribute to conserve the EUR by somewhat.

EUR: USD came under strain

Lastly, the USD arrived under strain soon after the US trade numbers showed that the trade deficit expanding from -$43.6 billion to -$50.2 billion to its biggest degree considering that October 2008. The expansion within the trade gap was induced largely by a surge in oil imports and in addition the exports dropped 0.5% with retail sales weakening within the 2nd quarter, if the trade harmony continues to be at latest levels in June, the GDP progress in Q2 may be considerably slower, which can impact the EUR/USD.

Quantitative Easing (QE2), Fed’s “emergency cash” will not likely to derail gold’s 10-year rally. However, gold may possibly encounter a difficult road as these “emergency cash” which offered the fuel for gold’s ascent, dries up, at the least for now.

At the moment, gold’s performance being a safe haven is not quite clear as fund managers have cited a few factors for this, which contain, overvaluation of gold, slower progress, threat of deflation and resurgent USD.

Gold: Gold price has greater than doubled considering that 2008′s low

Just before that, the worth of gold tended to ascend in times of economic crisis. Gold has reached greater than 200% gain from its 2008 year’s low in the depth of economic crisis along with the value of gold went up by 20% considering that Fed’s chairman, Ben Bernanke spoke for the duration of Jackson Hole’s speech in August 2010, which marked the commencement of quantitative easing round two (QE2).

Last week’s Thursday, 30th June 2011, the USD 600 billion QE2 programmed has ended by Fed as the addition of cash for the monetary technique has induced the US interest levels to drop.

Mr Bob Haber, chief investment officer of fund supervisor Haber Trilix, stated that, “Even with QE ending, there’s no prospect of the Fed rising rates anytime shortly. We have negative US real rates of interest. And gold does quite well historically within an unfavorable real-rate environment.”

On last Friday, gold dipped beneath USD 1480 per ounce, almost USD 100 beneath its historical high of USD 1575.79, which was set on 2nd May 2011.

Gold: No hints of QE3 as of now

Fed’s Chairman, Ben Bernanke, didn’t give any hints of QE3 as of now. Even though the monetary policy just isn’t expected to become tightened, if Fed introduces extra market stimulus which was known as for previous week by Barack Obama, US President, to stimulate job development, gold price of gold will probably to rally.

Mr Mark Luschini, chief investment strategist at broker-dealer Janney Montgomery Scott, described that, “The notion of QE3 is much more liquidity, which will most likely be dollar unfriendly. And it will then even more run the chance of inflation.”

In the event the USD is strong, it will attenuate the status of gold as an alternative currency. Most commodities, which consist of gold and oil, denominated in USD, which continues to be the global’s reserve currency, even with the uncertainty in US economic climate outlook and also political tensions regarding the increasing debt limit in the world’s largest economic climate.

Mr Jeffery Sherman, commodities portfolio manager of DoubleLine Money, stated, “If danger assets promote off, and people shun the dollar, that’s when we are within a new regime, that’s when gold’s going to take off. But I really don’t see that happening”.

He also talked about which the danger of deflation, which was partially caused by the European Debt crisis, need to make investors go for US Treasuries along with the USD and hence lead to gold, susceptible to weakness. “Gold is somewhat of a safe haven, but it is safe haven only whenever you are anxious about inflationary pressures”, stated Mr Jeffery Sherman.

X-Men: First Class – 2 June, 9.45pm @ GV Max

Kungfu Panda 2 − 3 June, 7.15pm @ MBO Melaka Mall (Malacca)

The Hangover 2 − 5 June, 6.50pm @ WE Suntec

X-Men: First Class – 10 June, 6.35pm @ The Curve (Selangor)

Super 8 − 12 June, 12.00am @ GSC Maxx, Times Square (KL)

The European Central Bank (ECB) is set to reveal its second rate hike given that April 2011 on Thursday and may well then pause for any although to find out the euro zone’s financial prospects as Greece confronts with its financial debt crisis.

Jean-Claude Trichet, president of ECB, reiterated on last week the ECB governing council was “in a state of powerful vigilance” about inflation, which represents a code phrase for an announcement for that enhancement of rates. Jennifer McKeown mentioned that “A 25 basis point hike to 1.5% looks like a completed deal.” It is a common impression which can be shared by a lot of other individuals.

Jean-Claude Trichet: To lessen euro-zone inflation

The ECB’s intention is usually to reduce the euro-zone inflation, which can be at present at 2.7%, for the target of just under 2%. ECB will also look in to the broader macro-economic perspective, whereby among the goods consists of unemployment which hovered at 9.9% for that 3rd month consecutively inside the month of May, indicating which the euro-zone economic climate is cooling down. Investigation group, Market, printed the latest purchasing managers’ index, demonstrates a widening gap among the core euro-zone members and a number of other members.

Meanwhile, in London, the Bank of England is expected to take care of its main rate of 0.5%, that’s with the record-low level, on Thursday. Market interest is centered on no matter whether Jean-Claude Trichet will signal an extra rate increase within the afterwards part of this yr, or regardless of whether is Jean-Claude Trichet suggesting the bank will settle right into a wait-and-see mode as being the leaders in the European Union (EU) deal with Greece’s challenges. Commerzbank economist Michael Schubert mentioned that Jean-Claude Trichet “will possibly give little away on what takes place thereafter”.

A telephone meeting was held by euro-zone finance ministers on the very last Saturday, 2nd July 2011, to approve the EU’s share of fund payments together with the International Monetary Fund (IMF), that’s worth a whole of EUR 12 billion, to aid Greece to prevent a debt default. This move arrived about following the Greece lawmakers passed new prudence actions which was ordered by the creditors to create way for continued emergency funding from Europe, along with the IMF.

In accordance to Deutsche Bank Global Markets Research, the central bank could be the single greatest holder in the Greek public financial debt, whom had acquired about EUR 47 billion worth of sovereign bonds on secondary markets.

Jean-Claude Trichet: Debt-laden nations ought to change past practices

Jean-Claude Trichet ordered the EU lawmakers that Greece as well as other debt-laden countries should adjust earlier practices “that weren’t sensible, and should happen to be prevented”. He also pointed out which the soaring salaries provided to public personnel in a number of nations which were threatened from the financial debt crisis and mentioned that presently, there is a correction. Also, one essential crucial problem for the markets and economists is whether will the ECB voluntarily renew bonds issued by Athens after they turn into because of, to bring up private investors to join Greece rescue efforts. By ploughing a number of the maturing bonds again into your new bonds with terms of up to 30 a long time would mean giving Greece some buffer. Nevertheless, this can not address the root with the problem, that’s the country’s inefficient economic system. Other global ratings businesses may even now believe that this kind of rollovers will contribute to a de-facto default and Jean-Claude Trichet emphasised in the course of last week that ECB won’t participate.

Today July 4th as a trader you may be wondering whether it would be a good idea to trade the market…read on to find out why it’s not.

Market Open
You will generally find the markets open even on the major holidays like Christmas Eve and Christmas Day, New Year’s Eve and New Year’s Day, as well as on the U.S. Thanksgiving. Throughout the trading year, the U.S. or New York Session is one of the largest in the Forex. However, you must also remember that U.S. banks are very liberal with taking holidays off. Therefore, just because the Forex market itself is considered open, that does not mean that the banks are all open and rendering full service.

Brokers’ Platforms
Many brokers have facilities available for trading on these major holidays. But the reality is that the volume becomes very thin. Let’s face it-even traders like to take time off to spend with their families and friends and spend money at the mall. The effect of the decreased volume in the market is decreased liquidity. When a market does not have liquidity, it is difficult, at best, to get in and out of positions profitably. On the other hand, when there are lots of traders participating, fun can be had and money made. The U.S. Thanksgiving is not going to be as quiet as Christmas in the market, since it will perhaps affect only the U.S. Dollar-based currency pairs for the most part. Apparently, other countries and their traders are not as excited about our national holidays as we are. Surprise, surprise.

Risks
One of the consequences of a market that is not so liquid is the increase in the spread charged by the broker. You will notice a similar effect during any given weekend of the year, by virtue of the same reason of lack of liquidity. Naturally, as a trader, you prefer the smaller spreads, since you get to keep more of the profits in your pockets as a result.

Conclusion
So then should you or should you not engage in Forex trading on these holidays? If you like boring and expensive trades, then go for it. Otherwise, look your loved ones in the eye and tell them that you are so thrilled to spend some quality, uninterrupted time with them. Then prove it by spending some of that quality cash you earned during the previous months. Happy spending!

Sandy Robinson, J.D., Copyright 2007