Spanish debt sale Miss weighs on euro trading

Spanish debt sale Miss weighs on euro trading
Traders were European meeting disappointed, a Spanish debt sale, which brought higher yields and missed a 3 billion maximum target by 20 million euro. Spanish 2014 bonds were sold to 5,204% yield, compared to 4.335% in June, and 5-year notes were 6.46% in today's sale until sold by 6.07% sale on June 21.
Show higher than expected Spanish borrowing costs a dropping confidence in the ailing economy. The German House will most likely approve the EFSF-100 billion euro aid package after Spain; But German Finance Minister Schäuble legislators said that the Spanish Government for the bailout loans were responsible. The Minister further said that the direct bank recapitalisation can be done only under a condition of the sovereign responsibility. This means that the Spanish government debt will likely increase with the upcoming stimulus package, thereby further confidence in Spanish debt lower.
Meanwhile notes to 0.86% yield, down from 1.43% in the last auction, were French 2017 as investors flock to the relatively safer French economy sold. The European session opened with shares up over 1%, vice versa this sent the euro twenty points behind short-term support of 1.2300, but the gains quickly temporary as EURUSD and European shares were most of these profits. Following the news of the Spanish debt sale closer to 1.2250, slightly above the 50% expansion from may up to June low fallen euro.
In other European news UK retail sales (without a car fuel) increased by 0.3% in June, though still disappointing expectations for a rise of 0.4%. Swiss exports were also to 2.6% in June. Many data fed comes including sales existing for June, leading indicators and the Philadelphia today from the United States. for July. Traders should watch for the results of the German House of Commons vote on the Spanish aid package.
EURUSD15 minute: 19 July 2012

: Forex Trading Facts Update

What's Moving Markets continuous on Forex Forum Key Items:, EZ- ECB, US- Productivity, Crude, Beige Book. The forex trading theme of the week remains central bank policies. The ECB is meeting now and the outcome of its conference is due on the NY open . Markets are hoping for some action from the central bank, but it is unclear what they will do. The emergency G7 Finance Ministers phone conference on the European situation ended with no actions on policy. Although Japanese FinMIn Azumi said there was discussion of unwarranted JPY strength. Australia saw GDP data that was much stronger than expected and has given the Aussie a strong lift.. The EURUSD remains in a major downtrend. The 10-yr bund is 1.27%,  +6 bp. The key EURUSD 20-day average is 1.2642. Key European bourses are higher. The U.S.10-yr is 1.60%, +4 bp. Key Asian bourses closed mostly higher. The 10-yr JGB is 0.86%, +4 bp. The key USDJPY 20-day average is 79.39. EURJPY 20-day average is 100.38. USDJPY is up and the EURJPY is stronger. Check the Forex Forum over the day for an updated and ongoing discussion of current trading themes in the MARKET CHATTER continuous discussion thread.Forex pairs vs 2-yr note spreads Some traders focus intently on the Japan vs. U.S. 2-yr note spread (only the U.S. 2-yr moves much). .

Forex			#REF!			GBP vs.	9:35
EUR	1.2508	56	JPY	98.91	87	JPY	122.12	101
GBP	1.5443	61	GBP	80.99	4	CHF	148.25	-9
CHF	0.9600	-44	CHF	1.2008	-1	CHF vs.
JPY	79.08	35				JPY	82.37	73

Some traders focus intently on the Japan vs. U.S. 2-yr note spread (only the U.S. 2-yr moves much).

.

COMMODITIES and Commodity Currencies

Click on Chart to Enlarge

  

Commodity							9:35
CAD	1.0320	-58	AUD	0.9861	122	Gold	1633	14.66
CNY	6.3635	-45	NZD	0.0000	0	WTI	85.18	1.02

EQUITIES & INTEREST RATES

Bonds are a counter to risk trades because risk investments must be financed. When the cost of money moves up (higher interest rates), the return and allure of risk trades such as equities falls. 

Click on Chart to Enlarge

  

Equities							9:35
NIK	8534	152	DAX	6069	99	DJIA	12128	-2
HSI	18521	262	FTSE	5328	68	S&P	1286	0
SSEC	2898	0	SMI	0	0	NAS	2778	0
ASX	4055	12				TSE	11508	1

$$EURUSD: Trading the U.S. Retail Sales Report

Time of release: 06/13/2012 12: 30 GMT, 8: 30 EDT
Primary peer Impact: EURUSD
Expected:-0.2%
Previous: 0.1 %
DailyFX Forecast:-0.3% to 0.2%
Why Is This Important Event:
U.S. retail sales are expected to contract 0.2% in May and the downturn in private sector consumption may drag on the dollar as it dampens the outlook for growth. As Fed officials remain cautious optimistic towards the economy, a marked contraction in household spending may spur dovish comments from the FOMC, and the central bank may keep the door open to expand its balance sheet further as the sovereign debt crisis continues to pose a threat to the recovery.
Recent Economic Developments
The Upside
CHHI Chain Store Sales (YoY) (MAY)
U. of Michigan Confidence (MAY F)
The Downside
Average Hourly Earnings (YoY) (MAY)
Change in Non-Farm Payrolls (MAY)
As household sense picks up, the resilience in private sector consumption may generate an above-forecast print, and the Fed may continue to move away from its easing cycle as the economy gets on a more sustainable path. However, subdued wage growth paired with the ongoing weakness in the labor market may continue to curb household spending, and a downturn in sales may reignite speculation for another round of quantitative easing as the central bank aims to encourage a sustainable recovery. In turn, a dismal report may spark a rebound in the EURUSD, and we may see the pair work its way back towards the 23.6% Fibonacci tracing around 1. 2640-50 as market participants increase bets for QE3.
Potential Price Targets For The Release

As the EURUSD maintains the downward trend from 2011, we remain bearish against the pair, but a dismal sales report may spark another run at the 23.6% Fibonacci tracing from the 2009 high to the 2010 low around 1. 2640-50 as it raises the scope more easing. However, as the relative strength index fails to maintain the upward trend from earlier this month, the pair looks poised to consolidate ahead of the Greek elections, and an uptick in private sector consumption may push the EURUSD back down wards the 1.2300 as it saps speculation for additional monetary support. For a complete EURUSD technical outlook and scalp levels, refer to this week's Scalp Report.
How To Trade This Event Risk
Forecasts for a drop in retail sales certainly casts a bearish outlook for the greenback, but an above-forecast print could pave the way for a long-term U.S. dollar trade as it dampens expectations for more easing. Therefore, if private spending holds flat or unexpectedly increases from the previous month, we will need a red, five-minute candle following the release to establish a sell entry on two - lots of EURUSD. Once these conditions are met, we will set the initial stop at the nearby swing high or a reasonable distance from the entry, and this risk will generate our first target. The second objective will be based on discretion, and we will move the stop on the second batch to cost once the first trade hits its mark in order to preserve our gains.
On the other hand, the lack of wage growth paired with the Loescher recovery in the labor market may ultimately lead to a weak sales report, and a marked contraction in household spending may dampen the appeal of the greenback as currency traders maintain for more easing bets. As a result, if consumption tracks lower from the previous month, we will implement the same setup for a long entering trade as the short position laid out above, just in reverse.
Impact that the U.S. Advance Retail Sales report has had on during the last month USD
Pips Change
(1 Hour post event)
Pips Change
(End of Day post event)
April 2012 U.S. Advance Retail Sales

Household consumption increased 0.1% in April, with nine of the 13 major categories advancing, while a separate report showed consumer prices growing at an annualized pace of 2.3% during the same period to mark the slowest pace of growth since February 2011. Although the initial reaction was fairly muted, the slipped below 1.2800 as market participants scaled back their appetite for risk, and we saw even the track lower throughout the North American trade as it ended the day at 1.2728.

Trading brut - USOil !

11 June 2012 12:30 GMT West Texas Intermediate (USOil) is a specific grade of crude that is used around the world as a benchmark in pricing oil. Normally oil prices fluctuate with global demand cycles for the commodity. This can be seen depicted below as USOil rallied as much as 254% from its 2008 low up to its current 2011 high at $114.80. Price has standing support at $32.40 the October 2011 low, but even after a major multi-year price rally, US Oil has yet to form a new high since July 2008 at $147.27.
These sharp extended moves have made for excellent trend trading opportunities. To see if these prevailing trends can continue, today we will focus on the fundamental factors currently driving US Oil prices.

 Global Growth
Oil prices can be a great indicator of global economic growth. As economies boom there is an increased demand for oil to power industry. As well, many finished goods are comprised of the resource. Everything from asphalt to crayons to shampoo use crude in their production. As demand increases for these products, and supply of crude remains flat, it is expected for prices to rise. As growth slows and demand increases the obverse is true. With demand for crude oil decreasing with assumed supply flat we would reasonably expect prices to decline. One way we can monitor this is by keeping an eye on the economic calendar. Specifically, numbers such as GDP, CPI, and employment figures can help us spot expanding or contracting economic conditions.
Trading USOil
Similiar to gold, trading a commodity like USOil it is always important to view the denomination that a commodity is traded in. USOil is based in the US Dollar, which means it is quoted in Dollars per barrel. This means the price of crude oil is affected by fluctuations in the USD. Below we see USOil compared to the USDCAD currency pair. This pair was chosen specifically since it includes the USD component mentioned above, along with the CAD. Canada is a world supplier of oil wich means the Canadian Dollar is also influenced by the price of US Oil. Depicted below we can see that when compared the two assets are inversely correlated. This meaning that both assets travel in opposing directions. If the USDCAD is heading up, it would be expect for USOil to be trading down.
This information is very useful to traders that have a general fundamental view of the market. If you have an opinion on crude prices you can clearly also trade the USDCAD. Often traders that are bullish on US Oil prices choose to sell the USDCAD. This allows a trader to use the positive interest rate differential on the currency to gain interest while trading their opinion on USOil.

 Current Price
Bellow we can see the current price action on WTI (USOil) using a daily chart. The market has been consolidating between support and resistance with the commodity neither making a new high or new low for over eight months. Currently price is residing at a 78.6% retracement level measured from the October 2011 low toward the March 2012 high. If this level of support holds it is probable that a triangle pattern is forming signaling a potential return toward resistance at $107.75. A break below support would be in line with a bearish global growth outlook, signaling for a further drop in USOil prices.
 ---Written by Walker England, Trading Instructor

:: Trading the Yellow Metal - Gold

Gold (XAU/USD) has been used as a medium for exchange and a store of value for thousands of years. Normally known as a slow moving asset, gold began the last leg of its rally during the 2008 financial crisis. From the 2008 low, gold has rallied as much as 181% to its current all-time high at 1920.80. Price is currently finding support at 1,522.50 after a 20% decline only a year after a peak was established.
With these sharp movements occurring in such a relatively short period of time, gold often leaves traders with more questions than answers. Today we will be looking at the fundamental factors currently driving the gold market.

 Safe Haven Status
With a modern fiat currency system, Gold has lost much of its use for exchange and payments for goods. That doesn’t mean the asset doesn’t have its uses. Gold is now seen as a safe haven investment and used as a store of value. Traditionally investors have parked their funds in gold in order to retain their value and purchasing power. During the financial collapse of 2008 many central banks around the world, such as the Fed in the United States, stepped in to add liquidity (supply of Dollars) to financial markets to stimulate lending and purchasing. This program known as quantitavie easing, increased the assets on the Feds balance sheet, and by default weakend the purchasing power of the Dollar. As the USD weakened commodities and gold rallied.
Trading Gold
Trading a commodity like Gold it is always important to view the denomination that a commodity is traded in. XAG/USD is based in the US Dollar, and is quoted in Dollars per oz. This means the price of gold is directly impacted by the price of the USD. Below we see Gold compared to the Dow Jones FXCM Dollar Index. These two assets are inversely correlated, meaning they will head in opposing directions. If the USDollar is heading up, expect Gold to be trading down.
This information is very useful to traders that have a general fundamental view of the market. If you have an opinion on Gold or the US Dollar this can be relayed into a trade idea. Often traders that are bullish on Gold choose to trade the AUDUSD instead of the metal itself. The Aussie Dollar carries a 3.50% banking rate, meaning traders can earn additional interest while executing a buy order on a positively correlated opinion of Gold. If a trader is bearish on the AUDUSD currency pair, traders can in turn sell gold to avoid accumulating interest on their trading balance.

 Current Price
Bellow we can see the current price action on gold (XAUUSD) using a daily chart. The market can be seen consolidating in a triangle pattern between support and resistance. The market has been effectively on hold for the last 10 months neither making new highs or lows as we wait on new economic policy to influence direction. Either a new federal easing program or a resumption ofUSD strength could push the asset out of this pattern. Until this time, traders can elect to set entry orders waiting for a breakout or elect to trade the interior of the triangle.

 ---

: How to Transition to FX from Stock Trading?

This article will identify how a trader can use their current fundamental and technical analytical methods to transition into forex trading.
Fundamentals and FX Technical Trading Tying it All Together Fundamentals and FX
There are many reasons why traders buy stock in a particular company. These reasons typically include items such as an exciting new product the firm has released, explosive earnings or revenue growth, a strongly improved balance sheet, or strategic acquisition of another firm to create synergy. In essence, the stock has a fundamental story to tell and it is compelling.


We have similar fundamentals to analyze in FX. One may argue the fundamental analysis in FX is simpler because it boils down to interest rates and their anticipated movements. You see, in FX, rather than trading a specific company’s earnings, revenue, and balance sheet projections, you are trading whole economies. The whole economy can be summarized through their central bank target interest rate.
If the economy is doing well, then the inflation (money chasing after goods and services) will likely be high and rising. Therefore, the central bank will be under pressure to increase the target interest rate to keep the economy from overheating.
If we are near the beginning of a growth cycle for that country, the central bank may increase rates several times over several years without any negative impact on the job growth or Gross Domestic Product (GDP) growth. This type of action tends to be bullish the currency as traders buy the high yielding currency to earn a higher interest rate. If we catch a country in the early stages of economic expansion, then it is similar to finding a stock that is about to experience growth in earnings and revenue due to a new product.
However, at some point in time, the increase in interest rates begins to weigh on the local economy. The cost of money becomes too much and the economy slows down. This will pressure the central bank to reduce the target interest rate as inflation concerns have subsided. This reduction in interest rates will send investors looking for either safety or higher returns in other countries and the currency sells off.

So high and rising rates tends to be bullish for the currency while low and lowering rates tend to be bearish. The big exception to these tendencies is during times of risk aversion when high yielding currencies are sold while safe haven currencies such as USD are bought.
You can find the current central bank target rates at forex research sites like www.dailyfx.com.
Technical Trading
“Patience is the key to success not speed.” – Jesse Livermore
Nearly 100 years ago, Mr. Livermore describes patience and how there is a right place and a right time to make trades. Technical analysis is a method on how we can determine that right place and time. Technical analysis is essentially determining recurring patterns from price charts that offer a precise entry and exit point for a higher probability trade.
For equity traders, patterns may include price and volume of shares traded on the exchange. When trading stocks, I rely on volume as my crutch for making trading decisions. Rising volume on increasing price is indicative of a bullish move for the stock. Volume provides me with a clue about future potential market movements.
One of the biggest challenges I endured on my transition to FX was finding a crutch other than volume of shares traded. As many of you may already know, intraday volume figures in FX is not reliable because there is not a centralized exchange where currencies are traded.
However, foreign exchange has an advantage over the markets that helps bring stability to technical studies…its size. FX trades nearly $4 trillion each day which is about 85 times larger than the NYSE. Besides that, the FX market is growing in volume which means many traders are discovering this market as a means to trade.

The size of FX means that trends and chart patterns tend to be a bit cleaner because there is so much liquidity behind the pattern. After all, the patterns like triangles, flags, double bottoms, etc. are a culmination of greed and fear in the market. When these patterns appear in a $4 trillion per day market, the pattern is going to be more stable.
Trend lines, pivot points, and horizontal levels of support and resistance can help us identify higher probability turning points. Candle patterns such as dojis, morning/evening/shooting stars, engulfing, and hammers also provide us clues about levels of support and resistance in the market. FX traders will use these price zones on a chart to identify potential buying and selling opportunities.
Tying it All Together
Due to the 24 hour nature of trading foreign exchange, traders look towards fundamental analysis to help them identify which currency pairs to trade. They invariably match up and buy a strong currency while simultaneously selling a weak currency. This generally leads to a strong trend in the currency pair.
The trader will then use technical analysis to find the right time to enter and exit the trade creating a higher probability trade. Many of the same types of strategies that traders use in stocks can be transferred into FX like a moving average cross over strategy or a breakout strategy.
Once traders have identified their entry and exit points of the trades, it is important to trade with conservative amounts of effective leverage. We have found through our profitability statistics that traders who implement conservative amounts of effective leverage tend to be more profitable then traders who are more aggressive with their leverage.
Since stock margin trading accounts offer 2 times leverage, consider starting your forex trading with no greater than 2 times effective leverage. You can always change it in the future but this way you are planting risk controls in your account.
In closing, identify the market you wish to trade your strategy, and then utilize a conservative amount of leverage.

Commodity Prices Have Scope to Rise into the End of Trading Week

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By Ilya Spivak, Currency Strategist 18 May 2012 08: 56 GMT Talking Points

Crude Oil, Copper May Rise Amid Profit-Taking on Risk Aversion Bets Gold and Silver Well-Supported on QE3 Hopes, Eurozone Instability Commodity prices are showing diverging performance in early European trade. Growth-sensitive crude oil prices are following shares lower goal likewise sense-linked copper is essentially flat. Meanwhile, gold and silver are on the upswing, following up on a jump higher in late Wall Street trade after a disappointing set of US economic data seemed to stoke Fed QE3 bets and drive demand for precious metals as an alternative store of value while boosting Treasuries and weighing on the US Dollar.

Looking ahead, a difficult environment presents itself. Risk appetite is under pressure as the aforementioned US data set teeth hopes that an accelerating US recovery will help offset slowing performance in Europe and Asia. Mounting Eurozone crisis woes are compounding the dour mood after Moody's downgrade 16 Spanish banks overnight, stoking fears that lenders in the currency bloc's fourth-largest economy (and possibly elsewhere) may buckle as Greek-born jitters metastasize region-wide.

However, three consecutive weeks of aggressive selling across the spectrum of risky assets may force a period of profit-taking, with traders unlikely to be willing to carry significant directional exposure into the weekend given the degree of uncertainty surrounding the satiation unprecedented in the Eurozone. & S P 500 stock index future have erased overnight losses and now point higher, hinting that correction may be brewing that pulls crude oil and copper higher along with equity prices.

Gold and silver appear likely to remain well-supported however. The current environment plays to the metals' appeal both as inflation hedges (given QE3 speculation) and as assets that don't necessarily rely on financial markets to derived their value, a major advantage at a time when another 2008-style rout is appearing increasingly plausible. In the absence of US economic data, the high - profile Facebook IPO may also prove to be a catalyst to consider.

WTI Crude Oil (NY Close): $92.56 / /-0.25 / /-0.27%

Prices put in back-to-back Spinning Top candlesticks above support at 92.51, the December 16 low, pointing to indecision and hinting a bounce may materialize. Initial resistance lines up at 95.41, the February 2 session low. Alternatively, renewed selling through media statements 90.49.

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1574.27 / / + 71.48 / / + 2.25%

As we suspected yesterday, prices recovered after putting in a Spinning Top candlestick above support in the 1532 45 - 1522 50 area, marked by the September 26 and December 29 spike lows. Buyers cleared the 23.6% Fibonacci tracing at 1560.98 to challenge the 38.2% level at 1582.10, with a break above that exposing the 1600/oz figure and 1616.23. The 1560.98 has been recast as near-term support.

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Silver (closed NY): $28.04 / / + 0.82 / / + 3.01%

Prices are recovering from support at 27.06 to challenge resistance in the 28 43-70 area marked by a form level support and the underside of a previously broken falling channel set from early March. A break above this barrier statements 29.71. Alternatively, a push through media statements the 26 05-15 region marked by the September 26 and December 29 spike lows.

Daily Chart - Created Using FXCM Marketscope 2.0

COMEX E-Mini Copper (Close NY): $3.480 / / + 0.002 / / + 0.06%

Prices are mounting a shallow recovery after putting in an Inverted Hammer candlestick above support at 3.459, the 50% Fibonacci tracing. Buyers see initial resistance at 3.584, marked by the 38.2% Fib level. Alternatively, a reversal through media statements the 61.8% tracing at 3.334.

Daily Chart - Created Using FXCM Marketscope 2.0

-Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

18 May 2012 08: 56 GMT May, 17 08: 46 GMT Crude Oil, Gold May Recover as Greece Eurozone Exit Fears DigestMay, 16 11: 08 GMT Commodities Sold on Greece Woes May Extend Losses on Fed MinutesMay, 15 10: 40 GMT Gold, Silver Rise as US Dollar Pulls Back After Eurozone GDP DataMay, 14 09: 00 GMT Crude Oil, Gold Sink as Euro Crisis Fears Grip Financial MarketsMay11 08: 58 GMT Commodities Sold as Risk Appetite Unravels, US Data May Cap Losses

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A Personal Trading Strategy

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By Richard Krivo, Trading Instructor 18 May 2012 03: 00 GMT While I occasionally trade from the Daily chart, I primarily use it to determine the trend of the pair.

Once I have identified the pair that I feel has the strongest trend based on the Daily chart, I will usually enter on a 4 hour or 1 hour chart... whichever time frame best optimizes my entry.Here's what I am looking for chart by chart...

The Daily Chart:

The Daily Trend on the NZDJPY is down. This determination is made based on the peer making lower highs and lower lows, price action is below the 200 SMA and pulling away from it and, at the time of the analysis, the NZD was the weakest currency and the JPY was the strongest. Also, looking at Slow Stochastics, I see that it is below 20 which is a very bearish sign.

Given all of the above, I know I will only be looking for opportunities to sell the pair as they will have the greater likelihood of success. (Trading in the direction of the longer term trend offers us that edge.)

The 4 Hour Chart:

Then I will look to the 4 hour chart and look for a tracing (a move against the Daily trend) to be finishing and beginning a new move to the downside. In other words, a fresh move back in the direction of the Daily trend. Sometimes that fresh move will present itself straightaway or I may have to wait for the set up to occur.

In the case of this particular 4 hour chart I would need to wait for the peer to cycle back up as a new move to the downside has already taken place over the last five red candles on the far right of the chart.

I will also run through this same process on the one hour chart looking for the same set up.Once a "fresh move" begins on either the 4 hour or the 1 hour chart, an entry can be made with a stop placed above the highest level of the recent tracing. (Stochastics, MACD or RSI can be used to time the entry further.)

The 1 Hour Chart:

In the case of this 1 hour chart, I would be waiting for a pullback/tracing to take place to even the short.

Since the pair has been in a strong, on-going downtrend on the Daily chart, I would have been able to successfully sell the hand at any of the points on the chart after the tracing (black arrows) takes place. The short position would be opened when momentum shifts back to the downside (Stochastics crossover within the black circles). In each instance the stop would go above the most recent high approximately at the black lines.Sidebar: Some traders will become frustrated when they see price is moving opposite the direction of the Daily trend. Don't worry about it. It is fine since that means a tracing is taking place and once that is complete, we will be looking at an opportunity to enter the trade in our direction of choice... the direction of the Daily trend.

-Written by Richard Krivo

To contact Richard, please email instructor@dailyfx.com. You can follow Richard on Twitter@RKrivoFX.

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18 May 2012 03: 00 GMT

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Trading the Dragon: GBPJPY

The pound sterling - pair of currencies Japanese yen is a volatile offering that provides traders with potentially important movements of prices from many other couples. This currency pair is sometimes so volatile that it earned the nickname of "The Dragon", but also another term well-coined: "The widow-maker."
Whatever you call it, it remains the same: GBPJPY can really move.
Consider, for example, the first launches of the financial collapse in 2008. While the EURUSD, at one point, had gone down by ~ 3300 pips, moving from top to bottom on GBPJPY was much greater: at one point given, a loss of more of a 7000 pips spread.

Created with the Marketscope/Trading Station
This volatility may be a good thing, or it can be a very bad thing; Depending on the way in which Exchange you it.
DailyFX Traits of successful traders
Comprehensive research was conducted by DailyFX Quantitative strategist David Rodriguez, review of trades over 12 million placed by traders live FXCM trading platforms. The objective of the research was how traders have been speculating, which was not working and that we, as a group of research and education, could do to help.
The results of the research are shocking and what was found that was mistake number one that FX traders are often revolves around the reports of risk and reward; This is how much is lost on the loss of the trades against how much is used on winning trades.
Research, David said:
"Traders are just more than 50% of the time, but would lose more money to lose trades earning on the winning trades." Traders should use stops and limits to meet a risk/reward 1: 1 ratio or more. »
GBPJPY is an extreme example of this fact.
Our research, we can see that merchants are just an exorbitant sum of 66% of the time on GBPJPY!
Prepared by David Rodriguez for the successful Traits of traders series
But just as David had found in the search, this percentage earning robust will benefits; as traders took far greater losses when they are wrong and that the benefits when they were right:
Prepared by David Rodriguez for the successful Traits of traders series
Traders of earned, on average, 52 pips on GBPJPY trades when they are right. but when they are wrong, they lose a monstrous 122 pips. The graph above, GBPJPY is showing that the lowest ratio of pips WINS pips v/s lost (on average).
This type of risk-reward ratio puts traders in a precarious situation; to be profitable in the long term should be right about 75% of the time (3-4) to expect a net profit.
I know not you, but there are very few things in life that I want if expected to be good in 75% of the time especially anything potentially cost me money when I am wrong.
GBPJPY trading
Exchange a currency pair GBPJPY could be optimal for traders volatility or large displacement; but it should be noted that these movements are always very smooth. This is exactly why the overall profitability was not higher on the pair.
The first item of importance, is that given the points above, GBPJPY trade should always include a stop-loss protection order. Lack of making faces therefore the operator risks, as the pair can trend for a long period of time.
Due to the volatile nature and taking into account the pair could trade with very wide swings in both directions, at the risk of can be an interesting approach commercial GBPJPY. This will allow traders to maximize profits on large pendulum movements when they are right; all to reduce their short losses as large swings are moving against them.
Traders escape strategies are followed by support or resistance; waiting for a breach of the level of prices in the expectation that once the break is made - price will continue in this direction, for maximization of profits in instances when the operator is correct (which is still an another reason stop losses are important, such as extended moves can cost significantly in instances when the operator is incorrect) running.
In the article "Price Action escapes", we watched a mannerism of trade price-breaks without the need for any indicator, with price only to identify the levels of support and resistance.
In the article, "workshops: how to stay away from some losing trades,' Jeremy Wagner introduced another indicator, the price of channels aka Donchian channels, to help monitor price levels which may justify future opportunities of small groups."
For traders to speculate on the currency pairs denominated in yen, Ichimoku may also be a relevant way of analysis. Ichimoku is a popular technical system which was developed at the Japan before the second world war. Its power of staying as a popular to initiate trades continued, as the system is still widely used today.
Ichimoku is often used as a system of trend - following, but with a slight change can be used to trade in the escape-style scenarios.
Much Ichimoku is "The cloud" which is an area of support or resistance plotted on the chart movement. When prices of breakthrough on either side of the cloud, the merchant may often consider trade of eruptions by placing a trade in that direction.

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£/$ GBPUSD: Trading of the Bank of England interest rate decision

Trading the News: Bank of England Interest Rate Decision

What’s Expected:

Time of release: 05/10/2012 11:00 GMT, 7:00 EDT

Primary Pair Impact: GBPUSD

Expected: 325B

Previous: 325B

DailyFX Forecast: 325B

Why Is This Event Important:

Although the Bank of England is widely expected to maintain its current policy stance in May, the bullish sentiment underlining the British Pound may gather pace as the central bank adopts a hawkish tone for monetary policy. As the BoE preserve its wait-and-see approach, we may see the Monetary Policy Committee refrain from releasing a policy statement, but the quarterly inflation on tap for May 16 may trigger fresh highs in the GBPUSD should the central bank raise its fundamental assessment for the U.K. Indeed, we should see the MPC move away from its easing cycle as BoE officials anticipate to see a faster recovery in the second-half of the year, and the board may start to lay out a tentative exit strategy as the stickiness in underlying price growth raises the risk for inflation.

Recent Economic Developments

Release	Expected	Actual
Retail Sales ex Auto Fuel (MoM) (MAR)	0.4%	1.5%
Consumer Price Index (YoY) (MAR)	3.4%	3.5%
Producer Price Index - Outputs (YoY) (MAR)	3.5%	3.6%

The Downside

Release	Expected	Actual
Halifx House Prices (3MoY) (APR)	0.4%	-0.5%
Gross Domestic Product (QoQ) (1Q A)	0.1%	-0.2%
Average Weekly Earnings (3MoY) (FEB)	1.2%	1.1%

As the outlook for growth and inflation picks up, we should see the BoE adopt a hawkish tone for monetary policy, and a fresh batch of central bank rhetoric may spark fresh highs in the GBPUSD as market participants start to look for a rate hike. However, the ongoing slack within the real economy paired with the slowdown in wage growth may encourage the BoE to strike a balanced tone for the region, and we may see the central bank carry its current policy stance into the second-half of the year as the recession in the euro-area – Britain’s largest trading partner – dampens the outlook for growth. In turn, a neutral policy statement may halt the bullish run in the GBPUSD, and the pair may ultimately face range-bounce prices as market participants maintain bets for more easing.

Potential Price Targets For The Rate Decision

A look at the encompassing structure sees the pound continuing to trade within the confines of a well-defined ascending channel formation dating back to the January low with the downside correction off the 2012 high at 1.63 finding ample support at the 61.8% Fibonacci extension taken from the January and March troughs at 1.6070. While our medium-term bias remains weighted to the topside, it’s important to note that broader risk trends may continue to drag on the pound, limiting advances in the near-term. We continue to favor long entries between the 1.60-handle (channel support) and the 1.6070-mark with a breach above the 78.6% extension at the 1.62-figure dispelling further downside pressure. Such a scenario eyes topside targets at the 1.63-handle and the 100% extension at 1.6360.

The scalp chart shows the GBPUSD holding within the confines of a descending channel formation dating back to the April 30th high with the pair testing channel support early in the US session. Soft interim support rests at 1.6130 backed by the 61.8% Fibonacci extension taken from the March 12th and April 5th troughs at 1.6088 and 1.6065. A break below the 50% extension at 1.6035 risks further losses for the pound with subsequent floors seen at the 1.60-figure and the 38.2% extension at 1.5980. A breach above channel resistance targets the 78.6% extension at 1.6165, the 1.62-figure, 1.6235 and the 100% extension at 1.6265, with a breach above the 2012 high at 1.63 exposing our objective at 1.6360. As the BoE maintains its current policy we may see a muted reaction to the release. However we will be closely eyeing these levels as we head into the quarterly inflation report due out on May 16th.

How To Trade This Event Risk

Trading the BoE rate decision may not be as clear cut as some of our previous trades as the BoE is widely expected to preserve its current policy stance, but a hawkish policy statement could set the stage for a long British Pound trade as it raises the scope for a rate hike. Therefore, if the central bank sees a greater risk for inflation and continues to favor a stronger recovery for the second-half of 2012, we will need a green, five-minute candle following the decision to generate a buy entry on two-lots of GBPUSD. Once these conditions are fulfilled, we will set the initial stop at the nearby swing low or a reasonable distance from the entry and this risk will establish our first target. The second objective will be based on discretion, and we will move the stop on the second lot to cost once the first trade hits its mark in order to preserve our profits.

On the other hand, we may see board member David Miles continue to push for more quantitative easing amid the ongoing slack within the real economy, and the majority may carry its neutral policy stance into the third-quarter in an effort to encourage a stronger recovery. As a result, if we see a growing rift within the MPC, with the board highlighting the downside risks surrounding the region, we will carry out the same strategy for a short pound-dollar trade as the short position laid out above, just in reverse.

Impact that the Bank of England Interest Rate Decision has had on GBP during the last meeting

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

April 2102 Bank of England Interest Rate Decision

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
APR 2012	04/05/2012 11:00 GMT	325B	325B	+26	+4

As expected, the Bank of England preserved its current policy in April, which produced a fairly muted reaction in the British Pound, but the meeting minutes sparked a sharp rally in the GBPUSD as the MPC voted 8-1 to keep the benchmark interest rate at 1.00% while holding the asset purchase target at GBP 325B. Indeed, board member Adam Posen scaled back his view for more QE as BoE officials expect to see a stronger recovery later this year, and it seems as though the central bank is looking to conclude its easing cycle this year as the committee no longer sees a risk of undershooting the 2% target for inflation.