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Australian Dollar Loses Traction Ahead of Employment Figures

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Market Place
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What Makes an Elite Trader

The Australian dollar declined against its US counterpart Wednesday despite stronger than forecast consumer confidence and home loans figures, as the markets shifted their attention to Thursday’s employment report.

The Aussie fell back toward 77 cents US on Wednesday after attempting a re-test of the 78-cent level in the overnight session. The AUD/USD consolidated at 0.7705, declining 0.86 percent. The pair faces initial support at 0.7690 and resistance at 0.7826.

In economic data, Australia home loans rose faster than forecast in December, raising concern the country’s housing market was overheating. Home loans increased 2.7 percent in December, following a 0.4 percent drop the previous month, the Australian Bureau of Statistics reported Wednesday.

The value of investor loans rose 6 percent to a record AUD $12.56 billion, well above the average monthly increase of 2.6 percent over the last six months.

On Tuesday Westpac said Australian consumer confidence rose briskly in February, as falling energy prices lifted optimism about family finances and the overall economy. The consumer confidence index rose 8 percent to 100.7, a 13-month high.

The ABS will release January employment data on Thursday. The Australian economy added 37,400 total jobs in December, following a gain of 45,000 in November, rounding out the strongest two-month period of job creation in eight years. Full-time employment soared by 41,600 in December, while the unemployment rate dropped to 6.1 percent from 6.2 percent.

Despite a more robust job market, the Reserve Bank of Australia last week cut interest rates for the first time in 18 months, setting the stage for another rate cut in the next several months. The central bank also lowered its 2015 growth and inflation forecasts and said unemployment will rise, underscoring the need for more accommodative monetary policy.

According to the revised forecast, the Australian economy will expand between 1.75 percent and 2.75 percent this year, down from the previous estimate of between 2 percent and 3 percent. Consumer inflation is forecast to slow to 1.25 percent in the year through June.

The RBA has long held that the Australian dollar is overvalued, giving policymakers plenty of scope to drive down interest rates. The AUD/USD has declined nearly 6 percent since the start of the year and is expected to fall below 75 cents in the short-term. According to BlackRock, the world’s largest asset manager, the Aussie will bottom out below 70 cents US in the first half of 2015.

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USD/CAD Loses NFP-Inspired Rally amid Higher Energy Prices

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Market Place
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Dollar, USD and American Market

The North American currency pair back was on its heels Monday, as rebounding energy prices and better than expected Canadian housing starts supported the Canadian dollar.

The USD/CAD declined more than half a percent to 1.2454. Initial support is likely found at 1.2417 and resistance at 1.2589.

The pair rebounded on Friday after the United States Department of Labor said nonfarm payrolls rose by 257,000 in January, following upwardly revised gains of 429,000 and 329,000 in November and December, respectively. The unemployment rate edged up slightly to 5.7 percent from 5.6 percent as more people entered the workforce, while average earnings rose at the fastest rate in six years.

The stronger than forecast report sent the US dollar surging and supported expectations the Federal Reserve could signal for higher interest rates by midyear. Speculation about a midyear rate hike had cooled in recent months amid sluggish domestic growth and global volatility.

The loonie received a boost on Monday after the Canadian Mortgage and Housing Corporation reported stronger than forecast housing starts in January. Canadian housing starts rose to a seasonally adjusted annual rate of 187,300 in January, up from 177,600 in December and compared with expectations for 177,500.

Rebounding energy prices also helped shore up the Canadian dollar. Crude prices advanced for a third day, as West Texas Intermediate for March delivery rose $1.46 to $53.15 a barrel. Global benchmark Brent crude jumped 43 cents to $58.23 a barrel.

The USD/CAD faces further upside in the short- and medium-terms, as the market continue to price in a much lower Canadian dollar. The loonie’s prospects have been shattered over the last seven months, in part by declining commodity prices but also because of a weaker domestic economy. Canada’s gross domestic product is expected to increase just 1.5 percent in the year through June, according to the Bank of Canada’s said last month. That’s nearly 1 full percentage point below the Bank’s previous forecast.

The BOC joined a growing list of central banks to cut interest rates in January. The Bank reduced its target for the overnight rate by 25 basis points to 0.75 percent. That was the first rate adjustment since September 2010. According to analysts, the BOC could slash interest rates by another 25 basis points by midyear to cope with weak energy prices and deflationary pressures.

Canadian consumer prices declined 0.7 percent in January, as annual inflation slowed to 1.5 percent from 2 percent.

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The Wonderful World of Spread Betting

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Market Place
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Financial Analytics

Do you have a feel for the stock market but no wish to deal with brokers, tax calculations and other complexities? Spread betting might be for you, but you should read a little about it first. The risky practice involves getting exposure to price action without putting money down, a dream for many quick and casual traders.

Spread betting has been a big hit in recent years despite its illegality inside the United States. A financial spread bet is, at its core, a mix between betting on a horse and investing in a stock. You make a direct closed gamble on stock prices without actually ever buying a share on the market. This is usually called a derivative, and big banks use what are essentially the same mechanisms to bet on everything from the housing market to the price of cobalt.

How does spread betting work?
You make an agreement to bet on a security, lets say oil,  at a sum, let’s say $1000, and decide what each point change is worth, let’s say $1. You’ll also need to pick an expiry date as these contracts don’t run indefinitely. A point is an arbitrary value that can change based on the security traded. For this case let’s assume that one point is a one cent increase in the price of oil. That means you can earn $100 if the price increases by $1.

A spread-betting broker offers you a buy/sell price on the deal, the same way a stock broker would, and you invest your $1000.

In a winning case the price of oil increases by $10 and you double your money: ($10*100 points per dollar=$1000). In order to make $1000 on a $10 increase in a barrel of oil through traditional means you would have to have invested $10,000 to start with, and that’s not taking into account the taxes, commissions and charges that you’ll encounter.

If the price of oil drops by $10 you lose all of your money, however, and if the price drops $50 you lose more than you invested to begin with.

The buy price will be a little higher than the market average and the sell price a little lower, allowing the spread bettor to earn its revenue from those margins. That means that if the market price on a Brent contract is $50, the spread bettor might offer you it at $51.

Spread bets are generally much cheaper than investing on the stock market and they carry a much higher reward for successful participants. They also incur no taxes on their winnings if they’re in the UK, augmenting the gains relative to an investment in the stock market.

Through spread betting you’ll be able to invest in markets that are otherwise prohibitive in terms of cost, or nigh-impossible to get involved in with the amount of money you’re working with.

Why would anybody buy stocks again?
With the advent of spread betting and its lower-cost model, it may be difficult to see why anybody would ever buy stocks. The simple answer concerns risk tolerance. A smart investor knows they’re going to be wrong at some point, if not regularly, and balances their risk profile to suit. That means they’re unlikely to lose everything in a single day, and they can’t ever lose more than they have invested.

Risks in spread betting are also increased by exposure to the spread betting company. Some have been around a long time and are relatively trustworthy, but others are relatively new. A spread-betting company could go bust at any time and take your money with it.

Last but not least, not everybody buys stocks to make capital gains. Some traders prefer to play a slower game by collecting dividends and watching their holding slowly appreciate. Actually owning a share also gives you a say in the running of the company, and a vote at the company meeting.

Spread Bettors
Most of the market for spread betting is in the UK, though some of it takes place internationally through international brokers. Here we list some of the bigger spread betting companies out there. Find one that’s right for you, but be aware of the risks involved in this type of trading.

IG: The inventor of the market, it has 41% of the UK spread-betting market. IG along with the others on this list are regulated by the Financial Conduct Authority.

DF Markets offers spreads starting at just 0.6 points and lets you bet on market indices around the world as well as commodities and currencies.

Spread Co is unique in offering a dedicated relationship manager to each of its clients, and allows newbies to try their luck with a minimum deposit of just £25 and trading at just £1 per point.

Capital Spreads offers an incredible array of resources and tools to improve the trading experience, and hopefully the results. The company allows newbies to come in at a low initial deposit to get a feel for the market and some of the tools on offer.

Finspreads basically invented the browser best spread-betting paradigm and the company still offers one of the best packages around. The company has a large number of resources, and offers tight spreads on a range of securities.

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EUR/USD Holds Ground as Political Tensions Escalate

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Market Place
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Dollar , USD

The euro was little changed against the US dollar on Monday, trading above 1.13 cents US ahead of the European Union meetings in Brussels. The meetings, which will be held on Wednesday, will be attended by newly appointed Greek Prime Minister Alexis Tspiras and German Chancellor Angela Merkel.

The EUR/USD climbed 0.06 percent to 1.1326. The pair is likely supported at 1.1259. Resistance is ascending from 1.1435.

Risk-off trading was the norm on Monday, as investors digested latest comments from the newly appointment Greek Prime Minister, who on Sunday outlined plans to dismantle the Troika’s “cruel” austerity plan. Tspiras said he would not extend Greece’s €240 billion bailout plan set to expire at the end of the month, setting the stage for a political standoff with the country’s European lenders.

European Commission President Jean-Claude Juncker fired back on Monday, telling Greece the supranational institution would not bow to its demands.

“Greece should not assume that the overall mood has so changed that the Eurozone will adopt Tspiras’ government program unconditionally,” Juncker said in Germany on Monday.

Tspiras’ far-left coalition swept to power last month on a platform of “anti-austerity,” promising voters to raise the minimum wage, cut taxes and negotiate a new bailout agreement with international creditors. The Syriza party secured 36 percent of the vote and 149 of 300 parliament seats.

Meanwhile, escalating violence in Ukraine continued to weigh on market sentiment, driving investors to safe haven assets like the Japanese yen and gold. At least 45 Ukrainian soldiers and 11 pro-Russia fighters have been killed in renewed violence in the eastern part of the country, prompting the EU to postpone Russia sanctions ahead of the Minsk summit. German Chancellor Angela Merkel arrived at the White House on Monday to meet with US President Barrack Obama around the issue of whether to arm the Ukrainian government against Russian separatists.

In economic data, Germany’s trade surplus widened more than forecast in December, capping off a record year for international trade and signaling that Europe’s largest economy was improving. Germany’s trade surplus reached €217 billion in 2014, shattering the previous record of €195.3 billion. The country posted a surplus of €21.8 billion in December, up from €18.3 billion in November and compared with the consensus forecast of €17.9 billion. Exports rose 3.4 percent, while imports declined 0.8 percent from November, official data showed. Economists forecast exports to rise only 1 percent in December.

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How Do Central Banks Affect Exchange Rates

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Market Place
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Trading and exchange analysis

We all know that central bank decisions are some of the most influential occurrences on the forex markets, but how do the actual mechanics work? When the Bank of Japan lowers interest rates, the SNB stops buying Euros, or the ECB starts buying bonds, what’s going on?
Here we’re going to have a look at the basic mechanics that cause central bank decisions to hit the forex markets. The important thing to remember is that old solid Supply and Demand. Currencies trade based on this in the same way as any other commodity. Central Banks have to affect on, the other or both in order to change exchange rates.

Interest rate changes
Back before 2008 central bank’s simply wouldn’t attempt to intervene overbearingly in markets and interest rate changes were the only likely outcome of a meeting of the Federal Reserve. When the Federal Reserve changes its interest rate, it changes the relative benefit of keeping money in one currency instead of another.

If the central bank increases the interest rate, bank rates and bond rates in the United States tend to go up. If everything else remains equal the US dollar is more attractive to hold that the euro or yen and money begins to flow into the country’s investments.

Basically the price of the currencies with higher interest rates will go up until no more money can be made through simple transfers. On the financial markets, as you can see after major interest rate decisions are made, this happens almost instantly.

Direct market intervention
This is the actual buying and selling of currencies by central banks designed to influence exchange rates. At its simplest level it involves affecting the demand for one currency in another by central bank intervention. It can take several different forms in specific cases, however.

The best example in recent years has been the intervention of the Swiss National Bank which set the maximum exchange rate at 1.2 Franc to the Euro in 2011. The central bank kept its currency low against the euro by printing francs and using them to buy euros, meaning there would always be infinite supply of Francs at that level and none above it. Nobody is going to sell 1.3 francs for a euro when the central bank is selling them at 1.2.

This, of course, was risky for the Swiss National Bank and was a last gasp policy designed to reduce the impact of serious deflation brought on by a flight to safety during the financial crisis.

The other, more common side of direct intervention is propping up a currency: a practice Russia attempted sporadically through 2014. This involves buying your own currency with the central bank’s foreign currency reserves. This is an unstable practice that can result in the bank running out of reserves, and the weakening of the currency accelerating as a result.

Quantitative easing and other innovations
Less understood than direct intervention because of its novelty, QE involves printing currency in order to buy securities, i.e. bonds and equities. The US began doing this several years ago and was followed by the ECB, the BoE and the BoJ. The way it affects currencies is still debatable, but the central theory references two factors: increase in currency supply and lower interest rates.

Buying US treasuries at such a level means that yields fall substantially, lowering demand for the dollar to buy them in and having a knock-on effect on interest rates across the economy, and having the same effect, at one level, as a change in interest rates.

Increasing the money supply by such a margin, 60 billion euro in the case of the ECB program, every month creates a downward pressure on the price of the currency compared to others.

This has been the basic effect of easing programs in the US, Japan and the UK, but the ultimate result of the European program remains to be seen. Further study as central bank innovations keep popping up will result in greater understanding of these mechanics.

Predicting movement

The above gives an outline of the mechanics that central bank decisions drive on the market, but there’s so many factors affecting the supply and demand for currencies that none is a guaranteed bet. Take any currency chart and look at it through the last seven or eight years to get an idea of the unpredictable volatility that drives forex at certain points in time.

Knowing is half the battle, however, so getting used to the way that central bank decisions are made, and learning about these mechanics and the decision making apparatuses behind them will put you ahead of the average market participant and give you insight into the more complicated derivative results of central bank intervention.

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A Trader’s Guide to The IMF

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Market Place
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Forex Traders Chart

The International Monetary Fund is one of the most important market movers out there. Its actions have caused turmoil on the markets in recent years, and since its inception. Few traders understand the importance of the institution, however, and fewer still are able to predict its effects on the world markets.
This guide takes a look at the IMF from the basics of what it is and how it works to more complicated descriptions of how it pushes world markets and why traders should be keeping an eye on it.

What is the IMF?
The IMF was set up by the Bretton Woods agreement as part of the system of weights and governance that kept semi-fixed exchange rates in place across the world. It’s goal was then, and is still, international monetary cooperation.

The institution has several principles that are pillars in its vision of a globalized free trade system. It wants to minimize trade imbalances and create currencies that float freely with maximum stability, an approach designed to maximize trade between all countries. It is one of the three most important multinational economic institutions, alongside the World Bank and the World Trade Organization.

How does it work?
The IMF is an organization of 188 countries, each giving its share of funds to the organization. Operating like a company, the funds also determine the amount of votes each country has. That means that the United States, which has the most votes, has close to three times the voting power of the second biggest contributor Japan.

Policy is decided by the Board of Governors, a body made up of two representatives from each country, a governor and an alternate. These are usually the highest profile financial controllers from the respective countries. For example, the United Kingdom’s representative is the Chancellor George Osborne. His alternate is the Governor of the Bank of England Mark Carney.

The Board of Governors delegates day to day operations to the Executive Board of 24 members. 8 of these members: the USA, Japan, Germany, France, the UK, China, Russia and Saudi Arabia get their own representative. The other 16 spots represent constituencies of between 4 and 22 countries each.

The IMF board elects a Managing director, currently Christine Lagarde.

Why does it affect my investment?
There’s three basic ways that the IMF works on the financial markets, the first is through information and analysis releases, the second through its existence as a lender of last resort, and the third in its actual dealings with countries. We’ll deal with each of these issues separately here, though they’re often intertwined.

Information and analysis

The International Monetary Fund is constantly releasing information about the basic state of the world economy, from simple data collection to forward looking analyses of global and regional trends. This is some of the most highly regarded economic data and analysis on the planet, and it has been known to move markets.

Example of important, market-moving reports include the organization’s World Economic Outlook, anything it releases on a country in an IMF program, and its case studies on economic performance and reforms.

Lender of last resort

The IMF acts as a lender of last resort for the lenders of last resort. This is a passive effect of the organization. Its impact is priced into the market, and it’s generally clear that countries have options other than outright default when they run into financial trouble.

This may not effect the market directly, but it has a logically compressing impact on bond yields around the world. Recent action in Europe has strengthened this part of the IMF’s reputation. This effect is implicit, meaning it will only move markets if it is questioned, or confidence in its ability to achieve this end falls.

IMF loans

When a country hits rock bottom and it can no longer afford the interest rates the markets levy, it heads to the IMF for a dig-out. Conditions are usually attached to these loans, and are sometimes controversial. As can be seen from several events in recent years, markets stand up and react when the IMF steps in.

This has been most apparent in Europe in recent years. IMF intervention in countries like Greece and Ireland forced changes in government policy, and completely revolutionized the way European bonds were treated by the world market.

This is the most dramatic way in which the IMF has an effect on markets, but it is not as uncommon as might be believed. Loans from the IMF have increased in recent decades, and dozens of countries are currently in some kind of IMF program.

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Canadian dollar rebounds sharply as oil prices rise

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Market Place
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Dollar , USD

The Canadian dollar advanced on Monday as oil prices continued to rally, while US consumer spending declined at the sharpest rate since 2009 and manufacturing activity softened.

The loonie, as the Canadian dollar is known, rose 0.8 percent to 0.7941 US, erasing Friday’s losses. The USD/CAD exchange rate tumbled more than 100 pips to 1.2590. The pair faces initial support at 1.2510 and resistance at 1.2805.

Canada’s currency has declined for ten consecutive weeks against the US dollar, as plunging oil prices and weak fundamentals have weighed on the commodity-sensitive currency. The loonie faced renewed selling pressure two weeks ago when the Bank of Canada unexpectedly reduced its trend-setting interest rate to 0.75 percent and downgraded its economic outlook.

Rising oil prices helped lift the Canadian dollar on Monday. West Texas Intermediate for March delivery rose 1.6 percent to $49.01 a barrel. Global benchmark Brent crude rose more than 2.3 percent to $54.23 a barrel.

In economic data, Canadian manufacturing softened in January, the Royal Bank of Canada reported today. The RBC manufacturing PMI declined from 54.9 percent to 51 percent in January, as overall business conditions improved at the weakest rate since April 2013.

US manufacturing activity cooled again in January, as new orders continued to moderate, the Institute for Supply Management reported today. ISM’s monthly gauge of US manufacturing declined from 55.5 to 53.5. New export orders declined for the first time in 26 months, as only five manufacturing sub-sectors reported growth.

In a separate report the Department of Commerce said household spending declined at the sharpest rate since September 2009, a sign consumers were pinching their pennies toward the end of the holiday season. US personal spending declined 0.3 percent in December following a 0.5 percent advance the month before. However, personal incomes increased 0.3 percent. Combined with cheaper gas prices, higher incomes translated into a 4.9 percent increase in the saving rate.

Monday’s data deluge wrapped up with construction spending, a key indicator of US housing activity. Construction spending rose 0.4 percent in December, well below estimates calling for 0.7 percent. The November rate was revised up to reflect a 0.2 percent drop instead of the 0.3 percent decline reported last month.

The US government will report on factory orders on Tuesday, followed by services PMI and employment data on Wednesday. The United States and Canada will each report on international trade on Thursday.

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Betting on The Black Swan: Getting Rich The Impossible Way

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Market Place
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Financial Think and Analysis

Nassim Nicholas Taleb is a trader and a philosopher. His books about the way people think about probability have been obscenely influential, and trading strategies based off of his ideas are becoming an indelible part of the market.

His strategies center around the idea of the “black swan,” an event that’s incredibly unlikely to happen according to the models but has significant power on the market when it does. He made a great deal of money from betting on these events over the last few decades, leveraging what he saw as the mis-pricing of options in order to generate massive returns.

Finding a Black Swan
Taleb defines a black swan event with three attributes: (1) It’s wholly unpredictable given current models, (2) its effect is powerful, and (3) it is incorporated into models after it happens. You can have a better chance of calculating the likelihood of these events than other traders, but Taleb is emphatic on one point, you cannot predict the black swan and you shouldn’t be trying to.

Betting on a black swan isn’t about trying to predict what’s going to happen next year, it’s about finding bets that are mis-priced because nobody has calculated the odds of them properly. Taleb made his money on options that covered all sorts of low probability thresholds that were eventually crossed, most notably during the 1987 stock market crash.

These events may only happen on average once every hundred years, but if you have a hundred of them, you start to average one a year. The payoff is, at the same time, incredibly high because of the extremely low probability. Balancing a portfolio around this idea can be incredibly lucrative, but it’s not for the lighthearted.

You need a strong background in valuing options in order to make this strategy work but, most importantly, you need to know how to build a portfolio. If you’re investing your own money on long term chances, you may run out of cash before anything has a chance of paying off.

Building a black swan portfolio
There’s no case in which an investor should rely entirely on long-odds high-payoff investments to make his money for him, especially when the odds are so long that they’re impossible to calculate. You need to build a portfolio that can offer a steadier stream of income while you wait for the big bets to pay off, assuming they will, or at least one that ensures you don’t lose all your money.

In order to accomplish this, Taleb advises a portfolio in which 80-90% of the money is put in something extremely safe, with Treasuries being the generic instrument, while the rest of the money is invested in out-of-the-money options that carry ridiculous levels of risk.

This portfolio, which he titled the barbell, means that there is a guaranteed floor. You can’t lose your safe money. At the same time there’s huge upside from that once-in-a-hundred year event. If you aren’t familiar with options, however, or you’re not disciplined in your creation of a portfolio, trying to follow this strategy may be enough to wipe you out completely.

Don’t rely on the black swan
It’s been close to thirty years since Taleb discovered the power of so called out-of-the-money options, and many traders have invested in strategies that mirror his in the intervening years. That has risen the price of options covering the kinds of trades he made his name off of.

He was gifted with the 1987 stock market crash as a demonstration of the power of this idea, but he does not believe that strategy would automatically an ordinary investor, simply because there isn’t enough information to price the risks, and therefore, the mean time to happen, properly.

The bottom line is that this strategy takes a lot of work and involves a lot of risk if mismanaged. The original idea was to hold a tiny portion of your money in options for the long term while keeping the rest in something with a lot of safety.

Many investors go for broke investing in what they believe is a Taleb inspired portfolio, forgetting that he was working for an investment bank, and playing with their money, when he invented the strategy.

There’s still money to be made in this area, and there’s still plenty of mispricing of options going on every single day. You have to know when to buy them, however, how to price them, and know how to build a portfolio around them. If not, your returns are going to look downright bad, and you may spend forever waiting for the black swan.

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6 Central Banks That Rule Forex

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Market Place
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The role of central banks in deciding exchange rate levels cannot be overestimated. If you want to trade currencies you need to understand what a central bank is, and how it controls exchange rates.

The actions of these institutions drives the day to-day fluctuations in the forex markets, but who are they, and how do they work? Here’s  a look at the 6 most important central banks in the world, and the way they make their decisions.

1. The Federal Reserve
This is the big one. The Federal Reserve is the most talked about, and by far the most important, central bank on the planet. The Dollar is the currency of world trade.

How does it work? The seven governors, appointed by the president and confirmed by the senate, serve 14-year terms. The meet once every six weeks with 5 of the 12 presidents of the district reserve banks to form the Federal Open Market Committee. This committee decides interest rates, and more dramatic actions by the central bank.

What does it want? The Federal Reserve’s dual mandate is full employment and stable prices, meaning it wants to keep both inflation and unemployment low. This goal, which is wider than that of many other central banks, is what allowed actions like quantitative easing to take place based on unemployment figures rather than inflation numbers.

2. The European Central Bank
The guardian of the European common currency, the ECB was set up by a treaty between the member states of the Eurozone, which now number 19.

How does it work?  The decision making body of the bank is made up of the 19 heads of regional central banks and six executive board members nominated by the governments of the bloc in concord with each other. The bank’s governing council meets twice per month in Frankfurt, and announces its monetary policy decisions at the first of these.

What does it want? Enshrined in treaty, the objective of the ECB is clear: maintain price stability in the Eurozone. This is the reason that the ECB was not able to introduce QE-style program to allay the effects of unemployment. The bank was only allowed to interfere on the grounds of dangerous deflation.

3. The Bank of Japan
The keeper of the Yen since the nineteenth century Meiji Restoration, the BoJ is the monetary policy decision maker of Japan.

How does it work? The committee of the bank of Japan is made up of nine members, including a governor and two deputy governors. The committee meets once or twice per month in order to decide the country’s monetary policy.

What does it want? The bank of Japan doesn’t have the kind of clearly defined goals that the Fed or ECB have, making it a little less predictable. It’s mandate gives it reign to implement monetary policy and ensure the soundness of the financial system while maintaining price stability, though it doesn’t put any of these goals on a pedestal above the others.

4. The Bank of England
By far the oldest bank on this list, and the one that the rest have based themselves off of, the Bank of England has been around for more than three hundred years.

How does it work? Tricky because of its reliance on British traditional politics for guidance, the Bank of England’s monetary policy is decided by a committee which is made up of nine members and meets once every month.

What does it want? Price stability is currently the main goal of the BoE, but that can change as it’s the government that chooses the inflation target, and the overall objective can be amended by act of parliament. If the bank misses that target by a wide margin it has to explain its mistakes to the Chancellor of the Exchequer.

5. The Swiss National Bank
Established in 1907, the Swiss National Bank floats 45% of its shares on the stock market, and is the only central bank on this list that actually makes a profit.

How does it work? The SNB is supposed to conduct it monetary policy decisions as if it were an independent central bank. The governing board of the SNB has three members who are responsible for decisions on monetary policy. It decides interest rates quarterly.

What does it want? Price stability, including a definition thereof, is the central goal of the Swiss National Bank, though it has a secondary goal of accounting for economic developments in order to foster an atmosphere that supports economic growth.

6. The People’s Bank of China
Unusually opaque, the People’s Bank of China acts as the central bank for the yuan. It was the only bank in the communist country for decades, but the liberalization of the banking system left the PBC squarely with the duties of a central bank.

How does it work? China’s monetary policy is decided by  a committee which includes the governor and two deputy-governors of the PBC, along with representatives from government, regulators and an academic. The committee meets quarterly.

What does it want? The goals of the monetary policy committee are set to be prescribed by the State Council, meaning they’re unusually amendable.

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USD/CAD Weekly Outlook

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Market Place
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Dollar, USD and American Market

The USD/CAD advanced for a tenth consecutive week last week, climbing to a nearly six-year high of 1.2794. The pair gained more than 9.5 percent in January, as the Canadian dollar continued to struggle with plunging oil prices and a shaky domestic recovery.

The USD/CAD was trading at 1.2700 in Monday’s early Asian session, as investors set their sights on a deluge of economic data from both countries. Below is a breakdown of this week’s major market movers.

Monday

On Monday the United States Department of Commerce will report on personal income and outlays for December. A slight increase in personal income is expected, although consumer spending is forecast to drop 0.2 percent in December following gains of 0.6 percent the prior month.

Separately, the Institute for Supply Management will release its monthly manufacturing PMI. US manufacturing activity is forecast to remain steady in January following a protracted slowdown in the second half of the year.

Tuesday

On Tuesday the US government will report on factory orders, which measure demand for durable and non-durable goods. According to forecasts, factory orders were unchanged in December after falling 0.7 percent the previous month.

Wednesday

ISM will release its monthly non-manufacturing PMI on Wednesday, an important gauge of US service activity. US services PMI is forecast to rise 1 percentage point to 57.2 in January.

Separately, the ADP Institute will release an advance estimate of US private sector employment growth. Last month the ADP said US private payrolls rose by 241,000 in December. Economists expect a January tally of 215,000.

Thursday

The United States and Canada will report on international trade in the latter half of the week. The US trade deficit reached an 11-month low of $39 billion in December, as oil imports fell to their lowest level in two decades. Meanwhile, Canada’s trade deficit widened in December, as oil exports fell to their lowest level since January 2012.

Friday

The most anticipated data releases of the week come Friday when both countries report on employment. According to forecasts, the US economy added 230,000 nonfarm payrolls in January after registering the strongest year of job creation since 1999. If forecasts hold, January would mark the 12th consecutive month of above-200,000 job gains.

Canadian employment is forecast to rise 5,100 in January after contracting unexpectedly the month before. Statistics Canada last week lowered the number of jobs gained in 2014 from 185,700 to 121,300. The statistics agency also revised the unemployment rate for December from 6.6 percent to 6.7 percent.

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Euro rallies as technical trading outweighs German deflation

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Dollar , USD

The EUR/USD rallied on Thursday, as technical trading sent the pair higher amid mixed economic data from Germany.

The EUR/USD regained 1.13 and climbed to an intraday high of 1.1367. It would later consolidate at 1.1320 in the North American session, advancing 0.4 percent. Initial support is likely found at 1.1253 and resistance at 1.13355. The EUR/USD could sustain a larger rebound above the initial resistance test as the RSI climbs off oversold levels.

Technical trading supported the euro despite plunging German inflation, which highlighted even more so the downside risks facing the Eurozone economy. Germany’s consumer price index of goods and services declined more than forecast in January, plunging 0.3 percent annually.

Germany’s harmonized CPI rate, which calculates inflation using a method consistent throughout the European Union, declined 0.5 percent annually, the biggest drop in more than five years.

The European Central Bank last week joined a growing list of central banks that have eased monetary policy this month to account for deflationary risk. The ECB introduced its long-awaited quantitative easing program last Thursday, announcing it would begin buying government bonds worth €60 billion per month. The QE program, which is expected to last until at least September 2016, could inject up to €1 trillion into the Eurozone economy.

The EUR/USD plummeted to fresh 12-year lows following the news and risks further downside action as the markets brace for weaker inflation figures and diverging central bank policies between the ECB and United States Federal Reserve.

In a separate report today Germany said its unemployment rate fell in January to its lowest level in more than two decades, a sign Europe’s largest economy was gradually improving despite regional imbalances. Germany’s unemployment rate fell to 6.5 percent in January, down from 6.6 percent a month earlier. That was the lowest level since the reunification of East and West Germany in 1990.

An improving labour market and cheaper gas prices are lifting German consumer sentiment, according to GfK. The market research firm’s monthly consumer confidence index reached 9.3 in February, a 13-year high.

“Consumers are expecting the German economy to continue developing positively over the coming months,” GfK reported on Wednesday in a press release.

It added, “Falling energy prices will play a major role in this respect. Low energy prices combined with a considerable depreciation in the euro are acting as an economic stimulus and should boost not only exports, but also companies’ willingness to invest.”

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US dollar continues higher as Fed pledges patience toward raising interest rates

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Dollar, USD and American Market

The US dollar advanced against a basket of currencies Wednesday, as the Federal Reserve conveyed optimism that inflation would gradually reach its target in the medium-term despite pledging to be patient on raising interest rates.

The US dollar index – a weighted average of the greenback’s performance against a basket of six currencies – climbed 0.33 percent to 94.33. The index reached an intraday high of 94.46 in the hours leading up to the Federal Open Market Committee rate statement.

The Federal Reserve made no changes to monetary policy on Wednesday, pledging to remain patient about raising interest rates in the face of below-trend inflation.

“To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate,” the Federal Reserve outlined in its official rate statement.

The statement added, “When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.”

Policymakers are confident that inflation will gradually return to target in the medium-term as the “transitory effects” of lower energy prices and labour market underutilization diminish. Energy prices have plunged nearly 60 percent since the summer, driving down inflationary pressures throughout the advanced industrialized world. This has prompted central banks in Canada, Switzerland and Singapore, among others, to ease monetary policy to stave off deflation and promote economic growth.

The Federal Reserve has maintained rock-bottom interest rates for more than six years, having only in October ended its record bond-buying program. According to experts, the Federal Reserve could begin lifting interest rates in the second half of the year. Analysts had previously forecast a rate hike to materialize by June.

Rate-hike speculation has fueled the US dollar over the past seven months. The US dollar index is trading at 12-year highs, having gained more than 17 percent year-over-year.

The dollar was trading higher against the euro on Wednesday, as the EUR/USD declined 0.67 percent to 1.1307. The pair is likely to face initial support at 1.1277 and resistance at 1.1359.

The greenback rose more than 100 pips against its Canadian counterpart, as the USD/CAD retook the critical 1.25 level. The pair consolidated at 1.2509 in the North American session. Initial support is likely found at 1.2425 and resistance at 1.2555.

The US dollar could receive a boost at the end of the week when the Commerce Department reports on fourth quarter GDP. The US economy is forecast to rise 3.3 percent annually in the fourth quarter, following a 5 percent gain in the July to September period.

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Who Really Moves Wall Street? The Top 10 Trading Firms Revealed

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Stocks Chart

Just a few days ago, Goldman Sachs revealed that its trading revenues were at lows not seen since 2005. The company, which is the most reliant of all the big banks on trading revenue is suffering as a result, but it’s not the only one having trouble. Trading revenues are falling all over Wall Street.

But what exactly does trading revenue mean, and what’s causing the big changes in the market? Here’s a look at why the number is an important indicator for investors, and what’s happening that’s crushing Goldman Sachs.

What is Trading Revenue and why should I care?

Trading revenue is, most basically, the amount of money that institutions earn from buying and selling financial instruments. The way that big firms do this isn’t the same as the way a retail investor does. Goldman Sachs doesn’t buy Apple stock and hold on. It buys every stock by the bucket-load and sells them for a tiny profit margin.

This is called market making and it forms the basis of bank trading revenue. The two main sources tend to be equity market making and fixed income market making. In equities Goldman Sachs acts as a clearing house, offering to buy almost any common shares and sell them at a small spread, or gap between those numbers.

Market makers are a structural necessity in the stock market, providing liquidity where it couldn’t exist normally. In fixed income banks perform the same basic function, but make money off of the interest paid on debt they hold. There are other assets that banks tend to hold for market making including currencies and commodities futures, and every other instrument under the sun.

There’s a couple of reasons these numbers are important. First of all they’re an absolutely essential part of valuing a bank. Secondly, trading revenue gives a glimpse into the way the markets are moving and, particularly over the last year or two, may clues about how to invest going forward.

Top Ten Trading Companies

Over at Investopedia Shobhit Seth took a look at the world’s biggest trading companies measured by revenue. The list gives an insight into how trading actually works on a big level, as discussed above. Here’s quick look:

Barclays PLC $17.6 billion

JPMorgan Chase & Co $20.26 billion

Citigroup, Inc. $16.2 billion

Goldman Sachs $15.7 billion

Bank of America Merrill Lynch $13.59 billion

Deutsche Bank AG $13.15 billion

Morgan Stanley $10.81 billion

HSBC Holdings plc $8.69 billion

UBS Group, Inc. $5.058 billion

Credit Suisse 2.475 billion

Following the money trail

Most retail investors don’t really know how the $10,000 they manage on eTrade actually gets moved around the market and gets turned into shares and bonds. The above list should give you some idea.

If you have an account with Charles Schwab and you want to buy 100 shares in Twitter, that company might not waste time trying to match you with buyers, it can sells you the shares directly, and assumes it will make a profit by buying them lower when somebody else wants to sell them. This isn’t how orders are carried out all of the time, but it is the path that best illustrates the role of the market maker.

When Charles Schwab wants to buy a hundred thousand shares it has a similar relationship, but with the banks listed above, buying directly from their stock rather than from a counterparty truly interested in selling..

This is how Wall Street works. There’s no big computer that allots everyone shares, there’s hundreds and thousands of small deals that make the price and the big banks make money off of each one. Trading revenue is, basically, the income a bank gets from being big enough to make a market, but there’s risks involved, as Goldman is finding out.

Big changes on the horizon

Regulations have been tough on trading revenues in recent years, but some of the biggest pain has come from movements inside the fixed income market.

The compression of yields on US bonds, and others around the world, means that while they’re sitting in the Goldman Sachs vault they’re earning the company very little money. At the same time volatility has disappeared meaning the peaks and troughs that Goldman relies on to power its revenues are almost nonexistent.

The fixed income market has changed, possibly forever, and one place to see that effect holistically is in the trading revenues of the major banks. Wise investors who try to get a view of the entire market before making a big bet need to watch these numbers, even if they’re not planning on buying financial shares any time soon.

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Top 10 Web Investment and Trading Resources

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What Makes an Elite Trader

Want to lose money? The internet is full of trading ideas that will help you do just that. What you need is not to be told what to do, but to get advice that will allow you to think for yourself. To meet this end we’ve put together a list of ten resources that you will need to make your own decisions and have a chance of success on the capital markets.

SEC Edgar

We’re sure of one thing. If you don’t spend time on the SEC Edgar platform you’re not doing well in stocks, or you won’t be for much longer. Every single public filing is searchable and downloadable on this database and every company that’s ever gone public is displayed for your analysis. If you don’t read annual reports you’re not investing, you’re gambling.

Investopedia

Billed as a great solution for beginners, Investopedia is so much more than that. Everybody runs into a metric or a strategy they’re not familiar with every now and then even big traders rarely know what’s going on outside of their discipline. Investopedia, augmented by Wikipedia itself, is a great resource for any trader who’s bogged down in jargon and looking for a simple way out.

Yahoo Finance, Google Finance

With a range of simple to use tools and basic charts, the two financial news and information aggregatiors are there to give an all-round look at the way companies are performing. You’re getting the basic package on Google Finance and Yahoo Finance, so don’t expect miracles. Use them to glance at how the markets are doing, but go elsewhere to really get your hands dirty.

Twitter, Feedly

Depending on your tolerance for social interaction you’ll need to choose between these two sites to give you a constant news ticker. Feedly uses RSS feeds from news websites, while Twitter is more adaptable allowing you to add in Carl Icahn’s latest comments, along with those from Justin Bieber.

If you’re trading regularly you’ll need to keep up to date with the latest news, and sticking to a single source just isn’t good enough anymore. Even investors with access to a Bloomberg terminal use a Twitter feed on the side.

Ycharts

Take any two pieces of information and chart them against each other in order to find a relationship. Ycharts is one of the best charting systems out there, and beats many of its rivals by sheer range of indicators and ease of use. It’s a one stop shop for data visualization and comparison, and it’s got a great free trial.

FRED

The Federal Reserve’s collection of financial data is one of the best sources of economic information in the world. We know that the world runs on macroeconomic indicators and you’ll need access to them in order to make good decisions.

Zero Hedge

You won’t want to be basing your decisions off of what you read here, but Zero Hedge is full of challenging contrarian views that will keep you on your toes and test your real knowledge of the financial markets you are betting on.

You may disagree completely with what you read, but if you can’t write an argument to back up your side you’re running on instinct alone, something that will more than likely emaciate your retirement fund.

eTrade, Ameritrade etc.

We’re not going to pick one online broker above all the others here. You know which one is best for you and you should stick to it. There are some interesting options out there, but this isn’t the time or place to list them. Do some research and find out what works for you.

If there’s one piece of advice we could give out: pay attention to the trading costs. You’ll need a suitable online brokerage to drive your investments, so make sure it doesn’t eat your kids college tuition fees.

WhaleWisdom.com

If you’re a hedge fund nut you’re probably aware of the limitations of the 13F filing. The .txt copy published by the SEC is woefully unreadable, and requires manual spreadsheet work to allow comparisons.

Whalewisdom does the work for you on this one and creates an accurate look at how hedge funds have been buying and selling according to their most recent filings. Have a look at the site and see how it can help make hedge fund decisions form a reasonable, readable whole.

SeekingAlpha, Fool.com

For something a little different head to sites like Seeking Alpha and the Motley Fool. While not a thorough learning experience, and certainly not full of information to take at face value, the essays on the platforms will get your creative juices flowing and give you a decent insight into the markets and the way other investors are thinking.

Set yourself up with something from each heading in the above list, and you’ll be able to do most of the basics of analysis and portfolio management by yourself. If we’ve left out anything you love to use, or an up-and-coming darling, be sure to let us know in the comments.

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Copy Trading Rules Clarified By FCA UK

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The Financial Conduct Authority of the UK has released a clarification on the nature of copy-trading services like eToro and the kind of permissions that platforms will need in order to carry out the practice in the country.

Copy trading is a relatively new type of investment that allows investors to release their trades publicly and have other traders follow them in their decisions. Online social trading platforms are driving the possibilities, and they’re becoming a big enough problem that financial regulators are .

The basic definition at the heart of the statement from the FCA is the following: If the brokerage asks permission before every copied trade it’s not managing the portfolio. If it executes the trades automatically it is involved in portfolio management and will need a license that allows it to do so legally.

In its own words it is portfolio management in a case where“managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more financial instruments.”

Regulators move in
The increased popularity of copy-trading is making it impossible for investors to avoid regulating the area, though there seems to be little protest from inside the industry to the current level of regulation. It’s clear that the area is becoming important enough to pay attention to, though it’s not being regarded as a major concern.

A relatively light touch procedure is certainly being followed, but increased regulation may still bring massively increased costs. This week’s announcement could cause an increase in wages and legal fees for some copy trading platforms, and the effects of regulatory action in the UK will inform the debate on similar moves on the line in the United States.

As with so many Internet-borne financial innovations, most traders are waiting to see what the establishment thinks before getting in on the action. With stories of fraud and bad returns strangling much of the media coverage of breakout Fintech, it’s not surprising.
Big returns are there for some people, and there will always be stories of the major victors in the papers. Copy trading should only be added to a portfolio if the risks are understood, and you have a good idea of the process from start to front.

Copy trading gains prominence

With an increase in lower cost trading platforms, copy trading is becoming a real force in retail investment. Though people have always tried to follow the likes of Warren Buffett into big moves, today’s atmosphere is decidedly different from that old-school style.

Nowadays using platforms like eToro you can follow somebody without a news presence and attempt to get exposure to their good decision making. The point of the regulator’s clarification is that this sometimes constitutes portfolio management by the investment services offering it.

Regulators have essentially decided that if the client needs to approve each trade there is no need for the platform to follow portfolio management regulations. If, however, the trades are executed automatically in line with the investor’s follows, that is seen as portfolio management and extra rules have to be followed in order to make it legal.

Shock risks loom big

Famed experts on copy trading sites, like Chris Fahrner a 25-year-old German currency trader, aren’t immune to the problems of the wider market, meaning that shocks, like that in Switzerland last week can cause huge slumps.

Fahrner is one of the stars of eToro who, at his peak, had more than 5,000 people copying his every trade. His total gain across the last year is close to 300%, but in the last three months he’s lost 10% of his portfolio value and copiers keep deserting him. In the last month he’s dropped 15% of his value.

Copy-trading is investing in a single person and, though you may be able to pick the wheat from the chaff, one irrational decision can ruin an investor and wipe out your portfolio at the same time. Shock macro situations, like the Swiss Central Bank’s decision last week can be similarly destructive.

Some are still betting that copy trading will remain a niche method of investing, but the sites involved continue to grow. eToro says that growth in 2014 was four times levels in the previous year, a striking statistic.

Regulators also seem interested in letting the industry breath for the time being, so copy trading, and other forms of network driven social investment, will likely form the backbone of a major trend in changing investment in 2015.

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Swiss Franc Black Swan and the Hedging Volatility of the Global Economy

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Coins, Currencies and Exchange rates

A black swan event is a term coined by Nassim Nicholas Taleb and it works as a metaphor that describes an event that comes as a surprise and has major consequences. These kind of events are rare and  its occurrence deviates beyond what is normally expected of a situation and can create substantial damage and chaos. Black Swans without any doubt are extremely difficult to predict, even in a time of sophisticated trading real time, risk management and predictive capital market algorithms.

The Black Swan term sums up what is happening in the hedging volatility of markets after the currency move by the Swiss National Bank and it displays something holistic we perceive at this moment in the world’s fragile and sensitive economy.

This disruptive and influential theory was developed and highlighted by Nassim Nicholas Taleb, a finance professor and former Wall Street trader, in the book with the same name of 2011. This influential concept was drafted, introduced it before in Taleb other 2001 book Fooled By Randomness, which concerned financial events and the power of random events and things that changes the normal trajectory of things.

The pillars of the Black Swan concept can be summarised in these 3 points in Taleb’s words:

  1. “The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
  2. The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
  3. The psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs.”

Unlike the earlier concepts and philosophical “black swan problem“, the Taleb “black swan theory” refers specially to unexpected events of large magnitude and consequence and their dominant role in history. This theory has become special relevant in the capital markets and trading world where the theory became a Bible for traders and part of the implicit DNA of trading.

Aerial Photo of Davos – the host Alpine City of the World Economic Forum Annual Meetings

Such special and unexpected events, that happen very fast in hawkard circumstance, considered extreme points of no return, or outliers, collectively play vastly larger roles than expected regular occurrences and shift actions and special the players. More technically, in another paper, Taleb describes in the scientific monograph Lectures on Probability and Risk in the Real World: Fat Tails, a more sophisticated mathematically explanation that highlights and translated the black swan problem as “stemming from the use of degenerate metaprobability”.

So yesterday move of the global markets after the Swiss National Bank’s sysmic shock move to stop intervening in its foreign exchange market, has been one of the biggest Black Swans of the last years for traders. Special only after three days the Swiss National Bank, Vice President Jean-Pierre Danthine had defined the Swiss Franc cap a “pillar” of monetary policy.

In these circumstances people and special traders, markets, brokers and investors don’t behave normally special when central banks don’t. This has created a butterfly effect in the global markets with riddle effects still difficult to predict.

This move all comes in the follow up of the European Central Bank big introduction of quantitative easing when it meets Jan. 22 2015. Switzerland is making its home work and somehow surrendering before a critical and polmic wave of post-QE money fleeing the euro that threatens to make a mockery of its currency policy. It’s also in the follow up of the lower oil prices that brings global deflation ever closer.

This move has been affecting the world markets, disrupting even big retail trading players of the industry such as FXCM with its Shares Trading down 85% in Pre-Market Trading and a Massive $225 Million Client Negative Balance Hit Due to CHF Volatility ). IG Group another massive world trading house disclaimed  losses up to £30 Million, Tip of Industry CHF Volatility Losses. And the most radical case Alpari Uk entered in admnistration following up client losses. LCG Group also faced up to $2.5 Million Losses.

To add a more positive note Gain actually generated profit with this black swan Forex Industry black Thursday. Other retail trading players such as Saxo Bank and Mahih FX, CMC Markets, City Index continued with their businesses and trading operations despite the CHF Convulsion. Also IC Markets and Darwinex persisted despite Minimal Losses and Setbacks.

This exceptional market turmoil following up from the Swiss move has created and trickered a series of events and dsiruption and has extended its impact worldwise. Swiss stocks such as Swatch and Nestle fell sharly and in the same path Asian shares dropped with U.S. index futures, while Japanese and Australian government bond yields had record plunges.

This action by the Swiss National Bank taking will put in question the effective strenghts or weakness of the euro polemic currency adventure that started some 15 years ago.

Adding to the chaos coming from Swiss central bank unexpected moves there is the Russian ruble and its weakening economy that continues to lose buying power, and a lot of the big Oligark money that has been flowing into Switzerland from that country. The challenge now is how this will affect more the sensible and fragile Russian economy completely fragilised by the lower and lower prices of cheap oil.

No doubt this move by the Swiss National Bank is a black swan game changer. And its repercussion will probable continue as the ECB continues its path to a massive action that will intensify new actions and potential disruptions. The US economy probably will be the balance in this complex and fragile system.Investors and traders have to be wise at the moment and eventually move their portfolios to solid commodities. This is the case of gold that will be growing its value. Example of that is the move in its the price that keeps its trajectory of 4 month highs. Gold in these occasions is the traditional safe haven out of paper money.

Interesting also that the Swiss Central Bank did this less than some weeks before the global Davos World Economic Forum Annual Meetings – that are host in the Swiss Alpine City.

Be safe and wise if you are trading these days! and beware of the black swans riddle effects in the hedging volatility of the global economy.

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Forex Trading Platform: case of cTrader

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What Makes an Elite Trader

The cTrader platform, designed for Forex traders, is an insightful and precise, and user-friendly platform designed by Spotware. It offers top-level liquidity and a vigorous trading structure into the platform, with a fast and smart ECN connection. A fast ECN connection is what gives clients the edge when they compete in a cut throat Forex environment.

Spotware cTraders Platform dashboard, TradersDNA

Here are some of the benefits of cTrader:

A Fast and Effective Trade Execution

When you talk about Forex trading, timing is absolutely essential. A successful trade is only guaranteed if you’re fast and calculating. Spotware cTrader is an innovative platform that helps to fill in trade order in a matter of seconds. Moreover, with cTrader, you can easily and very quickly process all your orders simultaneously.

Level II Pricing

Another advantage of using cTrader is its ability to identify and display a variety of different executable prices straight from the liquidity providers. Using the VWAP (Volume Weighted Average Price), you can conveniently fill in all your orders using your trade book.

Precise Charting

The charting feature of the platform boasts a number of different options for you to use while trading in the Forex market. For example, you can use a variety of different presentation options, view information in any layout you want and alter any template you want.

Chart Trading

Another great benefit of the platform is it makes your trading experience a lot simpler. Using the platform’s interactive click and drag feature you can choose to open and close all your trade orders. Plus you can customize your own stop losses, calculate profits and minimize your orders.

In-Depth Analysis

You’d be surprised to know that cTrader provides you with all the customizable trading tools that guarantee a precise technical evaluation of all your trades. This may include factors such as common trade trends, oscillators, volatility analysis and line drawings. Additionally, via cPanel you will more easily be able to plot different objects and trade indicators.

Custom Indicators

Traders using cTrader can easily familiarize themselves with the algorithmic infrastructure which will help them develop their own indicators. In other words, cTrader offers the option for easily customizing your indicators for both manual and automatic trading. Developers can also designate different parameters and graphical integrations for different indicators.

Favorites Option

The ‘Favorites’ option in cTrader allows traders to bookmark their most desired currency pairs allowing them to conveniently access those pairs anytime they want.

QuickTrade Feature

The QuickTrade feature allows you to quickly access different trading charts. Combine this with the platform’s fast executions and you have a powerful tool helping you any fast trading market.

Multiple Accounts

Spotware’s cTrader allows traders to maintain an unlimited number of accounts. You can even designate each account with your preferred currency. Switching accounts is fast and easy.

Feedback Driven Updates

cTrader takes into account different feedbacks, especially when developers decided to launch new products. Now, as a trader using cTrader you will be able to directly control the dynamics of your trades using your account at cTrader. The feedback process is relatively easy and just by clicking the feedback tab on the platform you will be able to offer your suggestions and queries pertaining to any aspect you deem necessary on the platform. Upon completing your feedback, you will see that the process of launching feedback is automated and takes no time at all.

Charting Templates

Using Spotware’s cTrader, you will see that developing newer charting templates becomes easier. Furthermore, your templates are shared on cAlgo which means you will encounter zero problems upon switching templates between automated and manual trading.

Trading Sessions

When trading, the element of knowing which markets are open for trading around the world is critical. This way, you can optimize your trading strategies to determine a more favorable outcome. cTrader’s trading sessions give you an edge by instantaneously notifying you which markets are in session around the globe.

cAlgo Integration

Although cAlgo and cTrader are two different trading platforms Spotware’s developers have provided with an easy way to integrate the use of both platforms simultaneously. This way, traders can streamline their strategies and switch between manual and algorithmic trading easily.

Detachable Charts

Each chart on cTrader is designed to be separable, which means it can act as an impartial trading application on your desktop, allowing you to use options in full screen.

Concluding Thoughts

The cTrader platform is tailored for Forex traders that need to make quick trades with customizable options and features. Plus, with a user-friendly interface, you can even trade on the go, using the platform on your mobile device. All in all, there are few brilliantly designed Forex trading platforms and Spotware Systems’ cTrader is one of them.

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Global Currency Forecast for 2015

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Currency and criptocurrency
World digital map Tradersdna

The Global Currency Forecast 2015 by Scandinavian Capital Markets (SCM).

The outlook for the EURUSD in 2014 was for the prices to move within a 1.2753-1.4225 zone with a downside break of 1.2753 favoring further price decline to 1.2319 followed by 1.2185, and 1.2050. The range for EURUSD in 2014 was 1.2096-1.3992 and the pair closed at the low of 1.2096 and more importantly well below the 200 month simple moving average (SMA) which is at 1.2237. For 2015, the EURUSD risk remains for further price decline in the weeks and months ahead as a monthly open and lower close below the 200 month SMA will confirm further price decline to 1.1580, 1.1423, 1.1295, 1.1096 and 1.0033. As to the upside, only a monthly open and higher close above 1.3322 will confirm further rise is once again underway initially targeting 1.3522 and the 2014 high of 1.3992.

GBPUSD

GBPUSD fall continues to unfold as our November 2014 outlook confirmed a weekly open and lower close below the 200 week simple moving average (1.6032) would witness further price decline to 1.5721, 1.5373 and eventually 1.4812. November prices closed at 1.5641, below the 1.5721 prior target as our December outlook confirmed lower prices was underway to 1.5373 and 1.4812 in the weeks that followed. December prices opened 1.5641 and closed 1.5577 thus confirming continued decline to 1.5371. As of this writing, GBPUSD has reahed 1.5324 and remains offered into the months and weeks ahead. For 2015, GBPUSD risk remains for significant price decline as a weekly open and lower close below 1.5373 followed by a monthly open and lower close below 1.5373 will confirm continued downside risk to 1.4812, 1.3904 and 1.3623 into the months ahead. As to the upside, only a monthly open and higher close above 1.6037 will turn the outlook to neutral with modest upside risk to 1.6477. Currently, we continue to hold GBPUSD September 2, 2014 short trade from 1.6565 for 1.4812, 1.3904 and 1.3523 targets.

AUDUSD

AUDUSD’s fall from the April 2013 high remains active as prices will continue to move lower in the week’s and month’s ahead with the 200 Simple Moving Average (SMA) currently at 0.7780 as the next downside target. As to the upside, only a monthly open and higher close above 0.9334 will turn the outlook to neutral with modest upside risk to 0.9629. For 2015, AUDUSD will continue to move lower as USD makes broad gains with an AUDUSD monthly open and lower close below 0.7780 confirming further downside risk to 0.7203 followed by 0.6006.

USDJPY

For 2015 USDJPY will likely continue to move higher with 122.55, 124.13 and 128.83 as the next upside targets into the weeks and months ahead while only a monthly open and lower close below 99.48 will turn the outlook to neutral with modest downside risk to follow.

USDSEK

The multi-month rise from 6.3221 continues to unfold as risk remains for further price rise in the weeks and months ahead is favorable. For January 2015, look for a monthly open above 7.6662 and higher close to confirm further price rise is underway to 8.0492 followed by 8.5375 and 9.3270 in the months ahead. As to the downside, only a month open and lower close below 7.2585 would turn the outlook to neutral with modest downside risk to 7.0827.

USDCAD

USDCAD rise from 0.9405 continues to unfold with 1.2199, 1.2323, and 1.3062 as the next upside targets in the month ahead. For 2015, look for a monthly open and higher close above 1.2323 to confirm further price extension to 1.3062, while to the downside, only a monthly open and lower close below 1.0335 would change our outlook to neutral.

UAXUSD – Spot Gold

Gold continues to consolidate the multi-year rise from $212 as 2015 will witness prices consolidating within a $889-1,526 zone as a sustained break of this zone will witness further price extension in the direction of the break. For 2015, look for $889-$1,526 range as a month open and lower close below $889 will witness further price decline to $777.41 followed by $645.94. As to the upside, a monthly open and higher close above $1,526.85 will confirm further price rise is once again underway initially targeting $1,637.83 and 1,745.90. Though still in a multi month consolidation phase, the spot gold market remains net long as this net long sentiment could witness a very painful downside correction or squeeze similar to that recently witnessed with crude oil prices. Look for a monthly open and lower close below $654.53 to witness a dramatic decline or near collapse of the gold market with prices eventually reaching $263.45.

Crude Oil (WTI)

Barring any significant cuts in production from OPEC or any geo-political events which could impact oil prices, crude oil prices will remain low throughout 2015 and risk for further price decline towards $33 is favorable. For 2015, look for a WTI monthly open below $52 and lower close to support further price decline to $33.18 while to the upside only a monthly open and higher close above $86.40 will remove any downside risk.

 

Scandinavian Capital Markets SCM is a Sweden based asset and fund manager founded 2010. The company was founded by a group of traders and former portfolio managers to help investors diversify their portfolios and provide a profitable alternative to other asset classes with risk-adjusted returns. The company’s global wealth management seeks to identify and capitalize on intermediate-term price movements in a broad range of major currencies through global macro investing using a combination of fundamental, technical and systemic trading. The company is registered under Swedish Financial Supervisory Authority (Finansinspektionen) 

Investment Philosophy

The team has based on several years of research and trading effectively developed automated and discretionary strategies that incorporate macro-economic views and technical analysis that seek not only to outperform major benchmark and stock indices but also to generate uncorrelated and risk-adjusted returns that offer true diversification.

Investment Team

The investment group consists of a highly competent trading team of currency traders, market analysts and skilled portfolio managers including former Head of Portfolios from Barclays, Citigroup and Lloyds TSB. The team utilizes more than 25 years of trading experience within the banking and institutional investment sector which has made it well suited to generate risk-adjusted returns irrespective of market climate.

 

Scandinavian Capital Markets Social Media presence:
Twitter: @ScmFX
LinkedIn: linkedin.com/pub/scandinavian-capital-markets-scm/52/2bb/33b
Facebook: facebook.com/ScmForex

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