Charting Forex With Metatrader 4.0

The Art of War (Trading)

2012-01-31T10:17:00.000-08:00

Sun Tzu wrote The Art of War more than 2500 years ago - in many ways it actually applies to trading:

*All warfare (trading) is based on deception.

*According as circumstances (market conditions) are favorable,one should modify one's plans (trading strategy).

*He will win who knows when to fight (trade) and when not to fight (trade).

*If you know the enemy (market) and know yourself,you need not fear the result of 100 battles (trades). If you know yourself but not the enemy (market),for every victory (target price) gained you will also suffer a defeat.
If you know neither the enemy nor yourself,you will succumb in every battle (trade)

*The consummate leader (trader) strictly adheres to method and discipline,thus it is in his power to control success ($$$).

*In respect of military (trading) method,we have,firstly,measurement, secondly,estimation of quantity,thirdly,calculate ion,fourthly,balancing of chances,fifthly,victory.

*Ponder and deliberate before you make a move (trade decision).

*Do not linger in dangerously isolated positions.

FOREX Metatrader Brokers MT4-MT5

2012-01-22T02:53:00.000-08:00

Link List: xx = very bad reviews, A - Top Rated, Mix = Mixed Rating, N/A = not enough info
metaquotes.net - mt4 download demo
metaquotes.net mt5 download demo
Alpari UK mt4 & mt5 -- reviews Mix
Alpari Russian -- reviews A
Broco Trader mt4 & mt5 -- reviews xx
Ava FX -- reviews xx
GCI Financial -- reviews xx
Admiral Markets -- reviews N/A
ActivTrades -- reviews Mix
Dukascopy -- reviews Mix
AM Financials -- reviews N/A
MB Trading -- reviews Mix
FastBrokers -- reviews A
Compass FX -- reviews A
GFT -- reviews Mix
FiboGroup -- reviews Mix
GainScope -- reviews A
Oanda -- reviews Mix

(for the small fish) List of Metatrader brokers with Micro Account (minimum lot size 0.01):

Name ~ minimum starting ~ P=Paypal ~ M=Moneybookers
1lotstp $100 M
1pipfix $100
4XDG $50 P
AAAECN $100
AAAFx $300 M
AccentForex $10 M
ACFX $50 M
ACM Gold $250 P reviews
ActivTrades €250
Admiral Markets $1 M
AFX Capital $200
Alpari UK $200
Alpari US $1 P
Arab Financial Brokers (K.S.C.C) $50 M
AstaForex $1 M
AVS Carter $500
Axiory $500
Broco $25
Bulbrokers $50
CMS Forex $500
Deltastock $100
DF Markets $1
ECNPROFX $50 M
EES FX $500 0.01
EFX - England Foreign Exchange $500
eToro $50 M
EuroBroker $10 P
EXNESS $100 M
FalcoFX $100
FastBrokers $500 P
FBS $5 M
Finexo $100
FinOdds $25 M
Forex Club $200
Forex Control $500 M
FOREX.com $500
Forex4you $1
ForexCent $1
Forex FS $500
ForexYard $100
ForexWebTrader $25 M
FX|Clearing $1 P M
FX Choice $10 M
FX Financial Group $300
FX Solutions $250 P reviews
FXcast $10 M
FXCENTRAL $500 M
FXCM Micro $50
FXD24 - FX direct S.A. $10
FXDD $250 P
FXDealer $250 P
FXM Financial Group $100 P M
FXOpen $1
FXOptimax $10 M
FXPrice $250 P
FXPRIMUS $250 M
FXSalt $250 M
Gallant Capital Markets (GCMFX) $100 M
Go Markets $1 M
Grand Capital $1
Hirose Financial UK $20
HotForex $5 M
IamFX $100 M
IBFX - Interbank FX $1
IFC Markets $1
InovaTrade $500 P
InstaForex $1 M
Intel FX $10 M
InvestTechFX $100 M
IronFX $500 M
LEADER FOREX $100 M
LiteForex $10
Loyal Forex $50
Lucror FX $500 M
Marketiva $1
Markets.com $100
Masterforex $1
MB Trading $400
NordFX $5 M
OANDA $1 P
One Financial Markets $250
Pacific Financial Derivatives (PFD) $200 M
PaxForex $5 P
Pepperstone $200 M
PFG FX - Pro Finance Group $10
PipFixed $100 P reviews N/A
Proedge FX $250 P reviews N/A
Profiforex $1 M
RBS - Royal Bank of Scotland £1
Real Trade Group $20
RoboForex $10 M
SmartTradeFX $100
Solidity Brokers $100 M
Sunbird $100 M
Synergy FX $500 M
ThinkForex $500 M
Trader's Way $1 M
TradersChoiceFX $250 P
Tradeview Forex $100 M
Trading Point $5 M
UpFX $250 Paypal
UPME Group $1 M
UWC - United World Capital $5 M
Vantage FX $500 M
Vantage FX UK £350 M
Windsor Brokers $100
WSBrokers $10 M
XForex $100
XoomForex $100 M
YouTradeFX $100

*As you can see there are alot of FOREX brokers. Chose a broker that is well capitalized, has a good reputation, is available by phone and able to answer questions, and lastly verify they are currently regulated. If they are well capitalized they will usually brag about that in their about company page. Don't just go by look or features - those are 2ndary options when trading real money.

Difference between account types in pips:
Standard Account $10 a pip for EUR/USD *lot size = 1 lot
Mini Account $1 a pip for EUR/USD *lot size = .1 lots
Micro Account $.1 a pip for EUR/USD *lot size = .01 lots (some brokers even lower)

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Correct Way To Properly Draw Fibonacci Retracements

2012-01-17T00:15:00.000-08:00

This is almost never explained precisely or correctly so I will provide a precise howto that illustrates which end goes at the top and bottom of an uptrend and downtrend so that you draw the fib retracement in the right direction (not backwords) for meaningful technical analysis.

How to draw Fibonacci Levels in Metatrader:
(This is in Metatrader (mt4) but most other terminals are practically the same)
This part is as simple as pedaling a bike but don't worry it gets more complicated.

I personally use metatrader to do this so that will be our model. The tool should be part of the "line studies" toolbar in mt4 - if not you have to add it by clicking customize and insert. With your line studies toolbar is enabled, click on Fibonacci Retracement, and simply place it to the chart you are using. You may have to also double click it to stretch it.

Placement
The big idea is to find a big movement to measure which can be subjective to the traders eye but in general you want a pretty good chunk of data (a trend) that actually measures the correct starting point of the trend in question (the top of a downtrend or the bottom of an uptrend is the starting point). The end point might still be forming so that is the hard part. You basically use swing points (high to low or low to high) of the movement to draw your extensions.

If you are measuring a downtrend the top (swing high) will be the 100% and the bottom (swing low) will be 0%. If you are measuring a uptrend the bottom (swing low) is the 100% and the top (swing high) is 0%. In otherwords you are always chasing 0% in the direction of the trend and 100% is the starting point.

Finding a top or bottom
It takes participation to find a good retracement and this is subjective to every technician but I'll tell you my own method. You have to continually redraw the extension - because as mentioned you never know exactly where the top or bottom will actually occur unless you are a high profile fortune teller that sees in the future and thus wouldn't need technical analysis at all. So with that said - keep drawing extensions until there's a reaction to a retracement to the 1st Fibonacci level 23.6% and then interpret the pattern at that point with other confirmations (eg is volume picking up? ect).

Interpretation (add more detail)
The key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%. These lines
are simply ratios between two extreme points of a high and a low. The 50% level actually does not have anything to do with Fibonacci, but traders use this level because of the tendency of reversals after retracing half of the previous move. The 50% was added by Dow Theory's. Basically the ratios act as either support or resistance levels.

The 61.8% is considered the golden ratio but my advice is to simply use all levels as support and resistance points to confirm with other indicators such as volume.

Example: If there is strong move but the move starts to loose it's steam. Lets say it's a downtrend and the sellers reduce their position so you draw a fibo extension from the swing high (100%) to the swing low (0%). There is a pullback to approximately the 38.2% and the sell off continues there with selling volume coming into play. What that means is the majority of sellers may have reduced their position by about 38% - the amount of the correction. Or perhaps it retraces to the 50% area and the sell off continues there because the sellers perhaps reduced half of their position (the amount of the bounce you see) and then new sellers came back in at the proximity of the "retracement level" if the trend is strong. If it breaks the 50% perhaps the sellers are not only reducing their position but the pattern may be reversing since resistance is not working.

Retracements are really not meant to be stand alone. They work well with other strategies combined (also called confluence see my article in blog archive). Many sophisticated traders will often combine Elliot Wave Theory, volume analysis, or other strategies with Fibo Retracements. It's just a way of finding weakness in a trading pattern of confirming it's strength instead of a stand alone magic trick. In live trading you need to confirm with other trading tricks especially when you have real money on the table.

In Action:

In an Uptrend:

Here a Fibonacci Retracement manually drawn between a low and a high in a short-term uptrend on a hourly chart for a currency pair. Price falls through the 23.6% and firms up at roughly the 38.2% providing a re-entry point for a long. Notice the candle pattern stays bearish here into the 38.2% - that is ideal. Then candles clearly firm up at the 38.2% which acts as strong support. The implication is that the trend will continue and perhaps set a new high.

Another clear example of a bounce that occurs at ruffly the 38.2% which acts as support because it's an uptrend. There is also some confluence with the 50ema which is considered a key moving average.

Did you notice something? Compare it to the example above. It is the same instrument at a different date. The previous bounce at 38.2% made a new high so this is actually a new fib retracement but it's still in an uptrend and the 38.2% once again turned out to be the buying point.

In fact if you zoom in on each example the only difference is the first Fibonacci retracement is drawn from January 13th 2012 to January 17th 2012 and the 2nd example is drawn from January 24th 2012 to January 26th 2012. That is the power of both a strong uptrend and Fibonacci. Does it work? What's it look like?

In a Downtrend:

Here a fib retracement is drawn from swing high to swing low because it's measuring a downtrend. The bounce occurs at ruffly the 38.2% and the 50ema. Again the fib levels are merely support and resistance points. In the case of a downtrend the 38.2% is resistance.

What can Fibonacci Retracements work on?
Everything that has price data: Bonds, Stocks (Google, Apple, IBM, Dow Jones Index), Currency Pairs/FOREX (aud/usd, gpy/jpy, usd/jpy, usd/chf), Options, Commodities(gold, silver, copper, wheat, sugar, coffee, crude oil), ect.

Historically
The history of Fibonacci dates back to when Leonardo Fibonacci (12th Century Italian Mathematician) was studying the construction of the pyramids and wrote about what he learned in a book called Liber Abaci (Book of Abacus or Book of Calculation).

The number pattern seemed to be found everywhere - even in nature.

Liber Abaci proposed and solved a problem involving the growth of a population of rabbits based on idealized assumptions. The solution, generation by generation, was a sequence of numbers later known as Fibonacci numbers. The number sequence was known to Indian mathematicians as early as the 6th century, but it was Fibonacci's Liber Abaci that introduced it to the West.

In the Fibonacci sequence of numbers, each number is the sum of the previous two numbers, starting with 0 and 1. This sequence begins 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987 ..

The higher up in the sequence, the closer two consecutive "Fibonacci numbers" of the sequence divided by each other will approach the golden ratio (approximately 1 : 1.618 or 0.618 : 1).

When used in technical analysis, the golden ratio is typically translated into three percentages: 38.2%, 50% and 61.8%. However, more multiples can be used when needed, such as 23.6%, 161.8%, 423% and so on.

The primary methods for applying the Fibonacci sequence to finance:
retracements / extensions
arcs
fans
time zones

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer

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Candlesticks Overview and The Doji Pattern

2012-01-16T12:41:00.000-08:00

The Doji is a good candlestick pattern for a beginner to recognize because it's very easy to spot so it will be emphasized it in this article.

Historically
Candlesticks were originally used by Japanese rice traders to do early technical analysis in the 1600's and was implemented by Charles Dow in the 1900's in the US. Steve Nison later made candlestick trading more popular in the US from his book "Japanese Candlestick Charting Techniques" published in 1991. Nison also translated early Japanese works.

Although candlesticks were first used in the 1600's they were not fully utilized until Munehisa Homna a prominent rice trader implemented them in the 1700's. With his research he developed a philosophy called "The Sakata Rules" which became the framework for Japanese investment. His research took into account historic price moves and weather conditions. Surprisingly, Japanese Candlestick analysis was never a hidden or secretive trading system.

In 1755, Munehisa Homna wrote "The fountain of Gold - The Three Monkey Record of Money", the first book on market psychology. He notes the psychological aspect of the market is critical to trading success. He is rumored to be the most successful market trader in history, generating over $100bn in profits at today's prices, some years earning over $10bn a year. He literally cornered the rice market and was made a financial adviser to the government. To some he is despised (many successful rice traders were) but to some (including myself) he is a Japanese hero of the time.

Homma named various patterns; Long days, Short days, White Marubozu , Black Marubozu, Spinning tops, Stars, Rain drops, Dark Cloud Cover, Evening Star, Doji's, Three Black Crows, Dragonfly Doji, Hanging Man and others.

Interpretation
The key to candlesticks was price action rather than news events that were unreliable than the actual mathematical representation of supply and demand or market emotion that could depicted in the form of a candlestick.

There are various patterns watched by candlestick traders that reflected emotion, supply and demand, or simply put points where the market may reverse do to previous interpretations. A Doji is one such pattern - it represents a decision point (some say a meeting of the minds) because the open and close are very close together (nearly equal).

To properly identify the Doji you must know what the candlestick parts mean. The first key part of a candlestick is the body. The body is the point between the open and close which makes up the width of the candle. I use a dark color (red or brown) to represent bear candlesticks and a bright color (lime or light blue) to represent bull candlesticks. A stick is bearish when the closing price is less than the opening price and bullish when the closing price is greater than the opening price.

The other key part of the candlestick is it's wick (also called shadows - a more confusing term) which is a very important piece of data but not as important as the open and close. The wick represents the high and low prices. Wicks represent where price action goes independent from the open and close so they don't have a body but reflect price extremes.

Don't get too complicated with candlestick parts - they are meant to be easy to read - interpreting patterns however is another subject entirely. The key pieces of a candle are: 1. The Body 2. The Upper Wick 3. The Lower Wick 4. The Opening Price 5. The Closing Price. How those various parts interact together make up what type of candlestick has formed - the wise rice traders watched these pieces of data like hawks. Also what the previous sticks have done and the following candlesticks after a pattern has formed are the key to learning and using the patterns. The previous candlesticks help identify patterns while the following (not yet formed) are used for confirmation of a pattern.

*Sometimes candles have no upper or lower wicks or no body (for example: when opening price equals closing price.

Doji Tutorial, Identification, Analysis

Above are variations of valid Doji's. Both variations represent a meeting of the minds - decision points (also called a tug-of-war between the buyers and sellers where the result is a standoff).

Bullish or Bearish action is based on preceding price action and future confirmation.
Therefore the previous trend is one of the keys to spotting a valid Doji Pattern. A Doji in a range is not as enticing as one that appears in a ascending or descending set of candles.

People get very technical in the identification of Doji Patterns but in general you are looking for a meeting of the minds (where open and close is nearly equal) after a preceding uptrend or downtrend. Preferable there's at least 5-10 bars in an uptrend or downtrend when the Doji occurs and not within a range.

(click to enlarge)

To me the above pattern is a valid Doji Pattern with all the essentials: 1. A prior trend 2. A long (of the previous direction) candle prior to the actual Doji. 3. A Meeting Of The Minds or Tug-of-war that ends in a standoff. 4. Confirmation / breakout of the Doji Pattern.

In my opinion you couldn't ask for more from the above pattern. The reward was also very impressive. It occurred in a daily timeframe so the profit was very generous.
Some might say that pattern was actually a spinning top (but the upper wick is not tall enough if you want to get technical - there are some grey areas to identification). I classify it as a Doji because I see a meeting of the minds and that's what were looking for - indecision after a prior trend.

Also the above pattern can be confused with a Hanging Man or Hammer but no look closely the lower wick is not long enough for either patterns to be valid.

A rarer variation is the Dragon Fly and Gravestone Doji. These patterns are times of high emotion and sometimes mark massive tops or bottoms.

Another variation is the Long Legged Doji.

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer

Why I blog

2012-01-16T02:35:00.000-08:00

My blog and some BS about me
Actually since the inception of this blog I've never really introduced it properly in so far as describing exactly what this blog is or my motives. This is a forex trading blogspot obviously and it's primary emphasis/motive has always been to keep my nose in trading when I'm not in a trade. It is nothing more than my own personal blog and trading experiences. My trading diary if you will.

Initially I started the blog just to keep track of market movements. As I gained more knowledge of trading I began developing products which I decided to sell through my blog - which was actually not a plan of mine and I don't really make much doing it. The blog is just to keep myself actively involved in the business. Weather I sell a product or not makes no difference to me but I have made a few pennies selling products which I do not deny.

My primary emphasis however is to make money trading. The blog is simply my experiences, to make myself more knowledgeable, and meet other traders to share a common interest. Another motive is to keep myself from over-trading and kill time between those empty moments of just staring at a chart when nothings happening - but you just never know so I like to stay by the computer, watch the charts, and blog.

If I can make a marketable trading product that is a bonus and makes me a more competent trader (a professional) with a greater edge because I can put forth something "in the trade" that is worth something other than just making a fast buck with my skills in the game (which is also great! I'm just saying, you know I can have a name for myself because someone might say down the line I helped them which is something to feel good about). It's just another way of seeing it in that aspect that my imprint will go down in history if I end up helping other traders and prove that there is enough money to be made in trading that we don't have to fight over it - we don't have to be enemies just because we're trying to get a piece of the same pie. The way I see it is if I get to into one of those big penthouse condos overlooking the beech I don't want to be the only one there.

Every now and then I like to put up some great charts and show off my charting skills as well. In fact if there was no money in trading I like the mathematical aspect of charting so much that I would do nothing but post chart patterns all day and explain the theories as a hobby. I would be like one of those weird little kids you sometimes hear about that have a butterfly collection to find them sickly fascinating. In other words I'm someone that can find something that most people would find utterly boring and turn it into an interesting science. So if you think I'm just some greedy financial person I would gladly study things (most others wouldn't) just for the betterment and greater good of society. That is if society didn't revolve around money but unfortunately it does.

I'm never one to be shy about talking about the markets, charts, making money, or forex. I don't really like to talk about individual companies though - that is just too yuppie for me. I could care less about big names like Exxon Mobile, Goldman Sachs, or Google. My quest is a scientific one that revolves around the inner aspects that are mathematically based.

Forums were a learning experience but not for me
Ironically (and what actually brought me here) I'm actually well known in some trading forums which I don't frequent as often anymore but will drop in from time to time just to see how many originals are still around. I left because I got sick of the arguments (although I'm actually well respected by most), newbies that think they know everything - are very annoying to say the least, and the rampant unprofessionalism of many of the posters that is often a constant theme (with the exception of few select posters that are consistent and serious).

So I decided although everyday is a new learning experience to me that I would much rather write in my quite blog without the abstractions of meaningless jabber mixed with a few sporadic but worthy post that you have to fish for in those large forums that are open to the public. When I have something to say people will find me if they are interested in the same topics rather than those crowded forums that are often filled with trolls that make post after post just to hear themselves talk - honestly I think half of them were market makers because they often try to run you off if you talk too much sense.

Blogging for me is a more focused and a thought out form of logging my trading experiences without all the attitudes online.

Outside of blogging...
I like to read books on trading. One of my favorite books in trading is Remnants of a Stock Market Operator. I think it's because it was one of the 1st books I read from cover to cover in trading. I got addicted to that book - I mean addicted. I was in St. Augustine, FL reading that book over and over by the beach while taking a little vacation.

I actually had a beautiful girlfriend there and I didn't even want to see her I would rather read that new trading book about one of the orginal heavy hitters in thrading. I got it at the local Barnes & Noble (I think I read it a few times there too over some cappuccinos) and headed over to the beach. You know I read that book through several times in a day. I would get up again and go to the beach and read it a few times more - so much so I thought I was the great trader Jesse Lauriston Livermore. I think I must of read it from cover to cover 10 times in a 3 day period.

I used to carry books around with me about trading to bars, the beach, on walks, the hot tub, you name it lol - where ever I would go I would have at least 1 book about trading. I would meet some pretty interesting people that way and they would want to discuss trading with me - it wasn't a great way to pick up girls though but it was my passion. Some would ask totally lame questions but every now and then I would meet some very interesting and knowledgeable people that could hold a descent conversation about trading or the financial world.

With my extensive knowledge I called a massive bottom in gold back then and predicted the big recession when the market was at a peak. People looked at me like I was nuts when I said there would be a big market crash and possibly a recession or the fact that gold would go much higher than $600 (at the time was in the $500's). At the time I predicted it people were raking in the cash in real estate - I warned people who ended up losing big but no one would listen and now they won't even talk to me because I warned them and unfortunately for them I was right. It's too bad they didn't listen to me because although I seemed crazy then I was offering them very rational sane advice but they didn't want to listen.

So anyway that is the story of my life and why I blog. My blogging style has changed considerably since I first started blogging. I'm more into trading topics rather than market events.

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer

Advanced Trading Topic: Confluence

2012-01-15T20:54:00.000-08:00

-Confluence in Trading-
Real World Definition: 1. A coming or flowing together, meeting, or gathering at one point. 2. In geography, a confluence is the meeting of two or more bodies of water.

Synonyms: convergence, conjunction, convergency, meeting
Antonyms: divergence

When 2 streams come together and flow together there can be a spectacular current that is dependent on the force of the 2 streams. In nature the flow of water is a very powerful force - much like a strong trend in trading.

In Trading, my definition of confluence is when 2+ forces intersect and more accurately the implementation of multiple trading strategies into one. When there are more forces intersecting there is more confluence. When several forces intersect at once we more astute traders will say there is a great deal of confluence. One might say well that's just a fancy word for "confirmation" - not exactly but there are similarities. I see confluence as something that occurs more naturally than when a trader is looking for some type of confirmation of a signal in their linear trading system.

It takes greater knowledge to spot confluence than a simple confirmation - the greater degree of understanding in technical analysis and trading the greater mastery you will have of conflowing factors that work together like a strong rushing river or mark the end of a drying stream.

Confluence may also be thought of as events - as in the confluence of events. These events make up a theme.

examples of confluence in trading:
example 1 (case: reversal - bear signal) price hits a major resistance in HR4 time-frame. Soon after in the hourly tf MACD negative divergence occurs. You also see at the M15 tf that stochastic is overbought.
*All the indicators do not have to have the same signal for every time-frame.

example 2 (case: reentry or confirm short) after a strong sell off you measure from your swing high to swing low and find that price action retraces to an area of supply
that intersects with a 50% Fibonacci level. In this case the strategy is to hold a short longer (if already short) or to look for a short at the 50% fib extension retrace. *Or perhaps your not in a trade but were considering a long and you see price approaching the 50% fib at an area of supply - you might want to steer clear of that long.

example 3 (case: continuation) An Elliot C wave forms at a 38.2 retracement fibo level ie b to c for the fib extension. After the 38.2 price action of the trading instrument in question breaks through the swing point with heavy volume indicating a stronger move should follow. An aggressive trader in this scenario might place a trade at the 38.2% fib with a stop loss at the 50% fib. If the swing point (at the Elliott b wave) breaks with heavy volume it is just an indication to perhaps hold trade for more profit or trade that break. (warning aggressive strategies can produce high losses - always adhere to a stop loss in any scenario). A "conservative" trader would wait for the break of the b wave + confirmation of heavy volume in this scenario and put stop loss and the 38.2%. *note that 61.8% retracements are warning signs of a potential trend changes.

Summery
Confluence is the increase of probabilities. It's like adding more straws to the camels back and eventually the camels back will surely break - this is the case of a trend reversal.

In a continuation it is like the construction of a house - where you see the contractor putting in the foundation, then the frame, and ultimately the roof.

It becomes evident at some point that the final stages will proceed or the beginning stages will fail. You wouldn't want to place a trade against the trend when the "frame" of the pattern goes up unless there's really bad news like the builder didn't pay his bills and the project was canceled or held off do to funding - this is the equivalent of a big news event that can reverse or stall a pattern.

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer

Forex Trading Strategies

2012-01-09T20:48:00.000-08:00

Every newbie trader in the world wants to put down their first trade and win the lottery. They are told how easy it is to trade FOREX and that they can be the next over-night millionaire. It could happen but without a complex strategy and the leverage to put the money down it probably won't. Some literally believe they will whip out a few thousand dollars and in a few days they will be wealthy playboys/girls.

9 trading tips!
Criteria for a good trading strategy when charting with Metatrader:
1. As a bare minimum a trader must have rules for entry and exit - possibly re-entry points (add or subtract from a position if your a multi-lot trader). Additionally these
rules can contain what-if scenarios that I call plan B's if the trade doesn't
work as expected but to keep it less complicated you can just firmly stick to stop losses and target points. I neglected to say that part of your exit is either a target price or a stop loss.
I often take a break after a stop loss
to avoid making the same mistake twice.

2. Use at least 1 indicator that provides a strong signal that predicts a reversal point. One of the most important part of a good strategy is the initial signal.

3. The signal indicator should then be confirmed by a confirmation indicator. I actually have a stand alone indicator that I use but I set levels to provide strong signals for it. In other words it doesn't need a confirmation if used properly but most indicators need further confirmation - it's great to have a sharp signal but a sharp signal can be nothing without a confirmation. It goes back to the old carpentry rule - measure twice and cut once.

4. The strategy is not so complex that the chart is filled with clusters of indicators. As a rule of thumb I only will have 3 windowed indicators and 3 on-chart indicators for a total of 6 indicators. I also try to not use indicators that do the same thing or nearly the same thing. I then set up my trading rules for each of the indicators. If I can't think of a rule for a particular indicator I then weigh it's specific use and will likely get rid of it if I can't define a trading rule for it. *I can sometimes break the rule of 6 total indicators if they are luxury indicators that make the chart look better such as pretty candles or enlarged price - in which case they are indicators that don't help to make decisions.

5. Your trading strategy should be tweaked for the particular time-frame(s) you trade such as scalping, daytrading, swing, or long term. For instance: A long term strategy will not have the same stop loss/target price as a scalping strategy - if so something is not right because a 10 pip stop-loss might work for a scalp but must be much deeper for a long term. Finely tweak the trading strategy to a time-frame and don't try to negotiate. If you have a 100 pip stop loss and are taking 10 pip gains something isn't working right.

6. Practice in the strategy tester (Ctrl+R in your trading terminal) and then when you got the strategy down use a demo account with practice money before going live. Almost all Metatrader Brokers have demo accounts (I haven't seen one that hasn't). Take advantage of the demo feature before losing real money.

7. This seems simple but if the trading strategy is not working change it until it does or find a completely different one all together.

8. Master technical analysis. Trading without concrete understanding of the technicals is not very wise. I always notice the easy patterns such as Head & Shoulders - anyone who hasn't isn't taking trading seriously.

9. Not following any one of these tips can be a serious mistake and lead to a short trading career. These rules apply to trading stocks, currency pairs, futures, or options. So follow these tips with concrete discipline and put yourself a step ahead of most of the competition who won't.

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer

Metatrader Criticisms - Finding a forex broker and Charting Considerations

2011-12-31T02:12:00.000-08:00

Your chart vs Broker execution
When you trade there are 2 very important considerations to completing a trade - 1. How well can you chart your trading strategies. 2. How reliable your broker is at filling the trade weather you are entering a trade or exiting.

No matter how bad your broker, it is a must that you properly chart market data. If the data is bad or the charting software doesn't have the capabilities (including tools & indicators) there is no way to make money in the market with such bad charting methods. A chart is like a map. Just imagine Columbus sailing to America without a chart - he couldn't expect to just jump in the ocean without direction (just because he had an expensive ship) or expect to survive without past data. The past data is the key to it all. It wouldn't matter how good his leader was either if he didn't have any charts - he simple would not be able to sail the seas because he was ordered to and had a good ship. It would equal a dead crew and no ship.

But this is trading and nevertheless we still need to get a good fill when we click trade and many brokers have been criticized for delaying trades - this is more prevalent when there is a big event such as the dreaded Non Farm Payrolls or a Fed Bank meeting. During such times of high volatility the market may move so fast the price will be 50 pips or more from where you thought to trade or clicked buy/sell and the market just keeps pulling away from that point. Talk about intense!!!

You know those times you click buy or sell and the order doesn't execute immediately and you end up getting in at a price much different from when you clicked trade. Doesn't it suck? I actually don't get "bad fills" with my broker (GFT) but I do get those re-quotes that sometimes anger me but I usually can get in or out of the market without a problem because I stay in tune with the market. If your trying to get out of a bad trade fast it can be really costly in those moments and getting in won't be easy (imagine everyone trying to get into a ship out of "Dodge" or in a lifeboat from the sinking Titanic).

Since I usually trade the majors the spread isn't too bad so unless there's something crazy going on I usually get a good order fill with my broker and really that's all I personally expect with my own trading strategies - there's lots of opportunities to make a buck in FOREX. I tend to avoid those high volatility situations - but some people prefer to trade them and sometimes their just unavoidable. But there's never going to be a perfect broker for such a situation when everyone is trying to get out or in the market at the same time.

Electronic Market vs Real Life
Just imagine a real life situation where all the farmers go bankrupt because the food commodities crash (ie wheat or corn) and their all trying to sell their farm at the same exact time before the price falls too fast to get their money back on their investment - it's not going to be easy to get rid of the entire farm when the market collapses and in that case there's no such thing as a "good" broker because their not going to take your loss.

Broker Reputation
I'm not defending brokers there are some real crappy ones of course and their in business just like us. But that's were reputation comes in and you will find ample information of people bashing FOREX brokers and if they have been in business for awhile there will be ample information on them. The bad ones will try to save their reputation but if they are dishonest the word will be out. Of course they are going to put out bad words about each other because of how competitive the field is but there's no masking a very bad and dishonest broker.

The way I see it is a broker is like a car dealer - they are all going to lie to some extent but if you know what your doing you are not going to get ripped off easily and there are legitimate brokers that don't want to be accused of being scammers. This is like street smarts where the thief's are going to avoid messing with you because you are harder pray and not worth it for them. It's also where charting and trading strategies come in and why I personally like Metatrader to make my charts because of it's capabilities. If your brokers is relatively legitimate you should be able to operate as long as you are good at charting and have the required tools of the trade available to you.

If your unsure about a broker just google their name and a keyword like scam, complaint, ripoff, or report. You will always find complaints about them but if their reputation is horrible stay away from them. Some complaints will be by traders that just can't trade and blame the broker for their own trading errors. It's better to spend a few hours or even days of time researching brokers rather than losing all your money if they end up to be a scam.

But seriously why Metatrader?
There are some people that say Metatrader sucks or that it is designed by the bucketshops so that you can't make money. Sure it was created by the industry for the industry but I see it this way - they provide an opportunity to make money but on the most part only the good one's will be able to benefit from it because the big horses in the race are always going to win and be at the top of the pack. If a few end up in the middle they aren't going to fret because a large majority will be at the back.

If you really don't trust metatrader terminal to place your trades you can chart in metatrader with a demo (they are always free) and have your trade placed by a separate non-metatrader broker or ecn.

You can make money and there is a way it's just that odds are most people will not be able to find that way or will fall short. In a sense it's gambling in that aspect because the house is always going to come out ahead in the long run. They are not going to make a path to a safe for you to just take money and say here you go just take it but if you can find the correct path it's there. The market is a huge place with lots of slop so don't let anyone tell you there isn't a way and don't believe the way is simple.

Metatrader gives you a chance to chart and if you are good at charting you can become a successful trader providing you have enough money to invest and are able to correctly manage your money. But no amount of skill is going to allow profit from every trade. The market is like a combination of the currents in the ocean and the weather patterns. It's hard to predict like the weather and like the ocean if you get on the wrong end of the current it takes no prisoners. So even if your an expert chartist if you can only buy 1 lot and if that one lot must be right (ie no loss) the trader still stands a good chance of losing because it is very competitive - 1 chance is not enough to win big.

Just having the tool/terminal (ie Metatrader, Tradestation, Metastock, eSignal, any of them) is not enough to beat the top dogs. Watch a NASCAR race and every-time the big winner of the circuit is going to be those guys that got everything into the races including: top equipment, the best crew, the resources, and promoters. They won't be running used tires, run low grade fuel, or hire inexperienced crew members. So just because you have a car it isn't a threat to the top dogs at the highest level of competition because their cars are maxed out to a science and their trading 100's of big lots a day or more. 1 lot traders are not a threat to them even if 1 out of 10 make a living they aren't going to fret one bit. In fact any one trader (an independent trader) is not a threat to them by themselves - the big dogs have a staff working for them 24/7 - full staff of trained professionals. Remember 2 minds working together are better than one and they are a finely tuned machine.

With all that said Metatrader is not a scam in itself or the other trading vessels and you won't be able to beat the top dogs with it - but if your good you can make a living with the tools that are available to everyone willing to find and employ them properly. Trading in itself is a racket like any other racket including sports. Only so many are going to be able to make it but most will not make it professionally. The opportunity is there though and genuine. In my opinion Metatrader is the best thing invented for independent traders to have a chance at becoming professionals.

Let's take a sports analogy
Top traders often take losses but losing is actually part of getting it right.
Losses can be like incomplete passes or sacks for a top trader that takes a small or a moderate loss. Their like a pro QB. The leading QB's don't try to score a td every play but they look for it if there's an opportunity ie the defense is asleep and a receiver is open. If the opportunity is not there a good QB usually doesn't try to force it but rather they will throw the ball away or would rather give up a sack rather than cause a turnover - that's the mentality a pro trader has to have.

Since there is no time limit like in sports this should never happen (ie big turn over) but you often see inexperienced traders blowing up their accounts - it is equivalent to forcing a pass to get a touchdown because the time is running out but the defense intercepts and scores a td the other way - just take the loss if your wrong and if you don't have enough equity you better get some before for you expect to survive the markets. Some will even resort to blaming their brokers for this but in reality they made a bad play and refused to take a sack (a stop loss) or an incomplete pass (no trade in volatility ect.).
If the opportunity is there the trader scores big and makes up for the few small losses that incurred to get to the prime moment which like the weather is hard to predict but like the current will take you with it. You can't blame the broker as a professional trader if you simply fight the trend.

Football Statistic For NFL Champion QB Aaron Rodgers:
For last years Superbowl the winning QB stats for the Superbowl were 24 of 39, 3 TDS, and 0 interceptions. That means he threw the ball away 15 times and out of 39 passes he "only" threw 3 touchdowns in 39 passes - I know 3 is alot for football but think about it - he threw 39 times for only 3 scores. For the year he only threw 11 interceptions which is excellent and was 68% on his pass completions which is very high actually but nevertheless nowhere near 100% and when I went to school 68% on a test score was barely passing. In my Microsoft Certifications Exam I took for programming 68% would be a fail - I got something like 65% my first try but I never went back because of the cost at the time. Rodgers didn't try to throw a touchdown on every play was the key to his success for the year and the Superbowl. QB's that try to make the big play and force it unusually end up losing from throwing interceptions(unless their competition sucks). An interception in trading is like a really big loss where the trader neglects to abide by a stop loss and gets hammered.

An Experienced Traders Trading Advice For The Newbee
My earnest advice is worry less about who your broker is and focus on your charting abilities - finding a good broker is least of your worries. Metatrader provides ample tools and indicators. I'm not just talking about the indicators that come with Metatrader but custom ones that are created by indicator designers (myself being one). You can even hire a programmer to make you a custom indicator if you have a good idea or strategy off of current indicators. Even simple modifications can make an indicator come to life.

If your not prepared to trade - Don't trade - It's simple advice. You stand a better chance of winning the lottery or going to the casino if your unprepared to handle situations that arise. Don't blame the broker or mechanisms because of laziness or radical behavior. An example is a trader places a trade and takes a vacation. I actually knew a guy that did this. He was way ahead on his stock options. He and his wife thought they were on the path to riches and played at the beech. When they got back their account was blown -- And this was a guy I could not beat in chess even if I cheated. This was before the wireless age so he couldn't manage his trade that way. Now he drives a truck for a living - I did too at one tie and in fact that is how I first met him and he told me the story because he noticed I was charting on my laptop many years ago in Florida.

Bottom line is if your not willing to give 100% expect to take serious financial losses. I have a saying and it is this:
"100% is a losing effort in FOREX but if you give a little more you just might make it."
Neal Vanderstelt

Actually you have to go above and beyond the limits to expect to make a trading dream come true.

MT4 vs MT5
Metatrader uses a programming language called MQL4 (for mt4/metatrader 4.0 indicators, ea's, and scripts). I personally write my own indicators and the language is much like the C programming language.

C is a simple linear programming language. MT5(metatrader 5.0) is more object oriented and like c++. For this reason it really hasn't taken off that fast so I speculate it will be a few more years (maybe even 5 yrs some say never) before MT5 really takes off. Because it's object oriented it's a little more difficult to program in and the MT4 programmers have had a hard time in transition. Least to say I don't think all the bugs have been worked out of MT5 yet. Personally I'm sticking to 4 until 5 takes off (if it does).

MT5 does offer more power by adding more object choices to programmers but personally as a programmer I still prefer MT4 simple because it's easy to use. There's a wealth of resouces in MT4 perhaps because MT5 hasn't fully evolved but maybe because the transition is too much of a leap. We shall see.

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer

In regards to AUD-USD

2011-12-29T22:18:00.000-08:00

We are finding out that this range could be a continuation but it has to break up higher which means 1.0200 will have to be taken out. We are finding out that the previous area (circa 1.0042) served as strong support. But it is still in a range. The market has not fully decided - it is just favoring the upside. Take in mind this is end of year price action - be careful - as you can see it has been choppy.

(refresh for charts - adding in 10 minutes - or if from exterior site go to real link
)

http://forexindicators-metrader.blogspot.com/

My indicator "The Last Jedi" caught the major moves in the market even in these tough end of year conditions. It does not repaint. It's not free but you can get further details and purchase here.

The horizontal lines were manually drawn. They are visually chosen levels that serve to filter out the small moves. The concept is to buy crosses above and sell crosses below the horizontal lines.

Here is the same move as above with stronger horizontal filter lines. It captures the 2 major moves while the market consolidates in the weaker ones:

*note that the market was irrational do to the post holiday and end of year trading so the first move in particular would have been harder to jump in on (surely not a loss) just harder to capture maximum profit . Contrary (and without as much risk from the volatility) the next move was completely workable for sizable gains since the price action slowed down a bit and the currency began a smooth trend rather than desperately trying to find support. The Last Jedi was not fooled in either case. The 1st trade was actually feasible it just required more skill and I'm pointing out the differences between the 2 big moves that occurred nearly back to back providing a rare opportunity to win big in both directions.

The Last Jedi

The Last Jedi will not be defeated!

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer

MACD for MT4 Indicator

2011-12-28T20:12:00.000-08:00

Looking for MACD for Metatrader 4.0?

I will try to make a compilation in my spare time since MACD is such an important indicator in forex trading strategies and doing technical analysis. These should work on all brokers (ie fxpro ect) / version 4 trading terminals. If there are any problems leave a message. Some of these have alerts, some are colored + histogram, and some are good for trading divergence. Also I have included similar indicators in the list.

You can download for free here: (just click the slow download - I think the wait is like 20 seconds)

MACD True.mq4 Also called "Real MACD".
MACDmVersion2.mq4
MACD_OsMA_4ColorH_2LVar_mtf.mq4
MACD_ColorHist_Alert 12 26 9 LA .mq4
MACD-4H-v10.mq4
GA-ind.mq4
JMA_MACD.mq4 jurik research?
JMA_CCI.mq4
MACD (DEMA) DiNapoli.mq4
StochasticDiNapoli_v1.mq4

Just add to your indicators folder and restart metatrader.

About
MACD was developed by Gerald Appel in the late 70's. Moving Average Convergence-Divergence (MACD)turns 2 moving averages into a momentum oscillator by subtracting the larger moving average from the shorter moving average. More correctly it is a "price momentum oscillator".

MACD fluctuates above and below the zero line as the moving averages converge, cross and diverge. MACD is unbounded, it is not particularly useful for identifying overbought and oversold levels especially since moving averages don't work that way.

Calculation:
MACD Line(Price Velocity): (12-day EMA - 26-day EMA)
Signal Line: 9-day EMA of MACD Line
MACD Histogram (Price Acceleration): MACD Line - Signal Line

12, 26 and 9 is the typical setting used by traders although they can be changed to give sharper or duller signals.

Broadening Formations

2011-12-28T02:04:00.000-08:00

*Occurs during high volatility.
*A period of great movement but little direction.
*Identified by a series of higher pivot highs and lower pivot lows.
*Considered a rare formation.
*Can be a period of consolidation or reversal.
*Considered difficult to spot.
*False Break-Outs and confusing price action are often prevalent.
*Can be powerful continuation or reversal patterns.

Variations Right Angled, Descending Wedge(falling wedge), Ascending Wedge (rising wedge).

Rules (Falling Wedge):
1. Must be a prior downtrend to reverse.
2. There must be 2 reaction highs from the peak to form the resistance trendline.
3. Similarly there must be 2 reaction lows with the 2nd low lower than the 1st.
4. As the pattern matures the upper and lower trendlines should converge (ie come together). Ideally there will be a 3rd shallower low before breakout to the upside occurs.
5. There is a convincing breakout to the upside through resistance trendline.
6. Volume pickup also occurs at the breakout. Low volume moves are prone to a higher rate of failure.
alternatively watch for a breakout above a previous high.
Unlike symmetrical triangles falling wedges have a definite slope to the downside and a definite bias to the upside.

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer

Linear Regression for Trend Analysis in Trading

2011-12-25T20:27:00.001-08:00

In trading linear regression is the analysis of 2 variables price and time - basically an algorithm. The 2 lines are graphically displayed by an indicator (or can be drawn) - the parallel lines comprise a price channel where price action is prominent. In general more bars will yield a larger channel. The upper trend line of the channel serves as the resistance and the lower trend line serves as support. If there is a center line it serves as an equilibrium point which usually has a slope. All lines will actually slope together at a fixed distance from each other unless the channel resets. The slope depicts the trend direction.

The name "linear" refers to a straight line while "regression" (a statistical term) is the relationship between the mean value of a random variable and the corresponding values of one or more independent variables. In trading we are most concerned with the variables of time and price.

Example of linear regression in statistics:

Background - Historically
Linear regression was the first type of regression analysis to be studied rigorously in statistics (used first in astrology) and it was later incorporated into financial theories. The first form of regression was "The method of least squares" circa 1794 by Carl Friedrich Gauss when he was only 17 or 18 but the method was not published until 1809. Gauss's method was applied to track a newly discovered asteroid called "Ceres". The method is not considered perfect but was a breakthrough in science, mathematics, and statistics. Gauss is ranked as one of history's most influential mathematicians.

It took awhile for regression analysis to be used in trading and even longer to become popular. In the 50's - 60's economist used desk calculators to calculate regressions. Before the 70's it could take up to 24hrs to receive the result from one regression. Today regression analysis is very common in trading and new methods have been developed. Where it once took nearly 24hrs - today a channel can be drawn in a fraction of a second by advanced indicators like the one's I use in mt4.

The principle
Prices usually exceed the channel frames for a short time. If they keep outside of the channel frames for a longer time than usual, it forecasts the possibility of trend turn. The big idea is to define a previous trend, hopefully predict it's trajectory, and establish support and resistance points. If price action stays within an established channel it can be good points of entry or exit at or near the tops and bottoms - additionally if price breaks the channel it can be a possible reversal. In essence it is a probability theory. As with all trading strategies: experiement, set a stop loss, and set a target price. Never float a trade without a plan.

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer

ZUP indicator metatrader

2011-12-22T18:54:00.000-08:00

This is a forex reversal indicator for mt4. I found it while browsing the internet and thought I would share it. It is based off of Gartley patterns that look like a butterfly. The last leg will repaint so use with caution.

Scott Carney published the book "The Harmonic Trader" published in 1999 was based on H.M. Gartley early works of circa 1935 and of course harmonic trading. Carney added Fibonacci ratios to the distances between points.

The pattern starts from x point and has waves a,b,c,d with d being the last leg.
Each wave has an angle / fibonacci ratio. These patterns are similar to M or W type Elliott wave patterns.

according to Carney:
1.27/1.618% is ideal ratio for A-B points.
ideal for C is .618/.786%
ideal for D is 76.8% (he considers this to be vital)

Key Features:
Must have an AB=CD pattern that converges in the same area as the .786 Fibonacci on the XA, and also the 1.27 or 1.618 BC. The B point retracement ideally at .618 of the XA leg.

download ZUP for MT4 (just click slow download - it should be free)

Here is a different version:
ZUP_v86.mq4

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer

Risk On Crude Up, Stocks Up, Shinny Christmas?

2011-12-22T17:32:00.000-08:00

Despite troubles in Europe the market is moving up and risk takers are at the table. The market remained thin with market in holiday mode. I'll remain skeptical until the holidays are over with to see if this bullishness will last.

Crude Oil 1hr trend reflects strong upchannel. "Crude oil rose a fourth day as applications for unemployment benefits in the U.S. decreased to a three-year low and the index of U.S. leading indicators signaled that economic growth will accelerate."

Looking for forex metatrader indicators? look here

By Neal Vanderstelt
Forex Trader, Market Analyst, Trading System Designer

A limited number of my non-repainting indicator

2011-12-03T14:41:00.000-08:00

The Last Jedi will be sold for $1000.00 a piece. It is a small price to pay for such a gem. Click Here For videos, Photos, and purchasing information.

Reversal Patterns Part 1a Inverse Head and Shoulders

2011-12-02T14:36:00.000-08:00

Common Characteristics

1. (Left Shoulder) trading volume increases notably
followed by a minor recovery on which volume runs less
than it did during the days of the final decline and at the bottom.
2. (Head) Another decline carries prices below the bottom
of the left shoulder on which activity shows some increase
(as compared with the preceding recovery) but usually
does not equal the rate attained on the left decline, followed
by another recovery which carries above the Bottom level of the
left shoulder and on which activity may pick up, at any rate
exceed that on the recovery of the left shoulder.
3. (Right Shoulder) A third decline on decidedly less volume than accompanied the
making of either the left shoulder or head which fails to reach the level of the head before another rally starts.
4. An advance on which activity increases notably, which pushes up through the neckline and closes above by an amount approximately equivalent to 3% of the market price, with a conspicuous burst of activity attending this penetration. This is the confirmation or breakout.

(you must click image to enlarge )

The neckline is also the resistance line. If volume is strong through the resistance line it is considered a better break. These patterns appear usually after a notable downtrend and mark the bottom or a short term reversal in a prior trend.

New Indicator To Be Released Soon

2011-12-01T10:24:00.000-08:00

This is a non-repainting indicator. By non-repainting I mean once the current bar has formed the previous bars won't turn from positive to negative or negative to positive to look like it captured every move. The current bar of course repaints because it is calculating. This will be available soon on ebay or buy directly through paypal.

USD-CHF Breakout 2nd time lower After Pullback

2011-11-29T03:15:00.000-08:00

USD-CHF Breakdown in 30 minute TF

2011-11-28T03:50:00.000-08:00

Projection 1 met - Massive call in gold is spot on nearly 1000 pips!

2011-11-21T11:48:00.000-08:00

(see 2 previous post and compare to this one) November 16, 2011 weakness was spotted and projections drawn based on indicators results.

The drawings are mine based on the combination of a couple of indicators that I modified. If your interested in the indicators contact me - leave a message or email me - traderneal@gmail.com or click link below to see purchasing information - includes both .exe and .mt4 files for metatrader 4.0. Simply installation and can be used infinitely on demo charts so you can use a non-metatrader broker to trade and a demo to chart. When demo expires just make a new demo account.

Purchasing information

Includes mt4 indicator used in chart. Triangles were manually drawn to points that the indicator projected by the lines you see. Projections were figured manually as well from areas on confluence. Indicator will be sent as an attachment - you get both the .exe and the .mt4 file. Only works in Metatrader 4.0 at this time. All sales are final- no refunds after indicator is emailed to you. As stated it is a modified indicator which means I made coding modifications which in this case were huge modifications.

That call on gold was nearly 100 full points - not pips! It would be nearly 1000 pips! Any doubts in technical analysis? I didn't read any news what so ever. The call was 100% technical.

Gold heads towards lower projection

2011-11-17T10:34:00.001-08:00

Only modification is I manually drew in lower projection 2 on the chart - the price action speaks for itself.

Gold looks top heavy

2011-11-16T12:02:00.001-08:00

Part 1 Wolfwave Trading Strategy

2011-11-12T04:04:00.000-08:00

Think of patterns or waves if you will as sound octaves for a moment if you will. If you study a sound wave the sound of particular octaves will peak out at some point in the wave and at which point begins the end of the wave. Wolfwaves are a 5 wave strategy (5th wave peak) that work on the principle that after a 5 count wave is complete there is a chance of a sizable reversal.

As aspiring as these patterns seem they can be dangerous because take in mind unlike a predefined musical sound a market trend is an unknown wave until it's finished and a strategy like this is a reversal strategy that can either get you in a good reversal trade but if you're wrong you end up fighting the trend. For those reasons it's important to get confirmation after the 5th wave has set up because you can get destroyed by fighting a trend that has not ended. But with risk comes rewards too - so if you play your cards right - there's great profit potential.

In the wolf wave ideally 1,3,5 wave points are established with timing intervals between moves. The 4th wave should revisit the price range established by waves 1,2. Wave 5 is often (but not always) a false breakout move beyond the 5 wave pattern which is sometimes compared to a rising or falling wedge. The great thing about the wolfwave is you don't have to have a complex understanding of technical analysis.

The principle of the wolfwave is not subjective - in otherwords if done correctly it would be impossible for different traders to come to different conclusions unlike many elliot wave strategies that work from hindsight. When there is a wolfwave signal it is a mathematically valid signal but take in mind you may be fighting a trend (which could be a greater force) and despite theory it may not always work as intended.

There is a variation that is called the 3 indians setup.

Subscribe / follow for future updates.

Bad news out of Italy

2011-11-11T02:28:00.000-08:00

May require a bailout and contagion fears have escalated (see video)

Stocks were rocked this week by Italian bond market yields that rose above 7%. Fears were subdued later in the week but many feel Italy is too big to fail.

Fundamental Analysis vs Technical Analysis vs News Traders

2011-11-01T01:50:00.000-07:00

Survey of trading methods-

The key differences:
Financial Statistics vs Price Data vs Reaction to an event

Technical Trading:

A true Chartist will look for technical breeches in a pattern before going long or short on a trading instrument that is based primarily on price data. By technical breaches I mean breakouts of a pattern, a support or resistance level, or a moving average cross for example. True technical traders see no reason to analyze the news or fundamental event because the chart will reflect the value the market has set. With proper trade management strict Technical Analysis can be very profitable method of managing a trading account.

The real objective in Technical Analysis is not to predict the future direction but to detect a change in the current direction.

One of the greatest errors of traders of any kind is to try to pick a perfect top or bottom which is a guess. A correct diagnosis of the technicals is meant to eliminate the error of top or bottom picking by looking for break-outs of patterns or indicators. Without a breakout nothing has changed.

Another technique that has evolved is by combing several strategies and looking for areas of confluence or where 2 or more indicators agree with each other at a specific point. It isn't very meaningful if there's just one indicator making a change but when several "agree" it can indicate a powerful move. The power of math of confirming a result and it works for traders in the form of finding proper confluence.

You will often here the term holy grail by technical traders. In other words experienced traders are most often trying to convey to other traders that their is no holy grail in technical trading and therefor proper money management has to be employed for technical analysis to work.

Fundamental Trading:
Fundamental analysis is on the most part a long term approach where analysis is done on financial statistics to gauge a big fundamental change such as increasing factory orders or lower GDP.

Another such strategy in Forex is to look for changes in
the currencies benchmark rate cycle. The trader would look to go long when the interest rates enter a series of rate hikes and short when the interest rates start a series of cuts.

Wouldn't it have been nice to short the dollar when rates where first cut from 5.25%? Problem is the dollar didn't go down right away - at least not vs the Euro but it did drop pretty good vs the Yen.

Federal Funds Target Rate Historical Chart

Most analysis for Wall Street is on the fundamental side. In fact I was not allowed to write for the website Seeking Alpha because they said my articles are "too technical". I was considered but they continually told me to make my articles more fundamentally based. I have nothing against them - personally I just couldn't do it. You'll find most trading sites are very much on the fundamental side. I study the fundamentals but I believe all trades should be technically based - fundamental traders are just the opposite.

There is some merit to fundamentals even for one that relies on price data. It is clearly beneficial to know the direction of the rate cycle and if the economy is expanding or contracting. By analyzing fundamental data the economic theme can be gauged to some degree of accuracy but nothing involving money is ever perfect in a world of greed and fear.

News Trading:
A News Trader is different than a fundamental trader although some think both are the same - they are not.

A News Trader will trade a reaction to a piece of data - at least a smart one will wait until after it is released. The news in question might be earnings releases, Non-Farm-Payrolls, Employment Data, or perhaps the GDP.

The gauge is the reaction to the data not weather it was to be perceived as bullish or bearish - this involves some charting so it's not strictly fundamental and some will even combine technical strategies to see if a turning point has occured.

If the reaction to the news is bearish at the time of release the trader will short and inversely go long if the reaction is bullish at the time of release. Some wait a set amount of time like 5 minutes to be sure the market got it right and to filter out any knee-jerk reactions.

So the difference to fundamentals is a fundamentalist will develop an economic theme based on data whereas a news trader "reacts" to how the market perceives the data which many times can go against the long term fundamental picture. The news trader therfore is for fast moves in gerneral.

Summery

Put another way - Fundamental Analysis is political in nature, advanced Technical Analysis is purely mathematical in nature, and News trading is based on perception. All of them can make you money if they are understood thoroughly.

Since Fundamental Analysis is meant for long term strategies it is most effective for large traders and it is political since any policy change is going to effect the fundamental nature of the market. Policies are what control the financial markets. Technical Analysis is very mathematical in nature and is one that is based on mathematical skill rather than economic knowledge. Technical Analysis can be implemented by smaller traders with tight stop losses - it allows someone with enough skill to work their way up the ladder if they are good enough. News is perception based and trading it is meant for fast traders.

In any case it is at least good to understand the different methods markets are gauged and how to apply them before one makes any kind of financial decision.

Japan Intervenes to Weaken Yen

2011-10-30T23:48:00.000-07:00

Yetsenga Says Yen Intervention Effect Will Be Limited
Fink Says Yen Intervention Move to Shore Up Sentiment

Since September 2010, Japan has now intervened three times on its own and once jointly with other G7 nations to weaken the yen.

Peter Schiff Debates With Wall Street Occupiers

2011-10-28T16:57:00.000-07:00

In an attempt to reason with Wallstreet protestors a notable economist that predicted the financial crisis tries to redirect their angry at policy makers.

Did Economist Peter Schiff Make More Sense Than The WallStreet Protestor?

CrossTalk: Euro Haircut

2011-10-28T13:04:00.000-07:00

3 weeks ago a date was set by French Prime Minister Nicolas Sarkozy to sort out Greek debt resolutions. After 3days of marathon talks Greek debt was slashed by 50% (equivalent of €100 billion) and debt-to-gdp is to be reduced to 120% by 2020. A debt-to-gdp ratio over 100% is a clear sign a country's economy is not working so a reduction to 120% is not exactly a goal for a stable nation that has an upper hand on the situation. Current Greek debt-to-gdp is ruffly 160%. Greece has also adopted a number of austerity packages since 2010 which have resulted in protest including physical clashes.

Quotes:
"when is a deal really a deal?"
"who's going to pay for the bailout: "
"It's about as voluntary as sticking a gun to someone's head and making them agree to it"
"it is a terrible program"
"this is like an Irish marriage where the preist tells the couple to stick it out no matter how bad it gets"
"wouldn't it be better to just have Greece leave the Eurozone"
"as for Greece or any other country leaving the Euro - I don't think this would be a good idea... for a simple reason none of the long term benefits for being in the Euro are null and void"
"It's as though we have a case of gangrene in the head of a patient and the cure is to decapitate him"
"we have a system where growth has been halted - how are we going to make these gdp target projections"
"where is the growth to pay for these future debts!"
"proponents of austerity say you can not spend your way our of a debt crisis... well one thing is you can't cut your way out of a debt crisis. You have to generate growth and growth requires investment."

"we need real banking reform"
"the moral hazard argument is obviously there - if they're wrong the tax payer has to pick up the bill"
"if your being honest not much has been reformed in the past 3 yrs"
"The fear is if Germany is going to become the United States of Europe"
"frankly I don't think the American model is the right one"

Quest:
Henning Meyer
Jeffery Sommers
Marshall Auerback

Will Greek Haircut (50% debt reduction) be enough to save Greece from a future default on debt?

Eurozone Debt Issues Overshadow Technicals

2011-10-27T18:21:00.000-07:00

This video was way off the mark but I'll post it for analysis because there is still some valid points.

Quotes:
"technical outlook is still for a bearish euro"
"the market has been in a range and is going to have to breakout in one way or the other"
"alot of central bankers are in recession mode / forecasting recession, growth is still anemic"
"QE1 or QE2 Did not work it was the bazooka for the US and was massive compared to EFSF"
"US situation was different, primarily to avoid deflation and to stimulate employment vs the Eurozone trying to prevent default and reduce debt but it seems like their just throwing money away"
"the price of the Euro by year end will highly depend if there is QE3 in the US"

The next FOMC meeting is scheduled for Nov. 1-2

Will there be a QE3 before the FOMC benchmark rates are raised?

If Greece Default.... Is US Next?

2011-10-27T15:41:00.000-07:00

Edward Harrison (founder of Credit Writedowns) says a default would be good for the US if there's no contagion.

Quotes:
"bailout fund is not credible (the EFSF)"
"If there is a Greek default what will the impact be: creditors of Greece - primarily banks / Greek banks - insurance companies mostly throughout Europe especially France and Germany"
"Greece would actually have more fiscal space if they defaulted because they have to take on massive austerity to make ends meet. A default would mean less austerity."
"Can Obama Really Change the US economy with an Executive Order: What you really need to see is credit write downs - Really were sort of stuck here - there's no systemic solution the problem"

Final Attempt To Save Euro Concluded?

2011-10-27T14:08:00.000-07:00

Greek 50% haircut of debt but has it solved the Euro problem? Johann Van Overtveldt says it's just buying time and a similar action will have to happen to Portugal. Under the agreement Greece will be allowed to hold debt-to-gdp well above 100% (target is 120% from the current 160%) with a deadline of 2020 which is not a major achievement by any means.

Van Overtveldt said the recession will likely deepen for Greece because they will have to cut expenditures to increase taxes and Greece will be back on the Euro negotiation tables within 6 months.

Quotes:
"not a structural resolution"
"they are afraid to bite the bullet"
"there is only 1 solution for Greece - to leave the Eurozone"
"there is a huge problem brewing in Portugal"

Johan Van Overtveldt is in charge of Belgium's leading financial magazine and concidered a distinguished Belgian economist.

------
Will Europe's 'big bazooka' hit its target? Post-game analysis for Euro summit:

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ISDA's Geen Says Greek Accord Unlikely to Trigger CDS

Obama is a cockroach!!!

2011-10-26T22:12:00.000-07:00

This protest has been going on forever and he has done nothing to quell the situation in a diplomatic way. Not that the protestors are taking hostages but this is similar to when Jimmy Carter was president and hostages were held for over a year (444 days.) while Carter road it out. To add insult to injury the hostages were released the day Reagan was inaugurated.

Obama's budget plan is also just do nothing. Obama should go down as the worst president in the history of the United States and I am shocked that he actually has the nerve to say he is going to run for a 2nd term.

Oakland has a very thick black community that is strongly against police violence yet Obama has said nothing about the misuse of force against the protestors. Yet Obama made the claims about foreign governments in Egypt regarding police abuses so you would think he would be steaming angry about this being from his "own" country. The Oakland police severely injured at least one protestor that was a 2 time Iraq war vet and seriously injured many others. His skull is fractured and was admitted to the hospital in critical condition. The vet was shot not once but twice. While he was laying on the ground other protestors ran back to drag him out of danger and they shot him again with flash granades which severely injured him.

Like a cockroach on every issue Obama just stays in the shadows out of sight and out of mind doing nothing while crisis erupts.

Breaking News: NY police begin arresting protesters

2011-10-26T21:49:00.001-07:00

New York police officers started arresting Occupy Wall Street demonstrators who took to the streets Wednesday to decry a crackdown against fellow protesters in Oakland, California, RT correspondents reported.

Protesters are taking to side streets, throwing construction barricades and trash bags into the street to slow down the police in pursuit.

Economist Yanis Varoufakis: "Greek banks already bankrupt"

2011-10-26T21:18:00.001-07:00

war-crimes by Oakland Police - 3rd world tactics

2011-10-26T11:41:00.000-07:00

Police use cowardly tactics on unarmed protestors. There were allegedly some bottle thrown in today's protest by in the previous night Oakland police assaulted peaceful protestor ripping down tents and declaring their protest as an "illegal protest". When I heard the comment I was shocked because it comes right out of the movie 1984.

The Oakland police didn't go after the so called bottle throwers instead they bombarded peaceful protestors that did not have anything to do with the rebel rousers. Caught on video was a group being flash grenaded while trying to carry off an injured protestor which was a woman. This reminded me of a war crime like act.

The Oakland police also attacked a person in a wheelchair and severely injured many peaceful protestors. I never tought I would live to see the day my government would stoop this low.

EUR-USD Batlle of Support and Resistance

2011-10-24T08:05:00.001-07:00

1hr chart - click to expand:

There Will Be A 2nd EFSF Meeting on Wednesday

2011-10-23T10:37:00.001-07:00

And will bring all 27 members back into the picture to finalize a response to the debt crisis.

EU leaders concluded on Sunday agreeing on plans to boost the firepower of the eurozone rescue fund - the European Financial Stability Facility (EFSF) - and backed plans to recapitalize banks who would be hit by a massive writedown of Greek debt.

Gold Day Chart:

Gold has been struggling to stay in an uptrend. It still is in an uptrend but it looks heavy to me. Last time I said that it rocketed higher and blew through resistance. I will be watching gold pattern closely this week and look for any confirmations of weakness.

free mt4 indicators

2011-10-21T07:00:00.000-07:00

Looking for a few free indicators. Here's a couple I highly recommend. It's an alternative Ichimoku system and bar trend. It can be a good primer for a trading system. You can use the standard Ichimoku that comes with metatrader but this is much more appealing than the standard Ichimoku Kinko Hyo and there is a different and I feel more accurate signals. By the way it works if you put both the standard and the modified together on chart - try it for comparison.

Download mt4 indicators ichimoku & bar trend
click "slow download" to download for free and follow instructions.

Euro trying to break out of range on "optimism"

2011-10-21T06:35:00.001-07:00

EFSF bailout fund has been a major topic of concern. Germany and France continue to discuss ways to handle the European debt situations with a summit on Sunday and possibly another one on Wednesday. ECB has also talked about the possibility of slashing rates last meeting do to double-dip recession.

h1 EUR-USD chart:

Euro breaks above 1598 ema (fibonacci moving average) in a jagged thrust higher.

Are the Bulls Really in control of the market?

2011-10-15T00:14:00.000-07:00

It's a tough question right now especially with all the news reporting how strong stocks suddenly are - it's hard to develop a bearish theme on the news. We will have to watch the charts closely in the coming weeks to see if technical support holds and what reaction the markets have to technical resistance should they continue to march forward.

While the markets march higher due to injections the real economy remains recessionary with high unemployment which currently under-reflects the real picture. While some banks are insolvent, low rates do not reflect the real market risk so banks that have money won't lend or are very selective about it. Low rates actually crimp credit after markets fundamentally crash.

What does insolvency mean?
Insolvency is when a business has insufficient assets to cover liabilities.

According to Wikipedia the definition of Recession: In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way. Production, as measured by gross domestic product (GDP), employment, investment spending, capacity utilization, household incomes, business profits, and inflation all fall, while bankruptcies and the unemployment rate rise.

Overall I think the current economic picture defines a recession and in looking at the banks many or insolvent or unwilling to loan money into a recessionary scenario where there are more risk. Banks in general are in the business to make money - although many are biting the bullet thanks to bank deregulation. However we can't get too caught up in fundamentals as traders or we won't make money or even survive if we get too caught up in the news, financial reports, or the fundamentals. Although it is wise to properly read the financial picture but also understand all the factors in play including artificial manipulation by the government and banks in the form of injections and unconventional monetary policies such as Operation Twist, Quantitative Easing, Bailouts of any nature, fraud, ect.

In fact the market makers use the news and fundamental picture to sway the emotions of competition - which is you if your a trader - in tougher markets this becomes more evident. Sometimes the fundamentals can not be fought but most of the time enough market manipulation will boost almost any market in the short term to medium term. So if your a small trader you will not be able to win that game.

Price action and technical analysis are our only friends in the game.

Dow Jones Industrial DJI30 H1 (1hr chart):

DJI30 Day Chart Part1:

DJI30 Day Chat Part2:

DJI30 Day Chat Part3:

Europe Pledges To Fix Banks Not Good Enough

2011-10-13T03:06:00.000-07:00

To keep the EUR-USD above 1.3800 and the market turned back to risk aversion in the European trading session. European Commission President laid out plans to "solve" the European Debt Crisis. Although several methods to deal with the debt burdens were laid out - financial analyst criticized the plan as being too vague and lacking detail.

Slovakia has still not gave the thumbs up on the expansion of the EFSF but said a final decision would likely happen on Friday. Without the vote the expansion plan to save the banks will fail.

I heard traders in chat rooms talk about the debt crisis being unsolvable in the long-term and some say the Euro banks involved are insolvent. Needless to say the Euro hasn't completely collapsed but is a dangerous game of cat and mouse (The "cat" is unable to secure a definitive victory over the "mouse", who despite not being able to defeat the cat, is able to avoid capture).

EUR-USD Trade Outlook: Position mildly bearish. Trade strategy: Short with stop loss at 1.3832 Target 1.3572. If stop loss triggered think will go to at least 1.4000.

Dow Jones Industrial (DJI30 - Big Cap Stocks)

2011-10-12T02:10:00.000-07:00

In technical 1hr uptrend with higher lows and higher highs. Until this pattern is broken it would be logical to stay bullish even though fundamentally things seem bearish. At least until the pattern breaks. There's no way to define a perfect top in emotional markets.

X's mark where 1 hours lows are.

EUR-USD, Major Equities, Gold breakout

2011-10-12T01:21:00.000-07:00

through previous short-term highs. Short-term Slovakia fears lifted? Short term surge although EFSF issue is not solved yet but there has been a huge sell off across the board of the USD.

EUR-USD H1 Chart:

DAX30 H1 Chart:

Gold H1 Chart:

DJI30 (dow jones industrial) H1 Chart:

AUD/USD H1 Chart:

USD/CAD H1 Chart:

Alcoa 3rd Quarter Earnings Disappointing

2011-10-11T22:17:00.000-07:00

Alcoa is the 1st major US corporation to report 3rd Quarter Earnings. Profits were well below what Wallstreet expected. Alcoa blamed lower aluminum prices, weakness in Europe, and seasonal factors.

CEO Klaus Kleinfeld said "With the exemption of Europe, we saw growth in our end markets, though at a slower rate than in the first half, as confidence in the global recovery faded "

Analyst had lowered earnings forecast for Alcoa to 24 cents per share and sales of 6.23 billion due to falling aluminum prices. Revenue increased 21% from year-over-year to 6.42 billion but was lower than the 6.59 billion reported from the 2nd quarter prior to this report.

Alcoa did report higher than adjusted forecast but earnings fell short of expectations.

Alcoa stated aluminum prices were 5% below 2nd quarter prices. Earnings were released after Tuesdays US market close so it did not sway the US session but Alcoa traded lower in after hrs as did the equities.

Alcoa shares are down 33% this year making Alcoa the 3rd worse performing stock in the Dow Jones Industrial stock market index.

DJI H1 Chart:

The Dow Jones Industrial stayed in a 1-hour uptrend after dipping to 55-ema (a fibonacci based moving average). Markets stayed on edge in regards to the EFSF vote out of Slovakia that could shake the global markets.

Slovakia Rejects EFSF Bailout Fund

2011-10-11T21:09:00.000-07:00

Slovakia the last of the 17-member bloc to vote rejected the EFSF expansion proposal but the finance minister said it will likely be approved later in the week in a 2nd voting. Slovakia is the 2nd poorest member and has the lowest average salaries in the Eurozone.

Richard Sulik (House Speaker, party leader, and opponent to the expansion) previously said "How am I supposed to explain to people that they are going to have to pay a higher value-added tax (VAT) so that Greeks can get pensions three times as high as the ones in Slovakia?"

Sulik also said "The EFSF is going to massively hurt Slovakia in favor of bailouts of foreign banks,".

US Dollar finds ground / short-term rally in Asia Session

2011-10-11T02:23:00.000-07:00

But US Equity futures slipped. European stocks fell ahead of a key vote by Slovakia to expand the EFSF bailout fund. 3rd quarter Earnings releases will be the key focus in US session. Alcoa (AA) will be the 1st major US corporation to report earnings for Q3 on Tuesday. Expectations for Alcoa are down 15.7 percent from 3 months ago. Later in the week on Thursday Google will report.

Slovakia is the last of the 17-member bloc to vote on the EFSF expanision - if they say no it doesn't get approved so the markets are staying cautious which is EURO negative. Slovakia Prime Minister threatened to resign if an agreement isn't made today to expand the bailout fund. The vote is not due until the end of October.

Gold slipped due to risk aversion even with India's wedding festival which starts in late October and ends in December. This usually prompts a gold buying spree for the worshiped metal but in this case commodities were weak bringing down Gold as well from short-term highs. India is the #1 consumer of gold and accounts for 1/5 of gold demand overall.

Gold H1 Chart:

Gold hit resistance at the 377 ema - A fibonacci based moving average but was still holding on to higher lows.

Wallstreet Protestors - Occupy Wall Street have good reason to be angry

2011-10-10T06:36:00.000-07:00

Wallstreet criminals pump markets to be dumped again - it won't be long before currency is worthless. It won't matter how much you make in this market (if you make anything) because it won't be worth anything in the near future - if they even make it through this year.

By all rights this market should be collapsing to allow for a natural correction. Stocks are way overvalued and the US dollar and Euro are doomed because of all the artificial manipulation. No amount of stimulus is going to solve the debt situation in the US or Europe. Creating more debt to fight debt that is already out of control never works.

I wrote about this over 2 yrs ago and everyday it is becoming more of a reality. The American dream has been destroyed and a new corporatism put in place with the complete destruction of the middle class and freedom that was once a staple of the United States.

There will be no housing market recovery without jobs. Since there's no hope of a job recovery because all the jobs were outsourced away there could not possibly be a recovery based on jobs. Why would people work when the government just creates more money so more cheap goods can be purchased from China, Mexico, or India (anywhere but here)... Eventually this situation comes to a biter end.

The construction industry which provided many jobs has also been destroyed. No reason to build new houses with no jobs and so many homes available that have been drastically reduced from once soaring values (some people actually think those days will come back). So basically the core of jobs has been destroyed - even jobs that have to be done here such as building a house are gone.

Unlike people that lost their job & homes corporations like Goldman Sachs or Pfizer get massive bail outs - and tax payers get the bill. Despite all these bailout no jobs have been created for civilians.

The Federal Reserve Bank meanwhile spent approximately 16 trillion between 2007-2010 according to the Ron Paul audit. The sick thing is not only is this more than the combined national debt much of the money went to foreign countries. Yes that's right they spent more than the combined national debt in only 3yrs time. All Bernanke can say is I don't know where the money went - not good enough Ben! You are not only liable for that money - you are responsible for much of the destruction of the United States financial system.

Americans were promised hope and change after Bush left power but all Obama has brought is an extension of the Bush nightmare and new debt. No wonder young people are marching down the streets in anger. They have good reason to be angry when their own government sold them out. It will just get uglier though - the government will just enforce martial law and use this as an opportunity to expand the government more.

Law Enforcement doesn't care - they will just collect more overtime. Guess who gets the bill - the tax payer. Little do they know the money they make now will be valueless in the near future for the polices they are protecting. You might live high now - but you will come down - like everyone else that has gotten high off of this artificial stimulus and fraud. The clock is ticking and the pool is overflowing with debt.

Is it really the responsibility of the people when the government created the debt situation by repealing acts such as Glass Steagall Act and allowing the central bank to push rates so artificially low? The corrupt WallStreet controlled government knew exactly what it was doing all along and they never stepped in when things got out of hand.

Will Greece Default? If So When? In October, Before The End Of The 2011, When The Euro Defaults. Video:

2011-10-08T00:26:00.000-07:00

If Greece does default the question is when and what happens to the Euro afterwords? Investors are very nervous over this and many market strategist and economist feel Greece will default from between anytime now and then next 5yrs (or even longer) but they will default according to the consensus. Some even think Greece will default this month at the height of the situation but others feel they will be propped up before defaulting because it would be a bad time for it to happen while the economy is struggling or possibly it will be avoided at all cost - but I highly doubt Greece it that important - they are just important now do to the current global economic situation.

The ECB would like to avoid a default as it could cause a domino effect where other Euro members would follow suit. (The other "Pig States")Italy, Spain, Ireland, Portugal could follow Greece's lead and cause the Euro to cease to exist as a whole. The Pig State's all have their own sovereign debt issues so the matter is a serious one.

Italy and Spain were also downgraded by Fitch on Friday. On Sunday Germany and France disagreed about how to handle the situation but both seem to agree that a default would have catastrophic consequences for the Euro-zone.

France wants to tap into the EFSF rescue fund to recapitalize its own banks - Germany insisted that the fund should only be used a last resort when all national funds have been exhausted.

Needless to say there will be alot of topics to debate come the EU summit meeting on Oct.17-18 like how to kick the can, how far to kick the can - I'm being sarcastic but unfortunately that's all their doing.

Rumors have even popped up that Germany's Bundesbank will go back to a national currency (for example - the Deutschmark). Many German's have had a hard time accepting the Euro and would actually rather go back to a national currency which they believe would be more stable. Something that will likely not happen overnight despite the rumors and talk.

Despite all the negative news an IMF Official (Poul Thomsen) reported Greece is making good progress. "There has been good progress but there are still important issues to be discussed. We're not quite there yet. The review will hopefully conclude soon." Greek Finance Minister (Evangelos Venizelos) said the country had enough cash to make it to mid-November.

At the same time Greece is under fire so too is Bernanke. Bernanke makes bold statement that the "economy is faltering" and pressures congress to act. It would seem that everyone is begging for money from Athens to Washington, DC but the credit line is running dry.

Crude Oil Threatens to go Back into The $80's

2011-10-06T00:08:00.000-07:00

Because of a supply drop according to US Inventories.

Crude Oil H1 Chart:

Brent Crude H1 Chart:

Despite the gains some analyst remained bearish because of the overall economic outlook and the Greece Crisis. Nevertheless the market preemptively seen it as bullish that European finance ministers were examining ways to beef up the banks balance sheets.

Crude Oil was fast to rise on the news making gains of 5% while Brent was up by 3%.

Euro-Zone Retail Sales (YOY-AUG) Surprise Forcast Come In Worse Than Expected

2011-10-05T22:37:00.000-07:00

At -1.0 vs 0.7 ahead of ECB Rate Decision. The Euro did not have too much of a reaction and stayed in a congested rebound but has set up short-term resistance 1.3357.

EUR-USD H1 Chart:

Although no rate change is expected the IMF is pressuring the ECB to slash rates because the debt situation threatened a 2nd round of recession. There are some that think the ECB should cut rates to 1.0% from the current 1.5%. Trichet will be reluctant to make such a move with inflation above the ECB's target of 2.0% although there is a remote possiblity the European Central Bank will cut rates by 25 basis points from 1.50% to 1.25%. The bigger issue at this point seems to be the Greek situation so they will likely take a wait and see approach with Greece and then gauge the economic situation. Unless there are strong economic figures the Greece situation and sovereign debt crisis (in regards to defaults and ability to pay) will take the center stage.

Pound Moving Lower Before BOE Meeting

2011-10-05T22:28:00.000-07:00

GBP-USD H1 Chart:

UK Pound sets up a wall of resistance in H1 time-frame. Will the previous low hold is the question?

Dollar weakens in short-time frame, Equities trying to find footing

2011-10-05T00:52:00.000-07:00

Dow Jones DJI30 Daily Chart:

Dow Jones DJI30 H1 Chart:

Today's Market Notes Oct. 04, 2011

2011-10-04T13:56:00.000-07:00

*Report in the Financial Times that EU ministers examining
ways of coordinating recapitalizations of financial institutions
lift some gloom off of market.

*Greece slipped closer to default.

*Eurozone ministers meeting over Greece crisis to see if Greece qualifies for more emergency funding. A final decisions on whether to pay out the next 8 billion Euros in aid on October 13th was canceled and EU/IMF inspectors will have several weeks to report back on Athens budget cuts. Ministers decided that that Greece could wait until mid-November.

*Greece has only enough money to pay pensions, salaries, and bondholders through mid-November says the finance minister. Greece is facing bankruptcy within weeks.

*Bernanke said the US economy is close to faltering and a disorderly default by Greece would have a serious impact. He went on to say that "Unless the European situation is brought under control, it could be a much more serious situation for the US economy". Bernanke also stated that the most significant factor for depressing consumer confidence was the poor job market performance. Bernanke did not tell us anything we didn't already know basically.

*Bernanke made headlines and boosted markets by stating the FED is prepared to take further steps to support the US economy but failed to define what those steps are.

*What could Bernanke do - is he just jawboning? Bernanke said he could use more tools but what exactly does that mean with every option seemingly exhausted? The FED could for example do Forward Guidance on the balance sheet, Increasing the balance sheet, Provide funds directly to the Private Sector. So there's still things they can do that are left in the tool-box but the situation is unusual. They might try to wait it out at least until November to see what happens with Greece and if the global picture stabilizes they might try to wait it out even longer to see if a technical recovery can take hold.

*Crude Oil staying in the 70's.

Michael Pento of Euro Pacific Capital admits he was wrong about being so bearish on bonds but says he will never buy Treasuries - "It is the biggest bubble the planet earth has ever seen..." citing the time to buy treasuries is when real interest rates are very high and inflation is falling. He was also right about gold. He said you have to be bullish on gold when the Fed is stuck at zero for at least another 2 yrs -- which guarantees real interest rates will be negative for a very long time.

Last month:
*No new jobs in August in US. 1st time since Feb. 1945.
*US postal service might end overnight delivery to stay in business.

****Under Editing****

Looks like my simple but effective analysis was spot on.

2011-10-04T00:55:00.000-07:00

Most try to go for the most complicated ideas when trading. If you had listened I made you money using a very simple approach. As you can see the contagion has spread. If you went the other way chances are if you were not religious before you are on your knees now praying that the market will correct or contemplating jumping off a building - don't do that there's lot's more things to live for than money and materialism. But if your going to jump off a building, just because you lost money - while in perfectly good health - I don't feel sorry for you.

Forget god (sometimes you have to even if you believe), forget money, get in touch with your inner spirituality. And above all stop trying to catch a bottom or a top - it is the most common error in trading. Most traders think they can do this but trying to find the absolute bottom or top is virtually impossible.

Yes you see I show you the simple and the simple stuff can work but I also know complicated tricks as well but if you don't first understand the simple stuff the complicated stuff won't do you any good. Friend if you want to make money get in touch with yourself and fine tune your emotions. The market is tuned to manipulate your emotions of greed and fear. They will keep you chasing your greed and running from your fear.

This speech from the movie trading places says it all:
"Think big, think positive.
Never show any sign of weakness.
Always go for the throat. Buy low, sell high.
Fear, that's the other guy's problem.
Nothing can prepare you for the unbridled
carnage you are about to witness.
The Super Bowl, the World Series. Pressure? Here it's kill or be killed. Make no friends and take no prisoners. One minute you're up half a million,
the next, boom. Your kids don't go to college
and you've lost your Bentley."

If I helped you - help me by buying my trading system to the right - just click on the picture. Not only will the system help you - your karma will improve and it is a small price to pay for the advice and tools I have given to you from my own experience.

The most formidable weapon though is you and having absolute control of your emotions which with discipline cancels out greed and fear. This market is only for the most disciplined traders that have the patients not to jump on every move but able to react to technical breaches.

Big day of losses - Video Report Dow Jones Industrial plunges - Buy the dips?

2011-10-03T14:53:00.000-07:00

Greek contagion spreads, Chinese woes, Lack of QE brings hyperinflated markets to reality - Day of Reckoning. by TraderNeal

Will Be Posting Charts Later

2011-10-02T22:48:00.001-07:00

Stay tuned. As much as I want to make a post now in these wild west like markets - I have to manage my own trades. I'll try to post a chart in US session and perhaps some market analysis.

I suspect this bloodbath in Asia will hold up in US session. I'll post some charts in US session to try to figure it out. If there's a major slide I might wait until US close.

**Update** sorry didn't have time to post charts in US session but I still might later. please stay tuned - I just made a video which is being updated and will be available shortly on this blog. It is actualy easier to make a video than to do chart analysis and post charts.

Bernanke can't see the forest through the trees, Europe losing the battle with Greece

2011-09-30T11:05:00.000-07:00

Bad News Banks (or is it bears - both in this case):
Banks led the sell off today which was very much fitting do to the unstable scenario they have created. Of course this issue is much deeper thanks to former President Clinton who signed the repeal of the Glass Steagall Act which unregulated banks while in office. The act was founded by the FDIC and the original law was an amendment to the Federal Reserve Act but later was withdrawn.

The Banking Reforms drawn up in Glass Steagall (in short) forced banks to be either an investment bank (ie brokerages & hedgefunds) or commercial banks (ie checking & savings banks). The repeal allowed commercial banks to gamble with customers money and many feel it caused a deeper crisis in 2007 and maybe partially if not directly the cause of it. Don't blame this repeal just on the Democrats (although Obama supports it's repeal too) the Republicans also supported it's repeal on the most part.

Even though I'm a trader I don't support it's repeal because it sets up a dangerous environment where you have banks like Wells Fargo and Bank of America gambling with people's deposits. In my opinion the 2nd part of the GS act was created to prevent a 1929 like depression and by repealing Clinton (with support of Republicans) insured there will be another. Contrary to what some traders think there are many more opportunities to making trading profit in bull markets rather than bears (although a sharp trader can still make a fortune but there's less opportunity when the market shrinks).

Greece in the news:
Over in Europe, Finance Minister Evangelos Venizelos had discussed plans for an orderly Greek default with the IMF last week (although the reports were played down - it is still on the table). The question many are wondering has to do with if Greece will survive it's debt or will Greece survive the Euro? Unfortunately it's a difficult problem because although Greece has created alot of it's on debt through bad business decisions it is also being punished by having to be in the Euro which policies are actually set to benefit the industrial countries (namely France and Germany).

The fear of a member default is the domino effect. In other words if one member defaults it cause other weak members such as Ireland, Portugal, Italy, and Spain to consider following Greece's lead. In such a case, a default could be disastrous for the Euro and it's very survival at stake even those Greece alone would not be a loss to the Euro because it make up only a very small fraction of it and barely 3% in terms of GDP.

So the Euro could survive the loss of Greece but it could cause contagion to spread at a time when a recovery has not taking foot. This fear should not be underestimated. Markets are not just statistics but emotions - that's why the real value is never reflected by the market. The combination of emotion, manipulation, and fundamental worth gives you the financial markets value.

Some economist estimate that the Euro is overvalued by as much as 25%. So just imagine if fear took over the market and there was a 50% change in the other direction if this figure is correct. Or even if it was 10% and it took a 20% swing in the other direction. In my opinion no amount of support from the Euro will be able to save Greece. It only a matter of time before the day of reckoning occurs.

But the question still remains is the US dollar more stable with a man like Bernanke in charge who can't see the forest through the trees and is behind the curve everytime.

It looks like nothing they can do can stop the financial avalanche, Dow Jones Panic Selling Extended From Global Worries and Gloomy Outlook

2011-09-22T03:37:00.000-07:00

Market Update:
Bernanke yesterday stumbled and bumbled new unconventional proposals to stimulate the market but nothing stopped markets from dipping. The Feds Policies underscore "Debt based economy" that is so prominent in the United States. As I type there is a huge sell off in equity futures and it looks like the market will open up as a black Thursday but we'll have to see how it closes and if they can further manipulate the markets back higher but so far gloom is today's picture. Operation Twist they are calling it not QE3 so far is a big flop.

Meanwhile The Aussie dollar has broken through parity and it looks like there is a complete lack of appetite in the markets. Gold, oil, equities all retracing in tandem (to varying degrees).

"Operation Twist" is a 400 billion dollar program that will last through June 2011. The FED also pointed to significant downside risk to the economic outlook. Makes you wonder what good injections will do with "downside risk" - perhaps this is for a "soft landing" but at a cost of compounding debts that the Federal Reserve Bank keeps racking up for the public in an already debt laden economy that currently looks to have no footing for Bernanke & the Fed's big gamble.

In Europe fear spread over continued Greece worries and the possibility that they could still run out of money despite the previous bailouts. There is still a chance Greece could default or leave the Euro all together providing worries that the Euro is not stable. Recessionary worries also shook global markets especially after the US Feds gloomy forecast. Tough times have hit Japan that have been further amplified by a typhoon that struck yesterday won't make Japan money handlers happy. Not long after Japan was then hit by a 5.3 earthquake (as if Fukushima disaster earlier this year wasn't enough to depress Japan). All together the sentiment has been on the gloomy side causing strong selling.

I've dubbed this era of bad fortune "The Era Of The Black Swan" which started with the 911 disaster. I do not know when the Black Swan will stop it's attacks. A Black Swan event is a surprise (to the observer) and has a major impact. After the fact, the event is rationalized by hindsight. 911, Katrina, The War On Terror, Fukishima, the double dip recession, are all Black Swans because they are events that are hard to predict and have great consequences. Also these events seem to last longer than one would think and seem to escalate instead of ending as one would expect. When the Black Swans stop landing there will be a real recovery but until then it will be an era of unpredictability and hardship. I'm hoping the era will end soon but as long as I sense the Black Swan I will be on the defensive.

The AUD/USD (otherwise known as the "Aussie Dollar") has broken through not only parity but the key moving average that the big traders watch "the 200 ema" in the daily timeframe. All risk appetite looks to be sucked out of the market with
"pessimistic outlook" being the dominate force and lack of hope of a realistic global recovery.

This is either the buy of the year or the "risk markets" (equities ect) are clearly in a downtrend or what is said to be the straw that broke the camels back perhaps (an ancient proverb).

Bernanke is supposedly an "expert" (as he so describes himself) in the great depression but if you ask me he has no more expertise than Micky Mouse and is partially to blame for the current ongoing crisis if not a key factor for the housing crash because he was behind the curve with his rate policy and yes his lack of understanding of economic cycles. Oh well you can't complain if your a trader - you just have to go with the flow which in this case and point in time implies a bearish outlook. Take what you can get and stay out of long term trades is what I will be doing. We don't have to believe their lies to profit from them.
-TraderNeal

---extra---today's market notes:

*In economics, things take a lot longer to happen than you think they will, and then they happen faster than you thought they could.
*Stocks sell-off strong - Dow Jones down by over 400 points in heavy panic selling
*US 30yr Bond Yield biggest 2-day drop since 2008
*Ben Bernanke says he will shift the Federal Reserves holdings from short to long term spurring "Operation Twist" which seems to be a positive for the USD and a negative for stocks.
*Earlier this month the ECB's Stark said he will leave the central bank "for personal reasons".
*Tuesdays ZEW report signaled that Germany (Europe's biggest economy) is at risk of contracting.
*The looming threat of default by Greece combined with other factors (slowing economy, inadequate size of the EFSF, Italy's debt situation) has spread fear through Europe underlining the case for a weaker Euro dollar and risk aversion.
*ECB's Stark shakes the markets with commments over "the Euro's existance" as a currency because of out of control spending and excessive debt. His comments combined with Mr. Bernanke's painted a very gloomy picture causing the massive sell off today. Implications are indicating that longer term gloom could be the theme for the rest of the year but I'm just guessing. Unless the markets find support fast it will most likely be the case.

Is Bernanke Hinting QE3? Jacksonhole Speech

2011-08-27T03:52:00.000-07:00

The US Federal Reserve Bank Chairman didn't come out and say there will be a QE3 but he didn't say there wouldn't be. There really wasn't much that the speech disclosed that could be deciphered as different so lets dissect the situation since there aren't many clues:

Bernanke said:

"The Federal Reserve has a range of tools that could be used to provide additional monetary stimulus," "We discussed the relative merits and costs of such tools at our August meeting...The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability."

*In the previous FOMC speech it was disclosed in a bold statement that benchmark rates will not be raised for at least 2 more years. If they are being truthful this would leave one to believe that further monetary easing would be needed to stimulate the economy. The critical question is when. So let's further dissect the facts of the matter of the current economic picture.

*It is being more accepted by the world and the US that the US recovery or should I say the "economic conditions" are not inducive of a sustainable recovery and the term double-dip recession has become a common term. The likely hood of a deeper recession (even fears of a 29' like depression) seems to have set in to some extent. The question is raised that if QE actually helped the situation in the first place or could it have actually made it worse. If it is perceived to have made it worse by deciding parties QE could be abandoned but if it is felt that QE made a dent there will be more probability of more QE. Bernanke holds the reins in the argument but he is not the only deciding factor. He also will not want to go down in history as breaking the US economy with too much stimulus. Opposing parties:

*Inflationary outlook. If inflation stays tame but the economy continues to struggle there is more likelihood there will be more stimulus so in that aspect it is not a question of if but a question of when. Timing the next stimulus will likely be based on the inflationary picture. While gold is skyrocketing and the dollar is very weak I don't think there will be any stimulus as that would cause alot of frowns not to mention make the FED look like a fool. The last thing they want to see is gold making record highs and at the same time announcing more financial stimulus. The heat is further amplified by a recent credit downgrade on the worlds largest economy. It isn't just the debt ceiling that is being questioned but the financial stability of the country. With all eyes on the policy makers there is less likelihood that they will jump into QE3. Surely they want inject more stimulus to jumpstart the economy but while under a microscope it is less likely. Not impossible but less likely if they wish to keep their credibility.

*US equities. Despite what many think, when stocks dive there's more likelyhood of intervention. As long as Stocks are not completely crashing they may stay on the sidelines - conversely if equities where to go through the roof they would likely raise the rates but that is likely out of the picture unless they make some record highs. Jobs, recovery talk, inflation, GDP - forget all that stuff... When stocks are strong all is good because the giant corporations call all the shots. I suspect as long as this last low (circa 10,400) in the DJI holds they will hold off on QE3. It's a guess not a guarantee so don't mark my words but it quite often is the case in the theme of the money world.

*election factor: There is less probability for financial stimulus with an upcoming election combined with the above factors (unless equities tank again) so the next round of stimulus could be passed to the next presidents watch. If Obama wins it will still be the same situation. It's more likely that he would want QE3 on his 2nd term rather than his 1st because he will be under great scrutiny and hence more likely a 1-term president in that case. If a less "pro-Fed" president gets in there in 2012 there will be less likelyhood of stimulus (unless equities tank of couse they will prop the markets somehow because that's who puts them in power). Bernanke's term as Chairman doesn't end until January 31, 2014 so a loose dollar policy is almost guaranteed until then.

*war factor: The war factor is definitely harming the economy. If there is peace in the middle east this would not only improve relations but the economy would stand a greater chance to recover and reduce the growing worldwide skepticism of the US being a war monger. The government could then concentrate it's efforts on the economy rather than middle east wars that never seem to end.

The current situation is escalated with Libya, uncertain with Afghanistan, and an ongoing project with Iraq. There is also potential conflict with Iran so even if one problem fades another problem seems to pop up. So the war factor definitely puts a damper on economic recovery hopes especially since the region has the largest reserves of oil in the world that harm the consumer.

If war escalates there will be more emphasis on wining the war rather than having an economic recovery and a potential for very high oil prices despite the fact the economy is slow.

Israel is another wild card - they sometimes tend to provoke war and the US tends to be the big bodyguard in the background that says little but solves the situation regardless of who was at fault - this is because the US closest allies are always going to be given the benefit of the doubt. The political situation is not only critical of our enemies willingness to make peace in the middle east but is critical by US "allies" (ie Israel) whom seems content with more war on the plate and political friction.

The next president in office will also effect the outcome of the situation. To say the situation is a mess is a massive understatement. The mainstream news likes to make it seem as the US has a handle on it but in reality something big could breakout at anytime and there doesn't look to be any hope of peace with all the friction coming out of the region by both enemies and "allies".

People are catching on to this situation and the next president could very well be less pro-Israel. This might not necessarily be a good situation either as Israel has nukes but maybe Israel would be less willing to engage in war or cause friction if it's big bodyguard (The US military) took a vacation here and there or revoked it's close friendship. Problem is if Israel is attacked it would likely not have a problem using nukes on their hated enemies. This situation has to be solved by Israel's own willingness to engage in peace as much as it does the oppositions willingness to engage in conflict with Israel. Without mutual parties there will be more war, more US military engagement, and less recovery.

(picture depicts Israel surrounded by countries that they have disagreements with)
The "war on terror" by it's very statement has no central enemy. So with a policy that looks for terror the US military will surely find it in many corners of the world - it's not so hard to find a terrorist when it comes down to it and there will always be terrorist in 3rd world countries. But should the US government be engaging in a war on terror when the US economy seems to be a greater factor to the nations strength. I personally think there should be a balance of military might/influence and economic endeavors for the US to have a strong future.

The war on terror could also be seen as a crusade against the middle east (in particularly against the Islam religion and also Muslims although they avoid saying it) by Christian Right fundamentalist that seem intent on attacking opposite religious beliefs. In my opinion the war on terror was declared illegally or more accurately a misuse of executive powers by Bush who is a Christian Fundamentalist.

In Bush's speech of the war on terror he spoke of a very long war against a religion and to me that is a crusade over beliefs not redemption of an attack because you can't say a religion is attacking you per say because it is individuals that did the attack or a country but when they say religions that's an entirely different matter that puts us back in the dark ages or like a cop that profiles black people. He spoke of his Christian beliefs in the speech depicting Christians as good and Islams as bad. So clearly this is a vendetta against the dominant religion of the middle east and not to actually get criminals that did 911 attack but a personal vendetta by the Christian Right which has strong factions in the US government and ties with Israel Zionist that hate many other middle easterners.

I have no problem seeking redemption if it is accurate but clearly the retaliation of 911 was grossly sporadic and unjustified. It took a new president to actually go after those that were supposedly responsible for 911. Bush also used 911 to open up an old wound from desert storm to "finish the job" that his dad started. So understand I support the US, it's freedoms, and defending our society and borders but I don't support religious fundamentalist that are looking for crusades over belief. These vendettas are what is breaking the US economy.

-TraderNeal

Gold rockets towards 1700 after US loses AAA rating

2011-08-07T19:01:00.001-07:00

Will Gold go to 2000 before the end of 2011? Gold prices are stronger after the S&P downgrade and seem to be supporting higher prices. There is no sign of raising the rates any time soon with Bernanke in charge of the FOMC.

Gold blasted through resistance after the downgrade. The market was closed when S&P downgraded but opened much higher in reaction to the downgrade and market fear.

Market analyst like Peter Schiff, Marc Faber, and Jim Rogers would likely lean towards gold going above 2000 before the end of the year if I read their impression right on the US dollar and fate of the US economy.

Stock Market trend before the downgrade - S&P downgrades US

2011-08-06T16:39:00.000-07:00

Late on Friday the S&P ratings agency downgraded the US from AAA for the first time in history after the debt ceiling rise by the Obama administration. The US narrowly averted a currency default as the tea party put up opposition to the rising of the debt limit. Currently the debt to gdp is 95% and the national debt may go over 100% of all the goods and services produced in the country combined.

Obama had pointed to how many times Reagan raised the limit and of course Bush as he has so often done. When Reagan was in office the debt-to-gdp that Reagan left behind was 53.1%.. At nearly 100% debt-to-gdp (currently it is 95% and counting) the country doesn't produce enough to keep up with it's debt and in my book that is bankruptcy.

Obama was handed a debt-to-gdp of 84.2% by Bush but rather than try to cut that figure Obama has pointed alot of fingers and hasn't handled the debt situation well. Soon the debt-to-gdp ratio will likely go above 100% with the largest debt ceiling rise in history.

Neglected from the argument was any possibility to raise the rates and the US appears to be in a deflation trap much similar to the one that happened in Japan. It was known as the "Japanese asset price bubble" which lasted from from 1986 to 1991 but Japan still has next to zero rates in the aftermath. Japan stabilized after the crash but never really recovered. If our future is similar to Japan but Japan has a head start one can only think what the possibilities of our long term rates in the US and the fate of the US dollar.

After the asset bubble in Japan housing prices steadily eroded in Japan while rates were slashed and the yen became the carry trade currency. But that was until the US market crash. While housing prices crashed in Japan they were going up in the US, UK, and Australia to set up an asset bubble lead by the US. US Housing crash of 2006 to present (although some say housing prices have bottomed). After the US housing crash Bernanke started slashing rates. When artificially low rates didn't work then came bailouts and QE.

One can only wonder how the US will handle so much debt when the trade balance in no way favors the United States.

Obama Administration failing badly on the Economic Front

2011-08-01T04:04:00.000-07:00

Or is it their plan?

With the debt-to-GDP ratio at 95%(the highest it's been since WWII era) under Obama administration. Ronald Reagan debt-to-GDP was 32.5% at one point but increased it to 53.1% in his second term but still manageable. The debt-to-GDP is a very important statistic to a stable government and a stable economy. With the debt-to-GDP ratio at 95% the debt ceiling has to be raised by 1 trillion a year to keep from a currency default. Meaning the 1 trillion debt ceiling raise will have to be raised again another 1 trillion within 1 yr to meet the debt obligations. Obama hasn't done anything net productive for the economy and has increased the debt - that is why the debt ceiling has to be raised faster.

Obama acts as if he's done something important by raising the debt ceiling and by his looks he thinks he really accomplished something. While in office Obama has not done anything net productive for the economy while doing everything counter productive to it so we are in a tsunami of debt now vs a sea of debt. The loss of jobs is higher, the debt is higher, the US is an uncompetitive welfare collecting nation, there have been many bailouts of corporations and banks, and there is more war. So rather than trying to cut the countries debt (it's not all his doing) but he has done everything imaginable (but still stay in office) to increase the countries debt.

My prediction is there will be a huge market crash but when that happens I don't know. It will likely be a pump and dump or it could just suddenly happen. After the market crash we will get more QE or a new currency (we may be on QE4 or 5 when this happens but I think we are in pretty bad shape now so it could happen at any time especially if China pulls the plug). If this were a chess match China has the Queen totally surrounded but just keeps moving forward pawns and Obama keeps throwing away key pieces like Bishops and Rooks while China has all it's pieces on the board. Since China is not going to forfeit the uneventful will ultimately happen. Perhaps they will try to juice it more with QE and then when it all fails the new currency will be introduced. Note that QE may be called something else but it will be the equivalent of.

Oh the democracy!

Obama did accomplish one thing and that was have an economy so bad that even many of the illegals have left back to Mexico where the unemployment rate is not as high and the cost of living is lower. Mexico unemployment rate 5.4 percent, US unemployment rate 9.2%. In California (where many illegals seeked opportunity) the unemployment rate is 2nd highest in the nation at 11.8%. Over 40 million Americans (over 14% of the population) are on food stamps to add to the debt to GDP imbalance.

If the US sees temporary relief look for more flare ups in Europe over their debt crisis but the US won't be off the hook. Surely more war fits into the predictable theme. Currently there is an uprising in Israel and the whole middle east looks unstable. Wasn't Rome heavily engaged and had a currency crisis before the collapse? Hmmm. Makes you wonder.

Greek Crisis -- My View

2011-06-25T01:22:00.001-07:00

*Greece Crisis Stabilized?
Ongoing debates were held to help Greece find a resolution to save Greece from debt troubles and potential default. Greece was downgraded recently by Standard & Poor’s rating agency to CCC (a drop of three credit rating grades below "junk status") meaning Greek debt is “extremely speculative" and the outlook for Greek debt is “negative.”. There is a significantly higher likelihood of one or more defaults in regards to Greece said the ratings agency after the downgrade.

Credit-default swaps on Greece, Ireland and Portugal surged to records on concern European governments’ struggles to resolve the deficit crisis will threaten their ability to pay their debts causing the Euro to surge lower after S&P Downgrade.

The problems with Greece debt has caused a massive amount of ongoing debate and the plot has stayed thick. There were protest in Athens over the governments handling of the debt crisis and economic woes such as unemployment. In Athens, angry Greeks gathered while officials met and the Greeks made sure they were heard.

Banks in the UK and the US have decided to reduce their risk to Greece and there is no appetite in the capital markets to extend finance to Greece. If Greece eventually defaults in the coming years the government could no longer borrow and would have to cut spending rather violently. The Greek lending system would completely implode.

Although Greece is a very small portion of the Eurozone it has created a very large and complicated mess. The only thing Greece can do is restructure it's debt but the ECB and EU have been against it because it would hurt their banks. It’s also very difficult to restructure debt owned to outside governments as those governments would have to take a large losses on their accounts which would cause political uproar from Eurozone members.

Temporary bailouts have been the short-term solution to the problem but there has not been a final solution to the entire debt mess other than kick the can down the road.

Why won't EU let Greece default?
They are afraid of a domino effect. It may actually be better for Greece in the long run to default. If Greece defaults it could cause investment fear that the EU isn't stable and there could be a domino effect (panic & contagion) from other hurting economies such as Spain, Italy, Portugal, and Ireland that would be a worse alternative than bailing out Greece.

The current package of includes spending cuts, tax hikes and privatizations that has become very unpopular throughout Greece.

Ichimoku Kinko Hyo + Bollinger Bands Weekly Cap Day Charts

2011-06-19T00:00:00.001-07:00

The Ichimoku Kinko Hyo is an indicator used for trading financial instruments that uses an on-chart visualization for chartist to graphically show where support and resistance are in the form of Ichimoku Clouds. Ichimoku is not limited by clouds and has several other indicator lines on the chart that also provide graphical signals to technical traders called the Tenkan, Kijun, Senkou, and Chikou lines.

The general theory of the indicator is that if the price goes above the clouds a bullish signal is produced while below the clouds a bearish signal is produced.
The clouds also turn color that correspond to the trend but sometimes they are not inline with when the price crosses. A strong trend will have both a cross and change of cloud color to match the trend direction.

The clouds can also be used with other indicators to confirm trends. A cloud break does not guarantee the trend has change and is mearly a signal that the trend may have changed. It takes a diligent eye and skill with using the indicator to properly use it's powers.

Also put another way: a break below a cloud means the cloud can be a resistance and a break above it the cloud can be a support. Again this takes a diligent eye to properly use these technical analysis techniques and combine them with other theories of techncial trading. Most often knowledge, skill, and experience are the key factors to properly use.

The Tenkan and Kijun lines work similar to short term (Tenkan) and long term (Kijun) moving averages and some people even call them moving averages.

The meaning of the name of the indicator can be translated into "What a man in the mountain sees" and "one glance equilibrium chart" .

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USD/MXN (Mexico) Daily Charts (2):

USD/ZAR (South Africa) Daily Charts (2):

US Lumber Daily Charts (2):

10yr Note (price only) Daily Chart (2):

Market Notes Week Of June 13th-17th

2011-06-16T22:29:00.000-07:00

**Greece Debt Crisis persist with prior downgrades earlier this week from Standard's & Poor's rating agency which downgraded Greece 8 notches below junk status. The rating Company said the nation is "increasingly likely to restructure it's debt." A restructuring would likely, "result in one or more defaults under our criteria," "Risk for the implementation of Greece's EU/IMF borrowing program are rising, given Greece's increased financing needs and ongoing internal political disagreements surrounding the policy conditions required by Greece's partners." The rating company held it's recovery rating at 4, indicating it estimates bond holders would recover only 30% to 50% of their investment.

**France's top 3 banks were also put on review by Moody's for possible downgrades for their exposure to Greece. The Greece situation seems to be an ongoing theme with the Eurozone and members in disagreement of how the handle the situation properly.

**China continued to be worried about inflation but CPI came in at 5.5% vs the 6.0% that was expected by the market. Despite some signs of slowdown China stayed hawkish about inflation and raised the bank reserve requirement by 50 basis points. This may have had some effect on crude oil's recent fallout.

**US stocks closed higher on Thursday's US session despite major questions in the economy which were overshadowed by the Greek turmoil. US stocks have been on a steady decline since May 1st of this year and this week was by no means an exception overall.

**The Euro continued to be in correction mode to the downside and has not rebounded significantly from it's recent steep fall because of the Greek factor of the equation. Despite a few upside rallies in lower time-frames it has been on the weak side.

**Crude oil continued to be afraid to dare go back over $100 USD a barrel with too many questions about the global economy at large and enough supply seems to saturate the markets with the weaker global conditions but hasn't seemed to help the consumer.

**India raises rates by 25 basis points, more hikes likely. The rate rises from India combined with other countries in hawkish mode likely is putting downside pressure on crude.

**Despite the weaker economy Gold refused to trade much lower and is near record highs despite Crude Oil's recent downtrend / unpopularity. This could be the safe-haven effect at work with the very weak USD policy and despite the fact that QE2 has ended there is however too many unanswered questions as to a "certified recovery" for there to be any real strength tap on wood.

**All eyes will continue to be on the Eurozone as to how to handle the Greece situation and which method will jointly be agreed upon.

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Is Chinese economy a rosy picture?

2011-06-13T14:31:00.000-07:00

Not according to Nouriel Roubini who has recently been making waves about the possible meltdown (hard landing) in China.

Bloomberg:
“There are already elements of fragility,” he said. “Everybody’s kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest.” -Professor Roubini

Roubini points to U.S. unemployment, prolong high oil and food prices, rising interest rates in Asia, and the effect of Japan's trade disruptions from the Earthquake as major catalyst to the global economic woes that are likely to continue according to the New York University professor.

"China is now relying increasingly not just on net exports but on fixed investment" which has climbed to about 50 per cent of GDP, he said. "Down the line, you are going to have two problems: A massive non-performing loan problem in the banking system and a massive amount of overcapacity is going to lead to a hard landing."

Stocks worldwide have also lost more than $3.3 trillion since the beginning of May and this comes at a time of elevated commodity prices. Oil currently near $100 and gold is above 1500.00 (although both have been retreating). Food related commodities (Wheat, Corn, Sugar, Soybeans, ect.) all at very elevated levels. Good if your in that business but not good for a large civilization. Most corporations have been effected (some severely and even fatally) by the economic slowdown and high oil prices.

-------------
Jim Rogers however has always been high on China and says that the US may face fresh recession in 2011-12 worse than before. economictimes

"While Fed's Bernanke believes the second half of the year will be better for the US economy, you've got others like economist Robert Shiller saying the US is on the brink of a possible double-dip recession. Which side would you agree with?

Rogers: Bernanke has never been right. He's been in Washington for 7-8 years. Please go back and do a study of his record. You will see that the man has never ever been right. Don't pay any attention to Bernanke.

The economy is slowing down. We're going to have another recession in the US in late 2011 or 2012 or 2013 and it's going to be worse than the last time around, because America has shot all of its bullets, printing money and spending money we don't have. Be very careful."

Dow Jones Industrial Weekly Bollinger Bands:

Dow Jones Industrial Weekly Fibo Moving Averages:

Dow Jones Industrial Weekly (Special Chart) Click to zoom:

Rogers Position & Opinion:
**Gold & Silver - Not interested because it's at or near all-time highs but if it comes down he will buy more.
**Sugar - Optimistic for the next 3-4yrs (holding sugar) because of it's use as fuel and people are more prosperous in China and will buy more sugar than ever before.
**Currencies - He is Long but didn't give specifics. He seems to be pretty much anti-US dollar though.
**Commodities - He says he is Long on commodities but didn't give specifics.
**Emerging Market Stocks - He is Short.
**Technology Stocks - He is Short.
**US Bonds - He is Short.
**Short a large bank in the US - didn't specify which bank.
**Rogers is in the camp that the world is running out of Crude Oil. He believes that although OPEC cheats constantly against each other that they have very little power compared to what they used to have.
**Rogers says the US will start printing money again but after the 2012 election and they may call it something other than QE. So according to him QE3 is not out of the question it will just have another title and method but will be necessary do to economic woes.

---my opinion--- Economic stimulus is necessary to support the stock market at current levels unless better economic news comes out in the form of earnings, jobs numbers, or some other major factor that verifies the economy is recovering. This is my guess and I do not profess to know the future. I am a chartist first and news events are secondary or rather verify my technical analysis.

Sugar Day Chart:

Crude Oil Day Chart:

Investment friends

2011-06-12T23:41:00.000-07:00

I may have someone that is interested in trading for them. I am perhaps meeting with them next week but nothing has been arranged. He previously had someone trading for him but there was a disagreement and he may be interested in me. How would I go about trading for someone? I have traded for myself and know what to do but I have never handled someone elses money.

Any tips would be appriciated and I don't mean about money management or trading with stop losses/ within my limits because I'm well versed in the psychology of trading. I need to know about how would I gain control of someone elses money to trade with. Legal considerations, pay ect.. How would this be arrange. Thanks in advance.
-TraderNeal
Blog Author

Stocks Hit Will End Week On Losing Streak

2011-06-10T10:31:00.000-07:00

The DJI (Dow Jones Industrial) breaks below 12,000 level. I suspected it would be weak as you can see from my previous post. If you are not a follower be sure to follow so you don't miss key updates.

The Hourly DJI Chart broke down after hitting key resistance and broke down through support. After doing so it did not even try to test the pivot level and support was broken. The trend is down and although oversold does not look inspiring::

The 4h DJI broke down from pivot but was able to stage a test of R1 (a rolling resistance point) and pull faintly above pivot several times maintaining a congested downtrend. Finally it broke down after hitting resistance and support failed.

The Weekly Chart However paints a different picture and shows the DJI in an uptrend that looks to be overbought::

The news on the streets is that the Greece situation is still a problem and that China is experiencing the effects of the global slowdown. This means that debt is still a problem and there is a possibility of a deeper downward correction. It is possible that a range will form before the market chooses a path of least resistance.

Crude Oil, Gold, EUR-USD are also all down over economic woes.

The EUR-USD in 1h timeframe broke through pivot and fell through support. Also forming what looked to be a head and shoulders top that conveniently broke through pivot creating some confluence of the strong breakout to the downside. (click image below to zoom in on chart)::

The H4 EUR-USD was equally inspiring to the downside as the H1 with a break-through in both Pivot and Support::

If you like my style of charting you can get the full system I use to plot my own trades here or click the animation to the upper right of this post.

OPEC Cartel Should Be Classified As Criminal Orginazation

2011-06-08T08:48:00.000-07:00

It was a fake out. OPEC Cartel pretended they were going to raise production but it turned out to be a major lie to manipulate the oil price higher. Someone is making a fortune off of this corrupt trick. There was no raise in production as was expected causing Crude Oil to spike. The reports I read made it sound like from announcements OPEC that a raise in production was practically set in stone. The middle eastern countries prove to earn their label as the ring of terror or I say pure scum.

Crude Oil spiked back above 1hr pivot and back above 100 in an un-usual move that obviously caught the market off-gaurd causing un-stable prices.

EUR-USD Update US Session 6/7/2011

2011-06-07T09:57:00.000-07:00

The EUR-USD firming, stocks rising in US session, European stocks rose in Euro session, Japan stocks rose in Asian session causing a weaker USD. In 1hr time-frame Resistance is at 1.4837. EUR-USD tested near pivot level 1.4547 before advancing but has yet to test resistance.

Strong data out of Europe was also a catalyst for the upward move. Eurzone Retail Sales for April 11' (YOY) came in at 1.10% while the print was expected to be -1.70% and German Factory Orders April '11 (MOM) came in at 2.8% vs -2.7% that was expected. Bernankee is set to speak later in Atlanta (19:45GMT today).

OPEC meeting on Wednesday in Vienna. OPEC is expected to raise it's quota - the amount of oil it produces. The amount of the production increase for crude oil by the cartel will be decided at the meeting. There are some member countries that are against raising production so there will likely be a conflict at the meeting.

Crude Oil 1hr technical analysis
Crude encountered resistance R1 and fell sharply. Then tested pivot level in volatile trade. After a ruff battle began to trace below pivot and has yet to find support or put any pressure on the pivot. Trend is currently down but appears oversold.

(click chart below to zoom 1h EUR_USD)

(click chart below to zoom 1h crude_oil)

EUR-USD Update PostUS session

2011-06-06T14:41:00.000-07:00

Eurogroup Chairman, Jean-Claude Juncker mentioned today that the Euro was overvalued. Also putting pressure on the Euro..... German Ministry of Finance official mentioned that it was still not certain that a second Greek bailout deal will go through.

Unable to Post do to Electrical fire

2011-05-28T04:28:00.000-07:00

Hello, I recently had all my equipment damaged do to a rare electrical fire while away and need time to rebuild. So at this time I am unable to make research the market properly. I have been working on the repairs and I'm about 50% done. I expect to be back within a week.
Sincerely, TraderNeal

1hr Gold refuses to test support but

2011-05-17T21:15:00.000-07:00

still below pivot - see chart above.

Gold Getting Smashed in 1hr timeframe

2011-05-17T06:02:00.000-07:00

Gold getting rejected at 1hr Resistance and 1hr pivot. Seems to be heading to Support. See chart - click to zoom.

Daily Gold Bulls still in control

2011-05-11T06:48:00.000-07:00

To add to the confusion of the gold pattern the 1hr chart(see previous post) has been volatile but favoring the bears. In the daily chart (click image above to zoom and expand) the Bulls are still in control of the daily Gold pattern.

Indicators used are available here.

Gold 1hr unstable

2011-05-11T06:33:00.001-07:00

Gold having a hard time deciding which way to go and is volatile around the 1500 price area. Spot Gold in 1hr time-frame hit resistance 2 and sharply retraced below pivot - see chart above click to expand and zoom.

Gold firming back up after strong correction

2011-05-10T19:39:00.000-07:00

see 1hr gold chart above - click to enlarge and click again to zoom.

Bin Ladin Dead But Gold Sets Record High 1576.48

2011-05-02T20:04:00.000-07:00

Spot Gold retraced slightly from it's record all-time high 1576.48. It has carved many new record highs in the last few weeks. It was a historical day for the US military capturing and killing Bin Laden or was it... Obama and the news announced that he was dead while Gold at the same time traded near historical highs and crude oil traded at it's highest since 9/1/2008. Spot Crude Oil All-time Record High was set on 7/11/2008 @ 147.90 on a historical crude oil chart. Some speculators believe crude oil could eclipse the all-time high because of dollar weakness, the compounding national debt, and runaway commodity inflation that has shown little weakness. The US war effort has not helped the commodity situation as the cost of war is also an inflationary cost and the military uses alot of fuel to do operations, missions, and the cost of being in another country. This cost is not being taken from the enemy country - it is taken from the US taxpayer. Needless to say - no matter what you opinion is - the fact is commodities are in-fact soaring.

Gold Daily

2011-04-30T01:42:00.000-07:00

Gold sets yet another new all time record high showing no weakness.

Gold Price Sets New Record High

2011-04-28T16:22:00.000-07:00

Price of Gold once again sets record high despite speculation that commodities were about to weaken. See gold chart above.

Gold Gets A Bump Up After FOMC Meeting

2011-04-27T13:32:00.000-07:00

The FOMC meeting ended with uncertainties and some limited answers. The FED will not have a Q3 but will continue Q2. The FED is worried about inflation but raised the maximum inflation by .8%. Gold took advantage and set yet another high. No raising of rates - no time-frame as to when the fed will tighten. Another flush down the toilet for the USD.

*The indicators on the chart shown above do not repaint after bar closes.
Click here for my full trading system

Gold Holding Above 1500 After Dipping Below

2011-04-26T16:19:00.000-07:00

*click chart above to zoom in on gold chart*
Gold fell below 1500 temporarily but has since retook the psychological level. As noted in my chart above the bulls have been in charge of this daily move since Feb. 08 2011 and the first wave up of the move began on Oct. 02 2010. Of course Gold has been in a Secular uptrend for sometime but for us day traders a trend is a trend. The 2 indicators in this chart do not repaint after bar closes and are featured in my trading system (1 indicator (not shown) slightly repaints in my trading system but if you follow my rules it is easily dealt with and offers valuable signals). Click here for my full trading system

This system when used with proper money management and stop losses is profitable for me. The key is using the right time-frames.

Crude Oil Chart Metatrader MT4 Bears In Control

2011-04-14T03:27:00.000-07:00

Bears are still in control at the moment.

purchase this trading system

Does Obama Have a Clue When It Comes To Deficit Spending?

2011-04-12T23:39:00.000-07:00

While the Federal Reserve leads the US down the path of destruction Obama looks more clueless as the debts continue to skyrocket. Just recently he apologized that he once voted against raising the debt ceiling. Uh, hello that was the only time you were right! Things such as zero-percent interest rate policy, quantitative easing, and raising the debt ceiling are not measures to control debts or deficits.

As the deficits grow uncontrollably Obama acts like he just doesn't understand. Much like when Bernanke replied "I don't know" where the money went. Obama used to ride the argument the debts are because of Bush administration. NO Sir! These debts are incurring on your clock and because of your own policies. Trying to prop Wallstreet is not is not a of number 1 task of a president or leaders of any country.

Don't forget Obama also recommended and appointed Bernanke and had no intention of correcting the deficit that Bush had ran up. It wasn't enough that Bush administration ran up the deficits to record pace and levels. No it wasn't quite enough!!! Obama outspent Bush in only 100 days while Bush was in office of president for 8yrs. Obama wins the hall-of-fame for spending and bankrupting the people! Obama clearly doesn't care about what hole he digs the US into financially.

Despite at onetime being against raising the debt ceiling, Obama now claims it was a mistake and it is actually a vital measure to raise the debt limit because it is actually vital to the economy. Wow what an utter lie. It is clear that this man can't hold any water to his own arguments and will just change as it so fits him. Naturally he voted against raising it while Bush was in Office. Amazing! When he can't point the finger at Bush anymore he will just change sides on his arguement and outright admit he doesn't know what he's doing.

"The president has asked us to increase the debt limit, in other words to increase the limit on the credit card, without doing anything about the source of the problem. And we've got to deal with the source of the problem," House Speaker John Boehner, R-Ohio, said Monday on Fox News Channel.

I personally am sick of having a president that is cool. Ok so you look "cool" to the younger people but do your job 1st and foremost. Yeah spending money does look cool but I could care less how cool you look or act especially when the money your spending doesn't belong to you. To me as a responsible adult you are anything but cool.

Do Currencies Have Nicknames?

2011-04-10T00:52:00.000-07:00

I guess everyone can have a nickname so why not a currency. Here are some of the popular Forex nicknames for the various currency pairs they are associated with:
GBP/USD = Cable
EUR/USD = Euro or Fiber
USD/CHF = Swissy
USD/CAD = Loonie
AUD/USD = Ozzie
NZD/USD = Kiwi
EUR/JPY = Euppy (pronounced "Yuppy")
GBP/JPY = Gopher
EUR/GBP = Chunnel (from channel tunnel between Britain & France)
USD/JPY = Yen

Stand alone nicknames (note some are the same as a pair):
USD = Greenback or Buck (Greenback - given to USD because of it's green print) - (bucks - before paper money buckskins were once used for trading)
CAD = Loonie or Caddy ("Loonie" came from the bird on the Canadian coin)
AUD = Aussie (Aussie - no apparent reason for the name other than it sounds cool)
NZD = Kiwi (Kiwi - Is a kind of bird that can't fly which happens to be a national symbol of New Zealand)
CHF = Swissy (Swissy - people just started calling it the "Swissy" apparently because it sounds like Swiss and was funner to add a y or ie to the end)
GBP = Sterling or Cable (Cable - from Trans-Atlantic cable between US & Britain)
JPY = Yen A name in Japanese that means round circular object or coin.

Why is the Swiss dollar abbreviated CHF?
CH is the international abbreviation for Switzerland -- comes from Latin "Confederatio Helvetica..

The purpose of knowing can be important if talking about a particular pair or currency with another trader or reading an article where slang is used. It's a little funner too I guess and a little easier to have a conversation than sounding out every pair or abbreviation. Some currency nicknames do have a historical meaning behind the name so it helps build up the knowledge if you know the meaning behind the name. Of course for JoeBlow Public none of this matters but for a currency trader it is at least fashionable or trendy and fits in with the niche.

Daily Trends - Weekly Close Analysis

2011-04-08T23:31:00.002-07:00

(click on any chart to expand - click on adds to find the indicators I use - they are not freebies)
This will be a new feature to this blog called the "Weekly Close Analysis". Here we will analyze the daily chart patterns of various trading instruments within Metatrader 4.0.

VIX
We will start off measuring volatility index also called the VIX. Some like to call this the "fear index" because it is believed to measure fear or risk. When the Vix is in a downtrend it is bullish (risk takers) and when it's in an uptrend it is bearish (fear). The VIX has what's called an inverse correlation to stocks. The Vix has been in a weak downtrend (bullish for stocks) closing below the 50 LWMA and or special indicator has been in a sell pattern. LWMA = Linear Weighted Moving Average.

DJI30
Now that we see the Vix is in a downtrend we can see that the DJI30 (Dow Jones Index) is in an uptrend and my indicator has been screaming buy since 3/18/2011.
Q1 earnings season kicks off Monday. Nervous investors will be anxious to measure the impact on corporate results after Japan’s Earthquake and Nuclear Disaster from the 9.1 great quake. Most insurers in the property-casualty insurance sector are likely to post losses after New Zealand and Japan earthquakes as well as Australia floods. After Fridays close the government managed to stay open with Congressional leaders and the White House reached a late-hour deal. $38.5 billion will be cut from the original budget for the fiscal year that runs through September in what leaders called the biggest annual spending reduction in history but the spiraling out of control deficit could reach $1.5 trillion in 2011 alone. There was no market reaction because the markets are closed for the weekend.

GOOGLE
Ironically Google has been trading in a bit of a down trend closing below the 50 LWMA. Google just recently agreed to antitrust deal on ITA.

Exxon
Exxon Mobil pulled back above the 50 LWMA and my indicator has been screaming buy 3/17/2011. Q1 2011 Exxon Mobil Corp Earnings Conference Call Thursday, April 28, 2011.

HSI
The Hang Seng Index has been rapidly moving higher the entire trading week. Despite the optimism China has issued price controls to control inflation.

DAX
The Dax rebounding from a sharp fall. The ECB (European Central Bank) raised rates 25 basis points to 1.25% despite pleading from Portugal that they need a bailout. Germany the Euros largest member has been opposed to bailout of the smaller Euro-Zone members. Earlier in the weak German Industrial Production came in at 1.6% MOM (month over month) for FEB2011 which was much stronger than 0.5% expected. The YOY (year over year) reading was 14.8% and also much better than 13.2% that was expected indicates the German industrial economy was strong.

Siemens
“We expect the growth rate to ease,” Chief Financial Officer Joe Kaeser. The company said earnings in the quarter that just ended were burdened by a “disappointing” renewable energy division. This quote was from Bloomberg News.

Siemens retraced down towards the daily 50 LWMA but still stayed above it. It did not look strong above the 50 LWMA.

FTSE
UK stocks mimicked the DAX and had a strong rebound.

CAC
Candian stocks followed along as well.

Nikkei225
Despite that large natural disaster that occurred the Japanese economy had been doing ok before the accident so was able to take back some of it's huge losses. It did however fail to close above it's 50 LWMA on the Daily Chart.

* now Corn, Wheat, Sugar Gold, Silver, Copper, Platinum among many others can be traded within Metatrader. Not all FOREX brokers have this but there are some that do.

Gold
Making record highs and on the front page of every newspaper. Gold has flirted with reversal but surging to new highs from US dollar weakness and lots of political turmoil. Imagine being a foreigner and reading the US government might have to shut down at the same time the US is at war with Afghanistan, Iraq (occupied), and Libya.

Crude
Crude oil as priced in USD has been carving out new highs and trading strongly above the psychological level of $100. This level has been mentioned in the past few years with weak dollar policy and the United States dependence on foreign controlled oil in many territories that are anti-US. The Egyptian and Libyan crisis have been key drivers of the push above $100.

Corn
Corn gaped higher on 3/18/2011 and has since been trending higher. The gap up from 629.25 never closed. Rising demand for corn for ethanol producers is pushing reserves in the US to the lowest point in 15 years. Corn reserves will fall to a projected 675 million bushels in late August, when the harvest begins. But be careful going long. In my experience when you see big headline news that's all over the wire that is extremely bullish or bearish it can often be a contrarian indicator.

Wheat
Wheat decided to break above it's 50 LWMA and follow Corn higher. But unlike Corn, Wheat isn't carving out new highs so in that sense is counter trending higher. Because of higher prices some importers are growing more wheat.

Sugar #11
Sugar went against the grain and went lower trading below it's 50 LWMA. Hurting demand was the worst ever earthquake to hit Japan and meltdown of it's nuclear facilities.

USDX
Behind the rising commodities prices was a very weak USDX. With the Euro going for a 2nd round of rate hikes the Federal Reserve Bank is still hold rates at near zero. As a consequence the US Dollar has been trading near record lows while the Australian dollar is making new record highs well above parity. At the same time Gold has made historical record levels. The USDX remains in a very strong downtrend. A reaction to the budget could reverse the downtrend but that is too early to say with the markets being closed at the time an agreement was made by US Politicians. The QE program will have to end soon and rates will have to be raised before there is any confidence in the dollar. This shouldn't stop smart investors from capitalizing by playing against the dollar while the USFED has the money creation pedal at full throttle. So be sure you hedge accordingly.

Who am I?
I am an expert chartist, a trader, a metatrader indicator and system designer. I blog to keep my mind in the market but I do sell a few products of my own. I have no affiliates but I do have products for sales. If you buy products from me you are supporting me and not some big fish. You also get a unique product that can make you money.
my best trading system
my original trading system

Does anyone own Gold? Gold is at record highs!!

2011-04-08T00:39:00.000-07:00

(click chart to enlarge)
In our historical gold chart (weekly timeframe) we basically have what appears to be a 90 degree angle for gold prices. This tells me that gold must be very valuable or inflation is out of hand and the currency is collapsing.

No matter how I try to justify this I can't see how Gold is worth nearly $1500 an ounce. As a trader I can but physically I can not justify this. I don't own Gold, I never have and never will. I've never owned diamonds and for diamonds I also can not justify their extreme value. The only exception is that happens to be the going rate apparently because people will pay what ever the price happens to be. People I know don't own any sizable amount of gold! It's not as if everyone gets up in the morning and says oh man I've got to get some gold or I won't be able to make it through the day.

But because the US dollar is weak governments buy it and the price will go up accordingly do to demand. It's only because the US Dollar and other currencies are weak and/or unstable so they buy up all kinds of gold and the price is going to the moon. As the US creates more money (from bailouts, low interest rates, ect) the price goes up for gold because it takes more dollars to buy the same items.

But I never see anyone ever buying any gold or looking to buy gold. Then there's that stupid saying: "This Stuff is like GOLD".. Ok big deal it's like gold - gold is worthless except for lure for fools that think it holds any type of real value. I know it can be used in industry but only a fool would rely on this stuff as there are many other cheaper metals that are more than adequate for industrial uses. Gold is not a major industrial metal unless you like to waste money.

I'm a pretty handy guy and I try to think of things I could build that would require gold to build. A car? A computer? A solar panel? NO!!! None of these product require gold to build. I can build high quality devices without ever having to use even a minut amount of gold. A jet? NO!!! How bout a UFO? You know I've never built a UFO but if I could I bet it wouldn't require gold lol!!!!

Golds real worth is probably just a bit better than silver in my opinion and even then the prices are only high because of the monetary policy. Lure and superstition shouldn't ever cause the prices we are seeing now. There's just not that kind of value in a metal that is only slightly superior to silver in industrial use.

Market Snapshot - Market Breadth

2011-03-26T17:00:00.000-07:00

This is one hell of a chart! If you like this chart be sure to Tweet it, Share it, and add to Facebook! If I don't get the support I can't waste time posting killer charts unless you pay me! See bottom of post to vote please and be sure to subscribe to this blog for future updates.

In this chart we have our clear out-performer for the week Crude Oil (SEE TOP WINDOW OF CHART). Secondly I liked EUR-USD, 3rd the DJ30, and worst was the US dollar even though it did modestly recover. It was however US Dollar weakness that lead to strong Crude, Gold, Euro, and just about everything else enjoyed the long term US Dollar weakness.

In metals (SEE 2ND WINDOW DOWN) Silver outperformed Gold. Copper outperformed Platinum and the USDX again was the driving force behind it all. Fundamentally the Libya conflict, Political turmoil, A weak economy with high inflation, and the Nuclear Event drove up hard assets like commodities. Despite all that equities managed to soar while commodities prices remained elevated.

For equities... (SEE 3RD WINDOW DOWN) The DJ30 (Dow Jones Index) outperformed the FTSE100. The FTSE100 outperformed the DAX30 and the NIKKEI225 managed to stay in the pack. Over all equities performed very well across the board.

Crude Oil outperformed Brent Crude Oil while the USDX and USDCHF were weak causing an elevated move for OIL markets. Fundamentally the Libyan crisis / war was a bullish factor for Oil.

Trends in Crude Oil Historical Chart

2011-03-21T10:23:00.000-07:00

This is price history of notable tops and bottoms in Crude Oil on a 4hr time-frame beginning on 12/14/2009 to 3/16/2011. I've come to the conclusion that there are 4 primary fundamental factors in deciding the price of crude oil:
1) The Middle East
2) The Middle East
3) The Middle East
4) The US dollar policy

Ok so that wasn't very comprehensive but in looking at the biggest factor it was always situations in the middle east. Demand, forecast, analyst opinion, crude oil inventory, and the state of the economy could all be thrown out the book. The only thing that was consistent was factors that had to do with the middle east, more factors to do with the middle east, yet more factors to do with the middle east and the US dollar policy.

What I found very interesting is when ever there was a surge in Crude Oil analyst would make predictions of $100+ crude. While yes that's easy to say now as we are above $100 but often when they made those claims crude oil would correct to the downside and sometimes immediately afterwords. Had you followed their recommendation you would likely have abandoned the trade or faced margin calls. Unless you had very deep pocket you would not have seen $100 crude. Of course if you did the opposite it would have been very profitable in the short term.

(If there are problems viewing picture go to this link: click here.)

The analyst proved to be wrong most of the time. Some long term calls were right but it seemed these calls (on long side) were at market tops most of the time. The news was very deceptive and reasserts my position to only use charts to determine market trends and but be wary of major market events that cause volatility.

Many (actually most) news events were contrarian indicators. Using the news can be utilized if knowing what to look for.

Metatrader 4.0 MT4 indicators, Howto Build A Forex Trading System

2011-01-31T21:50:00.000-08:00

Trading Systems
If you trade forex and want to make quality charts you need a good trading system. A good system must consist of good indicators, a trading plan / trading strategy, a trading terminal / trading interface, and reliable price feeds. If your lacking just one of these major requirements it is likely your endeavors in forex will be short lived.

Web-based vs Trading Terminal
Web based platforms tend to lack the speed necessary for forex. Also web based trading terminals tend to lack quality indicators needed to make up a good trading system although there are probably some good ones out there that are web based. I personally prefer Metatrader 4.0 for charting because of it's wide range of custom indicators. In fact there are so many custom indicators it is hard to find the right one in MT4. Don't forget MT4 is a stand alone trading terminal so your trading interface doesn't have to run though an extra layer (the browser) like web based platforms do.

Finding a good indicator is alot like fishing. You have to fish alot to find the right one or what they call the big catch. In order to get the big catch sometimes you will catch alot of fish that are throw backs but some are keepers. It's actually good that there are alot of fish. In fact if there weren't alot of little fish we wouldn't have the big fish were seeking. You guessed it - big fish eat little fish.

After you get your indicators set up on your trading terminal you can then set up some trading rules for your indicators or combination of indicators. If the rules tend to work you have made a trading system. The great thing is you can do all of this in demo and there are a dozens of brokers if not hundreds that offer demos in metatrader 4.0. The great thing is your indicators (.mq4 or .ex4 files), and templates (.tpl files) will all be compatible on other Metatrader 4.0 terminals. All the terminal cares about is the code compiles and the format is .mq4 or .ex4.
So as long as you have .mq4 indicators within your system MT4 is happy. Just imagine building a great system but it's only compatible through 1 broker. If that broker shuts down or switches the platform on the fly your S.O.L. as an independent trader.

Although some are free some you will have to invest in if you want the higher end ones but there are some pretty good free ones. Here are a few I found for free on the internet. To use them put them in the indicators folder of a metatrader 4.0 terminal and restart it. The indicators folder is in the program files folder / name of your metatrader broker / experts / indicators. To download these free metatrader indicators just click and select download.

Alternative Ichimoku v7
Alternative Ichimoku
Alternative Ichimoku v6
Magnified Market Price
Barros Swing
Goldminer 2 v0
About the indicators.
*Ichimoku indicators work on the premises of "clouds" that form support and resistance. If the price is above a cloud the cloud is said to be support and if the price is below a cloud the cloud is said to be resistance. The strategy seems to work better in longer time frames and is simplistic enough for beginners to understand but might not be accurate enough for short-term traders. A creative trader can combine Ichimoku with other indicators to make a trading system. There are 3 of this type which produce different clouds.
*Magnified Market Price is a luxury indicator. It doesn't produce a signal but it makes the price larger for tired eyes.
*Barros Swing is similar to elliot waves. A wave count is made in A, B, C, D, format and begins with X.
*Goldminer is a popular indicator that does repaint (especially on lower time frames) but gives signals when it thinks the trend has changed. A red bar is bearish while a green bar is bullish. It can sometimes be used to confirm other trading strategies and is not recommended as a stand alone indicator but as a confirmation indicator.

Template
Now that you have good .mq4 indicators here is your free example trading system I have helped you construct. Download it the same way as the indicators but put the .tpl into the template folder. It should look just like the picture when you open the template if you installed the indicators right.
example trading system

Tips on Building a Trading System
*The signals from your indicators will greatly differ from each time-frame. What worked on a 1hr chart might not work or work as well on a 5 minute.
*if you have too many indicators on the chart it will be hard to focus on each one. I have a limit of 3 on-chart indicators and 3 window indicators. Some on-chart indicators are exempt from that rule if they are not used as signals and are used to enhance the look of the chart such as having a larger price.
*If you find a good combination of indicators save the template and back it up. If you find a good combination don't expect to have the terminal save your work for you. Sometimes the terminals crash and you have to reinstall them. Make sure you back up your templates.
*Build trading rules to your system which include an entry and exit. Your system should have some type of stop loss or plan B. If not you are going to have to learn the hard way. This advice alone could save you from exploding your account.
*Be sure to test in demo not live.

Forex Demo Account
To find a FOREX broker that has demo accounts just google "metatrader 4.0 demo". Here are a few I know of off the top of my head that have good demos:
GCI
Activetrades
Ava FX

Gold Chart - Below Middle Bollinger Band and Key Levels

2011-01-21T13:39:00.000-08:00

Gold has recently traded below Key Resistance and Key Support Levels Suggesting a possible trend change. Make no bones about it Gold is and has been in a very strong uptrend and shorting is for the daring. Never-the-less I'm sticking with my bearish outlook but I'm not calling for a complete trend change at least at this point as a confirmed downtrend is not in place - not yet.

The fundamental picture is still strong with a weak dollar. The dollar's fundamentals are still weak with massive deficits, a near zero interest rate, a lack of an exit plan to low interest rates and quantitative easing measures.

Never-the-less the technical analysis for gold is that selling has picked up after hitting key resistance levels. Looking at a weekly chart I see several area's of confluence which builds a bearish case for gold technically.

1. Key Weekly Resistance 1416.68 rejected.
2. Key Monthly Resistance 1420.94 also rejected.
3. Strong Selling Occurring through Key Weekly Support 1358.52.
4. Gold Closing below Key Weekly Support 1358.52 Weekly time-frame.
5. Gold Closing below Middle Bollinger Band on Weekly chart.
6. Bollinger Bands have stopped widening indicating the that last up-thrust has stopped and would take a new one to continue uptrend. This is a good indication of at least a retracement.

The important factor to watch now are the volume patterns to see if buying volume or selling volume is to dominate after the rejected resistance and test of the middle bollinger band. If the trend is to continue to the lower bollinger band it will be interesting if it consolidates or bands begin to widen which would indicate a more severe correction and possible downtrend. Fundamentally the uptrend is still supported on the most part so if new fundamentals come in that are dollar bullish this would support the technical change but if that doesn't happen it should be treated as a pull back unless the selling volume continues to dominate the buying volume - in which case you can ignore any news developments if you want to make money as price action and the higher amount of buyers or sellers out-trumps fundamental opinions.

The next area of support is 1310.05. If that area fails to provide support look out below. For the bullish trend to continue key resistance (1420.94 Monthly & 1416.68 Weekly)will have to be defeated.

eur-usd technical analysis

2011-01-09T03:35:00.000-08:00

This entire move was literally captured by my mountain climber trading system. A strong sell came in at roughly 1.3366 give or take a couple of pips and could have been ridden to the current price of 1.2909 which equates to $457 big ones. That is pretty good for a system that I have for sale for only $250. There are times when you win some or you loose some but with proper money management these big wins make up for any of the small losses which can be easily avoided by following the trading rules.

In fact the last 6 moves which includes this one were all good signals. This one however was particularly strong at what traders dream of. There was some choppy market action prior to these good moves where the market was pretty flat but it is easily dealt with. The trick is not to get on the wrong side of the signal.

Amazingly once the price got under pivot (the yellow line) it never looked back. It was incredible move that was supported by USD fundamentals throughout most of the week. The only setback was NFP which came in much lower than expected but Eurozone debt issues seemed to plague the Euro.

Mountain Climber Trading System

eur-usd trade theme 2011 - Eurozone Fundamentals vs USD Fundamentals

2011-01-08T01:49:00.000-08:00

subscribe technical analysis using my trading system

US dollar - Eurozone trade theme for 2011

A carry trade is a trade when an investor sells a currency with low interest rates for a currency with a higher interest rate (example carry currency = .5 % vs currency with higher rate like 4.5%) . In the case of the eur-usd currency pair (1.0 vs .25 benchmark rates) the investor would want to be long in the euro especially when there are more risk takers in the market because the borrowing currency will be the one with the lower interest rate.

It seems to make sense that if equities are going up the usd will be going down do to it's near zero interest rate policy. It won't matter if it's the US, Asian, or European stock markets that are going up because the higher interest rate currency will be the beneficiary over the lower yielding currency (or the currency being borrowed from).

As long as the central bankers of the US and Euro are keeping the same tone this strategy usually works very well. So the idea is to go long eur-usd everytime stock indices are beginning a new uptrend and inversely sell short when stock indices are entering a downtrend.

Since there is no confirmed exit strategy for the US the greenback remains the carry currency of the Eurozone, Aussie, Kiwi, Loonie, the British Pound and so on. This is because most countries have a stronger central bank rate policy than the US, higher rates, and their outlook seems to be more serious towards fighting inflation.

The reason for this weak policy is because the US is what is known as a debtor nation. A nation with a cumulative balance of payments deficit. A debtor nation has negative net investment after recording all of the financial transactions it has completed worldwide.

Although the Eurozone has had it's issues, nevertheless, the ECB has had a stronger currency policy than the FRB headed by Bernakee and Company. Coupled with weak dollar policy, huge seemingly insurmountable deficits, and poor resources the US dollar has been a favorable short through much of 2110 and perhaps beyond.

US Debt Statistics

What are words without some stats to back it up? Here are some links:

US National Deficit

Who owns the public debt?

National Government Debt Clocks & Savings Clocks

While debt alone doesn't determine the value of a currency it does effect what options currency policy makers can set and indirectly effects the value of the currency. On one token more supply (lower rates - injections from stimulus) is needed to stimulate the economy but on the other too much has other effects like inflation and with stimulus and borrowing comes debt.

Policy Reflected By Egos of Americans

While many think the government and it's policies are to blame another finger to point is the ego of Americans have about themselves. Throughout the world many people have to struggle with less to get by while Americans believe they don't have to work as hard to have things. Meanwhile jobs are sent over seas and Americans just keep digging into their credit and deficits. Another reason to go long eur-usd although they have their own debt woes and similar problems.

But never mind hard working Americans - it goes much deeper than that. A much worse epidemic is the amount of resources Americans consume. No matter how hard Americans work "we" (I'm American) will never be able to compensate for the amount of oil this country consumes. This situation can only end tragically at this rate which will most likely equate to hyperinflation, high commodity prices, and a struggling economy do to the situation. All of which we are experiencing but the situation could get worse because nothing has really changed.

The United States was once the land of great opportunity throughout many eras such as the roaring 20's and the end of the great world war which she lead an epic victory over the nazis but in my opinion lived much too long off of reputation alone of the pre-50's. The youth today is not like the youth that had to stand in food lines of the great depression and fight against a mighty war machine. The youth back before the 50's knew what it was to fight for something very meaningful and understood what it meant to really work. Not only is the new age American youth lazy but our society and workforce are aging. Schools are filled with gangs and misfits that don't have any society skills. The US has the highest prison population on earth and consumes the most drugs of any industrial nation.

The society is literally dieing. Even the roads and other infrastructure is falling apart while other growing societies are laying down new roads and new industrial complexes.

US dollar parity

The USD dollar has flirted with parity many times against currencies it once held a distinct advantage over. USD-CAD and AUD-CAD have breached this mark several times but have had trouble holding it. This means the US has indeed lost it's once dominant position over these nations which have literally outgrown the US in many ways especially in trade policy and trade relations.

The aud-usd flirted with parity back in 2008 but the aussie proved not to be ready back then and it led to a major fall. Maybe parity is not the goal of all nations vs the USD but it is an inevitable reality with the great trade deficits that exist with America losing it's prominence. 2011 will answer that question if the US decoupling is being fulfilled as many economist have predicted and parity is not just tested but reversed to favor other nations that were very low on the totem pole compared to the great land of opportunity prior to the US housing collapse or some call this period "The Great Recession".

I personally see it as a depression that was never declared. Why Depression? Simple reason is the situation with jobs, debts owed, and the amount of banks that have went under. That is not a recession when that many banks go under - it's' a depression. In 1929 they had an excuse - it was all new. The roaring 20's and expansion of the US in the industrial age was all new. In this one history repeats itself but it was over the housing bubble. What a sick excuse for incompetent leaders that never stepped in to curtail the situation and knowing full well that that much leverage and debt ends disastrously.

Eurozone crisis compared to US crisis

We can only guess if Eurozone problems with deficit will be as bad as the current US ordeal. But as long as the stock markets are being supported by US central banks policy and addiction to "cheap" foreign oil we keep gobbling up at any price it will just be another opportunity for eur-usd long positions.

But wait there's Greece, Ireland, Italy, Portugal, and Spain to drag down the Euro. One can call this an Ugly Pagent as the Eurozone has done it's fair share of bailing out of it's pig states in comparison to the Fed's printing press team headed by Bernankee. It is in fact one ugly mess but one will rise above the other - it just won't be pretty.

Eurozone Greece Crisis

Back in December 2009 Greece problems began emerging and the eur-usd began it's collapse from the 150.00 area. Then in May 2010 Europe announced the bailout of $1 Trillion and the Euro momentarily recovered in June from a massive downtrend (at least until new issues emerged such as Ireland).

“Every other alternative is much worse and much more dangerous, so we have to do this,”

Finance Minister Wolfgang Schaeuble

Much like the US's aging population Europe's "pig states" like Greece have an aging population that relies on welfare and credit while unemployment is soaring. It is not a good situation which adds up to a huge deficit which other Eurozone members are not too fond of especially since their GDP (gross domestic product) does not even come close to their deficits.

Much like the US doesn't have a clear exit strategy from near zero interest rates, Greece does not have a concrete solution to their debts other than being bailed out by the rest of the European Union. In fact if Greece was not bailed out it would most likely had to default on some of it's debt which would have meant it's removal from the EU.

It's not just alot of debt for the Eurozone. In fact the Greece debt is one of the highest in the world relative to it's GDP and has even exceeded 100% of it's GDP at times like back in January of 2010 when public debt was nearly an astounding 120% of Greece's GDP and effectively earning #1 ranking pig state in the EU.

A very European crisis

Despite protests, Greek Socialists win budget vote

UK budget deficit 'to surpass Greece's as worst in EU'

Primer: Europe's dire debt crisis

Eurozone Problems Continue With Ireland's Debt Crisis

As if the Greece financial crisis wasn't enough for the EU, to make matters worse, Ireland also is a high risk to Eurozone stability, with high debt and deficit issues. Prior to the Ireland problem the Euro had been in "recovery mode" from the $1 trillion dollar bailout that sent the Euro flying. But in November 2010 when Ireland issues surface it sends the eur-usd back down again from the 140.00 area into another rapid downtrend.

debt crisis threatens to destroy euro

As long as Eurozone countries are a threat to default because of deficit the Euro is still a risk. Instead of trying to ride the US economic outlook for it's own prosperity, Eurozone and it's members have to take responsibility for it's own debt problems. And as long as the US has no exit strategy the US economic outlook will be on hold and the Eurozone is the hostage. It's a complicated race but an important one because as we forex traders know the eur-usd currency cross is what basically sets the value of the US dollar because of the weight the Euro has on the dollar or those in the know call the "anti-dollar".

Of 6 currencies that determine the value of the dollar the euro comprises 57.6% of the value of the US dollar and the 2nd is the Japanese Yen at 13.6%, UK Pound 11.9%, Canadian Dollar 9.1%, Swedish Krona 4.2%, and the Swiss Franc 3.6% . So as far as importance goes, EuroZone valuation is more than 4x important than Japan when valuing the USD.

Yes a complicated and important race.
It's also a race that the Federal Reserve Bank of the US isn't trying to win.

eur-usd updates

US dollar parity

2011-01-03T03:33:00.001-08:00

The USD dollar has flirted with parity many times against currencies it once held a distinct advantage over. USD-CAD and AUD-CAD have breached this mark several times but have had trouble holding it. This means the US has indeed lost it's once dominant position over these nations which have literally outgrown the US in many ways especially in trade policy and trade relations.

The aud-usd flirted with parity back in 2008 but the aussie proved not to be ready back then and it led to a major fall. Maybe parity is not the goal of all nations vs the USD but it is an inevitable reality with the great trade deficits that exist with America losing it's prominence. 2011 will answer that question if the US decoupling is being fulfilled as many economist have predicted and parity is not just tested but reversed to favor other nations that were very low on the totem pole compared to the great land of opportunity prior to the US housing collapse or some call this period "The Great Recession".

How To Use Metatrader Indicators and templates .ex4 .mq4 .tpl files

2010-11-18T09:58:00.001-08:00

Metatrader Is very simple to use. Custom indicators (.ex4 and .mq4 files) and templates (.tpl files) can dramatically improve your charting experience. To use them simply put the .ex4 and .mq4 files in the indicators folder of your metatrader terminal. To find the indicators folder right click the short-cut to your trading terminal and follow the path by selecting "find target". Open the "experts" folder and then open the "indicators" folder. Cut and paste your indicators into the indicators folder. It's wise to do this with your metatrader trading terminal shut down. Then restart metatrader and your new custom indicators will compile. If all goes well they will be available as "custom indicators" through the navigator of the metatrader trading terminal.

Location of Indicators Folder To Add .mq4 and .ex4 files:
Program Files / Name Of Your Metatrader Broker / Experts / Indicators

If you have custom templates they can be added to the templates folder. A template does not need to be in the metatrader trading terminal to be opened if you know the location of it. I often make a special folder with my templates so I can use them in any of my metatrader demo accounts.

Location of Templates Folder to add .tpl files:
Program Files / Name of Your Metatrader Broker / Experts / Indicators

tips:
*Don't use too many indicators per trading terminal. The reason is if you use too many custom indicators they won't all be available in the navigator. I have over 1000 of them and usually only half (sometimes much less) will show up.
I don't need this many indicators lol but I experiment with them so I have quite a collection.
*save your templates with a unique but easy to remember name.
*Screen clutter is the enemy of the trader. To minimize this try not to use
more than 3 onscreen indicators and 3 window indicators. This gives priority to the best indicators and allows you to focus on the best signals.
*When you have your customs indicators installed properly they will be available through the "Navigator" as "custom indicators". The Navigator can be accessed through "View" and then select Navigator.
*If you only have the .ex4 file and don't have the .mq4 file, the indicator will not be available as a custom indicator and can only be called from a template that used the indicator previously.

Doubts about the Economy causes Nasdaq -

2010-11-15T14:38:00.000-08:00

Doubts about the economy has caused the Nasdaq to break out of a long up-channel in 1hr time-frame and reverse into a down-channel. See previous post below to compare. The thick yellow pivot line is a rolling pivot. Currently is trading below the pivot. What I'm watching is if price can trade above the pivot or if it will find support lower. Support is the blue lines on the chart. System is for sale if interested and includes the indicators shown on chart.

Nasdaq In a Channel, Doubts about the Economy

2010-10-28T15:16:00.000-07:00

Currently the Nasdaq100 is flirting with a 1hr uptrend line. The trendline is not correctly drawn to the laws of technical analysis but to show the zones in which NQ100 has traded in. Minus a few whipsaws the trendline has been very accurate. The top trendline has also shown the upside zones of this move. It has steadily traded in this range forming somewhat of a channel in the 1 hr timeframe.

This channel is off course within the upmove and can only be considered as a short term cycle at them moment. The interesting fact however is how many times these price areas have been abided by. At the same time I'm watching a special indicator which is basically a rolling pivot average. It is depicted by the thick yellow line on the chart. The red and blue lines that surround the pivot average are resistance and support lines. This move has been very tight according to my indicator. It has stayed within Resistance 1 (R1) and Support 1 (S1) and not reaching R2 or S2.

What that tells me is we have a market that is very unsure about itself. If you read the news it draws out further uncertainty. Doubts about the economy, doubts about bailouts, doubts about the strength of the dollar, doubts about employment, and doubts about the housing market. This market is filled with too many doubts. For that reason I want to be very cautious.

Current Position - None
Looking to short resistance and perhaps top
of channel but will watch other indicators to
make trade.

Multi-Monitor Trading

2010-10-23T09:35:00.000-07:00

A dream set up may not be as expensive as you think if you are creative.

Forex Trading can be much more enhanced with multi-monitor set-ups. Unfortunately buying a computer that is built for multi-monitors can be quite expensive. A cheap way of doing it is have a motherboard with extra PCI slots and search for cheap Video Card adapters on ebay. I have lots of video cards I've purchased on ebay that have duel monitor capability. Some of my cards were purchased used and some are new but they were all relatively cheap. I've paid as little as $10 for a video card and was able to easily add 2 more monitors to my system in a matter of 15 minutes. Not only that but monitors go like hot-cakes for under $100 on ebay. You can find mounts and stands there as well.

Make sure you get the right PCI card for you expansion. That is the most critical part. You might have PCI or PCI-E slots. Make sure you know the right type of slots are on your motherboard for expansion. Otherwise you will be wasting your money. Then just follow the manufactures directions to install the new video card into the PCI or PCI-E slot.

(For windows xp) After installing the card(s) just right click on your desktop and select settings. Now select the newly installed monitor (there should me more than one monitor identified) and check : "extend Windows desktop onto this monitor". There you have it. Now you have extra monitors. Just repeat the process for each monitor you set up. Make sure you always back up your registry before making any changes and then you can restore the last checkpoint.

To back up your registry. Click: start | help | Pick a task | undo changes to your computer with System Restore. Don't worry your not undoing any changes unless you select to. There's an option to create a restore point from a bullet list. You will select the bullet option to "create a restore point" and fill in the fields to make a new restore. I often do this to tweak my system to increase the security in case the tweak doesn't work. That way any registry changes that were made can be easily undone.

As Metatrader Chartist and Forex Trader we want to have our system tweaked out to give us a maximum advantage against our rivals. Multi-monitors and security tweaks give us more advantages to compete and protect our system in the competitive world of money and trading.

If you already have your monitors set up and want to have metatrader on each monitor there's no way to put an individual chart in each monitor window. But you can stretch the metatrader terminal across each screen by clicking on the re-size (the square box located on the upper right corner) and stretching the terminal so it goes across each screen. You have to click on a side and drag the edge to re-size it. You must not be in full screen to do it that's why you click on the re-size box once before resizing it to go across the other screens.

List Of Metatrader Brokers

2010-10-20T10:29:00.000-07:00

Unsorted List of Popular Metatrader Brokers for trading Forex, CFD's, or commodities:
ACM
ActivTrades
Admiral Markets
Alpari
Ava FX
DeltaStock
FastBrokers
FIBOGroup
FXCM
FXOpen
FxPro
Forex-Metal
GCI
Global Futures
Hotspot FX
Interbank FX
LiteForex
MB Trading
Neuimex
OANDA
Prime4x
Windsor Brokers

Things to consider when selecting a metatrader broker:
Is there a demo to try first?
Are they a regulated broker?
What kind of reputation do they have?
Minimum account size?
What Funding and Withdrawing from account options do they have?
Spreads?
Type and variety of trading instruments traded (are cfd's, forex, commodities an option)?
What amount of leverage can you use?
Can you set stop losses and automate trade?
Is their customer and technical service good?
Do they have a reliable server with a minimum amount of downtime?
How long have they been established?

Conclusion:
When all is said and done there are many factors in selecting the right broker. One trader might want to have Paypal as a deposit and withdrawal option while another might want to use credit cards or a bank wire. Some traders are most concerned with spreads while others are more concerned about how fast an order is filled. Sometimes delays wipe out spreads so it's important to weigh the benefits with live trading performance.

Many traders like to have many trading instruments available to trade with other than forex (such as cfd's and commodities) so their not just stuck trading from a dozen or so choices. There are many options to consider when selecting a broker but the best thing you can do is open a demo and try them out. If your satisfied with their demo performance then you might consider adding some real money trade after doing some selective research.

Also try asking them these questions. If they seem irritated or can't provide adequate answers, find one more suitable. Chances are if their irritated before you sign on with them, they will be worse when you do and they have control of your money.

tip:
When loading metatrader demo for the first time all trading instruments might not be available. To make them available right click on the marketwatch window (you have to open it first) and select show all. After you have selected show all you should be able to see all the trading instruments that are available from that broker.

copyright 2010
http://forexindicators-metrader.blogspot.com/

List of Metatrader Oil Brokers:
ACM
ActivTrades
Alpari
DeltaStock
Easy-Forex
EXNESS

FastBrokers
FIBOGroup
Forex.com
Forex4you
Forex-Metal
FxCompany
FXcast
FXCM
FXOpen
FxPro
FX Solutions
GCI Financial
GOMarkets
Hotspot FX
IncoNeon
InstaForex
Interbank FX
LiteForex
MasterForex
MB Trading
PFG Forex
Prime4x
Real Trade
RoboForex
Tadawul FX
United World Capital
X-Trade Brokers

List of Metatrader Gold Brokers:

List of Metatrader CFD Brokers:

List of Metatrader Demo Account Brokers:

Bloomberg - Silver Fundamentals

2010-10-20T07:15:00.000-07:00

Oct. 19 (Bloomberg) -- Silver exports from China, the world’s largest, may drop about 40 percent this year as domestic demand from industry and investors climbs, according to Beijing Antaike Information Development Co.

Shipments may decline from about 3,500 metric tons in 2009, said Feng Juncong, chief analyst at the state-owned Antaike, without providing a specific forecast. Customs data show exports plunged almost 60 percent to 970 tons in the first eight months. Cancellation of an export rebate in 2008 is also hurting shipments, she said.

Reduced exports may bolster prices that are trading near a 30-year high on speculation that governments worldwide will take further steps to stimulate their economies, weakening currencies and increasing demand for assets that are a store of value. China, the third-largest producer after Peru and Mexico, revoked export rebates in August 2008 to curb use of natural resources.

“There is huge demand in China this year and that has affected exports, which were already hurt after the tax rebate was abolished,” said Ng Cheng Thye, head of bullion at Standard Bank Asia. “The demand is coming from all areas, including jewelry, investment and fabrication and this has resulted in a physical market shortage in the Far East.”

The metal for immediate delivery touched $24.92 an ounce on Oct. 14, the highest price since September 1980, and traded at $24.2750 at 2:28 p.m. in Singapore. Industrial applications for silver, including electrical conductors and batteries, represent about half global demand.

Silver Rally

“China may sharply reduce its silver exports this year following the scrapping of the rebate and as domestic demand picked up amid expectations for higher inflation,” Feng said. This year’s 5,100-ton quota is unlikely to be fully used, she said.

Silver has rallied 44 percent this year, outperforming gold and copper. In the short term, prices will be between $20.50 and $25.50, GFMS Chairman Philip Klapwijk said on Oct. 16. “Silver is likely nearing a top now, and that it has more downside in the short term than upside,” he said. “But we remain bullish in the long term.”

China’s silver production, including mined, by-product output and recycled material, grew by an average 14.9 percent every year in the 20 years since 1990 to 10,348 tons in 2009, Feng said. Growth was mainly because of the fast-growing production of lead, zinc and copper, which generates silver as a by-product, Feng said.

Output Drops

The country’s silver output dropped 1.9 percent in the first eight months to 7,445 tons, she said. About 60 percent of China’s silver mined output is in the form of by-product of base metals, according to Antaike estimates.

An expected drop in lead and zinc concentrate supplies will affect domestic smelter production, weighing on China’s silver output growth, she added.

“There are Chinese investors now hoarding silver, along with other resources, amid anticipation of higher inflation,” Feng said. “China is short of resources so these investors believe the metals will be more valuable in the future.”

--Feiwen Rong. With reporting by Glenys Sim in Singapore and Xiao Yu in Xiamen. Editors: Richard Dobson, Jake Lloyd-Smith.

To contact Bloomberg News staff for this story: Feiwen Rong in Beijing at frong2@bloomberg.net

To contact the editor responsible for this story: Jim Poole at jpoole4@bloomberg.net