2013-03-13 05:45 GMT (or 06:45 MQ MT5 time) | [CNY - Industrial Production]
if actual > forecast = good for currency (for CNY in our case)
China's industrial production, retail sales and fixed investment
grew less than expected in the first two months of 2014, underscoring
the moderate slowdown in the region as measures to clamp down credit
Industrial production increased 8.6 percent
year-on-year in the January to February period, the National Bureau of
Statistics said Thursday. Production was forecast to grow 9.5 percent,
following a 9.7 percent rise in December.
Another report from the
statistical office showed that retail sales grew by a double-digit 11.8
percent year-on-year during the two months, which was weaker than the
13.5 percent increase forecast by economists.
Further, urban fixed
asset investment during January to February increased 17.9 percent from
the last year, which was also slower than expectations for 19.4
The government targets 17.5 percent fixed asset investment growth for the whole of 2014, after it advanced 19.6 percent in 2013.
Nonetheless, economic data in January and February are usually distorted by the Lunar New Year holiday.
5 Software Stocks to Buy Now (based on investorplace article)
A further pickup in the U. of Michigan Confidence survey may prop up the
U.S. dollar ahead of the Fed’s March 19 meeting as it raises the
prospects for a stronger recovery in 2014.
Time of release: 03/14/2014 13:55 GMT, 9:55 EDT
Primary Pair Impact: EURUSD
Forecast: 80.0 to 83.0
Why Is This Event Important:
Indeed, positive developments coming out of the U.S. economy may
heighten bets of seeing another $10B reduction in the asset-purchase
program, but an unexpected decline in household sentiment may drag on
interest rate expectations as Fed Chair Janet Yellen pledges to retain
the zero-interest rate policy even after achieving the 6.5% threshold
How To Trade This Event Risk
Bullish USD Trade: Consumer Confidence Climbs to 82.0 or Higher
Potential Price Targets For The Release
Previous USD - Michigan Consumer Sentiment :
GBPUSD Technical Analysis (based on dailyfx article)
The range between 1.6600 and 1.6765/70 for the Pound remains in force.
While a test of the range-top looked possible yesterday, sellers at the
50% Fib Retracement level at 1.6690 acted to cap the GBP/USD’s advance.
This has resulted in a Bearish Engulfing candlestick pattern that is
threatening a break of the range-bottom at 1.6600.
China's Twitter "Weibo" Files For $500 Million IPO (based on Forbes article)
The Chinese version of Twitter, Weibo, filed a preliminary prospectus
on Friday for an initial public offering in the U.S. to raise $500
Weibo was developed by Nasdaq-listed Sina Corp., which now owns the
77.6% of Weibo. A subsidiary of Alibaba Group owns another 19.3% through
a $586 million investment made last April.
The IPO may be a step toward Weibo’s long-predicted spin-off from
Sina. The filing says the transaction agreement “contains provisions
relating to the company’s carve-out from Sina,” and that $250 million of
the net proceeds will be used to repay loans to Sina.
Launched in 2009, Weibo boasted 129 million monthly active users as
of December, according to its IPO filing. It allows users to post a feed
of up to 140 Chinese characters with multimedia attachments, and in
December alone some 2.8 billion of those feeds were posted. “Weibo
allows people to be heard publicly and exposed to the rich ideas,
cultures and experiences of the broader world.
The Forex Guide to Fundamentals, Part 1: What is a Fundamental? (based on dailyfx article)
The Forex Guide to Fundamentals, Part 2: Capital Flows & Interest Rates (based on dailyfx article)
Fundamental analysis in Forex studies economic factors that cause
shifts in buying and selling patterns of traders. As demand increases
for a currency so does its value. Likewise as money flows out of a
currency its value begins to decrease.
What is a Capital Flow
Capital flows describes the flow of funds in to or out from a
particular currency. Normally this flow is directly related to capital
investments inside of a particular country. For instance, if foreign
investors wanted to invest in stocks on the S&P 500, it would
require Dollars to do so. This means money would flow into the USD from
another currency to make the purchase.
The logic from here is one of supply and demand. If capital inflows
exceed outflows that means there is a demand for countries currency.
This can provide fundamental trading opportunities as for traders as
prices rise to accommodate the new demand. This is also true with a net
capital outflow. As there is less demand for a particular countries
currency, we would expect a fundamental opportunity to place new sell
Interest Rates & Central Banks
Interest rates are important to capital flows. As investors,
speculators, and traders in general all look to maximize their returns
they tend to look towards higher yielding investments. That means
countries with the highest interest rates, and best economic data tend
to see their countries strengthen due to capital flows.
One way to track capital flows is by monitoring economic data on the
economic calendar along with central bank releases. Central banks are
charges with setting the banking rate that is associated with their
currency. As this value changes, so will demand for a particular
Forum on trading, automated trading systems and testing trading strategies
Something Interesting in Financial Video January 2014
newdigital, 2014.01.15 07:13
What are interest rates?
Interest Rate Expectation (adapted from this article)
While it is easy for Forex traders to understand the logic of why
investors move money from lower yielding currencies and assets to higher
yielding assets and currencies. They may also believe that the simple
mechanism of supply and demand is responsible for currency movement.
However, this is only part of the story. The expectation of future
interest rate increases or rate cuts is even more important than just
the actual rates themselves.
For example, the United Kingdom had interest rates that hovered between
4.5 and 4.75% which was much higher than the 3.25% in the United States.
Conventional wisdom would dictate that GBPUSD should have went up
during this time period. However, as seen in the chart above, this was
clearly not the case as GBPUSD headed lower. The reason for this was the
expectations that the US Federal Reserve would begin a rate tightening
cycle. The 250 basis point premium enjoyed in the UK at the beginning of
2005 narrowed to just 25 basis point difference. The Fed raised the
interest rate from 3.25% in December 2004 to 6.00% by May of 2006.
If a central bank decides to one day, hike rates and then say that they
are through raising rates for the foreseeable future, then a currency
can still sell off though the interest rate was raised.
newdigital, 2014.02.15 06:58
Trader Styles and Flavors (based on dailyfx article)
Technical vs. Fundamental
Technical analysis is the art of studying past price behavior and
attempting to anticipate price moves in the future. These are traders
that focus solely on price charts and often times incorporate indicators
and tools to assist them. They look at price action, support and
resistance levels, and chart patterns to create trading strategies that
hopefully will turn a profit.
Fundamental analysis looks at the underlying economic conditions
of each currency. Traders will turn to the Economic Calendar and Central
Bank Announcements. They attempt to predict where price might be headed
based on interest rates, jobless claims, treasury yields and more. This
can be done by looking at patterns in past economic news releases or by
understanding a country’s economic situation.
Short-Term vs. Medium-Term vs. Long-Term
Deciding what time frame we should use is mostly decided by how much
time you have to devote to the market on a day-to-day basis. The more
time you have each day to trade, the smaller the time frame you could
trade, but the choice is ultimately yours.
Short-Term trading generally means placing trades with the intention of closing out the position within the same day, also referred to as
“Day Trading” or “Scalping” if trades are opened and closed very
rapidly. Due to the speed at which trades are opened and closed,
short-term traders use small time-frame charts (Hourly, 30min, 15min,
Medium-Term trades or “Swing Trades” typically are left open for a
few hours up to a few days. Common time frames used for this type of
trading are Daily, 4-hour and hourly charts.
Long-Term trading involves keeping trades open for days, weeks,
months and possibly years. Weekly and Daily charts are popular choices
for long term traders. If you are a part-time trader, it might be
suitable to begin by trading long term trades that require less of your
Discretionary vs. Automated
Discretionary trading means a trader is opening and closing
trades by using their own discretion. They can use any of the trading
styles listed above to create a strategy and then implement that
strategy by placing each individual trade.
The first challenge is creating a winning strategy to follow, but the
second (and possibly more difficult) challenge is diligently following
the strategy through thick and thin. The psychology of trading can wreak
havoc on an otherwise profitable strategy if you break your own rules
during crunch time.
Automated trading or algorithmic trading requires the same time
and dedication to create a trading strategy as a discretionary trader,
but then the trader automates the actual trading process. In other
words, computer software opens and closes the trades on its own without
needing the trader’s assistance. This has three main benefits. First, it
saves the trader quite a bit of time since they no longer have to
monitor the market as closely to input trades. Second, it takes the
emotions out of trading by letting a computer open and close trades on
your behalf. This means you are following your strategy to the letter
and are not able to deviate. And third, automated strategies can trade
24 hours a day, 5 days a week giving your account the ability to take
advantage of any opportunity that comes its way no matter the time of
GOLD Fundamentals (based on dailyfx article)
Fundamental Forecast for Gold: Neutral
USDJPY Fundamentals (based on dailyfx article)
Fundamental Forecast for Japanese Yen: Bearish