Finalizing FTA Deal will See Trade Volumes between Aussie Dollar and Yuan Go up
Australia Prime Minister Tony Abbott is expected to sign the final
terms to a trade agreement between China and Australia that will see
transactions volumes between yuan and Australian dollar soar and lower
the cost of business between the two countries.
Presently, the Aussie is one of the four currencies that can be fully
converted into the Chinese yuan. The Chinese government is currently
considering turning the renminbi into an international currency,
reported the Australian.
The deal to convert the two currencies was signed a year ago though
the trading volumes between the yuan and the Aussie dollar have started
to stabilize after initially surging. Currency flows are estimated to be
worth $US2.5 billion per month, up from around US$300 million before
former prime minister Julia Gillard signed the convertibility deal in
Analysts had expected the turnover to increase every month as more
Australian firms scaled up their Chinese exports. Currently, China is
Australia’s No. 1 trading partner, with volumes valued at more than
US$130 billion per year.
Other currencies that convert directly to the yuan
include the New Zealand dollar, the Japanese yen and the US dollar. The
deal between Australia and China ensures Australian export firms can
receive payments in the Aussie dollar. The full convertibility lowers
the transaction costs involved in using other currencies to settle the
payments. Certain exporters say that the agreement cut the transaction
costs by 10 percent.
“The trading between the dollar and the renminbi has flatlined over
the past couple of months but it will take off again, the next obvious
step is to see Sydney become a renminbi hub,” said Andrew Whitford, the
head of Westpac in China. “I’m a very strong advocate for Sydney to
become that hub. There is certainly a need for that to happen.”
Avoiding Psychological Traps That Ruin Your Trading (based on dailyforex article)
The mantra that 90% of the struggle to become a profitable trader is
fought and decided within the trader’s own head has become a persistent
cliché within Forex educational literature. Is it true, or is it just a
convenient excuse to sell warmed-up, content-free New Age psychobabble
at a huge mark-up? More importantly, does it mask a more sinister fact
that the market is in fact random and cannot be beaten by any kind of
analysis? The answers are mixed, and more complex than you might think.
There is no doubt that there is money to be made in the field of Forex
education. A quick search of the net will produce a lot of material that
is high on opinion and low on data. It is cheap and cost-effective to
produce a little feel-good material for that section of the public that
is ready to be talked out of the idea that it is gambling on short-term
time frames without clear ideas of any realistic parameters. However,
this in itself is not proof that the market is random and cannot be
beaten by analysis.
The Illusion of Randomness
The idea that the market is random, when properly considered, is
ridiculous. In fact, randomness in any context is wholly an illusion. It
is just a word we ascribe to situations we feel that we cannot predict.
In science, the apogee of randomness is the “Brownian Motion”
experiment, where particles are observed moving randomly as they are
buffeted by other unseen particles. However, if we knew the speed, mass
and position of all the particles within the experiment, we would be
able to predict the exact position and timing of every movement! It is
exactly the same with financial markets. Price movements are caused by
the value and timing of buy and sell transactions, and if we knew the
intentions of every market participant we would be able to predict every
tick of the market! So markets are not random, just effectively random
to us on smaller time frames as we cannot possibly determine all the
information required to accurately predict market movements.
The truth about technical analysis on smaller time frames is that it can
provide a statistical edge, albeit a very small one. For example,
certain technical formations, over large samples, might show a 53%
probability that the price will reach 20 pips in one direction before
the other. So the market can be beaten, even by technical analysis. It
can be beaten even more easily by traders who realize that the same
technical formations that show a 53% probability of 20 pips might also
show a far more profitable 35% probability of 80 pips. All speculative
markets can be beaten, in the long run, by strategies which cut losers
short and allow winning trades to run in an unlimited fashion. This is
because speculative financial markets consistently produce improbably
excessive returns far more often than they would if they were efficient.
Why Do We Fear the Market?
Now we have established that it is possible to beat the market, why are
so many traders, who understand and agree with my previous points,
having problems with profitably exploiting the market?
This is where the New Age psychobabble comes in useful. In this context,
it is not nonsense, but an accurate diagnosis. The short answer is:
lack of belief, or faith. The trader is still frightened that they
cannot beat the market, because the market has changed, or because the
trade they are looking at taking right now looks terrible, etc. There is
a long list of psychological issues that can be identified, but the
lack of faith/belief is at the root of it all.
How to Believe You Can “Beat” the Market
How can this be challenged? It should be challenged on two levels:
factual, and spiritual. The factual level is easier to prove. Simply
construct a strategy that follows a trend on a longer time frame, uses a
shorter time frame for entry, and seeks to hold positions until the
longer time frame’s trend has changed while employing fairly tight stop
losses on initial entries. It is best to try to trade instruments that
are showing the most powerful trends also. Then test the strategy over a
number of years. If the strategy is reasonably built and not over-curve
fitted, you should like what you see. Note that there are losing
periods, and remember these will test you far more as they play out in
real time than they do as you click through a mountain of historical
data over a period of a few hours of research.
The factual challenge was the easier part. What about the spiritual
challenge? Deep down, most of us believe that “there is no such thing as
a free lunch”. When this inner belief is combined with the fact that
you have to risk money on the market in order to gain a return, we can
feel foolish and guilty, like an arrogant child that is likely to harm
themselves by not heeding the wise advice of their parents. This is what
leads us to fail to take a trade, or close it out too early.
The first step in confronting this is to admit that the feeling exists
within you. Understand why it exists. The final and most difficult step
lies in persuading oneself that it is not true. Isn’t your life itself a
“free lunch”? Did you have to work hard to be born? Were you born with
some natural talents and positive attributes, and did you have to do any
work to achieve them? Most of us are born with and continue to enjoy
the unconditional love of our parents: did we have to earn that, or did
it come free? Does the earth produce enough food, water and air to
sustain us all, and before our ancestors took up farming, did they have
to work very hard at hunting and gathering?
When you can truly accept that life itself is a free lunch, you will
find that most of the battle to become a profitable trader has been won.
Of course, you do need to do some work building and testing a strategy
too, but that is the easier part.
Japan’s Annual Export Growth Falls Steeply In March amidst Fewer China Shipments
Japan’s growth in annual exports fell in March owing to weaker
deliveries to China, causing investors to speculate that rising external
demand may not help the local economy weather the effects of the April 1
hike in sales tax.
Data compiled by the Ministry of Finance indicated that exports grew
1.8 percent last month from a year ago, after surging 9.8 percent on a
year-on-year basis last month. This lagged the median estimate of a 6.3
percent advance in a Reuters survey of economists.
The country’s trade deficit widened to a record 13.75 trillion yen
($134.45 billion) in the year ended in March due to the weaker exports.
After earlier advancing faster than most of its peers, Japanese economy
has gradually slowed down as the boost provided by the central bank’s
stimulus package waned. However, expectations are high that the Bank of
Japan will roll out another fresh stimulus this summer following recent
economic figures that point to a weakening economy.
Nonetheless, the central bank has insisted there are no such plans,
saying that the economy will still meet its target inflation rate of 2
percent, though the onus is on the government to try to bolster private
"Exports are weak because Japanese products are not as competitive as
they used to be," Yasuo Yamamoto, a senior economist at Mizuho Research
Institute, told Reuters.
"This suggests the economy will struggle to recover after the sales
tax hike. The government needs to do more with its growth strategy to
make companies more competitive."
Japan’s exports to China grew 4.3 percent year-on-year in March, down
from a growth of 27.6 percent the previous month. Japan has struggled
to increase its exports amidst a weak yen which makes imports more
expensive compared to exports.
Japan’s trade deficit stood at a shortfall (deficit) of 1.446 trillion
yen last month, which is still less than the January’s record trade
deficit of 2.79 trillion yen.
Watch the video above and updated automated strategy outlook below. What happens when volatility inevitably surges?
Volatility Percentile – The higher the number, the more likely we
are to see strong movements in price. This number tells us where
current implied volatility levels stand in relation to the past 90 days
of trading. We have found that implied volatilities tend to remain very
high or very low for extended periods of time. As such, it is helpful to
know where the current implied volatility level stands in relation to
its medium-term range.
Trend – This indicator measures trend intensity by telling us
where price stands in relation to its 90 trading-day range. A very low
number tells us that price is currently at or near 90-day lows, while a
higher number tells us that we are near the highs. A value at or near 50
percent tells us that we are at the middle of the currency pair’s
Range High – 90-day closing high.
Range Low – 90-day closing low.
Last – Current market price.
The 10 Names Retail Investors Traded Most In 2013
Apple was the most actively traded stock every month of 2013.1. Apple (AAPL)2013 Total Return: 2.2%2. SPDR S&P 500 (SPY)2013 Total Return: 32%3. Facebook (FB)2013 Total Return: 105%4. Tesla (TSLA)2013 Total Retun: 344%5. Netflix (NFLX)2013 Total Return: 298%6. SPX2013 Total Return: 30%7. Google (GOOG)2013 Total Return:58% 8. Russell 2000 (RUT)2013 Total Return: 37%9. Bank of America (BAC)2013 Total Return: 35%10. Amazon.com (AMZN)2013 Total Return: 59%