Press review - page 148

Sergey Golubev
Sergey Golubev  

Using Microsoft Is Cheaper Than Free Software Says Government Chief Information Officer

It is hard competing with the world’s largest software company, but it can seem virtually impossible when even giving away your products is deemed too expensive. That is the point made by UK government Chief Information Officer for Hampshire Jos Creese and it throws a spotlight on the huge challenge faced by any company trying to compete with a giant like Microsoft or Apple.

“We use Microsoft [and] each time we’ve looked at open source for desktop and costed it out, Microsoft has proved cheaper,” said Creese in an interview with Computing. “Microsoft has been flexible and helpful in the way we apply their products to improve the operation of our frontline services, and this helps to de-risk ongoing cost. The point is that the true cost is in the total cost of ownership and exploitation, not just the licence cost.”

Creese isn’t alone. While gives an example of the adoption of open source software within the US Department of Veterans Affairs (VA) it admits the US government does not actively champion open source over proprietary Mac and PC solutions. This despite a government report that said tests prove Ubuntu 12.04 is more secure than both Windows and Mac OS. The US and UK governments have also publicly advised users switch from Internet Explorer after a security flaw blew holes in all versions of Windows which forced Microsoft to issue a dedicated patch to save XP after its support cut-off date in April.

Meanwhile hypocrisy abounds as both the US and UK governments have also agreed ‘survival deals’ with Microsoft to continue support for their PCs running Windows XP.

Hoping to change attitudes is UK cabinet office minister Francis Maude (pictured below), who is championing the adoption of open source software in government. Maude claims the UK could save “tens of millions” of pounds per year by ditching proprietary software and said roughly £200m ($340m) has been spent on Microsoft Office alone since 2010.

“The software we use in government is still supplied by just a few large companies. A tiny oligopoly dominates the marketplace,” argues Maude. “I want to see a greater range of software used, so civil servants have access to the information they need and can get their work done without having to buy a particular brand of software… We weren’t just missing out on innovation, we were paying top dollar for yesterday’s technology.”

Maude says some progress is being made: “One great example of the potential from small businesses was when we re-tendered a hosting contract. The incumbent big supplier bid £4m; a UK-based small business offered to do it for £60,000. We saved taxpayers a whopping 98.5%.”

“Each time we look at open source, Microsoft is cheaper” says local government CIO
“Each time we look at open source, Microsoft is cheaper” says local government CIO
Local government CIO Jos Creese has come out in favour of Microsoft over open source alternatives, explaining that it has always proved to be the cheaper option when he has examined the alternatives. Speaking exclusively to Computing, Creese said: "We use Microsoft [for our desktops]. Each time we've looked at open source for desktop and...
Sergey Golubev
Sergey Golubev  

The Three Keys of Day-Trading (based on dailyfx article)

  • Short-Term trading is not easy; traders need to plan their approaches.
  • Trading is not entertainment, and treating it as such could be a costly endeavor.
  • Trade management is extremely important to the short-term trader.

1. Have your strategy (and plan) set before ever placing a trade

Do you already have a trading plan with your strategy written out? If you don’t, you should. While it may sound overly-detailed, or pedantic; the simple act of just knowing how you want to approach a market can have a massive impact on your overall approach.

Discipline is a necessary trait for any discretionary trader, and perhaps even more important for a short-term trader: But if you don’t know what you should do or how you should do it – how can you expect to have long-term success?

That’s where the trading plan comes in. This is like the trader’s ‘constitution’ as to how they’re going to operate and speculate in a market. This way, anytime a trader begins their operations for a day they already know how they want to attack the market, and they don’t have to make up a brand-new game plan every single morning.

2. Be selective – Trading is not entertainment

A key benefit of having the trading plan written out is that the strategy or mannerism for placing trades is already decided upon, and the trader simply has to look to execute as their strategy dictates.

If a trader takes a position that doesn’t fall within the plan or the strategy, well they know that it’s their fault for not following the plan. It’s an unfortunate truth, but in many cases the only way discipline can truly be learned is by seeing and feeling the ramifications of being undisciplined; and in trading, that amounts to losing money.

If you don’t feel that your trading plan is strong enough then change it; make it better. And if you need to build more confidence behind the strategy or strategies contained within the plan, do some testing until you get that confidence.

I know that many traders, particularly new traders want to eschew this testing and building and formulating because, well it’s not all that much fun. But trading is not supposed to be entertainment. If you want entertainment, there are movies and music and all kinds of other things in this world to enjoy. Trading is a way to make (or lose) money.

Surely, there’s an emotional response that human beings get when placing trades… the potential to make or lose money brings on the excitement or thrill of ‘the chase.’

But losing money isn’t fun… making money is. Losing money is painful, costly, and psychologically-defeating. Over a long enough period of losing, most people will eventually abandon their efforts and look for greener pastures elsewhere (by quitting trading and giving up on their goals). And it’s all because that trader couldn’t control themselves enough to stick to their own plan.

Give yourself the best chances of success by choosing high-probability strategies that you’re confident in so that you can simply follow your own plan as opposed to ‘waking up in a new world every morning.’

3. Risk management is critical to short-term traders

One of the biggest misconceptions about trading is that winning percentages are the largest determinant of success. If you look at most other venues in modern-day society, winning is the only thing that matters.

In trading, this is somewhat deceiving; because the size of the losses versus the size of the wins takes on a huge level of importance. So much so that winning only 35-40% of the time could allow for profitability, while a trader winning 60 or 70% of the time could still be struggling while losing money (on net).

But many scalpers think or feel that looking for bigger rewards than risk amounts is simply impossible in the short-term; so they use wide stops and look to take ‘quick’ profits and they try to win 80 or 90% of the time. This doesn’t usually work out well. Why?

It’s because we can’t tell the future. No matter how strong your analysis, or strategy or trading plan – markets (and the future) will always be unpredictable.

Rather, trading is more about probabilities and trying to get the odds on your side, if even just by a little bit. And the shorter-term we get in our approach, the more unpredictable price action becomes. So short-term traders need to know how to lose properly, and when they do win, they have to look to maximize the potential of those scenarios.
Sergey Golubev
Sergey Golubev  

Indian Rupee Touches One-Month High on Yellen’s Comments, China Export Data

Indian rupee advanced to its highest level in a month following comments by Federal Reserve Chair Janet Yellen that the U.S. economy will still need further monetary stimulus to prop it up, while Chinese exports grew faster than expected.

The rupee was trading 0.1 percent higher at 60.06 per dollar in Mumbai, based on prices compiled by Bloomberg. The currency edged up roughly 0.4 percent to 59.9225, its highest level since April 19.

Yellen told a Joint Economic Committee of the Congress that the Fed will continue with its monetary stimulus program as the employment and inflation indicators are yet to hit its target. China’s exports in April surged 0.9 percent from a year ago after earlier declining for the preceding two months, removing investor anxiety about the possibility of a slowdown of the world’s second largest economy. Exports in March had declined 6.6 percent, which exceeded analyst’s expectation of a decline of 3 percent. Imports increased 0.8 percent, widening the trade surplus to $18.46 billion.

“Yellen’s dovish comments and an unexpected pickup in Chinese trade data have supported the rupee’s appreciation,” Vikas Babu, a currency trader at Andhra Bank in Mumbai told Bloomberg.
“Gains were limited as there were dollar bids from oil companies and other importers,” he said.

The rupee’s one-month implied volatility, which measures the expected shifts in the exchange rate used to assign prices to options, fell 0.09 percentage point, or 9 basis points, to 11.2375 percent.
The commerce ministry of India is expected to release data on India’s exports and imports next week.

India’s Rupee Climbs to One-Month High on Fed, China Trade Data
  • 2014.05.08
  • By Divya Patil
India’s rupee rose to a one-month high after Federal Reserve Chair Janet Yellen signaled the U.S. still needs monetary stimulus and China’s exports beat forecasts. Yellen said yesterday in testimony to the Joint Economic Committee of Congress that a “high degree” of accommodation remains warranted and that the Fed must continue to spur...
Sergey Golubev
Sergey Golubev  

2014-05-09 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - RBA Monetary Policy Statement]


Australian Dollar Falls After RBA Monetary Policy Statement, China CPI Data

The Australian dollar weakened against the other major currencies in the Asian session Friday and held steady thereafter, after the Reserve Bank of Australia said it would continue to keep its accommodative monetary policy some more time and as China's consumer price inflation slowed in April.

In its monetary policy statement, the RBA reiterated its commitment to hold interest rate unchanged for the foreseeable future.

The board's outlook on inflation suggests that there is still space capacity in the economy. The board's view is that the current accommodative monetary policy setting is likely to be appropriate for some time yet.

While the central bank raised its GDP forecast for 2014 to 3 percent from the 2.75 percent estimated earlier, it lowered its forecast for 2015 by quarter percent point to 2.25-3.25 percent.

"These minor revisions reflect the net effect of the rise in the exchange rate over recent months - which is expected, at the margin, to restrain exports and boost imports over the next two years - and a slightly stronger outlook for consumption and dwelling investment over the coming year," according to the statement.

Consumer prices in China were up 1.8 percent on year in April, the National Bureau of Statistics said.That was below expectations for 2.0 percent, and the April figure slowed dramatically from 2.4 percent in March.

Producer prices contracted 2.0 percent on year versus forecasts for a decline of 1.8 percent following the 2.3 percent fall in the previous month.

The Australian dollar dropped to a 1-week low of 1.0124 against the Canadian dollar in the early Asian session, down from yesterday's closing quote of 1.0154 and held steady thereafter.

Against the U.S dollar and the euro, the Australian dollar weakened to 0.9348 and 1.4799, down from yesterday's closing quotes of 0.9375 and 1.4763, respectively and held steady thereafter.

Against the NZ dollar and the yen, the Australian dollar declined to 1.0827 and 95.03, down from yesterday's closing quotes of 1.0841and 95.30, respectively and held steady thereafter.

Looking ahead, Japan's leading index for March is due at 1:00 am ET.

German trade data for March is due at 2:00 am ET.

Canada jobs data for April and U.S. wholesale inventories for March are set for release in the New York session.

RBA: Statement on Monetary Policy-May 2014
Overview International Economic Developments Box A: Growth of Australia's Major Trading Partners International and Foreign Exchange Markets Domestic Economic Conditions Box B: Lags from Activity to the Labour Market Domestic...
Sergey Golubev
Sergey Golubev  
Big banks extend dominance of forex league table

The biggest banks have reinforced their dominance of the $5.3tn a day foreign exchange market in the past year, according to a closely watched industry survey.

The combined market share of the top five banks in currency dealing has risen to 60.6 per cent from last year’s 57.4 per cent in Euromoney’s annual poll. It is the first time the combined share of the top five has risen above 60 per cent since 2009.

The main players in the currency market fight to secure their place in Euromoney’s rankings, which serve as the industry standard although they are based on voting by clients and claim to be no more than a proxy for market trends.

Last year, Citigroup’s head of FX sales resorted to dressing as a superhero in a campaign to drum up votes – and the gamble has paid off, with Citi overtaking Deutsche Bank to take the top spot for the first time since 2002.

But the lobbying has this year been more subdued, with several banks deciding not to canvass clients. The poll, published on Thursday, follows months of intense scrutiny of the forex market as regulators around the world probe allegations that senior traders at the top banks colluded ahead of key benchmark fixings.

More than 30 staff across 11 banks have been fired, suspended or placed on leave and a number of senior executives have chosen to move on at a time of turmoil in the industry.

The probes are accelerating a long-term shift from voice to electronic trading, which many believe could favour the dominance of the biggest operators, who are able to invest more in their trading platforms.

Scale matters in a market with high volumes but low and shrinking margins, and there is already a big gap between the top handful of banks and those lower down the rankings.

Euromoney said Barclays had retained third place in its rankings, with Royal Bank of Scotland and Credit Suisse suffering the biggest falls compared with last year. BNP Paribas and Bank of America Merrill Lynch were among the main gainers.

Some institutions have already chosen to scale back forex divisions that are suffering the same pressures as fixed income and commodities at many investment banks. But relatively low capital requirements mean few are likely to pull out entirely.

Sergey Golubev
Sergey Golubev  

2 Methods to More Patient Trading

  • One common mistake in trendless markets is impatience
  • Use conservative amounts of leverage even though market movements are slow
  • Analyze longer term chart patterns for perspective and bias

If you hang around trading communities long enough, you’ll hear the wiser traders encouraging the newer traders about trading with patience and removing emotions.

It sounds simple, especially if you are practicing with a demo account. However, see what happens to your patience when your money is on the line!

A few weeks ago, we covered three common mistakes traders make during trendless markets and how to correct them. Over the next few minutes, I want to expand on the third mistake noted in that piece to help equip you with two actionable methods that can promote more patient trading.

One common mistake of traders during trendless markets is that they become impatient and close their trades prior to the stop loss or target being reached. During trendless markets, patterns and waves are slower to develop which breeds the impatience we feel.
To balance that impatience, practice these two methods below.

“Remember the clever speculator is always patient and has a reserve of cash.” Jesse Livermore

Use Conservative Amounts of Leverage

We assume that trades which have historically reached their profit targets quickly should continue indefinitely into the future. Therefore, if prices aren’t hitting their targets quickly, it must obviously not be a good trade so we exit prematurely.

This impatience is in part due to expecting the next trade to be a big home run. As a result, we’ll place a trade size a little larger than normal so as to squeeze a little extra juice out of the trade in case it goes nowhere. However, during this process, the trader ends up risking a significant portion of their account on the outcome of that one trade.

Remember, a 25% loss requires a 33% return to get back to break even. If a 25% loss in a fast moving market is difficult enough to overcome, imagine how challenging it would be to overcome a 25% loss in a slow moving market. Therefore, de-emphasize each trade and think of the next trade simply as the first of ten trades rather than the next homerun.

You can reduce the emphasis by implementing less than 10x effective leverage. Effective leverage is simply taking the total notional trade size and dividing it by your account size. The result will indicate how many times you have your equity levered. According to our research, we recommend implementing less than ten times effective leverage.

Incorporating smaller trade sizes and less leverage will alleviate the stress of having to produce a profitable trade. As a result, you’ll be more likely to let the trade develop and let the trade evolve in the way the patterns indicate.

Analyze Longer Term Patterns

Another way to become more patient is to remember what the longer term chart patterns are suggesting.
Recently, I had been trading the USD/MXN extensively and the movement was quite choppy. It had been a while since I stepped back to review the daily chart. Since it had been several months, the pattern on the daily chart cleared up which affected my near term bias on the trades.

Sometimes, we can get caught up in the minutia of the day to day. Then, we forget what the longer term patterns are suggesting and lose that perspective in trading.

That is the benefit you get with longer term chart analysis. Longer charts help you develop a bias of direction. With each trade you make, there should be some method of determining a bias.

For example, trend traders look at the longer term trend and filter their trades accordingly. Range traders will see the longer term levels of support and resistance and make buying decisions near support and selling decisions near resistance.
The point is that the market tries to lull us to sleep, yet the longer term patterns are still playing out. What better time is there to analyze charts than while the markets are slow!

Good luck and happy trading!

Sergey Golubev
Sergey Golubev  

2014-05-09 08:30 GMT (or 10:30 MQ MT5 time) | [GBP - Trade Balance]

if actual > forecast = good for currency (for GBP in our case)


U.K. March Visible Trade Deficit Narrows

The visible trade deficit narrowed on higher exports in March, the Office for National Statistics showed Friday.

The visible trade gap came in at GBP 8.5 billion in March compared to GBP 8.7 billion in February. The deficit on trade in goods was expected to widen to GBP 9 billion.

Exports of goods increased 4.9 percent month-on-month in March and imports gained 2.8 percent from February.

At the same time, the surplus on trade in services increased to GBP 7.2 billion from GBP 7 billion in the prior month.

As a result, the combined trade balance showed a shortfall of GBP 1.3 billion, smaller than February's GBP 1.7 billion deficit.

Sergey Golubev
Sergey Golubev  

2014-05-09 12:30 GMT (or 14:30 MQ MT5 time) | [CAD - Employment Change]

if actual > forecast = good for currency (for CAD in our case)


Canadian employment change -28.9K vs. 12.0K forecast

Canadian employment change fell unexpectedly last month, official data showed on Friday.

In a report, Statistics Canada said that Canadian employment change fell to a seasonally adjusted -28.9K, from 42.9K in the preceding month.

Analysts had expected Canadian employment change to rise 12.0K last month.

Sergey Golubev
Sergey Golubev  

Can You Trade Forex Well with a Small Balance?

  • The Desire to Trade FX with a Small Balance
  • The Limits of a Small Balance
  • The Better Path Regardless of Risk

“Ninety-five percent of the trading errors you are likely to make—causing the money to just evaporate before your eyes—will stem from your attitudes about being wrong, losing money, missing out, and leaving money on the table. What I call the four primary trading fears.”

“Attitude produces better total outcomes than analysis or technique.”

― Mark Douglas, Trading in the Zone

What’s the least amount I can’t start trading with? That’s a common question running through a trader-to-be’s head when they’re about to open a trading account. However, you’ll soon see how that line of thinking can breed a lot of poor thinking patterns and get you in trouble.

Let’s start off with some tough love. You’re not trying to buy something at a discount when you put down margin for a trading account. Less is not more and as you could understand, less is less. Put in other words, the attitude that comes with trying to get the best deal on a large purchase can do damage to your trading.

Here’s how. The attitude you trade with will follow through to how you manage risk and in keeping that mindset, you’ll likely overleverage your trading account and potentially be forced out of trades at the worst possible point. A better approach is to ditch the focus on a win percentage and instead focus on preserving capital / downside risk as opposed to a key juncture break long before an extreme pressed you out of the market. This new attitude that focuses on risk often produces better total outcomes than analysis or technique alone.

The Limits of a Small Balance

There’s a reason Hedge Funds don’t start with $5,000 or $50,000 or even $500,000. That’s because they know their inability to enter into a position with favorable risk: reward is directly tied to limited capital. Now, before you think, “I’m not a hedge fund so that doesn’t concern me,” think about this. Everyone is trying to extract money from the market while risking as little as possible however, there is an amount of agility that is needed to trade well and put the odds in your favor.

In short, a small trading balance limits your agility as a trade. Acute observations from traders with small balances show common traits that limit agility and your edge as a trader:

  1. Lottery Mentality –always looking for the big winner
  2. Taking on too much risk relative to appropriate reward sought
  3. Overt focus on the short-term which can have less order than longer term moves

Agility is a mindset that traders need to have are often doomed without. When you’re agile, you’ll have the ability to pay attention to what matters most in trading, which is exploiting an edge in the market while always limiting risk. Of course, there’s an easy way to do this without trying to find a psychologist to change your mind frame.

The Better Path Regardless of Risk

Always think risk first regardless of your account balance. However, the more trading capital and usable margin you have, the easier it is to stay level headed and agile as the market moves. It’s been said that to enter a trade without a clear risk-point in mind is reckless and I agree. However, the more usable margin you have, which goes hand in hand with a larger account balance, the less you’ll keep holding out for the big winner and rather look for fewer high probability trades. Here’s a look from the Traits of Successful Trader’s Research that shows the correlation to high balance and better performance

The graph above shows a clear pattern: the less equity you trade with, the more prone you are to use high amounts of leverage. The more amount of leverage you utilize, the more focus you’re likely to have on short-term gains. The only problem with an overt focus on short term gains with high leverage is that you’re unlikely to take a small loss in the near term which can eventually lead to a huge or devastating loss before long.

Closing Thoughts

Starting with a small account can become one of the most expensive ways to get started. This article has opened up many of the mental traps that lurk for those trading a small account. The question becomes, are you willing to take trading seriously enough to protect your mental capital and align yourself with those who have made a success in trading before you?

I hope your answer is yes.

Happy Trading!

Why Traders Lose Money
Why Traders Lose Money
  • 2014.04.24
  • James Stanley
While the title of this article can have broad implications with numerous explanations, we’re going to do our best to reduce the answer to this query to the most logical and basic explanation. When a trader first gets started, it might be hard to imagine how getting control of losses can seem an impossible task. It may even feel like the...
Sergey Golubev
Sergey Golubev  

Two arrested in Australia forex probe

Australian police have arrested a government employee and a banker on charges related to insider trading and abuse of public office, after a probe into suspicious trading in foreign exchange markets.

The arrests follow the launch of a separate inquiry by Australian regulators into the country’s $168bn forex market, as the net widens in an international investigation into alleged price-rigging by banks and currency traders in the forex market.

Police said on Friday they had evidence that a 26-year-old employee of National Australia Bank had received price-sensitive information from a 24-year-old man who worked at the national statistics bureau. The two men met at university and were friends.

Between August 2013 and May 2014 the bank employee had used labour force, retail sales and trade data to trade in forex derivative products and personally profit from favourable price movements, police alleged.

The trading is thought to have generated A$7m in profits. If that is proved, it will be one of the biggest insider trading cases in Australia to date.

“Insider trading is a serious criminal offence that will not be tolerated because it has the potential to destroy trust, discourage participation and undermine confidence in the integrity of Australia’s financial markets,” said Chris Savundra, head of markets enforcement at Asic, the Australian Securities and Investments Commission.

The Australian dollar is the fifth most traded currency and accounted for $462bn in daily trades as
of April 2013, according to the Bank for International Settlements.

But with an average value of daily forex trading at desks in Australia of $168.6bn as of October 2013, it is only the eighth-largest trading hub.

Mr Savundra declined to say how the joint investigation by the police and Asic had uncovered the alleged fraudulent trading.

The bank employee did not use NAB’s internal systems to trade the derivatives. Instead, it is alleged that he used price-sensitive information provided by his friend to place bets with online forex trading platforms on fluctuations in the Australian dollar.

Investigators in this type of case are often tipped off by market participants such as brokers, online trading platforms or members of the public. Regulators also monitor markets for unusual trading behaviour.

Police said they had seized A$9,000 in cash during searches of property related to the investigation.

The statistics bureau employee faces charges of conspiracy to engage in insider trading, receiving a bribe as a public official, and dealing in the proceeds of crime. He is due to appear in court in Canberra on Saturday.

The banker faces charges of insider trading, giving a bribe to a public official, and dealing with the proceeds of crime. He was bailed at Melbourne magistrates’ court on Friday.

A separate Asic inquiry into the wider Australian forex market is looking at whether traders have shared information about client orders and tried to move forex benchmarks.

Greg Medcraft, Asic chairman, said in March this inquiry would take a year. At least a dozen regulators and 15 banks in the US, Asia and Europe have been engulfed by allegations of price rigging by banks and currency traders.

Australia regulators to probe forex market -
Australia regulators to probe forex market -
Australian regulators are launching a probe into the country’s $168bn foreign exchange market, as the net widens in the sprawling international investigations into allegations of price-rigging by banks and currency traders. Australia became the