Traders often have expectations based on gut feel, unreal risk reward ratios and what Gurus have told them. This presentation and view of the markets is a reality check to avoid chasing Rainbows that so often results in losses'
Includes: 'Three of the most useful tools to help establish entry and exit targets based on price action'
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So what's going on with Gold...
The main economic fundamental driving Gold higher is inflation, and the lack of it leads to a decline. There are two opposing camps justnow. Firstly there are the inflationists who argue that Gold should pop up to around $2360 and there are those with $10,000 in mind.
Bill Bonner sits in this camp, and his views are usually a good read:
http://dailyreckoning.com/keeping-the-genie-in-the-bottle/
They argue that the massive increase in money supply as a result ofthe various bailouts and Quantitive Easing, must result in inflationgoing forward. Indeed, they go further in saying that inflation isthe only way in which the massive sovereign and bank debt overhangcan be reduced is by inflating the worlds economies so the debt, asa proportion, becomes much smaller and so manageable.
There is also an opposite viewpoint from the deflationist camp.This group hold the view that for inflation to take off, increasingthe money supply alone doesn't let loose inflation. There has to bereal demand from businesses and consumers to chase prices higherand a willingness from employers to pay ever higher wages.
Just now the deflationists tell us that deflation is inevitable.Businesses are shedding staff, pensions cut, the feel good factorof ever higher house prices is all over and will not return for adecade or more.
Also, all the new QE money is just being sucked into bank balancesheets to counter all those dud property loans and not circulatingin the real economy where it just might have done some good.
For more on the deflation view read Robert Prechters views:http://www.elliottwave.com/club/20-questions-for-prechter/default.aspx?code=43274
So there we have it, two opposing views and one or the other will get the Gold price taking of again - one way or the other!
China has been the worlds Power House economy consuming oil, cement, agregates, steel and so on but there have been concerns that they have overdone it! It is said they now have sufficent power generation to come with demand for the next twenty years and have too many roads going to the wrong places.
This morning it's official with an expectated fall in the China Purchasing Managers Index and a fall in manufacturing output. Not unexpected as the US and European recessions are reducing demand for Chinese goods. Read the full article here.
The dollar index has been falling now for 9 days, a strong bounce is looking increasingly likely as we head into the weekend.
Wave watchers will also know that the a-b-c swing from the high now looks extended.
For more on this........join Tradersclass.net for the weekend video.
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Scams and Shams come and go and one of the most enduring
is the Nigerian Letter/Email Scam or, to give it it’s correct name
the ‘Advance Fee Fraud’. It’s origins go way back but the
Nigerian version got going in 1980’s by some university students
and it’s developed into big business with multi millions fleeced out
of the gullible every year. Here are a couple of links at Wikipedia
and http://fraudgallery.com/ that fill in all the details.
Why should I mention this now? well for the last few weeks I have
received an average of two per day when previously it was about
once a week. Must be countering the recession with increased
output!
How can people be taken in by these poorly written letters and
emails I hear you ask. Far too easily it seems. Maybe we are all
suckers for a sorry story and link that up to the prospect of making
easy money and it’s not so surprising that it works so well.
There are many variants of the letter and I chatted to someone who
knows a friend who is taken in time and again via dating chat rooms.
On this one, the scammer befriends someone (or several hundred)
and asks for the air fare to be sent so they can meet up. You know
the rest, cash is posted and you would think the fraudster is never
seen again in the chat room. Not a bit of it, using the basic marketing
maxim that is harder to sell to new customers than existing ones, they
go after the same hapless person again and again and do you know,
they often pay up time and again until the cash runs out!
The latest video for http://www.tradersclass.net/ members shows how
well the Breakfast Trade worked again today but what of the wider
picture now the Euro has modestly bounced?
Markets are inextricably linked with a move in one affecting another,
currencies link to bonds that in turn link to stock markets, the
correlations are never perfect but they are general principles that hold
true over time.
The Euro is now looking a slightly safer bet as the focus is shifting to
how the US will cope with rising unemployment and stagnant housing
markets. But the Elephant in the room, the big issue, is what will be
the result of all the printing of US$’s, British Pounds and Euros?
In a word, inflation. Gold rising in price is telling us that the value of
paper money is falling. Gold rises with inflation and (usually) a weak
US$, it is the only real indicator and so much more accurate than the
various CPI measures that have been ‘adjusted’ over the years. It’s
on this theme that John Mauldin’s latest newsletter focuses,
'Print baby, print' you can read it here.
The Boiler Room Scam
Despite clamp downs by regulators in Canada Spain and Belgium
from where most of these scams once operated this one is also on
the increase. I get these calls every few days offering the opportunity
to buy cheap shares. Just recently two members asked should they
should go along with buying discounted shares from a nice broker
who cold called them, one from the US and another Hong Kong.
My advice, give them short shrift and put the phone down! The scam
works like this. The punter is sucked in with talk of bargain prices,
or even discounted shares on a known company, big announcement
due soon, share will take off when the news is released, etc, etc.
Money is wired to an obscure bank and then begins the long wait for
some confirmation that the shares are actually in the punters name,
the boiler room doesn’t answer the phone and so on. Take a look at
this short video on YouTube and you will get a flavour of how they
operate.
Rule number one in trading and investing is 'Don't lose money' and
this must be rule three 'Don’t have anything to do with cold callers',
and never, ever send any money. Just tell them you are reporting them
to the FSA. If they are genuine they will be registered and regulated
by them. This link is provided by the FSA so report them when
they call!
BTW, if don't remember rule two just email me.
This post outlines how to use a Fibonacci Grid to time trade entries to ensure the optimum entry level to maximise profits when trading trends.
Firstly, let me outline the wrong way to trade. There are a good many trading books that have a simple buy and sell strategy, it’s this: Buy new highs and sell new lows. Now the problem with this is that the major part of the move has been completed before it gets to the old high or low, before it can break through it to create a new high or low. Also, reversals are most likely to take place in the region of old highs and lows! So either, get in much earlier or wait until a pull back after the new high or low.
The failure rate of buying new highs and selling new lows is very high, that is, the odds are not in favour of a continuation. Also, market manipulators (more on this in another article) like to push prices through to new highs or lows and then promptly run the price back in the opposite direction.
So here is the technique to correctly trade trends using the Fibonacci Grid. Firstly find an established trend. A trend is defined by a sequence of higher highs and higher lows for an uptrend. Once a new high has been formed do nothing – wait for the inevitable correction or pull back.
Place the Fibonacci Grid between the last higher low and the current high, as price retreats wait for it to turn back up at one of the key Fibonacci retracement lines and then buy in for a low risk high probability trade.
You can get more information on this trading technique here……www.fibgrid.com
We're all waiting for the non farm payrolls.....again this Friday!
And until we get the numbers, we're in a market chop with very low volume.
The Forex Market is just like any other, it's no easier or more difficult to
make money trading currencies than Stocks, Futures or Commodities, but read
on!
How the Forex Market works
The Economic Fundamentals that drive this market
News Announcements that must not be ignored
The Pairs to Trade and the ones to avoid
Long Term Strategy that makes money in two ways
Charts, trends and the ATR
Forex terminology, order types and definitions
An easy to spot day and short term trading technique
Trading Rules, Emotions and your Subconcious
Take Daily Profits from the Forex Market is available now as an E-Book with instant download for £97
However, for the first twenty sold - you can download and get started now for just £37! The 21st person and above will pay more! or Free when you register for the Forex Traders Workshop - details here
