Is It Possible To Trade Without Knowledge?

Foreign Exchange is one of the most popular and the fastest growing financial markets in the world. Each day more and more people make up their minds to enter this boundless world of finance and take up trading. But it is not a secret that being that much attractive, Foreign Exchange Market is also very unpredictable and risky. So, it is quite essential for each investor and trader to make sure that s/he has enough knowledge on the market.

Today, when entering different financial forums, one will come across one of the most frequently asked questions: “is it possible to trade without knowledge”? The answer is very simple “No”. Knowledge is the key component of profitable and successful trading, as it serves as a fundamental basis for future trading. Knowledge helps traders to understand what is Forex, what are the main tools for analyzing the market, what is an indicator, or a chart, etc. In other words, knowledge gives you a lot of information regarding trading, which you will later use in practice.

Today, there are many Forex brokers who offer many educational materials for beginners and for experienced traders. Besides using the materials offered by Forex brokers, one can also find a lot of materials regarding trading by making a good research on the Internet. Like, different financial forums, where traders share their trading experiences and get answers to their questions or different articles, etc. In any case, the variants are many, and each one is free to choose the best way of being educated.

Markets rise as OPEC agrees to limit output

US stocks follow oil higher

US stocks advanced on Wednesday as investor confidence was buoyed by jump in oil prices on reports of an OPEC agreement to limit crude output. The dollar ended little changed: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six major currencies, slipped 0.02% to 95.402.The Dow Jones industrial average gained 0.6% to 18339.24 with the shares of ExxonMobil and Caterpillar, up more than 4%, leading the blue chip index higher. The S&P 500 rose 0.5% settling at 2171.37 led by 4.3% jump in energy stocks. The Nasdaq added 0.3% closing at a record high 5318.55. The rally in energy stocks boosted investor risk appetite together with better than expected durable goods report: orders for durable goods came in flat in August instead of an expected drop. However, no growth in durable orders after 3.9% gain in July indicates slowing of investment, pointing to slowing economic growth expectations. Soft recent economic data support expectations of low interest rate environment. The Federal Reserve held off on raising rates at its September meeting, signaling it will act at its December meeting. Chicago Fed President Charles Evans said yesterday that the US was likely to be in a low-rate environment “for some time.” Fed Chairwoman Janet Yellen also testified yesterday before the Committee on Financial Services, saying that regulators needed to do more to alleviate the regulatory burden on small lenders. Today at 14:30 CET second quarter final GDP will be published. At the same time August advance Goods Trade Balance, and Initial Jobless Claims and Continuing Claims will be released, the tentative outlook is negative for dollar. At 16:00 CET August Pending Home Sales will be published. The tentative outlook is negative. And at 16:30 CET Natural Gas Storage Change will be released by the Energy Information Agency.

Bank and energy stocks lift European markets
European stocks rose on Wednesday lifted by bank stocks as Deutsche Bank rebounded and higher energy stocks ahead of OPEC meeting in Algeria. The euro and Pound edged lower against the dollar. The Stoxx Europe 600 gained 0.7%. Deutsche Bank shares ended 2% higher pairing earlier gains of 4% after a report German government is working on a rescue plan for the bank. Despite a dismissal of the report later by Germany’s finance ministry as “false”, shares of the biggest embattled German bank closed higher partly also due the news the bank reached a deal to sell its Abbey Life insurance business to Phoenix Group for €1.09 billion ($1.23 billion). The recovery in Deutsche spurred gins in the financial sector: shares of Banco Santander and Commerzbank rose 1.3%, BNP Paribas added 1%. Germany’s DAX 30 index rose 0.7% to 10438.34, France’s CAC 40 gained 0.8% and UK’s FTSE 100 added 0.6% to 6849.38. In economic news European Central Bank President Mario Draghi said the euro area needs “more robust policy prescriptions” to promote growth. Stocks continue rising today. The German labor market report indicated September Unemployment Rate remained unchanged at 6.1% while the number of unemployed rose by 1000. Data showed also September business and economic confidence indexes rose while the consumer confidence index remained unchanged in euro-zone. And at 14:00 CET September preliminary consumer price index will be released in Germany, the tentative outlook is neutral for euro.

Asian stocks advance on Thursday
Asian stocks are rising today led by energy shares as oil prices jumped on Wednesday. Hong Kong’s Hang Seng Index is 0.5% higher. Nikkei ended 1.4% up today with yen weakened against the dollar. Australia’s All Ordinaries Index gained 1% as Australian dollar slipped against the dollar.

OPEC agrees to cut output
Oil futures prices are pulling back today following a jump on Wednesday on news the Organization of the Petroleum Exporting Countries agreed to cut output to 32.5-33.0 million barrels per day (bpd) from around 33.5 million bpd. Another positive development for crude was the US Energy Information Administration report early Wednesday that domestic crude supplies fell unexpectedly by 1.9 million barrels last week. This was a fourth weekly drop in a row. November Brent crude rose 5.9% to $48.69 a barrel on London’s ICE Futures exchange on Wednesday.

Bank of England may loosen monetary policy

Deputy Bank of England Governor Minouche Shafik said the British economy may need additional monetary stimulus. Will it weigh on British pound?

The decision to weaken monetary policy may be made already at the following Bank of England meeting on November 3, 2016. No specific measures have been outlined so far as they will depend on economic data. After the UK voted for leaving EU on referendum on June 23, 2016, the Bank of England cut base rate of 0.5% to 0.25%. This level is historical low. Rate was first cut in August since 2009. Moreover, Bank of England raised annual volume of monetary easing from 375bn to 435bn pounds. As we see, British regulator assumes these measures may be insufficient, so further rate cuts may take place and monetary stimulus may be expanded. In August year-on-year inflation was 0.6% in UK which is far above even the current base rate. In Q1 2016 the current account deficit was 32.6bn pounds. Trade balance has been consistently negative in UK since the 1980s. Now it exceeds -10bn pounds a month which is close to historical highs. This Friday the Gfk consumer confidence index for September will come out in UK, as well as final GDP and current account balance for Q2, we see the tentative outlook as neutral. Pound may depend on these data now.

GBPUSD

On the daily chart GBPUSD: D1 has slumped after the Brexit on June 23. After that it has been correcting within the rising channel and is near support line now. Looser monetary policy by the Bank of England may push British pound lower again.

The Parabolic gives bearish signals.
The Bollinger bands have contracted which means lower volatility and are tilted downward.
The RSI us below 50, but far from the oversold zone. No divergence.
The MACD gives bearish signals.

The bearish momentum may develop in case the British pound fall below the last fractal low and support of the rising trend at 1.29. This level may serve the point of entry. The initial stop-loss may be placed above the Parabolic signal and the last fractal high at 1.313. Having opened the pending order we shall move the stop to the next fractal high following the Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop-loss level at 1.313 without reaching the order at 1.29, we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Technical analysis summary

Position Sell
Sell stop below 1.29
Stop loss above 1.313

Presidential debates in US may affect markets

How to Become a Successful Forex Trader

As it is known, Foreign Exchange market is the largest and the most liquid financial market in the world, which attracts more and more people each day. When entering the market for the first time, each one wants to become a successful and professional trader with constant profits. However, it should be pointed out that it is not an easy task. In order to become a successful trader, one will need to spend much time and work very hard. Moreover, there is no trader that can always have profits without ever suffering losses.

There is no exact guideline or strategy that can help you to become a successful trader overnight, nevertheless there are some important tips worth paying attention to. Before entering the market each trader should examine the market very attentively and should have an exact trading plan, as these are the main and the most important features to achieve success. Foreign Exchange market is very unpredictable and no one knows for sure what will happen next, that is why it is very important for a professional and successful trader to have the ability of controlling emotions, in other words have self-discipline. Professional traders consider emotions to be the worst enemy of trading, so each trader should try to control emotions in order to avoid further losses. They should exactly know when to enter and exit the market, when to trade and when to stop.

Trading with a small amount of money is another important tip a trader should take into consideration. It is not recommended to trade all your money at once, as it was already mentioned above the market is very changeable.

Another important thing that plays a great role in becoming a successful trader is knowledge. Before entering the market, traders should read, do research, examine the market trends, take part in various financial forums; in other words, become a participant of the financial market so as to make rational trading decisions.

And the last thing is of course having a well-developed trading strategy. Trading strategy is important since it makes trading process more disciplined and regulated. Trading by chance rarely brings any good result. Anyone should use the trading strategy that suits his own trading preferences, because one trading strategy may work for someone while not work for another.

Spend much time, work on yourself and on your emotions, enlarge your knowledge, examine everything carefully and in that case be sure you will achieve your desired goals.

Bank of Canada may loosen monetary policy

Canadian dollar slumped to a 6-month low. On USDCAD chart it looks like growth. Lower oil prices and bank of Canada’s statement supported such a trend. Will Canadian dollar continue weakening?
The victory of Hillary Clinton over Donald Trump in first round of TV debate as declared by CNN agency, could also have a negative effect at Canadian dollar. Market participants believe Democrats are more interested in Fed rate hike. In case their candidate Hillary Clinton wins, the Fed rate may approximate the one set by Bank of Canada which is being 0.5%. Meanwhile the Canadian dollar will become less appealing to investors. Bank of Canada Governor Stephen Poloz said on Monday the Bank will take additional steps to reach the 2% inflation target. This August it fell to the 10-year low of just 1.1%. On such data and statements by Canadian policymakers the chances for the Fed rate cut in mid-2017 rose from 20% to 50%. This may become yet another threat for Canadian dollar. Rate cut looks reasonable given weaker economic data. Canada’s GDP fell 1.6% year on year in Q2 2016. Current account shows deficit of C$19.9bn. Raw hydrocarbons account for about quarter of Canada’s exports so potential decline in global oil prices may have a negative effect on Canadian dollar. Unofficial data came out on Tuesday that OPEC member did not agree on oil output freeze in Algeria. The matter will be further discussed on OPEC November meeting this year. This week the Canadian GDP for July will come out on Friday, the outlook is moderately negative.
USDCAD
On the daily chart USDCAD: D1 has been rising for 5 months already and is struggling for returning to the previous uptrend. Monetary easing by Bank of Canada and lower oil prices may push the Canadian dollar further lower. On USDCAD chart it will look as growth.
The Parabolic indicator gives bullish signals.
The Bollinger bands have narrowed which means lower volatility and are tilted upwards.
The RSI is above 50 but far from the overbought zone, no divergence.
The MACD gives bullish signals.
The bullish momentum may develop in case the Canadian dollar surpasses the fractal high, 200-day moving average and returns to the previous rising trend: 1.328. This level may serve the point of entry. The initial stop-loss may be placed below the Parabolic signal and the last fractal low at 1.298. Having opened the pending order we shall move the stop to the next fractal low following the Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop-loss level at 1.298 without reaching the order at 1.328, we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Technical analysis summary
Position Buy
Buy stop above 1.328
Stop loss below 1.298

Advantages of Commodity Trading

The role of commodities in our reality is tremendous. We cannot imagine a single day of our lives without the usage of commodities. As it is known commodities are the raw materials of almost everything we use in our daily routine such as coffee, which we use as an energetic drink, sugar, which we use to sweeten our meals and drinks, orange, which we use as a food, gas, which we use for heating purposes, etc. But there is a certain category of people, who use commodities not only for living, but also for making profits. In other words, these people are those, who are engaged in commodity trading.

Commodity trading is considered to be a very exciting and risky type of investment. It has become very popular among traders and investors in the last few years. Those, who are actively taking part in trading can assure that commodity trading has a number of similarities with stock trading. However, it should be pointed out that the main thing that differentiates commodity trading from stock trading is the asset that is traded.

Commodities are divided into the following three categories:

• Agricultural Commodities (coffee, cotton, corn, rice, sugar, orange, live cattle, feeder cattle, lean hog, etc.)
• Metal Commodities (copper, gold, silver, platinum)
• Energy Commodities (oil, brent, natural gas, heating oil)

Obviously, each category includes various commodities which are all very popular and which are widely traded in the market. Actually, as it was mentioned above commodity trading has gained much popularity and this is due to the number of advantages that differentiate commodity trading from the other types of investment.

Now let us see what the main advantages of trading commodities are.

• Leverage

One of the main advantages of trading commodities is leverage, which gives traders and investors a unique opportunity of generating high returns.

• Diversification

Another important advantage of investing in commodities is the opportunity to create diversified portfolio. With a well-diversified portfolio, traders and investors can make big profits from any possible economic scenario.

• Liquidity

For each investor and trader liquidity plays an important role, as it gives the possibility to trade with any volume. Investments in commodities offer high liquidity, which in its turn means that traders can easily buy and sell commodity futures without facing any difficulties.

Commodity trading has the same objective as other types of investment that is to buy low and sell high. Commodity trading is considered to be risky, that is why it is highly recommended to make good research, examine the market, develop a well-planned trading strategy and only after that get engaged in commodity trading.

Risk aversion eases after Clinton-Trump debate

Financial stocks and debate uncertainty weigh on US markes
US stocks extended losses on Monday as concerns about falling financial stocks and increased uncertainty ahead of presidential debates weighed on market sentiment. The dollar continued the slide which started after the decision by Federal Reserve to leave interest rates unchanged.The live dollar index data show the ICE US Dollar Index, a measure of the dollar’s value against a basket of six major currencies, edged down 0.2% to 95.269. The Dow Jones industrial average fell 0.9% to 18094.83 led by Goldman Sachs and JP Morgan. The S&P 500 lost 0.9% settling at 2146.10 with financial stocks, down 1.5% weighing on the index. The Nasdaq composite closed 0.9% lower at 5257.49. Financial stocks were pressured by concerns about the negative impact of the Deutsche Bank troubles on European stock markets after a report Chancellor Angela Merkel wouldn’t support state aid for the bank. Market reaction to better than expected housing data was muted: sales of newly constructed homes in the US slipped less than expected in August, indicating some stabilization in the housing market. Today at 15:00 CET July S&P/Case-Shiller House Price Index will be released. The tentative outlook is negative for dollar. At 15:45 CET September Services PMI will be published, the outlook is positive. And at 16:00 CET Conference Board’s September Consumer Confidence Index and Richmond Fed Manufacturing Index will be released, the tentative outlook is negative.

Oil and Deutsche Bank lead European markets lower
European stocks fell on Monday as energy stocks tracked oil lower and the sharp loss in Deutsche Bank weighed on financial stocks. The euro and British Pound edged higher against the dollar.
The Stoxx Europe 600 closed 1.6% lower, its biggest one day loss since early July. The Deutsche Bank shares sank 7.5% after a German magazine report that Chancellor Angela Merkel wouldn’t support a state aid for the country’s largest lender. Shares fell despite Deutsche Bank’s denial of any request for a state support in its negotiations with the US Justice Department which proposed that the bank pay $14 billion to settle civil claims related to mortgage-backed securities. The German government also dismissed the report on Monday. Germany’s DAX 30 fell 2.2% to 10393.71 despite a rise in Ifo German business sentiment index in September: it rose from 106.2 in previous month to 109.5, the highest level since May 2014. France’s CAC 40 lost 1.4% and UK FTSE 100 ended 1.3% lower. No important economic data are expected today in euro-zone.

Asian stocks rise as Clinton seen debate winner
Asian stocks are rising today as investors viewed Clinton as the apparent winner in first US presidential debate with Republican Donald Trump. Chinese stocks reversed early losses with Shanghai Composite Index up 0.5% following a drop below psychologically significant support level 3000 points on Monday. Economic data today were positive: China's industrial firms profits in August grew at the fastest pace in three years. Hong Kong’s Hang Seng index is 1.17% higher. Nikkei ended 0.8% higher today at 16285.41 with yen retreating as risk aversion eased somewhat after debates. Earlier the release of minutes of Bank of Japan’s recent meeting spurred concerns the central bank is now more hesitant to dramatically ease policy as indicated by the board’s caution about expanding the BOJ’s stock-fund buying. Bank stocks pared earlier losses. Australia’s All Ordinaries Index was 0.4% lower while Australian dollar inched higher against the dollar.

Oil prices are retreating on Saudi comment
Oil futures prices are retreating today after hopes for output deal at oil producers’ meeting on Wednesday suffered a setback as Saudi Arabia's Energy Minister Khalid al-Falih calls it “consultative”. Yesterday prices rebounded on hopes major producers would agree to limit production. November Brent crude rose 3.2% to $47.35 a barrel on London’s ICE Futures exchange on Monday.

Classification of securities markets

Securities market or stock market is the aggregate of economic relations, which are formed during the issue and circulation of stocks. The market redistributes financial resources through its participants, who play a role, to a certain degree, in economic conditions of many countries. By their activities, major players can cause a panic in the market, thus leading to the fall of stock prices and financial crisis.

The securities market is a complex structure which can be classified according to various features characterizing the organization of a trade or the relation between market participants. The main features by which securities market can be classified are:

By the organization of a trade

The stock market of securities is an organized market, where the buy/sell operations of stocks take place in accordance with rules established by an exchange. Only the shares of listed companies are issued to the exchange market;

The over-the-counter market of securities is an unorganized market, where the conditions of transactions are agreed with the buyer and the seller. In the OTC market, the stocks of issuers, who have not been listed or do not have the desire to be listed on an exchange, are circulated.

By the stages of the issue and circulation of stocks

The primary market is a market, where occurs an initial offering of stocks. The initial offering can be either private or public (IPO -initial public offering). In the first case, the stocks are bought by certain number of persons without the disclosure of financial information. In the second case, the offering takes places through intermediaries with published financial indicators.

The secondary market is a market, where the already issued stocks are being resold. The main participants of the market are speculators, who make money on the difference between the buying and selling prices of stocks. 

By geography

National – stock market within a certain state, where occurs the redistribution of its financial resources between economic agents.

Regional – a market in a specific region with a closed circulation. Regional market can be formed within one country, but it can also combine some national markets.

International – a world market where occurs the turnover of securities between various countries and regions, thus providing transfer of the capital between them.

By issuers

Government securities market – a market of circulation of government debt securities issued mainly for the repayment of the deficit of the state budget or government projects.

Corporate securities market – commercial enterprises act as issuers.

By the types of transactions

Cash market – a market of immediate execution of transactions (up to two working days);

Spot Market – a market of derivative securities with delayed execution of transactions.

By the way of trading

Traditional market – trades on an exchange take place directly between the seller and the buyer;

Computerized market – trades are conducted through computer networks with the availability of a stock trading terminal.

At this stage of development of securities market through a worldwide network, trading is available to almost everyone. Trading terminals allow to follow the course of trading on an exchange in real – time and make transactions with any stock. 

Australian currency may benefit both from weaker US dollar and higher commodities prices

Australian dollar edged up on Monday amid weaker US dollar and increased global commodities prices. First televised debate was held on Monday in US where Republican Donald Trump and Democrat Hillary Clinton clashed. Clinton won the debate by putting her challenger on defensive. Most investors believe the Republicans are more interested in weaker US dollar to support the US producers. If Trump had won the debates this could have pushed the US dollar index down.

Weaker dollar would make other currencies stronger including the Australian dollar. Another factor to support the Aussie may become higher oil prices ahead of International energy forum in Algeria where OPEC members will discuss possible oil output “freeze”. The forum takes place on September 26-28. Higher oil prices push up prices of main Australia’s export goods: natural gas, coal, nonferrous metals, mineral resources and concentrates as well as grains and beef. The Reserve Bank of Australia meets on October 4. The bank cut the rate twice by 0.25% in 2016 down from 2% to the current historical low of 1.5%. Market participants do not expect it to be cut further in nearest future. Economic indicators in Australia look quite positive. GDP rose 3.3% in Q2 2016 year over year which is the highest in 4 years. Unemployment fell in August to its 3-year low of 5.6%.
More

AUDUSD

On the daily chart AUDUSD: D1 is in triangle with very wide boundaries. Now it is rising towards the resistance line. The political risks in US ahead of presidential elections and dearer commodities may further support the Australian dollar.

The Parabolic gives bullish signals.
The Bollinger bands have narrowed which means lower volatility and are tilted upwards.
RSI has surpassed the level of 50 having formed positive divergence.
MACD gives bullish signals.

The bullish momentum may develop in case the Australian dollar surpasses the two last fractal highs, the Bollinger band and resistance of the triangle at 0.773. This level may serve the point of entry. The initial stop-loss may be placed below the last fractal low, the Parabolic signal, the Bollinger band and support of the rising trend at 0.744. Having opened the pending order we shall move the stop to the next fractal low following the Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop-loss level at 0.744 without reaching the order at 0.773, we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Summary of technical analysis

Position Buy
Buy stop above 0.773
Stop loss below 0.744

A Brief Introduction to Corn!

Corn, also known as maize, is one of the most widely used and one of the most important grains existing in the world. Throughout years corn has become a staple in the diets of people across the world and today, there is hardly anyone who can imagine his life without the usage of corn. Corn is rich in various vitamins such as folic acid, niacin, and vitamin C, which are very important for our health. Besides being one of the most vital grains and one of the best sources of several vitamins, corn is also an important commodity in the financial world.

Corn futures are considered to be among the most widely and actively traded agricultural contracts. Corn futures are perfect hedging tools that offer corn price mitigation opportunities to market participants. They also provide global price discovery and what is the most important opportunities for portfolio diversification. 

Keep on trading Corn Futures!

Stocks and CFD on stocks trading

Stocks are considered to be unique financial instruments allowing to become a part of the global financial system and increase your personal profit. Trading real stocks is a fascinating but an expensive activity. In the early 1990s, English financiers John Wood and Brian Killian invented a derivative financial instrument CFD (contract for difference) for those, who loved to make money on the purchase and sale of stocks. Stock CFD trading is practically accessible to everyone, as it allows with a minimum amount of funds to carry out multiple transactions on the purchase and sale of stocks of the world’s leading companies.

Stocks and CFD on stocks

A stock is a security allowing its owner to receive part of the profits of the joint-stock company in the form of dividends and participate in the management of that company. Stocks can be common and preferred, that is to say with or without the right to vote at the general meeting of shareholders. In addition, the owner of the preferred stock receives a fixed dividend and has a prior claim on part of the profits of the company in case it liquidates. Stock trading can generate high profits, but only not by sitting and waiting for dividends.

Traders’ main income is generated from the purchase and sale of stocks in the secondary market. If the volume of your investments is small, stock trading, as a rule, is not as highly profitable as currency trading, because there is no or a very small leverage in case of trading in the stock market. For the same reason, the risk of losses in case of trading stocks is much lower than in case of trading in the Forex market.

CFD on Stocks is considered to be a derivative financial instrument through which traders can make money on the price fluctuations of stocks without owning those stocks. At the end of the contract, if the price of the stock has increased, the seller pays to the buyer the difference between the opening price of the stock and its current value, and if the price has decreased, the buyer pays to the seller the difference.

Stock CFD trading has many similarities with the classic trading in the stock market, however, there are a number of differences between them:

• When buying stocks, an investor becomes a real co-owner of the company and receives dividends:
• Stock trading through CFDs allows to generate profit both from the rising and falling markets of these stocks;
• Due to the mechanism of margin trading, traders can enter CFD market even with little initial capital. The usage of leverage allows to make high profits from small price changes of stocks.

Stock CFD trading is one of the most efficient and interesting ways of investment, only if you take the choice of a broker responsibly. So, try to make the right decision.