August 14th, 2009
Good morning traders! Below is a summary of all the high and medium impact out today during the London session. Watch out for my tweets throughout the day to remind you of each one.
ECB Monthly Bulletin
Time: 8:00am GMT
Impact: Medium
Currency: EUR
Source: European Central Bank
Description: This announcement reveals details about the last interest rate decision from the ECB.
Flash GDP
Time: 9:00am GMT
Impact: High
Currency: EUR
Source: Eurostat
Description: This indicates the Gross Domestic Product for the eurozone though minus France and Germany but still a high impact because it is the first indicator.
Core Retail Sales
Time: 12:30pm GMT
Impact: High
Currency: USD
Source: Census Bureau
Description: This is the change in the total value of retail sales, except from the auto industry.
Retail Sales
Time: 12:30pm GMT
Impact: High
Currency: USD
Source: Census Bureau
Description: This is the change in the total value of retail sales, including the auto industry.
Unemployment Claims
Time: 12:30pm GMT
Impact: High
Currency: USD
Source: Department of Labor
Description: The change in the number of people making claims on unemployment insurance.
Import Prices
Time: 12:30pm GMT
Impact: Medium
Currency: USD
Source: Bureau of Labor Statistics
Description: This is the change in the price of imported goods and services, domestically.
Business Inventories
Time: 2:00pm GMT
Impact: Medium
Currency: USD
Source: Census Bureau
Description: This is the change in the total value of all goods held as inventory by businesses.
Tags: Business Inventories, Core Retail Sales, ECB Monthly Bulletin, EUR, Flash GDP, Import Prices, Retail sales, Unemployment Claims, USD
Posted in Economic News | No Comments »
August 12th, 2009
While I was crawling around the BabyPips forum yesterday I noticed two seperate threads both asking the same question, “what do I do now?”
Having been through the educational material on the site these new traders didn’t actually know where to start. They knew how to buy and sell and which pairs they could buy and sell but they didn’t have the why and when to make a trade. They can see the road, they know where their destination is but don’t have any way to get there.
 Pic: tj scenes It reminded me of when I first started trading. Having learned all about the Forex markets and familiarised myself with Metatrader4 I didn’t actually know when or why I should make a trade.
The answer is simple: you need a method, a mode of transport to reach your goal.
Fortunately for me I had Jarratt Davis at my side teaching me his high reward, low risk style of trading. It’s not a system in itself but a set of principles which help you to build your own system of trading that you’re comfortable with and will help you on your way to consistent profits.
This was the vehicle I took control of and started down the Forex road to riches. It might not be the method you choose, but it’s certainly a good start.
Tags: Babypips, Forex, Jarratt Davis, learn forex, LiveConnect, Metatrader
Posted in Beginners | No Comments »
August 12th, 2009
Apologies for the news post yesterday messing up – I had a bit of a time zone fail (I think!) Below is the news for today, and I’ll be tweeting all these half an hour before they happen to remind you, as well!
Claimant Count Change
Time: 8:30am GMT
Impact: High
Currency: GBP
Source: National Statistics
Description: The change in the number of people who are claiming unemployment related benefits.
Average Earnings Index
Time: 8:30am GMT
Impact: Medium
Currency: GBP
Source: National Statistics
Description: The change in the cost of labour for both government and businesses.
Industrial Production
Time: 9:00am GMT
Impact: Medium
Currency: EUR
Source: Eurostat
Description: The change in the total output from manufacturing, utilities and mines, adjusted for inflation.
Bank of England Governer Speaks & Inflation Report
Time: 9:30am GMT
Impact: High
Currency: GBP
Source: Bank of England
Description: The Bank of England’s Governer, Mervyn King will speak at a press conference as the Bank’s Inflation Report is released.
Trade Balance
Time: 12:30pm GMT
Impact: High
Currency: CAD
Source: Statistics Canada
Description: The difference in value between imported goods and exported goods. This impacts the demand for the countries currency and therefore it’s value.
NHPI
Time: 12:30pm GMT
Impact: Medium
Currency: CAD
Source: Statistics Canada
Description: This is the change in the selling price of new homes.
Trade Balance
Time: 12:30pm GMT
Impact: High
Currency: USD
Source: Bureau of Economic Analysis
Description: The difference in value between imported goods and exported goods. This impacts the demand for the currency and therefore it’s value.
Crude Oil Inventories
Time: 2:30pm GMT
Impact: Medium
Currency: USD
Source: Energy Information Administration
Description: The change in how many barrels of crude oil are being held in inventory by commercial firms.
Tags: Average Earnings Index, Bank of England, CAD, Claimaint Count Change, Crude oil inventories, EUR, GBP, Industrial Production, Inflation Report, Mervyn King, NHPI, Trade Balance, USD
Posted in Economic News | No Comments »
August 11th, 2009
You may have noticed there was no blog post yesterday. That’s because there was no medium or high impact news out during the London session. Here’s the news that you need to be aware of today, and don’t forget to keep up to date by following me on Twitter.
Trade Balance
Time: 8:30am GMT
Impact: Medium
Currency: GBP
Source: National Statistics
The difference in value between exported and imported goods. Stronger exports will likely lead to a strengthening of the currency, making this an important indicator for traders.
Housing Starts
Time: 12:15pm GMT
Impact: High
Currency: CAD
Source: CMHC
The number of residential developments that began construction within a month, annualised.
Prelim Non-Farm Productivity
Time: 12:30pm GMT
Impact: Medium
Currency: USD
Source: Bureau of Labor Statistics
Labour efficiency has a direct impact on how much businesses have to pay for the labour they need, hence the level of impact for this announcement.
Prelim Unit Labor Costs
Time: 12:30pm GMT
Impact: Medium
Currency: USD
Source: Bureau of Labor Statistics
Similar to productivity, above, this announcement reports the actual Labor costs.
Posted in Economic News | No Comments »
August 7th, 2009
Good morning traders, here’s the news you’ll need to look out for during the London session today and it’s relative impact. I’ll be sending out a tweet 30 minutes before each one of these is announced as a reminder so make sure you’re following me on Twitter. I’ll also try and tweet the results as soon as they come out.
PPI Input
Time: 8:30am GMT
Impact: High
Currency: GBP
Source: National Statistics
This is a leading indicator of consumer inflation because it relates to the price of goods paid by manufacturers. Higher costs are normally passed onto the consumer so a higher figure indicates consumers are willing to spend more.
German Industrial Production
Time: 10:00am GMT
Impact: Medium
Currency: EUR
Source: Destatis
This is the change in the output of manufacturing, mining and utilities businesses. This is a leading indicator because output is so reactive to other economic factors, such as unemployment.
Employment Change
Time: 11:00am GMT
Impact: High
Currency: CAD
Source: Statistics Canada
This announcement is the number of unemployed people during the previous month.
Unemployment rate
Time: 11:00am
Impact: High
Currency: CAD
Source: Statistics Canada
This announcement deals with the percentage of the workforce who are unemployed and actively seeking work.
Non-Farm Employment Change
Time: 12:30pm
Impact: High
Currency: USD
Source: Bureau of Labor Statistics
This is the change in the number of unemployed people, taken from the previous month but excluding the farming industry.
Unemployment Rate
Time: 12:30pm
Impact: High
Currency: USD
Source: Bureau of Labor Statistics
This announcement deals with the percentage of the workforce who are unemployed and actively seeking work.
Average Hourly Earnings
Time: 12:30pm
Impact: Medium
Currency: USD
Source: Bureau of Labor Statistics
This is the change in the price that businesses, except those in the farming industry, will pay for labour.
Ivey PMI
Time: 2:00pm
Impact: High
Currency: CAD
Source: Richard Ivey School of Business
This announcement is a PMI index based on a survey of purchasing manageers. It’s a leading indicator because it shows the confidence, or lack thereof, in the economy of purchasing managers.
Tags: Average Hourly Earnings, CAD, Employment Change, EUR, GBP, German Industrial Production, Ivey PMI, Non-Farm Employment Change, PPI Input, Unemployment Rate, USD
Posted in Economic News | No Comments »
August 5th, 2009
Good morning traders, here’s the news you’ll need to look out for during the London session today and it’s relative impact. I’ll be sending out a tweet 30 minutes before each one of these is announced as a reminder so make sure you’re following me on Twitter. I’ll also try and tweet the results as soon as they come out.
German Factory Orders
Time: 10:00am GMT
Impact: Medium
Currency: EUR
Source: Deutsche Bundersbank
This is the percentage change in new factory orders, indicating the strength of the economy based on it’s manufacturing output.
Official Bank Rate
Time: 11:00am GMT
Impact: High
Currency: GBP
Source: Bank of England
This is the interest rate issued by the Bank of England. The interest rate is the leading factor in the valuation of a currency so this is a very high impact announcement. If the rate is changed, an statement will be made by the Monetary Policy Committee (MPC) which could have a significant impact on the markets.
Minimum Bid Rate
Time: 11:45am GMT
Impact: High
Currency: EUR
Source: European Central Bank
This is the interest rate again but this time applies to much of Europe. A press conference takes place 45 minutes after this announcement and often has more of an impact.
Building Permits
Time: 12:30pm GMT
Impact: High
Currency: CAD
Source: Statistics Canada
This announcement reveals the number of new building permits issued and is a good indicator of economic health because a building permit is one of the first steps for a construction project.
ECB Press Conference
Time: 12:30pm GMT
Impact: High
Currency: EUR
Source: European Central Bank
This is the press conference that follows the rate announcement. Questions that come from the press can often result in market volatility based on the answers of the ECB.
Unemployment Claims
Time: 12:30pm
Impact: High
Currency: USD
Source: Department of Labor
This shows the past week’s unemployment figures. A good indicator of economic health because it directly relates the level of unemployment.
Tags: Bank of England, BoE, Building Permits, CAD, ECB, EUR, European Central Bank, GBP, German Factory Orders, Interest Rates, Minimum Bid Rate, Unemployment Claims, USD
Posted in Economic News | No Comments »
August 4th, 2009
Good morning traders, here’s the news you’ll need to look out for during the London session today and it’s relative impact. I’ll be sending out a tweet 30 minutes before each one of these is announced as a reminder so make sure you’re following me on Twitter. I’ll also try and tweet the results as soon as they come out.
Halifax HPI
Time: 7:00am GMT
Impact: High
Currency: GBP
Source: Halifax Bank of Scotland
Result: 1.1% (better than expected)
This is the monthly House Prices Index from Halifax Bank of Scotland (HBOS). This may come out today but we don’t know for sure because HBOS doesn’t announce the exact date and time until very soon before the release. This is a high impact announcement because it is a leading indicator as to the health of the housing market.
Manufacturing Production
Time: 8:30am GMT
Impact: High
Currency: GBP
Source: National Statistics
Result: 0.4% (better than expected)
This is the change in the value of manufacturing output. It’s a high impact announcement because it is a leading indicator of economic health due to manufacturing’s fast reaction to changes in the economy.
Services PMI
Time: 8:30am GMT
Impact: High
Currency: GBP
Source: CIPS
Result: 53.2 (better than expected)
Services PMI is an index based on a survey of purchasing managers in the services industry. It’s a good indicator of economic health, hence the high level of impact.
Retail Sales
Time: 9:00am GMT
Impact: Medium
Currency: EUR
Source: Eurostat
Result: -0.2% (worse than expected)
An indicator of consumer confidence, this release only has a medium impact because France and Germany make separate, earlier announcements which relate to around half of the eurozone’s economy.
ADP Non-Farm Employment Change
Time: 12:15pm GMT
Impact: High
Currency: USD
Source: Automatic Data Processing, Inc.
Result: -371k (worse than expected)
This announcement releases the change in the number of employed people in the U.S. according to payroll services company, Automatic Data Processing, Inc. This is a good indicator of economic health because the number of employed persons impacts consumer spending.
ISM Non-Manufacturing PMI
Time: 2:00pm GMT
Impact: High
Currency: USD
Source: Institute for Supply Management
Result: 46.4 (worse then expected)
This is an index based on a survey of about 400 purchasing managers in the non-manufacturing industries. It’s a good indicator of economic health, hence the high level of impact.
Factory Orders
Time: 2:00pm GMT
Impact: Medium
Currency: USD
Source: Census Bureau
Result: 0.4% (better than expected)
This announcement releases the total value of orders placed with manufacturing companies, indicating the level of production demand in the economy. Broadly, a higher figure is better for the economy.
Crude Oil Inventories
Time: 2:30pm GMT
Impact: Medium
Currency: USD, CAD
Source: Energy Information Administration
Result: 1.7M
This indicates the number of barrels of oil that are held by commercial companies. It influences the price of crude oil but also growth because of the reliance on oil.
Tags: ADP Non-Farm Employment Change, Crude oil inventories, Factory orders, Halifax HPI, ISM non-manufacturing PMI, Manufacturing production, Retail sales, Services PMI
Posted in Economic News | No Comments »
August 4th, 2009
Yes, Forex has traffic jams… or do you think I’m crazy? Bear with me…
 Pic: Walid Hassanein We’ve all been there, driving down the highway when all of a sudden traffic flow takes a hit. Then it’s stop-go-stop-go for ages. We didn’t expect it and it takes us by surprise, ruining our journey and making us late.
So what does that have to do with Forex?
We’ve all been there, trading away when all of a sudden market flow takes a hit. Then it’s up-down-up-down for ages. We didn’t expect it and it takes us by surprise, ruining our trade and loosing us money.
Now do you see it? Good. So what can you do about it?
Well, there are ways to deal with traffic on the road – you can get traffic reports on the radio and those GPS systems that talk to other cars and check the traffic flow ahead.
In Forex it’s actually much easier. We have a good idea when traffic will hit because we know what causes it – economic news. There are tons of web sites that provide Forex calendars telling you when the news will come out and the expected level of impact it will have on market flow.
So next time you get ready to trade, check the news first. As chance would have it, from tomorrow I will be posting a summary of the days medium on high impact news announcements right here. The post will go up an hour before the London session each day and will focus on those news announcements due in the London session. Subscribe to the blog to make sure you don’t miss them!
I’ll also send a tweet out 3o minutes before each news announcement to remind you, so follow me on Twitter to get the benefit.
Tags: Forex, News
Posted in Announcements, Economic News | No Comments »
August 3rd, 2009
Whilst checking out the Newbie Discussion forum over at Forex Factory I stumbled on a short thread about aggressive brokers.
I found it interesting because the original post talks about a new trader who, after one trade (a profit-making one), was prepared to move from a demo to a real account.
Luckily his friend was there to stop him and he subsequently wiped out his demo account.
The lesson to be learned is that until you are supremely confident in your own trading abilities you shouldn’t trade real money. I asked LiveConnect’s Jarratt Davis what you should look to achieve before you can be confident enough to trade real money. He said, “traders should stay on a demo account until they have acheived a steady gain on their account over a minimum of 2 months using the same system consistently.”
Of similar significance is Jarratt’s suggestion of using one system consistently. Many new traders are guilty of system chasing which is ultimately the product of impatience and results in long-term losses in Forex trading.
Are you a confident trader?
Tags: Brokers, demo account, Jarratt Davis, LiveConnect, system chasing
Posted in Brokers, Psychology | No Comments »
August 3rd, 2009
According to some brokers, 93% of all new traders wipe out their accounts in their first few weeks of trading.
Why is this though?
There can be a number of reasons but a common one is a much too high risk/reward ratio.
Firstly, on a trade level, new traders will often set their stop loss and take profit at similar levels. For example, the stop loss and take profit levels are both 50 pips away from the entry point. This means that the risk is quite large. Risking a lot can reap bigger rewards but it only takes a few trades going the wrong way to create huge draw downs on an account.
The second reason is that often traders will risk a substantial amount of their balance by taking many trades at a time. It’s not necessarily a bad thing to take lots of trades at once, but only if the overall risk is still manageable. If all the trades loose it’s easy to get rid of an entire balance in just a few trading sessions.
Jarratt’s risk management video takes you through how he manages risk. He explains how best to calculate your stop losses and how best to manage your trades to keep your overall losses at an absolute minimum. These lessons are re-inforced every day in the chat room and the trade examples.
So if you have wiped out your balance before, you might want to try out LiveConnect and the accompanying Coach’s Corner.
Tags: coach's corner, Forex, Jarratt Davis, LiveConnect, Risk, Risk Management, stop loss, take profit
Posted in Risk Management | No Comments »
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