Archive for June 2010

Markets Plunging Yesterday With 2-3%

…which is normal I guess, when the US consumer confidence index, the largest market in the world, plunges with 10 points in one session. Compounded with the worries regarding the Greek exposure of the European banks, this also drove down the most important EU indexes (FTSE100, DAX etc). Read more

Technical Analysis Dilemmas- Some Contemporary Thoughts

Plane photo doitinvest.com

Plane photo doitinvest.com

I would like to think that by now I am an intermediate level MT4 user. And although I read 20+ books on technical analysis, I still feel like a child when I open the platform from my broker and I browse through the tons of indicators showed there.
Of course, we are all looking for the Holy Grail of the technical analsysis – that single one indicator which, used constantly, produces permanent profits. It doesn’t matter how big the profits are, if they are constant they will provide huge profits eventually through the magic power of compounding. Read more

What a Blow! – Chancellor of the Exchequer Osborne Confirms U.K. Will Not Join Euro

…. and of course this pushes the pound lower immediately on the markets. This is the typeof market news where noone would know how to react and this is why most experienced forex traders advise to stay aside when such pieces of asteroids hit the news.

The British pound declined and gilts (the British bonds issued by government) advanced amidst speculation the government’s pledge to balance the budget by the end of its first term will damp the economic growth. Osborne said the government will cut the deficit to 20 billion pounds by 2015-2016 and will cut spending by 30 billion pounds annually.

Concern the U.K. would struggle to narrow the biggest budget deficit among the Group of Seven nations helped send the pound 9 percent lower against the dollar this year. Speculation the U.K. would lose its AAA rating helped the 10-year yield reach 4.3 percent on Feb. 22.Osborne, 39, the youngest chancellor since 1886, will outline plans to cut spending by the most in a generation to rein in the deficit, which amounts to 11.1 percent of gross domestic product. “We have set a brisk pace since taking office,” Osborne said while presenting the budget. “It has earned us credibility.” Read more

A Book Review – “Harmonic Trading – Profiting from the Natural Order of the Financial Markets” – volume 1 by Scott M. Carney

There are various opinion currents in the technical analysis. One of the recent ones appeals to the natural order of the markets and to uncovering patterns which appear from time to time. This approach to technical analysis does not try to find models where there is none. Rather the natural order trading is trying to catch patterns as they emerge and ride them for the benefit of the trader. These things said, “Harmonic Trading – Profiting from the Natural Order of the Financial Markets” is a book which uncovers several such patterns for the benefit of the trader.

Scott Carney, founder and president of a company called (surprise surprise) “Harmonic Trading”, has studied quite a long time these patterns. His experience started with the Fibonacci approach, a trading method which uses the Fibonacci numbers to predict the most probable incoming price levels. This is a probabilistic approach and, like all the methods based on probabilities, it chases patterns where over the long term you are more likely to offset losses with your gains (rather than the other way around). Read more