So.. You think you can trade like Sarao? #FreeNav
#FreeNav….. (I just want to touch briefly on this…)So as soon as the Sarao story dropped in the media, I had 4 journalists contact me attempting to find out if what he did was possible & if so – how could 1 trader be the causation factor for such a huge crash?… Is this just a cover up for someones fat finger? Why did it take 5 years to uncover him and not 5 minutes? Why was he allowed to take money from his broker?…… What did he actually do wrong? … 350 years for making money trading the Markets??? WTF! Liam Neeson (Ex-Bearings Bank “Rogue Trader” said “No Trader comes into the market to lose money”)….Fact is – NAV Beat the system! This week has been pretty monumental with regards to authorities “stamping out” (scapegoating) high-frequency traders for their (lack of) risk-management algo blips & possibly deterring a lot more HF traders…. These modern day Robin Hoods are a risk to huge institutions and the general order of the markets.. However, with the dynamics of an ECN pool & given available market-depth… Their still lies a huge loop-hole which brokers/banks aim to hedge against. An IOC order is pretty common among API HF traders and 19,000 orders in a blink of an eye is pretty uncommon amongst UHFTs.. HF firms have been making money via these widely available strategies for years. However, this is what strikes me….. Nowadays, (and even back in 2010)… Large institutions have been paying £1ms to Nerds to design risk management algorithms to protect their liquidity pools from being hit….. So why did this not trigger with Nav? We call them “Pirates” in the Broker world as over the past 2-3 years it is has been extremely hard to cater for their strategies… as they aim to continuously hit stale prices with the view of arbing feeds (slower vs faster) & making exponentially high returns. Below is a trading statement of one such client (latency based arbitrage trading – Ultra High Frequency Trading)… THESE GUYS EXIST in numbers (albeit declining)…: There are many others like this….. So how can they get away with this? I will leave this questions up to the #FBI Signing out on a sad week for Traders.
Russia’s Barbaric Cry For A Gold Standard Currency
Russia’s Barbaric Cry For A Gold Standard Currency Putin’s Love Affair As Russia increases it’s Gold buying by 123% this year as it continues to hedge against the notion of an unstated “Global Currency Crisis”… The perfect combination of geopolitical tension, stringent isolation, ruble depreciation & steady economic decline have forced the Federation to take a drastic step into adopting a Gold-standard currency. Albeit, pretty far-fetched, this blog post aims to break down the economic viability of a new Gold-exchange and why it is a possible step for Russia. A Brief History The Soviet Union through the 40’s and 50’s viewed Gold & Silver as strategic metals and for National Security… Anybody holding Gold in a personal capacity would of been put in Jail.Here is a picture of an Old Soviet Bank Note – reading “Currency backed by Gold, Precious Metals & Assets of State Bank”. Russia aimed then and now to play hard-ball with the West – in protest against being held at mercy of the US Monetary policies – as they present their Gold backing as aCurrency-War weapon. Russia recently overtook China in terms of Gold reserves whilst their economy remains structurally weak. However, with supply threatened Oil prices along with several other falling energy prices & the depreciation of the ruble – A move to Gold will allow the country to be seen as a more efficient, perhaps a more trustworthy trading partner. .Strangling the USA An official move to Gold would be monumental and China would be more than likely to follow suit…. Huge threats of inflation would immediately flare upon the US Economy…. Ultimately, the Fed’s worst nightmare. A weapon of mass Financial Destruction Given the growing influences of Russia, China & other Asian states… a large accumulation of Gold indicates a move away from the USD for easier cross-border trade. But in reality…. What does the near-term have in store for Gold… Could this Russian buying spree come back and bite them in the ass? Will $1200 hold or could we see potential for lower commodity prices as the USD continues its endless bull run & lower Western % demand for metals. However, this does go against Putin’s aim – which is based around using the Gold-backed Ruble to pay odd the countries debt. Another major drawback is that the Ruble is already heavily backed with Oil and it is pretty unlikely that they would back it with 2 commodities. What will a continuation of this buying spree cause? Yet continuing to threaten the US currency, Russia’s growing stockpile of Gold would be aimed at taking away the US Dollar monopoly over the metal & with the BRICS on their side a realistic defiance against the threat of a US debt backlash could be on the cards. Are we prepared for this? If Russia’s biggest Oil Tycoon could be reprimanded and sent to Jail… Could Putin too? Is Putin hedging his bets?…. Trading Gold with Atom8As Gold continues to grip the $1200 handle… The market is waiting patiently for the next FOMC talk in June to decide on the next direction, as rate cuts linger… Atom8 offers XAUUSD and XAGUSD trading from 10 cents and 2 cents (spread + commission) respectively alongside leading DMA execution… it is a fine offering to check out.Any questions or feedback would be greatly appreciated. As always, Peace & Love..Anish
Why Women Are Better Traders Then Men?
Are Women Better Traders Than Men? …… So are you distracted? If you are Male you probably will look at her for about 2-3 seconds then notice that she is looking at charts…. If you are a Male trader you will more likely look back at her for a few more moments….. Still distracted?….. Well you can find the full image link here – as our broker licensed her for our landing page (hehe) : https://www.atom8.com/lp/english/ The Fintrader study Fintrader, like Atom8 offers online retail FX accounts and came out with an interesting study stating that 25% of their clients are women (compared to virtually 0) 10 years ago and one of their analysts claimed that the reason behind their trading success was due to “Women psychology”…. Think like a women to succeed in trading Like all, I am pretty skeptical but as I dig within my own research base… even though we have a handful of female clients, as I scan their performances – they are pretty darn profitable. Perhaps the “Man-Ego” is naturally alerted once such claim arises but it now makes some sort of sense why many traders are teaching their wives strategies & letting them get on with it… (even though their volumes are no-where near as high…. argggghhh!) By nature we have balls & with balls we have a natural “Alpha” about us… leaders of the pack… hunters…providers for our families.. This sense of maninism rests on our shoulders & the perceived responsibility is huge! I put it down to about 3 reasons why Women are better :1. Women are probably better at “Crisis-Management” and less emotional – therefore more disciplined and less likely to panic when losing trades occur or are in huge drawdowns; 2. As we may have experienced…. Women are better at saying “NO” lol – (loling on a blog – yes I do that) – On the contrary, we all see trades that we know we should not really take… but the reward just looks so tempting… Women however, stick to their manuals & perhaps approach trading with a more measured approach instead of diving in head-first! ; and3. Mainly because Men have balls. Some Statistics I remember in University I was looking at something similar and came across a study by Gary Belsky who in said that men traded 45% traded more frequently or “hyperactively” than women and concluded that the explanation for lower net returns (men vs women) was due to male overconfidence – leading to counterproductive trades… Why are only 20% of Investment Bank Traders are Women?What is the one word you associate to Trading?…. “RISK”… It is simple… Men take more risks than Women… We wouldn’t be in an industry of $4 Trillion volume per day if women were sitting behind desks… We would have stagnant market movement in fact…In a world where cost mattersBrokerages run on commissions & need volume…. Therefore, we have a natural conflict of interest… Albeit, women trade more profitably… but they don’t break the rules enough… Are they crooked enough to play the Finance game?So ladies… if you are already trading – well done! Keep it up & make full use of your time trading profitably whilst the volume is there – take advantage!…. Gentlemen… Pay attention… Learn something from these delicate flowers… Teach your girl/wife the skills & grow with each other… Do this together instead of letting her nagging you about your livelihood from trading… Take a holistic approach & reap the rewards… I personally think our roles as Men is to protect our women & learn form them… We have a lot to gain… You be glad to know that Women or Man you can trade your FX with Atom8 🙂 Peace & LoveAnish
How to trade Gold in today’s Erratic Markets
My Golden Strategy to Mastering the Markets Mastering the Markets… The story of the Retail FX/CFDs Market I have seen thousands of Trader’s come & go…. Most get greedy, thinking they can repeat amazing Demo performance in the Live arena’s & end up blowing up their accounts faster than they can say “PROFIT”… Some get into the markets way too early – especially after fancy FX education sales talk urging their clients to start churning accounts on a 3 pip EURUSD spread… More often than not they lose money on their first few trades & completely stop trading… Very few…. Actually make Money. So what is the Secret? Once over-complicated, trading becomes extremely difficult to digest. For me & from what I have seen, the key is to stick to a simple strategy that is proven to work. Stay disciplined, keep your emotions at bay & never trade with money that you can’t afford to lose (again a blunder that I see way to often)… Patience & consistency are very much key, as it takes many years for those who are profitable (not lucky) to perfect their strategies – willing to risk a stake to support their development. Also -keep your expectations low… Most traders looking to make a “passive income” think they can do a consistent 10-20% a month – which is very unrealistic… So… Step 1. Find a strategy that works & Step 2. Stick too it! Time to share my Golden Secret… I am always keen to get personal with the guys making money from trading FX – & making money consistently. So I found a guy who made at least 14% per week and had been doing so for the past 60 weeks with a very simple strategy. So I took the best bits from his strategy & formulated by own system (which is now running decently well on an automated basis)… Going back to basics here…. but let’s get straight to the point. Take a 3 day EMA and a 20 day EMA and but nice Bold colors on your chart. (I like to use yellow for the 3EMA and purple for the20EMA) & look at a 30 Minute TF…. Something like this : My rules As the 20EMA crosses above the 3EMA we have a short signal and as the 3EMA crosses above the 20EMA we have a long signal… Somewhat simple… but you have to know which time frame to pick… I usually find that the 30M works ideally for Gold – especially when the market is trending well. However, it is important to avoid the choppy markets. The key, therefore, is to study the “gradient” of the breakouts and have a fixed take profit amount in your mind before entering the trade. Live Example Let’s take the breakout from this afternoon. A long at the cross-over of the 3>20 around $1195 would be up 70 cents profit right now…So where do I take my profit now?You have two options, you can either close when the 20 goes back above the 3 or you have a fixed 30 pip or 50 pip TP integrated within your strategy. Remember – Avoid choppiness & essentially this trend following strategy works well once followed consistently on the correct time-frame. Would greatly appreciate your feedback & I hope this works out well for you guys. – Anish
The Spectacular Collapse of Iron Ore
The Spectacular Collapse of Iron Ore Falling commodity prices and a weak outlook for growth have increased the chances for a rate cut by the RBA next week – further applying downward pressure on an already weakened AUD. The ASX 200 fell over 30 points last night, as the prices of Iron Ore continue to feel the impacts – with mining & energy stocks leading the way. BHP has lost 2.2% & Rio Tinto ended the session 1.4% lower today. Iron Ore at 10 year lowsThe recent $13bn purchase of a Chinese owned mine in Australia have most definitely awakened this bear. Dubbed the “Sino Iron Project” it has been heavily criticized by the industry – as the Chinese plan to pump millions of tons or Iron Ore into an already over-supplied market. China in Peru, Africa & now Australia On Tuesday, Iron ore fell to $51 per metric ton. That is the lowest it has been since 2004. This now forces the likes of Rio Tinto & BHP to curtail output to boost prices. However, China is not stopping – as the state owned firm citic are planning a 30 year project expanding Worldwide. Even despite the Chinese GDP slowdown, the country still aims to protect it’s future needs. Realities The iron ore price would have to hit about $30 before the two major corps would risk losing money. Many voices in the industry point towards a wall around $45… but let’s see what happens following next weeks prospective rate cuts. Meanwhile… Iron Ore continues to slide…
The Royal Rumble of $USOIL
US Crude rallied over 6% yesterday – marking the biggest single day gain for 7 weeks – despite the prospect of sanctions being lifted on Iranian exports & also despitestorage levels being maxed out! (As discussed in post : Is Iran about to flood the Oil Market?) Let’s take a step back to Thursday, when top analysts from Goldman Sachs & Morgan Stanley remained very bearish and did not expect any real turnaround in the price of Oil. The Boost for Stocks This morning the FTSE 100 was lifted by the major Oil Stocks and the US Future exchanges are also trading higher of the back of this lift.The Stock Market has been affected by the bullish US $ and this brief relief has become a catalyst for the gaining energy sector – as also yesterday’s 2% rise in the S&P Energies showed. Why is a weaker USD & rising Oil better for Stocks? The rising USD has been putting a dent on the earning of multinationals – affecting the major corporations! Hence the reason why we saw a nearly 3% decline in earnings season for the last quarter – For the first time in 6 years!The Oil Price collapse did not help the Stock market either – However, the recent rallies in Oil have supported more bullish traders searching for a technical bottom in this greasy commodity. Post NFP turnaround? Probably the most highest miss of recent times was Friday’s NFP result – around 120K less than expected! – Traditionally NFP sets the tone for monthly trends & we saw some of this “worse than expected” NFP being priced from the ADP release. However, did we really expect it to be that bad?However, as last noted by Mrs Yellen – even though payrolls may disappoint – the average hourly wage has been increasing by nearly 0.5%.In this case, what is the real unemployment rate?… (I will leave that one for you to ponder)… April Crude Forecasts I think that (despite my recent postings) the Oil markets are likely to slowly churn along until the end of the year. Shale production is expected to slow down in December & the Bank’s latest reports suggest that $50 will remain a benchmark before increasing to $58-$60 by September this year. Although, we are still in an OVER-SUPPLIED market and this does not look like slowing down. The US reached another record high at the end of March with around 471 million barrels in storage. Oil producers have most definitely been the most effected – feeling the full impact of falling prices & with Iran set to finalise on a decision at the end of June… are we about to see more World Supply? How will OPEC control this? Adam Longson from Morgan Stanley thinks that no real impact of the Iran deal will be felt until 2016..A bullish move past $60 a barrel will for sure set the tone for a bull move & we could expect to see Stocks rally further. However, there is no real instability in the USD & not really on the cards for the near future…. A tough one! Welcome to the Royal Rumble of Crude! But then why will Oil rally? Will OPEC allow for a $10-$20 per barrel Oil Price?
Will tonight’s FOMC be the catalyst for a move higher in the Euro?
Are we on the brink of a EURUSD rally? The greatest fall in modern historyThe last 9 months have wiped away over 30% of the value in the Euro against the Dollar and with Goldman Sachs & many other analysts calling for further moves to the downside past parity and into 0.80 territory – This post argues for a bottom above parity and for a potential move to the upside. The Turnaround call… (follow the banks)HSBC currency analysts last week called time on the USD rally, after being one of the firsts to spot the Bull in 2013. As US inflation remains shy of its target – policymakers tolerance for this strength will not last for much longer. Furthermore, HSBC said that the USD is the most overvalued currency in the market ahead of the CHF. Fundamental pitfallsThe thriving Dollar & huge outflows from the Eurozone (post tensions from Greece & other failing nations) have combined to fatigue the politically formed currency group. Forecasts of parity claim to be easily achievable as the recent momentum has pointed too – with the Euro continuing it’s stage of decline. Is there any hope left? Short-term relief for this major has come from the recent economic data out of the US – seeing extremely disappointing Non-Farm Payroll figures & analysts pointing towards a more dovish stance from the FED later this evening. This lies key for future FOMC Interest Rate meetings and also discussions for low US inflation as the FED continue to stagnate their first interest rate rise in years. This week, retail sentiment for EURUSD and also GBPUSD has switched to a more “bullish” outlook as buyers eye 1.10 – technical outlook pictures further scope for near-term USD weakness. Are we ready to climb higher? Near-term gains for the Euro should not come as a surprise – especially as commodity markets are turning green and the pressure from the CAD has been somewhat relieved ahead of today’s BOC speech. A break of 1.10 or 1.095 would set the tone for this pair that is torn between ongoing ECN QE and a relentless run of US data on the other hand & A dovish FOMC may just be the catalyst to send this exchange into higher levels. Trading with Atom8 (for the marketing stuff)…Atom8’s unique liquidity allows you to trade EURUSD from 0.1 + commission on MT4, Java or by FIX. Enquire now at www.atom8.com -Peace & Love guys Anish
Have we hit a bottom in the Metals?
Dear Those who dare to ponder We analyse here, the case for a long position in my favorite (sometimes overshadowed) Precious Metal – Silver (XAGUSD)It is first important to understand the history & Economics of Silver trading. As traditionally, Silver was commonly accepted as a monetary metal, but more nowadays its principal uses are for industrial purposes & derivatives trading.Isaac Newton set the monetary relationship between XAU & XAG at 15.5 times when he was the master of the Royal Mint (nearly 300 years ago). However, today the ratio is more about 75 times. Key Fact Supply of mined Silver & scrap recycling materials total 980 million Oz. VsDemand of Silver is currently around 1,080 million Oz. (About 25% being bars & coins)Silver Institute study. circa 2014. It is clear that the characteristic of this white metal is hard to substitute with others. So…. the price can increase somewhat without actually reducing the industrial demand. What contributes to a rise in the metals? The notional thoughts of growing uncertainties among the major currencies economically are priced in a rise of Gold. The yellow metals seen traditionally as a hedge against uncertainty, as from the (almost) 2,000 oz high at the peak of the recession. Will the ongoing EU Crisis & a USD reversal warrant this long position? It stands to reason that Silver will also rise, according to the Newton based relationship and Silver’s price volatility relative to Gold is about 2 times higher… So in a rising market… a good idea would be to get a leverage buy on Silver. As the ongoing uncertainties within the EU & fears of a USD (bull-run) end… Is beginning to interest buyers who are chasing a bottom of both Gold & Silver markets…. Of course, however is the price of Gold falls, the losses of Silver can be expected to correspond greater. Following the end of the gold standard and its replacement with government currencies, there have been many occasions when gold ownership has been banned. Today this may seem unlikely, but confiscation may become increasingly possible if monetary conditions deteriorate in the future. As silver is predominantly an industrial metal, it should offer protection against this possibility. Silver trading at 5 year lows… Dynamics of the W,X,Y Elliot Wave Structure :In 2014… Investor demand outweighed supply by $113M. With Silver ETF trust fund holdings holding now record level highs in supply… However, some analysts think such a robust & consistent demand for Silver is crazy… As you can see from the chart above “retail investors” kept buying silver as it kept falling…. From $49.50 in 2011 to $12.40 in the spot market… A new, sudden & brief 5 year low! Metally speaking… Technologies are now replacing the demand lost from smart phones… & the industrial uses of Silver is now once more questioned… However, many people look at Silver as an “indispensable metal” from solar panels to “Silver” touch screens… Furthermore, if you look at this market from an “Eagles eye”… the fact is that it looks historically cheap in terms of Gold. Being a noble metal, Silver does not rust or corrode… it is the most conductive of all materials for electricity… With Global growth… you can build a solid case for Silver’s long-term value… But as short-term traders now… When Silver moves… It really moves as the 19% day rally proved back in December 14. Sane investors can fast track their Silver buying spree & check outwww.atom8.com for the lowest possible costs. Peace & Love Guys -Anish Any questions, let me know & your feedback is most appreciated…
$10 Oil by 2016?
Dear Readers From our highs of $110 last year… We have seen the price of oil fall to uncharted territory – Lows not seen for 6 years & it looks like there is no stopping this fall… But what is the driving force behind the decline? & why are prices not being absorbed into our REAL Economy? Why are Petrol prices not falling & why are my flight tickets more expensive than last year?Let’s try and break this down…Key Economic Facts The value of WTI/Brent has fallen over 50% in under 12 months; US Oil Production is at record highs; US Hoarding levels are at all-time highs (Storage with the anticipation of a price hike); Refineries are due to be offline for repairs in Spring…Storage levels set to increase further; Source : DailyFXPolitical Uncertainties Let’s take Iran for example… the falling Oil price has probably hit Iran more than others, given their export sanctions & talks of relaxing their sanctions have driven down global prices… Why is Iran so important? IRAN has almost 10% of the world’s proven reserves; Iran has 37 million barrels of oil in storage ready for IMMEDIATE export Relaxing sanctions would significantly support the European economies (who are becoming more reliant on trans-Atlantic Crude) & also ease the black-market issues which lurk in the background.The US Economy would also infact benefit!However, actual oil production has dropped over 60% in the last 3 years; and Financial sanctions have made it extremely difficult for Iran to attract FDI to actually pump Oil out of the ground. Back in late 2014, India was importing 350,000 barrels of Iranian oil per day… That has now fallen to 50K. What will happen now? Yesterday, Oil prices began their fight back on the back of a weaker USD… but this could easily be short-lived. As Oil Storage capacities continue to deplete, it becomes more likely that prices could drop significantly. However, this also depends on the extent of production…. As all of this occurs, demand for domestic crude in the US declines… pushing prices down & forcing more into storage…. “WTI could drop to $35 per barrel in the coming months” Projection from Societe General.Could Oil become the Most Lucrative Investment in Modern History? As populations continue to exponentially increase… there is no doubt demand will rise… However, a renewed bout of weakness in the oil markets, notwithstanding this week’s price gains, was further backed up by comments from the Saudi Arabia’s OPEC governor Mohammed al-Madi, who said on March 22 that a return to $100 per barrel would be hard to reach. Saudi Arabia’s Oil Minister Ali al-Naimi reiterated that position, blaming non-OPEC producers for their unwillingness to cut back on production. He said that OPEC will not do it alone, and even revealed the fact that Saudi Arabia recently boosted its oil production to 10 million barrels per day. “The production of OPEC is 30 percent of the market, 70 percent from non-OPEC…everybody is supposed to participate if we want to improve prices,” al-Naimi said.Trading Oil with Atom8 – Coming soon for April 2015Hope you enjoyed the read. Any comments, Feedback would be largely appreciated.Peace & Love Anish @anish8fx
Slamming the brakes on the Gulf’s Growth
As the Arab “Boom Years” draw to a close, we now see events over the last 4-5 years (for example, the Arab Spring) form as a catalyst for the recent Oil price decline… Almost 50% from this time last year. Simultaneous challenges of the threats from ISIS, political transitions & falling Oil prices have remained extremely prevalent in 2015 and more so impacting the Oil rich states of North Africa over the Middle-East. Slamming the brakes on the Gulf’s Growth As Political turmoil spreads, the jihadi threats hover over Syria, Iraq & more recently producing itself in the conflicts around Libya’s oil fields, as well as recent violence in Tunisia (post-Arab spring transitions). The recent weeks headlines have been focused around Yemen and the coalition of Sunni Islamic states prodding their Gold feet over the Pan-Arabian Muslims – attempting to constrain an unwanted addition of rival Iran. Libya, once Africa’s richest nations is now on the verge of Bankruptcy.. being named “The New Somalia”, as their new Government warns of an “Oil Production Shutdown” given the ongoing threats from ISIS and their “Black-Market” demands. No-one could of imagined in Post-Gaddafi Libya that their nations Energy sector would be so badly affected. Economic Impacts Since the recent Egyptian revolution in 2011, Egypt’s credit rating fell 6 points… Tunisia, since it’s revolution has declined 4 points… Egypt has been under the spotlight since 2011 as Ibrahim Mahlab’s party seeks stability & attempts to gain against it’s economic shortfalls. These Gulf states were somewhat supported by years of $100+ oil prices, as well as donations from other powering Arab nations (For example, UAE donating almost $20bn to Egypt + a further $12bn from Saudi & Kuwait… for aid & “investment”) Egypt, in particular is viewed as pivotal in bridging the gap between the Middle-East & the North African states… as the UAE’s Minister of State quotes “Egypt is central to the prosperity of the Middle-East” . However, the fall in Oil prices provokes pressures and furthermore, an instant-stimulus for these struggling economies. Private Investor’s eyesMost Foreign Investor’s are burdened by the risks of domestic unrest and in attempting to control the “social peace”, economic reforms to boost investment & reduce subsidies could be expected.. The overall thought is that the plunging Government revenues will surely filter into the real economy and the Growth forecasts become largely cloudy. Already, real estate prices in the once BOOMING Dubai are now largely reducing and empty skyscrapers now account for 25% of Dubai’s population. More-over, core infrastructure projects around the Gulf will be haltered, for example new Transport lines… at least until the Oil market stabilizes… if that. With $20 Oil on the horizon…. Will these Economies Survive?