Trading Forex in Baskets to diversify trading risk for both, speculative trading or hedging Forex risk by Ron Schelling
Using Fibonacci ratios to manage your trades efficiently
by Sunil Mangwani
November 23, 10:00 GMT
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A quick look on the trend of the EUR/USD and not much has changed since our last post.
It’s hard for the EUR/USD to break that earlier top and create a new higher high.
The bars stay green and so the trend remains up.
Only a close below 1.4095 this week can change the bars to red or a downtrend again.
Olsen Ltd recently launched the website www.OlsenScale.com as the first product of Olsen’s Information System with predictive information of the world economy and the financial markets that Olsen is building. The service is intended to provide decision support for investors; both institutional and private, to treasurers, risk managers, central bankers and government representatives. Its output is to be generated by processing byte by byte of data on economic activity, buy and sale flows on the financial markets and news events. The added value of the service is its systematic compilation and analysis of the abundance of data that is spewed out by the global economy. The service is based on the models of high frequency finance that analyze the complex feedback processes in the economy impacting the occurrence and outcome of future events. The Scale of Market Quakes (SMQ) measures price displacement on a tick-by-tick basis over a 2 hour time frame, thus quantifying the impact of political and economic events and other events, such as large orders; cascades of liquidations; and ubiquitous unbalances between buyers and sellers.
Interesting article about trading in Milliseconds! Have a look:
http://www.nytimes.com/2009/07/24/business/24trading.html?_r=1
(c) NYTimes.
This time look to the USD/JPY for trend direction.
Today’s bar is about to close higher than the previous weekly high and support by the RSI> 50.
If we close at this level today the trend has changed to Up and th bar remain green again.
A quick look on the EUR/USD which is in a small uptrend for the last five days approaching the last highest high of over 1.4300 in the beginning of June.
Do we get a double top ? or to we fall back below the last low of 1.3775 ?
Only a close this week below 1.3900 will change the color of the bar to red and so a down trend indication.
Interesting ranking of Forex ETF’s again and you can compare them with earlier posts.
Remember that those ETF’s are all quoted in USD, like Yen and CHF, but more important however are the weekly changes in strength and weakness (each column is a week).
Yen and Euro has changed most last week.
Building a trading system ?
Look at this link how to build and test small parts in order to build a complete system !
http://i.usatoday.net/tech/graphics/iss_timeline/flash.htm
What this means for the value of the Dollar ?
The US federal deficit has ballooned past the $1 trillion mark for the first time and could grow to nearly $2 trillion by the end of the budget year.
Massive government spending to help ease the recession combined with a sharp decline in tax revenues and the cost of the wars in Iraq and Afghanistan have caused the deficit to skyrocket.
The US treasury department said on Monday that the deficit in June totalled $94.3bn, pushing the nine-month total since the budget year started in October to $1.09 trillion.
The Obama administration now forecasts that the deficit for the budget year will reach $1.84 trillion by end September, intensifying fears over interest rates, inflation and the strength of the dollar.
The debt is largely financed by the sale of US treasury bonds and bills and the deficit is making Chinese and other foreign buyers of those instruments nervous about their security.
It could also force the US treasury department to pay higher interest rates to make US debt attractive in the long-run.
“Our foreign investors from China and elsewhere are starting to have concerns about not only the value of the dollar but how safe their investments will be in the long run.
California may be the most visible in deficit, the map below shows that other states across the US have budgetary probles too.
Cumulative budget gap is around $ 121bn this year !
