A UNIQUE TAKE ON THE FX MARKET FROM A UNIQUE FX BROKER CTRADER | FIX API | PAMM | CUSTOM LIQUIDITY

President Trump appeared at his regular press conference on Friday on the White House lawn to praise himself for the great job he had done in raising U.S. GDP from 2% in Q1 to 4.1% in Q2. There is little doubt that the tax cuts and infrastructure projects he has introduce have been the primary reason for this growth spurt.

Remember King Louie in The Jungle Book? He had “reached the top and had to stop and that what’s bothering him” (slight paraphrase). That seems to be Donald Trump’s problem too. If Donald stays focussed on the U.S. picking fights with China, Russia or even Iran all is well with the world.

One of the surprises of Bitcoin Ethereum, Ripple et-al is the lack of conversation around interest rates. Cryptocurrencies have no time value as they have no monetary base other than as an exchange of value. How many Bitcoins or now fractions thereof are you prepared to pay for a cup of coffee? Obviously, investors realize that when they invest in Bitcoin etc., they are considering capital gain and not income and this has been smoothed by the fact that cash deposits earn nothing now in any case.

What is the difference between trading and investing when looking at the currency market? For me, it comes down to time horizon. It is obvious that the longer down the time curve you travel, the harder it is to make money and the deeper pockets you need, hence it becomes an investment.

When watching the path of Bitcoin over the past week, I am reminded of the scene at the end of the movie Trading Places where everyone is scrambling to sell orange juice futures. The only difference is that, as we all know, at some level orange juice futures will have a commercial value.

The almost continual wrangling over the value of Bitcoin, the incessant threat that Governments are “looking into” the uses of blockchain and cryptocurrencies and the constant setting up of interest groups and seminars are starting to dilute interest which is vital to the eventual success of something that needs positive publicity.

When we start trading if our first trade loses money it can be incredibly disheartening and as we tend to exist in a vacuum, not knowing where to turn for verification. It is even worse when our trading strategy has worked successfully in a dummy account.

Evolution. A good thing? Not always. The Foreign Exchange market has evolved to such an extent over the past ten years or so that it is now beginning to become “untradeable with the naked eye”.

The last truly great Socialist Prime Minister in the UK, Harold Wilson, who was in office from 1964 to 1970 and from 1972 to 1974 uttered one of the most enduring quotable quotes by a British Politician. He said that “a week is a long time in politics”.

It is becoming harder and harder to exist as an FX trader in today’s market as more and more money is chasing less and less liquidity. This week, the euro has traded in an eighty-four-point range totally negating the opportunity for day traders to make money.

I was leafing through social media this week and came across one of those Three equals forty-five etc. puzzles that we all now know the answer to. It is an observation test not a test of mathematical ability. I came across the reply below from, you’ve guessed it, a quantitative analyst, who was so proud of his answer that he was moved to show us how he reached is conclusion which was very amusingly wrong.

I read an article the other day in which the writer asked, “what is bitcoin’s real value?”. I wasn’t sure if it was one of those “questions for the ages” or a more genuine piece in which a price to buy or sell it could be determined.

Is regulation set to be the battleground that defines the leap from Fiat to crypto? We seem to be living in a world of catchall words and phrases that are used to encourage or scare off potential investors and users of blockchain, cryptocurrency and basically anything new.

Last week I wrote about how Bitcoin was starting to react to its drivers in a way that mirrored the way Fiat currencies do. Option structures are being built around the volatility of the currency (I think I can call it that) and it was beginning to act just a little more predictably. This week I have seen a few differences that will need to change if Bitcoin, or any other cryptocurrency, is to join the mainstream.

It’s happening again. Sterling is “punching above its weight” in the run up to the Summit of EU Heads of Government summit being held this week. I have got myself short of Sterling on the back of several events taking place next week which on balance I believe will be negative for the pound.

Remember the halcyon days of the FX market when there were sudden unexplained 100 pip moves in currency pairs? We all started to understand the power of the burgeoning options market and size of the trades that were undertaken to protect a position or a particular level. As the market became more sophisticated...

Trust. That is the only thing that keeps the global economy and the flow of goods and services running. There is nothing backing dollars, euros, pounds or yen other than the belief of Joe Public that if he goes into a shop with a note guaranteed by a Government, he will be able to buy a loaf of bread or a liter of milk.

Over the past week I have read an incredible number of articles, comments and blogs that miss the point completely about how interconnected the FX market. One of the first things that should be realized by anyone who wants to trade FX that is an asset class in its own right but it is also the lubricant for every other asset class and will react to influences in occasionally unexpected ways.

An old boss of mine used to have a favourite expression, he used to label bottom or top pickers as trying to “catch a falling knife”. He was not a fan of averaging into a position. He didn’t see the point. His preferred method was to await the turn and if he lost a few pips confirming his view so be it. The effect was often the same, but he was more often right than those who had averaged in.

Well, that was an interesting week. The effect of jawboning was finally appreciated as Central Banks finally got the hang of the fact that words, in a lot of cases, speak louder than deeds...

The fall in the value of Bitcoin this week should bring about a period of reflection concerning the use and valuation of cryptocurrencies. It is unfortunate that all it has done is divide those in this community into two clear camps. On one side are those who...

No one should be surprised by the 90/90/90 anymore after the market suddenly turned far tougher than it has for some time.Traders have become used to what I would describe as a “single impact” market where influences seem...

It started with Sterling, moved on to the dollar and Euro and has now infected the Cryptocurrency market. Travelling within the safety of the herd, not thinking outside the box and becoming reactive. Funnily enough, I blame Reuters.

When gold was discovered in California in 1848 more than 300,000 people rushed west to stake their claim. This quickly became a totally lawless venture with, however, only a minority of miners making much money from the gold itself. It was much more common for people to become wealthy by providing the miners with over-priced food, supplies and services. I couldn’t help noticing two things; first, that there was a total lack of regulation of claims and the related ephemera and, two...

Building a solid relationship with a broker is more than listening to the well-rehearsed ad-lib lines of retention clerk whose only job is to ensure that you continue to trade. Quality not quantity is one of the best methods of judgement, particularly when starting out. Does the broker bombard you with phone call and offers? Do you receive emails every half an hour reminding you of a certain product or offer? If you do, he is probably trying a little hard and should probably be avoided...

Opportunities abound as spreads narrow. Every time I look at a trading platform I am amazed at the spreads quoted as “standard”. The advances made in liquidity and technology that allows all players a fair opportunity to “trade like a pro”...

News blackout means deal imminent. This week I have been fascinated by the market’s reaction to Brexit. I very much doubt that many traders were going long based upon the rumour that a) the U.K. had offered up to fifty billion euros to settle the divorce bill and ...

This is a great of example of what makes a great trader. You learn a lot more from a losing trade if your analysis stays real and doesn’t disintegrate into a tirade blaming yourself for something out of your control...

I got into a “discussion” this week with a “trader” who was publicly berating his broker for being a “robber”. I was intrigued by the guys choice of Social Media for his tirade and was keen to find out from him what had happened. It seems that the market...

If a seminar is free, you will be expected to buy something if you attend. If a seminar is charged for, you will be given something to make you feel the experience was worth it. Novice traders are often higher educated these days and so are used to attending a lecture of something similar in order for knowledge to be...

The FX market is becoming more and more automated by the day. While in the past, it was the province of guys (or gals, but mostly guys) who had an instinct for how long or short the market was, what sentiment looked like and who controlled most corporate orders, today it is mathematicians and computer geeks who hold sway...

In the coming week, the Bank of England will meet to decide on Monetary Policy. This meeting is eagerly awaited by traders who see it as pivotal to the short/medium term fate of the pound since there is high expectation that they will raise interest rates for the first time in over a decade year.

When wrapped up in a “trading bubble” it is easy to forget that there is a uniqueness to trading foreign exchange in that is the one asset class that sits on top of all others in its total encapsulation of real economies, real people and real events.

Central Bank actions have prompted most of the more “interesting times” we have seen in modern economic history. Dire warnings over growth, inflation and global collapse have emanated from many of the more prominent Governors, Chairmen and Presidents but life goes on and we can all still tell the tale.Now, we have an ECB President in Mario Draghi who may leave office never having raised interest rates. That will either...

Why would anyone tell you the secret of making money in the financial markets? If there was a secret, a magic formula or FX alchemy, it would certainly be harder to find than simply typing “how to make money trading FX” into a Google search. At FXPIG we ARE different!

This week the German Finance Minister lost his job the Chancellor scuttled around trying to knit together a meaningful coalition with two parties not used to Government.

I read articles now by people I wouldn’t trust to look out of the window and tell me whether it is raining or not. Keep on learning. No one knows it all.

Hats off to Super Mario and God help the Eurozone when his term ends in October 2019.

Why do people get into trading foreign exchange? It isn’t peer pressure as it can be a lonely hobby, most traders deal in solitude. You don’t see guys out on a Friday night regaling their mates with stories of moving averages and oscillators...

Just when you thought you had reached the final frontier! I consider myself to be reasonably “au-fait” with modern technologies even though I am one for clinging to what I know.

Reading, as I do, so much about the markets and the people who populate them, it never ceases to amaze me that almost without exception traders get “married to an idea, a style or a methodology”

‍Even in the summer, markets are driven by a multitude of factors. The only issue is that there are not as many people to take advantage of any moves or sufficient analysts to, well, analyse. So, what happens? We decide to blame the lowest common denominator and there is no lower or more common denominator than Brexit.

It’s about making money, isn’t it? Open any FX news and views website or look at any social media site and what do you find? A new way to trade foreign exchange.

The Fed, (it's always the Fed isn’t it), were the first to hike rates back in December last year. Ostensibly they were trying to stay ahead of the curve (using the literal rather than the generally accepted meaning of the phrase) but, in reality, they were trying to take a little steam out of the stock market where cheap money had seen it rise by 30% in under three years. Remember “irrational exuberance?”

‍Social media sites like Linkedin or Facebook are full of traders telling us how wonderful they are and they have discovered Alchemy or the Holy Grail. If, like me, you are intrigued by what other traders are thinking and build that into the fabric of your trading style, then...

Banks are seen as the enemy because they don’t “comply”. Yes, it may appear that they are hunting out stops and generally ruining the market for the “little guy” but that is definitely not their intention.

Interest Rates are Back! Since the Global Financial Crisis, Central Banks have taken a back seat allowing their stimulus packages to talk for them. Buying assets, debasing the currency and generally doing very un-central bank things led us to believe that the market had won. But, now they’re back. And I for one am pleased to see them

A whole new world has opened; Breakouts aren’t something that happen to a teenager before his first date. Doji’s aren’t found on the menu at Yo Sushi and Morning Stars occur at all times of day… (imagine me wide eyes staring comatose into my screen).

Advance Guidance or Advance misguidance... When Janet Yellen tells us that the future path of interest rates is dependent upon data releases traders are entitled to take that as a policy statement. When subsequent data is below trend or doesn’t comply with expectations...

Or a Sheep? The problem with the FX market is that we are all looking at the same thing. That is fine provided we are prepared to look at it in a different way. As Einstein said, “education is what remains after one has forgotten what one has learned in school.”

Don’t ignore what’s RIGHT in front of youThe other day I was chatting on Skype with a friend of mine as the news came over the wire that UK GDP had seen a larger than expected drop.“I’ll let you go. I’m sure you want to get involved”“No mate you’re OK nothing happening initially so I reckon the market is going to ignore […]

Global Leaders…...Really A subject I may have hit upon before is the fact that no matter how hard you stare at a chart it isn't going to tell you when a snap election is going to be called in the U.K. or Donald Trump is going to do something un-Presidential and possibly illegal. Politics have been the major driver for […]

The Market is <i>NEVER</i> easier to read beneath 400 moving averages, 12 Fibonacci studies, and 343 different trendlines.FX traders who spend their lives poring over charts in dark basements lit an array of two three or even four glowing screens are missing the whole essence of the market. Technical analysis isn’t and […]

Who is driving this market? The whole dynamic of the Foreign Exchange Market has changed over the past few years, this change has been been driven, almost exclusively by liquidity. Direct evidence of this can be found in the ever rising daily turnover estimates. In 1980, global trade (according to the WTO) was almost two […]

How do you take your news? You don’t need a degree in marketing to know that sex sells… A simple google search will give you all the evidence you need, too much most likely. Myself? I prefer to get my economic reports the old fashioned way, from a monotone guy in a jacket, preferably with a tie on... and absolutely fully […]

Politicians come and go; Economies survive So, we have a 'snap' election in the U.K. The ruling Conservative party is behaving at its most beastly, that is according to the Socialists and Anarchists, in kicking the opposition Labour Party while its down. Labour has no credible leadership, no credible policies, and no […]

Antipathy towards banks is unwarranted Talking to retail FX traders one thing always comes across to me. There is a general antagonism towards banks. This could be jealousy, it could be an inferiority complex, it could even be a feeling that the market is skewed towards banks and their ability to almost print money.It never […]

Currency manipulation becomes Currency misalignmentHands up if you remember when intervention in the FX market was a common monetary policy tool? Intervention is the most blatant currency manipulation weapon available to Central Banks. There is a mountain of economics professor ‘jargon’ that surrounds intervention. The web […]

Brexit, Smexit, Market Movers have been having their way with other people’s money LONG before the vote and this is something that is NEVER going to change. Take a look at this chart: Go back to 1973/74 and you will notice a major dip! This chart shows the performance of various U.K sterling based assets since 1950. If you […]

Healthcare Bill pulled before vote. It happened late, too late for the market to react, but Donald Trump suffered the first major setback of his Presidency late on Friday evening.The roll-back of Obamacare, the healthcare initiative voted into law by President Obama and his merry bunch of Democrats had been the number one […]

A two week supposedly definitive period which was supposed to provide sufficient guidance for traders to feel confident passed by with several questions unanswered. Obviously, we need some PIGs working in government to get that transparency bar off the floor...There were three major events in the past week that drove market […]

We are halfway through the so-called perfect storm, and we are thrilled to see all our partners have lived to fight another day. You know, PIGs are pretty smart, I am sure we covered that one before, and of course loyal, this one goes without saying, considering the level of support we provide on a wide array of markets and […]

The market is entering into a “perfect storm” where a number of factors will drive volatility. FXPIG will remain by our partners' side throughout... did we mention that PIGs are loyal? Yeah, we probably did, once, or maybe twice.Economic, Political and Interest Rate decisions are set to provide guidance to a market that has […]

At FXPIG we believe there is always something to say about the market even if ranges are narrow, techs are neutral and Trump isn’t on a tweet storm. Liquidity. The trader's lifeblood. Don’t be misled into thinking it will always be there. Like your best friend, you will miss it terribly when it's gone! The advent of […]