Forex Investment and Currency Trading

GBPJPY: We are still watching the momentum indicator on GBPJPY which is forming positive triple momentum divergence. The momentum indicator is beginning to cross up and a ST rally will confirm it. Such a pattern would then suggest a test of resistance levels at 157.51 and possibly 165 again.
S&P 500 in EUR terms

S&P 500 (EUR terms): The trend across the lows in 1998 and 2003 has so far limited the fall in the S&P 500 (EUR terms) and we have the possibility of positive triple momentum divergence which, if completed, would suggest a bounce up.

[Read more →]

Despite the substantial measures the US authority has been taking over the last few months to increase liquidity in the system, US financial conditions have been tightening. These tensions are partly related to the broader stress in financial markets and partly driven by cyclical factors. And in addition, there are elements of tighter credit quantities that the indicator may not be capturing. However, on a broader basis it does highlight the notion that the US financing environment is not growth supportive yet. And it is this tightness in financial conditions that underlines the discussion of a potential
liquidity trap and the [...]

[Read more →]

It’s one thing to speculate in the market and get the direction wrong. That’s good old-fashioned risk-taking, and it’s just part of the business of trading. But it’s another result entirely to get the direction right and still lose money, or not make as much as you could have, or not keep as much as you’d already made.
Most traders can readily accept the idea of getting the direction wrong. They shrug it off and get back to work in short order. But take a trader with a winning position in the morning that goes south in the afternoon, and you’re [...]

[Read more →]

FX Bottom Line: If the S&P 500 Index manages to form a bottoming pattern against last Thursday’s bullish key reversal low of 818.91, the DXY is likely to undergo a retracement phase that would highlight support levels at 84.45, 83.82 and 82.32. Keep an eye on this relationship this week.
The possibility is raised that the S&P 500 Index is attempting to stabilize against last Thursday’s (bullish key reversal) low of 818.91.
With a potential triple bottom pattern forming near 845.27 for stocks, a close above resistance at 940.73 would produce a bullish trend reversal.
This would then highlight the reaction highs near 1007.46 [...]

[Read more →]

Leverage is the size of a market position you can control based on your available margin collateral. If the leverage ratio is 10:1, and you have $1,000 of available margin, you’re able to hold a position equivalent to $10,000.
Online currency trading firms typically offer higher leverage ratios than you may be familiar with from trading stocks on margin. Leverage ratios among currency brokers are typically on the order of 100:1 for standard-size accounts (100,000 trade-lot size) and 200:1 for mini-accounts (10,000 trade-lot size).
Leverage is a great trading tool, allowing traders with less capital to participate in markets that they couldn’t [...]

[Read more →]