Forex4Everyone.com

Like others traders, I used to wonder what kind of personality it takes to become a successful trader? What makes them successful, and how do they make money on the Forex market while the other 90% of the traders fight hard to even get a single successful trade?

Here are some steps that the successful traders use to stand out from the rest.

1. Successful traders are prepared with a well laid out plan. Even more importantly, they stick to the plan and don’t rush through it. Remember, a plan that you haven’t thought through but rushed with it instead is is most likely a way for you to lose money.
2. The successful traders don’t get emotionally affected when trading. What I mean with this is, that they have guts to close a trade when it is in loss. A majority of traders keep trades open even though they are in a big loss, because they expect the market to reverse. Their problem is that by the time the market reverses, their trading account is simply wiped out.
3. They don’t “make things happen”. They don’t try to change the market, but instead they analyse the market, and trade per market conditions.

So, in simple terms, follow your trading plan and maintain the discipline!

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It may not have been so easy to define the Canadian dollar’s source of strength over the past year or so (hint: it is not a simple connection to crude oil); but we should have no trouble in determining where its next fundamental drive will come from over the coming week. On deck for the ‘loonie’ over the coming week are a critical Bank of Canada rate decision and the long overdue release of first quarter GDP. Given the consensus forecast for both events, the currency may find itself taking over the role that the Australian dollar has so clearly coveted since the global economic recovery took hold last year. If indeed the affair goes off as expected, the Canadian dollar may find itself with a growth advantage that no other major economy can match along with interest rate potential that is surely not yet fully priced in. On the other hand, it is clear that the market is already heavily biased on the outcome of these events. Disappointments would very likely illicit more of a reaction from currency traders than merely meeting bullish expectations. What’s more, it should not be forgotten that the currency has already appreciated significantly alongside its commodity currency counterparts. Will this moderate further gains or swamp tangible fundamentals with current changes in sentiment?

For the traditional fundamental trader (who likes to see his or her potential driver ahead of time), the first thing to be concerned about its Monday’s release of the first quarter growth report. We have already seen the first January and February monthly readings of economic activity; so we have a feeling for how the broader period may fair. And, given the relatively good performance over the first two months of the year, the 5.9 percent forecasted annualized pace of growth does not seem unreasonable. For context, this would be the fastest pace of growth in over 10-years and it would confirm speculation that the Canadian economy will outpace its global counterparts and is better positioned should there be a second slump in global activity levels going forward. This can prove a crucial source of strength for the currency because relative growth will rise in importance for long-term capital flows going forward. Economic activity is the backdrop of expected return on a nation’s assets; and a performance of this magnitude coupled with the knowledge that Canada was able to weather recession and financial crisis much better than its peers these past years will no doubt peak investors interests.

However, for returns, growth is only one component of a benchmark. Interest rates are another factor. According to overnight index swaps from Credit Suisse, the market is pricing in a 68 percent probability that the BoC will hike on Tuesday. That is perhaps lowballing the potential given the hawkish turn the group has taken recently and the OECD’s recommendations that it should start removing accommodation immediately. What’s more, the forecast for nearly six quarter point interest rate hikes over the coming 12 months has recently been reduced to approximately four. With this decision, we will likely see forecasts take a dramatic turn for the better or worse depending on the outcome.

It is important to watch both of these scheduled events and evaluate their influence again the backdrop of risk appetite. As it stands, the Canadian dollar has a significant risk premium and relatively little fundamental swagger to back it up. The loonie does not have the yield that its Aussie and kiwi counterparts maintain. Growth is running hot; but so the US economy. To find the ability to further appreciate (especially in the face of risk aversion), the currency needs to establish a high level of safety and potential return. This would be a unique combination that no other economy can match (Australia is fading). Yet, should these fundamental highlights not come to fruition, it could prove the Canadian dollar’s undoing.

John Kicklighter

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The Australian dollar rallied to a high of 0.8548 during the final full week of May following a rebound in risk sentiment however, the market moving event risks scheduled for the first week of June is likely to stoke increased volatility in the exchange rate as investors weigh the outlook for the $1T economy. The Reserve Bank of Australia is widely expected to maintain a neutral policy stance next month as the interest rate returns to “average” levels, and the central bank may adopt a wait-and-see approach going forward as policy makers assess the impact of its recent rate hikes.

A Bloomberg News survey shows all of the 22 economists polled forecast the RBA to hold the cash rate steady at 4.50% in June after rising borrowing costs six times during the last seven meeting, while investors are pricing a zero percent change to a rate hike according to Credit Suisse overnight index swaps as the board sees “monetary policy well placed for the present. Moreover, the central bank said that the board “spent considerable time discussing the disturbances in financial markets” sparked by the European debt crisis, and argued that a case “could be made for a pause in the process of normalizing interest rates owing to the uncertainties in the euro-area.” However, Governor Glenn Stevens maintained an improved outlook for growth and inflation and expects economic activity to “strengthen further over the next couple of years,” and the central bank may look to raise the cash rate further in the second-half of the year as the isle-nation continues to benefit from the expansion in China, Australia’s biggest trading partner.

Nevertheless, economic activity is forecasted to increase 0.6% in the first quarter following the 0.9% expansion during the last three-months of 2009, while company operating profits are projected to increase 3.0% during the same period, which would be the fastest pace of growth since the third-quarter of 2008. At the same time, business inventories are anticipated to rise for the third consecutive quarter, with market participants forecasting a 0.5% advance in stockpiles on unsold goods, and the rise in economic activity could benefit the Australian dollar as the outlook for future growth improves.

David Song

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The end of the smooth economic week is here, as once again Europe is lacking of economic data yet the week is ending on the upside especially as we have been witnessing stock markets improve. A slight wave of positive sentiment has been appearing in global markets lately.

Global stock markets have been volatile lately, as on one side there are the fears from the debt crisis spreading in Europe which might curb growth levels, while on the other side there are anticipations that the decline in stock markets was overrated.

The improvement that occurred in stock markets yesterday was from China announcing that they are not going to review the foreign-exchange holdings of euro assets, and this meant that the fear of the debt spreading was fading slightly from markets.

The announcement boosted confidence in global markets as the higher-yielding assets rebounded from their severe decline, especially the euro dollar pair as it was trading close to the lowest level in four years.

For every coin there are two sides, an although the euro depreciated versus the dollar, yet the weak euro is boosting exports in the euro zone and this is positively affecting their trade balance and improving growth levels.

The euro zone expanded by 0.2% in the first quarter and the major support came from exports, although consumption remains curtailed from the harsh winter that had weighed on spending levels, there is also the fiscal position of the euro zone that is hurting GDP.

As officials saw the fiscal crisis spreading, the EU and IMF jumped in by providing the euro zone with 750 billion euros to help to contain the deficit before the debt monster grips onto nations tighter which would have kept economies dealing with low growth levels

Ecpulse

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We will not open any positions today of many reasons.

It’s Friday and we are very cautiousness about trading Fridays and never after the N.Y. Opening.
It is bank holidays in both England (Spring Bank Holiday) and US (Memorial Day) on Monday, so we expect the market situation to be thin as many traders are already preparing for a long weekend.

We are seeing large draw backs on all the major pair we are dealing, so we just hold our breath and way to catch the trend way the possibility shows up again.

There is no obvious signals and the market is very unpredictable.

Because of the holidays in GB and US on Monday, we too take a break and doesn’t intent to trade again before Tuesday.

See you again late Monday evening or early Tuesday morning.

Have a nice weekend:

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