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Forex Strategy from Angel Kolev
March 22, 2022

The trading during the differ parts of the year could be much differ. If you trade by one way in August, you have to change that way in September. We will show in our lessons how to trade during the year.

Many traders do not want to trade in August, because then is very difficult to trade. Then in August as a holiday month in the north Globe the top dealers and many of the top dealers in the banks have a rest. They do not trade then and on the market have little volumes and strange movements not combine with the picture by the technical indicators.

There are couple of ways to trade during the year.

  • Strategy 1: Using the trend
  • Strategy 2: Using MACD trend
  • Strategy 3: Using MACD signals
  • Strategy 4: Using Stochastic indicator only
  • Strategy 5: Using Stochastic indicator and MACD
  • Strategy 6: Using Fibonacci levels
  • Strategy 7: Using the chart figures

Strategy 1: Using the trend

The trading using the trend is the simple trading way. “The trend is your friend” are told many dealers. What the trend mean? The trend is the direction where the trading with some currency pair will go on.

You simple are watching where is the direction and buy or sell where the trading goes on. But it is not so simple. You have to have sure proofs that the trading is go with the trend and for the future.

The market has to be moving on with some news, some basic news which is made the trend trading. It could be economic indicator announced in short time before, some major event happen worldwide or some speech of some main people like finance minister, some chief of ECB, Fed Reserve or other.

But also the trend trading could be cause and by some rumors appeared among the traders. You has to be sure that the market is moving by some event, event that is caused the trend on the market. Without event sudden trend is not a guaranty for continues such trend.

You could catch up the trend and when come in positions to turn the trend or to finish with the trend. Then to define well if it is trend is better to use the technical indicators. There are many indicators, as if you follow each of them you will confuse totally.

So it is use only few technical indicators, which make sure trading. One of the indicators has just showed the trend. This is ADX technical indicator. It is one of not much using and not so good indicator. The indicator consists of three lines. You can see the details for the indicator in the previous lessons. The ADX line shows how strength is the trend.

How the ADX line is upward and continue to be upward it mean that we have a trend at the moment. In the chart below is shown how to define the trend using ADX technical indicator. But ADX indicator as all is not so useful and you could not define well the trend using ADX.

To recognize when the market trading using the trend is better to use MACD. MACD is the indicator using in all trading ways and without MACD is a trading like the driving in the thick fog.

ADX trend

It is almost not possible to define the trend without to draw over the chart. It is taken the trend line and chart to define if have some trend. On the chart below is shown how the trend line defines the levels within the trend. So any significant movement out of the trend lines mean end of this trend.

To use this trend and to guaranty enough movement when you entry the market is better to use this trend for bigger chart period more than 1-hour. For the long traders it is better to use charts more than 4-hours. But it is possible to use and for shot periods too, as on the chart below. With 1 on the chart below is showing the start of the trend and with 2 is show when the trend is over. But to appoint it better is necessary to use an MACD indicator, which in the next trading way we use it.

The using of the trend with ADX and chart analysis

Strategy 2: Using MACD trend

This trading is one of the most difficult to define. But this trading is also starting by some major event like economic data public before with significant difference by the expectations, speeches or rumors on the bourse.

First of all using MACD to define if it is trading with the trend is to use MACD for long time period charts. Suitable for the trend recognize trading is for charts more than 1-hour.

Usually it is using 1-hour charts, 4-hours charts, 6-hour charts and 1-day charts. For 1-day charts it is good to use for long traders, who trade positions for more than one week, usually from 2 weeks to 3-4 months.

Such trading for long traders is needed to use less margin than the standard using by most trading companies of 1:100. It is better to use margin like 1:10 – 1:25 and to use stop losses more than 250 pips.

For the short traders prefer daily traders is better to use 1-hour chart trend and they could use margin to 1:100 maximum with stop losses about 40 – 80 pips. When is define the MACD trend is better to use the maximum fast of the trend. It means if the MACD chart fast move upward or downward we have sure signs for good trend. The slowly and slanting movement of MACD did not mean trend.

It means that at any moment the movement in the current direction could stop and to start movement in the other direction or that with the current trend is over. On the 1 day chart below using MACD is shown how strong is the trend and are shown two moments (1,2 - Entry 1, Entry 2)where are define good entry levels for a sure trend continue further. The Exit is recognized on the MACD indicators as 3.

Two difference entry levels using MACD indicator and MACD trend

Strategy 3: Using MACD signals

This way of trading is one of the best and most successive trading ways. MACD is such indicator who uses more than 75 % of the traders. MACD give excellent signals when the both MACD line crosses that every trader make action on the market by the crossing.

The upward crossing above the zero line generates a sell signal. The power of the signal means by the level at which MACD cross.

The signal could cross at level of MACD at 0.0001 and it could be at levels above 0.02. So for better explaining of the markets movements are better to use MACD at level above 0.0005.

When MACD lines are crossing between below zero line it is a buy signal. The power of the signal also means by the level, which the lines cross. It also could be told that the power of the signal is so much power than the line crosses how far is possible by the zero line.

Also for generating of buy signal is better to use MACD cross at levels lower than  0.0005.

Some traders use the crossing of the zero line as signal. This case is possible to use when the trading is in short range and the MACD is within the zone of –0.0005 and +0.0005. At this crossing have extra stimulus to continue the trading in the trend starting by the last crossing of both MACD lines.

One of the most successive scenarios to have sure positions using MACD indicator is to entry the market when the crossing is after smooth moving of the main MACD EMA. Then after smooth moving and making smooth top of MACD EMA the crossing SMA line is with downward or in horizontal movement and is seeing the turning start for sell and when SMA crossing below zero MACD line have upward start or horizontal starting upward movement.

But to see what will happen further is better to use longer charts. For example if you trade at 15 minutes charts is better to check what will happen after the crossing of MACD lines using 30 minutes or 1-hour chart with MACD.

On the chart below the MACD show one moment to sell with 1 when MACD lines crosses and with 2 the exit moment.

In this trading using only one chart for example the 5-minutes chart is better to protect stop losses with average 25/35 pips and to expect 25/40 pips profit. How the chart period is higher so bigger profits could expects.

For 1-hour chart is better to use stop losses at 30/40 pips and take profit average of 60 to180 pips.

The Standard entry and exit moments using MACD

Strategy 4: Using Stochastic indicator only

The second big part of the traders use Stochastic indicator only for the trading. The indicator has appointed levels from 0 to 100. The indicators both line the clear line and the dash line when crosses between at levels below 25 and level higher than 75 they generate signal.

The buy signal come when the main stochastic oscillator line and the dash line crosses at level below 25. The sell signals come when the lines cross over 75.

Not any cross but generate signal. The clear signal come when the lines and especially the %K line is smooth. When the line %K is at waves with not regular form it means than the trading level is moving faster and is not appropriate to entry the market.

This is very important! When the %K line makes waves it is sure sign that the crossing of the lines DO NOT generate signal (1 on the figure). This is sign for continued trend in the same direction and the signal will come only when the line stay smooth. At (2 on the figure) is generating signal, as then the chart is smooth and supported by MACD.

See the example below on the chart.

The Standard entry and exit moments using MACD

With stochastic oscillator is one very good indicator for the help to determine exact the market changing trends. Sometime the trading could be based over this indicator almost all the time. In June and July 2003 the trading were based over stochastic oscillator. With stochastic is possible to make very good profit.

One of the main elements where the traders could find that the trend of MACD signal is over is to see Stochastic Oscillator.

The standard Stochastic signal in on the chart below. There the lines are smooth and the signals are clear and sure.

With 1 on the chart below is show the smooth Stochastic Oscillator crossing of the lines giving a sure buy signal.

Sure Buy signal by smooth Stochastic

One of the surer signal using stochastic oscillators comes when is forming double top or double bottom with divergence.

If you are not bought or sold at the first crossing of the both lines at levels below 25 and over 75 and latter became second top which is with less power like on the chart below it is sure signal for big movement.

The figure below with 1 is shown the positive divergence where is sure buy signal.

Stochastic Oscillator positive divergence

With 2 on the chart below is shown the sell signal generate by negative divergence.

Stochastic Oscillator negative divergence

Strategy 5: Using Stochastic indicator and MACD

The using of both technical indicators is the key to the success. Over 90% of the traders use at least one of both indicators. Using and both indicators together thekey for the success is open.

Both indicator together could show with the highest precise the movement on the market. The indicators together make the trading much easy and with detail analyses every trader could explain the short movements on the chart.

The 90% of the traders use at least one of both indicator, also about 90% of the traders use technical indicators to make the trading on the forex market. One key advice to every trader starting on the forex market is to not go to trade without to watching at least one of both indicators!

What just could make more on the market using both indicators together?

First of all both indicators in combination will show where the starting trend
forming by MACD crossing of both lines finish. On the chart below is show where
Stochastic oscillator show the end of MACD starting trend. There all is finished and is
better to close the open positions if is using MACD analyses only. But if is using
MACD and stochastic analyses together such entry could not make. See on the chart
at 1 is giving the signal to buy using MACD, but stochastic oscillator latter show sell
and 2, so it is a sign for exit analyzing the second help indicator. If you use MACD
the exit level will be at 3, as that will make some losses if you wait to see MACD exit
signal.

Entry using MACD and exit using stochastic oscillator

Using MACD and stochastic oscillator is possible to make especially using stochastic many trading for 15 minutes chart it is possible to make at least 25 trading for 24 hours.

But it is not successive, the success come by the big trends and by longer chart analyses.

The best way to make this trading using MACD and Stochastic is to make the follow. It is necessary expect such levels of both indicators, where are showing movements in one direction.

There for very short time is receiving strong movement on the market and movement are much more sure than the moving using by only one indicator.

Strategy 6: Using Fibonacci levels

Many Traders use Fibonacci to determine where are the support and resistance levels.

Fibonacci mathematic calculations are one of the most power mathematic analyses on the forex charts where the traders could appoint with big accuracy the support and resistance levels.

The using of Fibonacci is simple and is necessary to find a good top and bottom on the chart to place Fibonacci levels between. The levels between the top 100% and the bottom 0 % are the zones where is expecting the trading to meet resistance. The levels are the follow:

- Level 1 – 23.6%
- Level 2 – 38.2%
- Level 3 – 50.0%
- Level 4 – 61.8%
- Level 5 – 100.0%

The Fibonacci levels also include resistance and above 100% and the levels are:

- Level 6 - 161.8%
- Level 7 – 261.8%
- Level 8 - 423.6%

The levels 6,7,8 are not using much by the traders and there is expecting minor resistance.

The using of Fibonacci is better to be using for bigger charts 1-hour, 4-hours, 6-hours 1-day charts. It is appropriate to use and for little periods, as few days but the top and bottom have to be very good determined.

By the same way is using to determine the support levels, as instead to using top and bottom is using bottom and top. The procedure is the follow:

It is take good determine bottom and top. Place Fibonacci between the bottom and top. The first supports come again at 23.6% followed by 38.2% and so on.

The key element for Fibonacci and to be sure in the using of Fibonacci when two Fibonacci levels by two difference top and bottoms (bottom and tops) will have same levels of resistance (support).

The levels could not be the same but the lines have to show the same currency levels. For example resistance for longer period Fibonacci level of 38.2% comes for EUR/USD 1.1525.

For short period 61.8% Fibonacci resistance is also at 1.1525. It means that the levels are good determined and the power of the resistance will be stronger.

At the levels of 23.6% to 100.00% if have not exact and view support (resistance) then the levels of Fibonacci are not using.

They are false and is better to not use Fibonacci for the moment or to find new other two top and bottoms where placing the Fibonacci levels on the chart will determine easy that the normal moving trend on the market is broken and the trading event is pushing away by the levels.

As one of the key levels for the market charts is possible to determine as levels 61.8%, 100.0%, 0% and 38.2%. These levels are the strongest but are better to consider for stronger the combination of two Fibonacci levels determine by difference top and bottoms (bottoms and tops).

On the chart below is showing how to determine the Fibonacci levels using top and bottom. There is seeing easy that the levels 38.2% make support. The support at 23.6 % with sign 1 is overtaken fast, but at 2 the support at 38.2% is sure and the trading do not overtaken that support. For the chart the Top to the Bottom places using Fibonacci.

Strategy 7: Using the chart figures

The charts and the figures on the charts talk to the traders much more than any technical indicator. Double top, head and shoulders, waves and much more are one of the best signals for the market traders.

On the figures below are show the main and most important figures that are surer to make winning strategy on the market.

1. The Backtrack – After every big moving in one direction follow backtrack. The market up or down usually retrace a significant portion of the previous trend. That correction is measure in percentages. The most common is fifty percent retracement of the previous trend. Maximum the retracement is two thirds and minimal one third.

2. The Trend Line – Draw always trend line. It is simple and effective way to catch up the market movement. It is using the trend lines placing between two upward or downward tops. If the trading brake the trend line it is expect to start new trend. Otherwise trade in the trend line. With 2 on the chart is shown the end of the trend line.

3. Calming waves. This element on the chart is possible to find after strong movement after that follow the calming waves and in one moment the waves stay with too short range. Any movement out of the drawing lines follow new strong movement in one or another direction. On the chart below there two buy signals the first come when the market touch the trend line and the second when the market trading broken the trend line.

4. Head and Shoulder. On the charts is possible to see one big top (or bottom) with little top (or bottom) next. The second top (or bottom) is s signal for movements in downward direction (upward direction). On the chart with 1 is show the first big topand 2 are the second top the shoulder. Second top is a sign for downward movement and the key sell level come when is broken the key support line.

The chart figures trading is one of the surest trading way and most successive. To be using right it is necessary to use for bigger chart periods. The figures but come rarely on the charts and is necessary to be patient when recognize the figure on the chart.

Forex Candlesticks Basics
February 19, 2022

One of the techniques you can apply in order to analyze market prices and signals is through the implementation of candlesticks. These represent a charting technique developed and widely used in Japan.

Their major purpose was the prediction the prices of rice, which constituted one of the first futures market in the world. Even though candlesticks were used for many years in Japan, its advantages have been recognized in Europe and the US in recent years.

Candlesticks are widely used in the forex market. Thus, if you want to increase your chances for success on this market you should be well aware of candlestick basics.

The basic components of a candlestick bar are the open, high, low and close of a currency pair. Being similar to a bar chart, it includes a colored rectangular portion, called the body.

A thin vertical line is situated immediately above and/or below it, which is referred to as the wick or shadow.

Forex Candlestick Basics

The difference between the opening and closing price is presented by the body. The color depends on whether it is a downward or upward movement of the price. Generally, if the closing price is higher than the opening price, then the body will be colored in white.

On the other hand, if the price has closed at a lower level, then the body will be colored in black.

The high and low price extremes of the period under consideration are shown by the wicks.

Tired of Being Too Early or Late?
February 17, 2022

 So you’ve analyzed the charts and have decided that your currency pair is trading at the right location for a possible reversal – a clear level of supply or demand. The questions in the back of most traders’ minds are, “Will this level hold?

Am I too early?” This is where multiple time frame analysis can help a trader decide WHEN to trade. The way I look at the charts is: My larger time frame tells me WHERE to enter, and my smaller time frame tells me WHEN to enter.

A very common problem with new traders is buying or selling too late, or waiting for too much confirmation. By the time the moving average has turned, for example, and the trader buys, the move has already started and your stop loss may be dozens of pips further out than it had to be! The opposite side of buying or selling too late is trading too early.

Very often traders will try to pick bottoms or tops, yet the price continues and stops them out. A relatively simple way to fix both problems is multiple time frame analysis.

On this 4 hour EURUSD chart, the blue arrow indicates the lowest risk, highest reward entry on the long side. However, many newer traders will be unwilling to take that long trade as the market has been trending down for the past several days.

The fear in this trader’s mind is keeping him from buying, because of the simple fact that the trend may continue down and hit his stop loss. Waiting to buy on a close above the upward trending moving average will get him in, but not until 1.3875.

The experienced trader is looking to the left on the chart and defining his demand zone (which was also a supply zone previously!) from the two dramatic moves to the upside from the 1.3761 level. This trader will get in, but approximately 100 pips cheaper!

Now the question remains: How can I get a better entry yet still have confidence that I’m not too early?

Using our multiple time frame analysis, we can see on the 15 minute chart that the price action came down into our demand zone TWICE within the four hour candle. This even shows us a double bottom pattern, a very common reversal pattern. So now, waiting for the blue arrow, the trader has a higher degree of probability in their long trade. Still not enough confidence? How about the doji candle with the longer tail, giving a potential bullish reversal?

I hope that three reasons to go long at the blue arrow are enough for you! If not, then try throwing in a moving average on this smaller time frame. Waiting for the trend to start will give you more winning trades – albeit with larger stops and smaller winners.

If you waited for the close above the moving average on this chart, you would still be getting in around the 1.3790 level – 30 pips higher than the best entry, but about 85 pips better than if you only watched the 4 hour chart!

In class, we call this “timing our entry.” Buying in high quality demand zones and selling in high quality supply zones has been covered numerous times in previous Lessons from the Pros newsletters. The only potential pitfall in this technique is getting in too early.

However, with lots of screen time, you will begin to trust the levels you have identified. Using the smaller time frame chart to confirm your entry within your longer time frame supply and demand zones will lead to a higher percentage of winners, and give you more confidence in trusting your levels.

One simple way to watch these charts is to set up two time frames for the currency pair(s) you will be trading.

If you are looking at only one chart and switching back and forth between your long-term and short-term time frame charts, you will certainly miss a trade once in a while. So I do recommend having two charts of the same pair next to each other on your screen.

Provided your trading computer has the necessary screen space, why not have these two charts for every pair you trade up at the same time? Trading from a laptop would make this a bit difficult to see the price action, but if you have a larger monitor or three, this would be a very efficient technique.

Longer term position traders will often use daily and one hour charts, swing traders may use 4 hour and 15 minutes, and shorter term may even be using 1 hour and 5 minute charts.

Always keep in mind that larger time frame supply and demand zones are more important than smaller time frames, and this technique should help.

Forex Broker Regulatory Bodies
January 31, 2022
Forex Regulator

Is your forex broker regulated? It is strongly recommended to trade with a broker that operates in a country where their dealing activities are monitored by a regulatory body. Regulated Forex brokers have to adhere to a set of requirements which are designed to help both protect and maintain a level of service to the client.

For instance, in the US, brokers should be regulated by the CFTC and the NFA while brokers in the UK should be regulated by the FSA. Regulated brokers in the US are required to submit financial reports to its regulators and are subject to lengthy regulatory audits covering everything from marketing practices to employee training regimens.

Countries with best regulatory agencies include:

  • USA
  • UK
  • Eurozone
  • Japan
  • Australia
  • Switzerland

Below is a comprehensieve list of regulated bodies for each country:

Forex Regulatory Bodies By Country

AustraliaAustralian Securities and Investment Commission (ASIC)
International Financial Services Commission (IFSC)
British Virgin IslandsBVI Financial Services Commission (FSC of BVI)
BulgariaFinancial Supervision Commission of Bulgaria (FSC Bulgaria)
Canada

British Columbia Securities Commission (BCSC)Canadian Investor Protection Fund (CIPF)Financial Transactions and Reports Analysis Center of Canada (FINTRAC)Investment Industry Regulatory Organization of Canada (IIROC) 

Ontario Securities Commission (OSC)

CyprusCyprus Securities and Exchange Commission (CySEC)
DenmarkDanish Financial Supervisory Authority (Danish FSA)
Dubai, UAE

Dubai Multi Commodities Centre (DMCC)

Dubai Gold & Commodities Exchange (DGCX)

Dubai Financial Services Authority (DFSA)

Emirates Securities and Commodities Authority (SCA)

France

Autorite des marches financiers (AMF)

Banque de France Credit Institutions and Investment Firms Committee (CECEI)

GermanyFederal Financial Supervisory Authority (BaFin)
Hong KongSecurities and Futures Commission (SFC)
IndonesiaCommidity Futures Trade Regulatory Agency (CoFTRA)
IrelandCentral Bank of Ireland
ItalyCommissione Nazionale per le Societa e la Borsa (CONSOB)
JapanFinancial Services Agency of Japan (FSA Japan) Japan Securities Dealers Association (JSDA) Japan Investor Protection Fund (JIPF) Tokyo Commodity Exchange (TOCOM)
KuwaitMinistry of Commerce and Industry in Kuwait Kuwait Chamber of Commerce & Industry (KCCI)
MaltaMalta Financial Services Authority (FSA in Malta)
MauritiusFinancial Services Commission of Mauritius (FSC Mauritius)
New ZealandNew Zealand Exchange (NZX) Serious Fraud Office (SFO) Financial Services Complaints Limited (FSCL)
RussiaFFMS in Russia (FCFR)
SwedenSwedish Financial Supervisory Authority (Swedish FSA)
Switzerland

Association Romande des Intermediares Financiers (ARIF)

Swiss Bankers Association (SBA) 

Swiss Federal Banking Commission (SFBC)

Swiss Federal Department of Finance (SFDF)

Swiss Federal Finance Administration (SFFA)

Swiss Financial Market Supervisory Authority (FINMA)

Swiss National Bank (SNB)

 PolyReg

Organisme d’Autoregulation des Gerants de Patrimoine (OAR-G)

United KingdomUK Financial Services Authority (FSA UK) Financial Services Compensation Fund (FSCS)
United StatesCommodities and Futures Trading Commission (CFTC)

Financial Industry Regulatory Authority (FINRA)

National Futures Association (NFA)

New York Stock Exchange (NYSE)

Office of the Comptroller of the Currency (OCC)

US Securities and Exchanges Commission (U.S. SEC)

Chicago Board of Trade (CBOT)

Securities Investor Protection Corporation (SIPC)
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Geopolitical Analysis on Forex Market
December 22, 2021

Geopolitical Analysis (Reasons)

- Main people interests
- Intervention

Geopolitical Analysis on Forex Market

The Geopolitical Reasons may be many of you will ask what just it means.

But Geopolitical reasons are all reasons to have movements on the market caused in real-time by speeches and interest of some key people around the world, as Presidents, Finance Ministers, Presidents of Banks and key cooperation’s. All sudden events happen around the world.

The terrorist attacks by 11th September 2001 are also geopolitical reasons that caused big movements on the forex markets. To geopolitical analyses also come events as agreements and contracts among countries organizations, companies, worldwide events like natural disasters terrorist attacks, earthquakes, fires, floods, and so on.

All events caused as geopolitical could have serious influence over the market for a long time ahead, but with sure for a very short time, the event causes big movements on the markets. It is necessary for every trader before to start to trade to follow the world news using some news agency like CNN and Bloomberg and every news to come in real time to him. The fast reaction on the forex market is the most important for success.

Never leave the news to go out without paying attention at least to the headlines. Waiting and watching every scheduled speech of people like presidents, finance ministers, and other key people like Alain Greenspan. They always tell hide words to the markets that will follow their words further.

The forex market is and the most dynamic market, every professional trader is the person who knows everything that happens around the world (events that could cause movements on the markets).

Why is so important to follow such news? Let’s take one example. There is an attack over pipeline of oil somewhere in the world (Iraq, Libia).

This attack on the pipeline if it is serious and is causing serious damages it could delay important supplies for some economies. This economy will have a deficit of oil for short time and will be necessary to search for new ways to deliver the oil in the country.

The new ways and new company delivering the oil will make the expenses higher and the country will separate more money for oil supply. Giving more money for something not planned in the budget will cause a deficit for short time and that deficit will cause the national currency to be weaker. Such examples could be given much. So never go to trade without a real-time news agency around you!

The main people's interests

There are many people who want to see the currency trading at the level where they want to see it. But only a few people could do that what they want. They could try and succeed but not always in maximal. First of all the Finance ministers could do what they want, even without flooding the market with big sums.

They simply said in an interview with them that won't do happen something and their words are supported knowing that they could flood the market with some bought and sold of currency to make the desired level of the trading.

Such movement on the market is very useful when some country management wants to improve the economy or to do some new rules and to put in some levels the economic growth of the country. Many countries want to see their currency weaker.

In this way, they will increase the export of the country-based manufactures and make the growing reality in the near future. The economic development of all countries passes through growth and fall off. When the countries go to strong growth the management of the country wants to decrease the power of the economy and by this way want strong national currency.

And when the country is in fall then the management wants weak national currency to make the exporters competitors on the world market. Other peoples also have an interest in moving the market to one or another level.

For example, see just you. If you have at the moment euros, but you have to pay somewhere in dollars and the euro is a weak currency then you will lose too much. In this way, the big companies trading on the world market also want to move the market and by this currency, differential to win, because the difference on the currency market is too much.

For example, the EUR/USD trading range by average 0.83 to 1.19 is equal to $ 0.36 lose for every dollar or for $ 100 000 the loss is $36 000. So the big companies are ready to come on the market and to game with big money to move the market to the level that they want. Therefore is important to know and to watch all reactions by the companies.

Interventions

One of the end steps on the forex market is the intervention. For minutes you can make millions or for minutes even second to bankrupt. Many traders are doing that and many will do that if not use the main rules on the forex market. Never trade on the market without stopping losses. You can leave take profit level open, but always place stop losses. One example by the near pass will show to you what risk takes any trade without to place stop losses.

One of the biggest massive interventions on the forex market was by September 2000 when the European Central Bank together with the Bank of Japan and some American banks make a strong intervention. Then we trade USD/DEM and by the level of 2.2950 the trading move to 2.21 for only fifteen minutes.

More than 800 pips for 15 minutes is equal to USD 10 000 with a margin of 1:100 to USD 80 000 profit or loss of the whole sum. How for 15 minutes on the market could make you invest money multiplied by 8. No other market does not provide so big profits for so short time.

But the forex market and is the riskiest and the big risks are the sudden interventions. The interventions are happening rarely but happen once they make serious movements on the market. At least 100 pips is the movement on the market by one intervention and an average of 150/160 pips movement by intervention done by the biggest banks like the European Central Bank, Bank of Japan Bank of England, and the Federal Reserve.

The companies also intervene in the market to realize their interests. But they if make a big movement on the market it not happen for a short time how it happen if intervention ECB, BOJ, BOE, or the Federal Reserve.

The interventions by the side of the biggest banks are not sudden. Always somewhere is talking for expecting intervention, or first is talking for intervention and if the market is not accepting the risk of intervention they the banks move to the realization of the intervention.

Also, the markets are full of rumors for intervention. Then the trading stays very nervous and on the market have big movements even before the intervention. The traders have to use the following strategy. Make the plan where last is made the intervention if is made in the recent month. The banks will want to keep the trading level far away by this level and any closing will mean to expect intervention.

When place positions place the stop losses are always close to the current level and accept that at any moment you could lose all money by the current level to stop losses level. When you see that the market moving strongly in the direction of the expected intervention, then go in positions with the intervention and also place stop losses closer average of 30/50 pips away by the current price. The intervention power will be about 100 pips and make the calculation stop on time. After the intervention the market is quiet and the movements stop.

Slowly recovery to the recent level could follow. Then the next intervention level could be different. The strategy used by the Central Banks to intervention is to use the good technical moments to support the intervention and by not big traders.

Then with little sum is possible to make a bigger effect on the market. The last calculations show that moving 50 pips on the market is equal to the intervention of $ 50 billion. The banks before doing the intervention make serial of talks and consultations for supporting the intervention because of how big and powerful to be one bank it is necessary to help to move the biggest market in the world.

The most important conclusion from this lesson is to understand that interest moves the market, and the key speeches of top people and combined with the interest have a big influence over the movements on the market.

To be in a step with all events by this kind the traders could watch and follow the news live, providing with them live news agency.

Forex Economic Indicators
December 22, 2021

Forex Economic Calendar

Average Hourly Earnings – The data show the average working salary. The indicator could show the potential inflation pressure connected with the value of the working force. The data come every first Friday of every month together with nonfarm payrolls at 8:30 AM EST.

Balance of Trade – The data give the difference between the national export and import. The most important is that a positive balance of trade is positive for the economy and is expected to strengthen the national currency.

Beige Book – The Federal Reserve public it eight times for the year, as Beige Book contains information for the economic and business conditions. The data coming by the bank sector in different forms of analyzing by interviews by economists experts and others. The Beige Book comes usually two weeks prior to each FOMC meeting. The indicator is in the help of the FOMC to make the decision for the interest rates. As the interest are the most important for the traders, the Beige Book data has to be considered as a very important element before the real interest rates decision.

Building Permits – The data come monthly and is the same as Housing starts but show the permits for the building while the Housing start shows the real start of the buildings. The key control of the housing start and permits come by the interest rates level.

Business Inventories – The data show the volume of the stores of enterprise load and semi-manufactured articles. The increasing data during the month could mean a standstill in the economy. The data come once in the middle of the month at 8:30 AM EST.

Capacity Utilization – The data come to show how the economy and the enterprise are utilization and the middle value is 81 – 83 %. The greater number led to higher prices (PPI) and proves to be inflationary.

Chicago PMI – It is a very important index for the Chicago area for business activity. The market usually reacts to that data. The index shows the enterprises and the stores available. The level of 50 is key and above 50 is reading for expanding economy. The index is published by Purchasing Manager Association in Chicago and comes on the last day of the month at 10:00 AM EST.

Consumer Credit – It is an indicator for the consumers and for the credit taken by the consumers taken for a long time. When the data is higher it is talking about overheating the economy. The data have season fluctuations. The data come once monthly at 3:00 PM EST.

Consumer Confidence – One of the most important indexes comes monthly at the end of the month and shows the level of spending and consummation in the USA. The index is very important because two-thirds of the GDP in the USA come from consumers. The data come once monthly about the 20th of the month at 10:00 AM EST.

Consumer Price Index (CPI) – It is data for the inflation of typical consumers. There are fixed baskets with goods that every month CPI gives the data what is the level of the consumer price index. There is and Core CPI that is a measurement of the true inflationary where are excluding the foods and energy items.

Construction Spending – The data come once monthly on the first working day of the month at 10:00 AM EST. The data give the spending in the construction sector. In most cases, bigger spending means a growing economy and is positive news for the economy.

Current Account – This economic indicator gives data for International trading and is the broadest measurement of the sales of goods, services interests, and unilateral payments and transfers.

Durable Goods Orders – The data come once monthly in the last week of the month at 8:30 AM EST. It gives the big bought as capital goods like machines, equipment, and transport defense orders, cars, furniture, and so on. Data is one of the important factors for the development of the economy. Some defense orders could make big volatility in the data so is better to watch the data in a bigger period and the local monthly changes to not accept all the time as key.

Employment Cost Index (ECI) – ECI measures the changes in employee wages and salaries. The data do not include the federal government workers. Not always rising ECI is accepted as positive, and it means by the condition of the economy. If ECI is higher but the economy is weak, sometimes it could be negative, because the industry will have less money for investments and so on.

Factory Orders – The data come once monthly as Durable Goods orders one week earlier. It is one of the most difficult data to forecast and is extremely volatile. It gives the orders for shipments of non-durable goods, manufacturing inventories, and inventory sales ratio.

FED FOMC meeting – One of the most important if not and the most important event connected with the changes of the Interest rates. After the decision, a few days later is making a protocol public with the reasons for the decision called Minutes of the FOMC. The market reacts to this news with very big movements as the key are the rumors starting months before the meeting even.

Gross Domestic Products (GDP) – One of the most important data for every economy is GDP. It gives the measure of the market gods and service produced in a country. The components of the GDP are four: consumption, investments, net exports, and government purchases. The releases of the data have three parts: Advance release, preliminary release, and final release.

GDP Deflator – The index is in analogy with the CPI index and shows the changes in the prices of all including in GDP.

Help Wanted Index – This index comes once monthly every last Thursday of the Month at 10:00 AM EST and shows the requests for help connected with empty working places not finding a suitable specialist. A sometimes higher value of the index could sign for higher inflation as the absence of working specialists could push higher salaries.

HICP – The Harmonized Index of Consumer Prices come from the EuroZone and is the main measure for inflation. All countries try to keep the inflation at in possible range and to not extend of 2.0% for the countries in the EuroZone. Negative inflation with mark minus is much more negative than bigger inflation and mean deflation.

Housing Starts – The data come monthly and show how many new houses are starting to build, as are divided into single and multi-family categories. The most import for rising housing starts come when the interest rates are low, and when the rates are higher the housing starts are lower.

IFO – IFO is the most important economic indicator for Germany. The data come monthly and show the business conditions in Germany. The markets’ most important indicator shows and gives the real picture of the economic activity.

Industrial Production – The data come once monthly and measure the percentage changes in the volumes of the output of factories, mines, and utilities.

Initial Jobless Claims – The data come every Thursday of the month at 8:30 AM EST and show how many new social requests are sent. It is one of the most important indicators for monthly Unemployment. The critical level accepted by the market is 400K.

Implicit Deflator – The data measure the inflationary component in the GDP report.

ISM Index – The index comes from the Institute for Supply management. It is the former National Association of Purchasing Managers (NAPM). The report comes on the first working day of the month and gives detailed data for the sector of the manufacture before coming to the key employment report. The market moves after that news-making real picture about the expecting employment data. ISM is the leading survey on US manufacturing activity. The key for ISM is level 50. Below 50 the data mean that the economy is in negative development and above 50 that the economy expands.

ISM Service – Only a few months ago the index was known as the ISM nonmanufacturers index. It is the same as the ISM index with the difference that the index shows the situation in the services sector – non-manufacture sector. Also, the level of 50 is key as ISM Index, and also reading above 50 is positive for the sector. The market also reacts to the news and is one of the most important.

Leading economic indicators – It is a component of 10 different indicators and gives the data for aggregate economic activity. The included data in the indicator come from various sectors as manufactures, buildings, finance, retails, and consumers. The data but is not so important for the market and the effect is little.

New Home Sales – The data come once monthly and show the new home sales for the four main geographical areas in the USA. The report includes information on the home prices and the number of houses sales. It is a crucial segment in economic activity because the changes in spending affect growth. Often but the reports contain big volatility.

Non-farm payrolls – The data come together with the US Unemployment data every first Friday of the new month at 8:30 AM EST. The data is more important for the traders by the Unemployment level and shows how many new working places are adding to the economy or is losing. With minus is the loss and with plus the adding working places. The data show more clearly than the Unemployment look in the future because adding new jobs mean that for the future the economy will develop having a more working place. The data is measured in real working places. For example, if the economy adds 115 000 new working places the index will be 115K, or when lose for example 115 000 the index will be –115K.

Personal Income – The data come once monthly and show all changes in the wages, salaries, proprietors income, income from rents, dividends interest social, and unemployment payments.

Personal Spending – The data come once monthly and show the changes in spending for goods services by individuals and is the largest component of GDP.

Philadelphia Fed Index – The index shows the business activity in the Philadelphia region. It is one of the key data for a key economic region in the USA. The data come about the 18th of every month at 10:00 AM EST.

Producer Price Index (PPI) – The data is realized once monthly and shows the changes in wholesale prices. Also, Core PPI is realized with PPI and shows the true picture of the inflationary forces as excluding the highly volatile foods and energy items.

Productivity – The data measure the change in the number of goods and services produced per unit of input. It is a key indicator for the economy and is accepted as important by the markets.

Purchasing Managers Index (PMI) – The index is used by Germany, Japan, and the UK and is equal to the ISM index for the USA. It is used to assess business confidence. The index gives data for the manufacturing and services industries.

Retail Sales – The data come once monthly. It measures the percentage monthly changes in receipts of retail sales stores and includes durable and non-durable goods. It is a real indicator of the strength of consumer expenditure. The markets accept the indicator as one of the keys to the economy.

Unemployment – Is one of the key indicators for the economy. It gives the real percent of the active people that are not occupied with work. The data come once monthly every first Friday of the start of the new month at 8:30 AM EST. It is one of the most important data that come together with US Non-farm farm payrolls. Also with the news come and other data as average hour’s earnings.

University of Michigan Consumer Confidence – The data come once monthly to give the real business activity and the confidence of the consumers in the future. The index has two characters showing the nowadays conditions – sentiment index and the expecting conditions – expectations index. The index is one of the most important for the economy.

Wholesales Inventories – The index shows the goods store. The index is connected with the selling and the remaining production in the stores. Up of the index mean some difficulties in the stores and not fast-selling production happens when having some standstill in the economy. The data come about the 10th every month at 10:00 AM EST.

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