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Friday, September 27, 2013

Avoid Forex Demo Accounts

Today I want to take a moment and discuss one of the biggest myths in forex trading. On countless conferences I come across people who started to dabble in the world of forex and they seek advice. Unfortunately most of the advice you can get about trading in general is absolute bullshit.

Every time I hear someone mention demo accounts I can’t help myself and laugh. Those who think they can learn how to trade in a demo account are on the wrong track. A demo account is very misleading and will give you false confidence. A lot of shady bucket-shop brokers bank on this and the more a broker pushes their demo accounts where you can practice for free with $100K the further away you should move from them.

A demo account is not the O and A of forex trading. In case you are scared to trade and feel you are safe and secure in a demo account, find something else to do as financial markets are not some joke for you tell others. Trading may be the hardest profession to master and if you are scared, leave!

How many people have you met who had some ridiculous great performance over a multi-month period in their demo accounts only to go live and blow their accounts faster than they can realize what happened?

The reason is that they will follow the myth that they are trading in a demo account and they do not face two of the biggest hurdles which are emotions and psychology. When I hear some newbie retard make the claim that a demo is just like a real account and the only difference is that you are not exposed to the psychology of trading I am amused.

See, it is this little thing called trading psychology topped with an unhealthy mix of emotions which cause traders to fail. The only way you can learn how to trade is by trading and you do not trade in a demo account. No money is involved and you never place a single trade which means you can’t learn how to trade.

You can only learn by falling down which in the financial world means you will need to lose some of your trading capital in order to advance. There is no way around that. So, open a micro-account and fund it with up to $500. Don’t trade more than 0.01 lots until you learn how to trade. You may end up blowing it all, but rather than to complain about it view it as an investment into your trading career.

Wednesday, September 25, 2013

Iran-US Handshake; Not so Fast

I am headed to my office I get a call from my personal assistant who fills me in with some of the latest developments around the world and with the progress of our business interests in several key regions. I have an important conference call right when I get to the office and am rushing through early morning traffic.

We briefly discuss Iran as their new President Rohani flew to New York in order to address the United Nations. Rohani, who is a cleric, was rumored to potentially meet with Obama. Leaders from the US and Iran have not met since 1979. Iran decided that the time is not right to meet with US officials, but there is hope for a potential meeting between both sides at a later time.

Maybe Iran is waiting to meet with a US President who is actually eligible by its constitution to be President in order to make it official. Hassan Rohani is believed to deliver a friendlier foreign policy and is rumored to seek to improve relations whit the West. He did promise to revitalize the Iranian economy which is being hammered by sanctions form the West as a result if its nuclear program.

While Rohani did say he was open for talks, but he did give no confessions and stated that Iran’s nuclear program is peaceful and nuclear weapons have no place in his countries doctrine. Iran does consider the US untrustworthy and they have plenty of reasons to do so, especially after the Snowden leaks and scandal.

Iran has been isolated for a prolonged time and most likely will remain in this stage. Plenty of Iranians do not like the picture most have in mind when it comes to Iran which is one of an unfriendly and hostile nation. Iran does nurture ties to terrorists and helps train them while it also support financial support to them which cause additional strains in diplomatic relations.

Hardliners and fundamentalists in Iran view the US as enemy number one and will not be convinced otherwise until the US is destroyed. This mindset basically ensures that no lasting positive progress can be made and it is likely that regardless of who is President of Iran, the country will remain isolated until the thinking there changes. 

Monday, September 16, 2013

Syria UN Resolution

I just got off the phone with one of our contacts who has confirmed to me that Syria will be given a serious chance to disclose as well as hand over its chemical weapons to the international community so they can be decommissioned and destroyed. This is a rather welcome development which took place on Saturday morning.

The US wanted to use military action against Syria and acted like an angry child which threw a tantrum for no reason. Russia stepped in and acted like a true global powerhouse as it proposed to solve the issue in a diplomatic way and after meeting US counterparts in Geneva on Saturday even the leaderless US announced that a deal was reached according to Russian guidelines.

Now the US and its sole Western ally France joined the UK who seek a very strong UN resolution where Syria will get punished if necessary by force if it fails to comply to the terms and condition set forward and brokered by Russia in order to eliminate chemical agents which have been outlawed for close to a century.

In return the US will move away from its aggression towards the country while it may continue to sponsor the terrorists for now. Personally I am glad that Russia stepped in and demonstrated to the world once again how a global leader presents itself as it out its own reputation on the line on behalf of a much weaker country which may have been hours away from being attacked by a much bigger aggressor for no reason.

On top of that Russia brokered a deal which paved the way for a diplomatic solution while it will continue to allow the government of Assad to deal with the US sponsored terrorists which he hopefully will crush sooner rather than later and put Syria back on a path to peace and calm.

Syria is best advised to fully comply and it is my understanding that it will do so. Even the US admitted that Syria has moved chemical weapons around, but only to more secure site locations controlled by Assad forces so that they may not fall into the wrong hands while the US also admitted that at least two locations were under the control of the terrorists which it supports.

Russia understood that the chemical attacks have been carried out by the terrorists in order to draw less intelligent countries like the US into the civil war raging in Syria for over two years. China, which stayed out of the mainstream media about this topic supported Russia in the UN Security Council and vetoed a military strike as proposed by the US.

I am convinced that Syria will turn over its chemical weapons and comply with the UN resolution while Russia came out the biggest victor from this conflict while the biggest loser is the US which did a great job damaging its already damaged reputation.

Tuesday, September 10, 2013

Russia offers Syria Resolution

I just got off the phone with one of our contacts who confirmed the press reports about a Russian proposal to solve the Syrian issue and avoid yet another mistake by the US. I think every intelligent human being is against a US military strike which would not solve anything. Up until now my hopes were that the US lack of leadership will listen to General Dempsey who advised against any military action on Syria.

The US under the ridiculous joke who degrades the White House decided to go against the advice of their top general, and in my opinion the true commander in chief of the US armed forces until a constitutional president is elected in 2016, and play as if the US runs the show and everyone will listen to it.

The US pushed for war and the clown who curses himself Secretary of State John Kerry sounded like he is actually convinced that a strike would be limited and beneficial. He further stated that the entire US intelligence community is convinced that President Assad used chemical weapons against his own people.

You remember the US intelligence community, don’t you?

The same guys who told the world that Iraq under Saddam Hussein has weapons of mass destruction, including a series of chemical as well as biological weapons. The world listened and trusted the intelligence and the US invaded Iraq only to find out the information was 100% wrong. The war is still ongoing and there is no end in sight for the misery Iraqi’s face thanks to the US intelligence community.

Fast forward to Syria and you find the exact same scenario plays out. The US was close and is still close to striking Syria, but they do not think about what will happen after that. Russia urged everyone remain committed to a diplomatic solution and China supported the notion as well. Only the US was pushing for war yet again which would put innocent soldiers on the line for no reason.

This clearly shows the lack of leadership from the US and is yet another sign that the US is by no means a global leader on the diplomatic or financial front. Times have changed and old powers become new powers while existing powers crumble.

Russia offered to step in as a world leader and stated that it will work together with the Syrian government in order to seize the entire Syrian chemical stockpile and place it under international control which would destroy all agents in a safe manner. This is how a true leader acts.

It was well planned by Russia and the execution was perfect. While the US, with only France on their side, pushed for war, Russia pushed for diplomacy and made an offer which Syria as well as the entire intelligent international community applauded. 

Monday, September 9, 2013

PaxForex Trading Recommendations September 2013

PaxForex Trading Recommendations are published every day over at PaxForex and I want to bring them right to you as well. Follow them if you want to get on board and earn over 1,500 pips every month. Feel free to give your feedback and share your success stories here.

Monday, September 2nd

GBPCHF Second Put

Tuesday, September 3rd

USDJPY Under Pressure

Wednesday, September 4th

EURUSD Quadruple Support

Thursday, September 5th

GBPUSD Solid Resistance

Monday, September 9th

EURAUD Support

Tuesday, September 10th

USDCAD Approaches Support

Wednesday, September 11th

CHFJPY Second Put

Thursday, September 12th

NZDUSD Triple Top

Monday, September 16th

GBPUSD Rising Wedge

Tuesday, September 17th

AUDNZD Last Call

Wednesday, September 18th

GBPCHF Final Put

Thursday, September 19th

EURUSD Rising Wedge

Monday, September 23rd

NZDUSD Second Put

Tuesday, September 24th

EURCHF at Support

Wednesday, September 25th

USDCHF Falling Wedge

Thursday, September 26th

CHFJPY Final Put

Total Profits: 890 Pips

Sunday, September 8, 2013

August 2013 NFP Report

As expected the August 2013 Non-Farm Payrolls report out of the US disappointed heavily. My prediction which I posted here about an hour before the official release was right in the money except for the unemployment rate. You can read US NFP August 2013 Prediction, but here are the main numbers:

  • Unemployment rate to increase 0.1% to 7.5% - It decrease 0.1% to 7.3%
  • NFP between 160K and 180K – It came in at 169K
  • Downward revisions to the prior two months – The last two months were revised lower

The August 2013 NFP report disappointed on all levels. Let’s take a look at the downward revisions first; June was revised lower from 188K to 172K while July was revised lower from 162K to 104K and the weakest reading in over twelve months. This means the past two months were revised lower by 74K and if we subtract that from the 169K figure for August, which is likely to be revised lower next month, the total for August clocks in at 95K.

The unemployment rate dropped by 0.1% to 7.3%, but it dropped for all the wrong reasons as more discouraged unemployed simply gave up looking for a job and the participation rate declined by 0.2% otherwise the unemployment rate would have ticked up 0.1% to 7.5% as predicted here on The Last Bear.

Overall the NFP report further confirms the dire state of the US labor market and how the US lacks leadership in all levels, especially in the White House. The economy never exited the recession and all data points to a repeat of an official recession. Watch out for the next NFP report for September to show a continuation of this trend in the labor market.

Friday, September 6, 2013

US NFP August 2013 Prediction

As I am getting out of my car and headed to the elevators I thought I share my US NFP prediction for today’s report which is due to be reported at 1430 hours CET. It is a nice day in Monte Carlo and I tend to take Friday’s a bit easier in order to get my weekend started on a positive tone. Of course there are exceptions and while we do not trade news releases, I throw out my prediction out there just like those who call themselves accurate economic report forecasters.

When it comes to economic reports, the best thing anyone can do is to take an educated guess as there is no way to accurately predict the number. Financial markets react right away based on the number and how big the positive or negative surprise was, while a number around consensus does not really move financial markets either way.

I think we will see an uptick in the unemployment rate to 7.5% (it really does not matter if it remains at 7.4%, drops down to 7.3% or increases to 7.5%) while the headline number will come in between 160,000 and 180,000 with downward revisions to the previous two months.

I also expect equity markets to sell-off and the US Dollar to weaken across major currency pairs. Watch out for a spike in volatility both in equity markets as well as forex markets. I am looking for the AUDUSD to breakout above 0.9200 while the EURUSD should reverse its corrective course and rally off of sound support levels.

The GBPUSD is interesting as it has rallied into solid resistance levels, but today’s NFP report will add negative pressures on the USD which could cause the GBPUSD to spike before correcting. I am also keeping an eye out for the EURGBP as dovish statements out of the ECB caused a nice correction into good support levels.

Tuesday, September 3, 2013

US sends Sixth War Ship towards Syria

As the events have been heating up and the White House has to wait another 4 years for a constitutional leader, those who are in the White House under the constitution abusing Obama have ignored the advice of the Chairman of the Joint Chief of Staff General Dempsey and are preparing for a strike with cruise missiles against Syria.

General Dempsey, the highest in command of the US armed forces behind the President and since there is no constitutional President elected he is the Commander in Chief at least according to every intelligent human left on this planet, has advised against any military action which is being ignored by those who are above him in the decision making process.

The US has moved five destroyers into the East Mediterranean Sea armed with cruise missiles which the US plans to fire towards Syria in what they call a precise and limited strike which some analysts predict would consist of striking Syrian military installations with anywhere from 200 to 300 Tomahawk cruise missiles.

The US claims that the six war ships are there as a precaution, but the pressing and unanswered question remains precaution to what? The US is under no threat from attack and while politicians claim this is a precaution, the correct term would be that it is the final step for an attack. It makes no sense to place six war ships in striking distance towards Syria.

We all know the story from Iraq, first it is a precise and limited air strike, and then a full blown air offensive and later ground troops enter and lose their life for no reason at all. This shows the absolute lack of respect for the lives of our brave men and women who are being send into combat without reason to fight a war which will never been won.

After tens of thousands of dead soldiers and a country in ruins the US will go home and be even more damaged on several domestic as well as foreign fronts than before. Sure, right now nobody considers ground troops which brings up the question as of why the USS San Antonio has now joined the five destroyers?
The USS San Antonio is an amphibious transport dock and the USS San Antonio is one of three ships which carried 2,200 Marines and was active in the region. Marines are not deployed for police or occupational missions, they are one of the finest expeditionary forces in today’s military arena and they are trained to go in and fight.

Having the USS San Antonio joining five destroyers signals that the US is prepared for more than a cruise missile strike. The good news is that Mr. Obama decided to seek approval of Congress and we can just hope he will get shut down otherwise the situation will escalate. I am headed to another meeting where we discuss how to act in the event the US decides to strike Syria, the fallout and how to protect our business interests in the region.