Gold: The Ultimate Wealth Reserve

Know your customer

Interesting experience by Market Skeptics with GoldMoney. Leaving aside the way it was handled or the time taken, but it does not surprise me with what happened.

The ability to transfer balances between GoldMoney accounts means that operation really is more akin to a bank than a custodian. As a result I can see that they are more diligent about knowing their customer and what the account will be used for, otherwise they could get shut down by regulators. Just see what happened to e-gold and the changes they have had to make in this DGC Magazine article.

The money laundering/terrorism rules these days puts the onus on the business to know their customer, make assessments about the potential for their customers to be engaging in illegal activities and if the risk is considered high, either declining the account, reporting it, or seeking further information from the customer to establish whether their use of the account appears legitimate.

There would be no doubt that GoldMoney would not want to go through the e-gold experience, hence the rigorous due diligence. This tells me they are serious about becoming a real "gold bank", which is something true gold money advocates would have to support. Yes, this means they become part of the regulatory "system" and will thus not appeal to those buying gold for privacy reasons, but I think GoldMoney's objectives are to target the wider market and it will be interesting to see how this develops.

Merry Christmas

Fat Prophets

Fat Prophets have been gold bulls for a long time and I give them kudos for that. However, in a recent article The Silent Gold Rush Is On they make the following faulty analysis:

The Australian newspaper reported over the weekend that the Perth Mint is not taking any more orders for gold until January. Our guess is that the Mint does not want to expose itself to higher future prices given that it does not have the inventory to meet the demand for bullion.

I sent the response below to them a couple of weeks ago, no response as yet:

Your guess that we do not want to be exposed to higher future prices is incorrect and is based on a misunderstanding of how the gold markets work. If we take an order and fix a metal price (it is also possible to take an order and agree to fix a price at the time the bullion is ready for delivery) then we immediately buy the raw gold that will be used to make the bars/coins for the client. There is therefore never any exposure the future prices. I discuss this is more detail in my blog on the value chain.

I really wish commentators would just call us up and ask us questions, rather than just guessing or making stuff up.

Open Forum

30 MINUTE MASTER STRATEGY

This great strategy is provided by Peterfibonacci:

Here is my strategy.

On a GBP/USD and EUR/USD M30 time frame:

Indicators:

8 EMA applied to Open
5 EMA applied to Close
Fibonnaci pivots to show the resistance and the supports.
Signal Line period of 45
2MA Crossover signal Indicator (to alert when a cross over has happened)

RSI 14
Stochastics (10,3,3)
MACD (5,15,9)

Long Entry:
Enter immediately when the MACD, Stochastics, RSI show a long position and the 5MA has crossed over the 8MA from below.

Place the stop loss a few points below the recent low with a take profit of 70 pips and a trailing stop of 30 pips.


Short Entry:
Enter immediately when the MACD, Stochastics, RSI show a short position and the 5MA has crossed over the 8MA from above.

Place the stop loss a few points above recent high with a take profit of 50 pips and a trailing stop of 30 pips.

This strategy seems to work best in a horizontal market. Sometimes one has to work with the resistance and support points to determine the proper Take Profit level, because it's not always 50 pips.

This strategy also works well with the H1 time frame. I personally like the H1 because the candlestick patterns are move evident and sometimes one can see entry and exit points before the alert(which is the EMA cross)!

Above and below a chart has been provided for your study, so that you can obtain a better grasp of this strategy. If you left click your mouse on the chart, you will have the options at the very top of that menu that says 'view image'. If you click 'view image', it will provide you with a larger, better view of the chart.

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Have an awesome trading week! Thanks!

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AWOL

Yes I am still alive. My break from blogging started with a trip to Canberra for the http://www.goldstandardinstitute.com/ conference. It was great to catch up with the attendees from last year and meet some new gold investors. The weekend after it was a short drive up to the Southern Highlands of New South Wales for the Highland Fling - a 100km mountain bike race. Six plus hours is physically tough, but it was harder mentally.

The plan was to get back to blogging on my return but the new Treasury system project I've been working on (in addition to the revamp of the Perth Mint's retail shop) kicked in with at lot of work required to meet deadlines. The new system will give us some efficiencies and thus help with customer service but we have decided to NOT go online for trading.

It is a bit old school, but the Treasury system will be standalone from our other computer systems and with no online ability means your account is just not hackable. I'm interested in any feedback on that decision - we feel if you want the ease of online then you can trade our ASX product (code ZAUWBA) or GoldMoney or BullionVault.

This Treasury system is going to take up some time so my blogging will be less frequent over the next few months but I'll keep any eye on any big issues that come up.

NO MAN'S LAND. GUEST POST

The No Man's Land Strategy is actually a very simple strategy.

It is based on Multiple Time Frames, Moving Averages (5 - 22 - 42) , and Pivot Points (for Support and Resistance), and I only run it on GBP.

The signal is generated from H4 Candle. I take the previous High + 10 pips ( you may use any number you like) + spread as a Buy Stop Order, while for the Sell Stop Order is previous Low - 10 pips.

Suppose I have a target 20 pips from my Buy Stop or Sell Stop Order. I then look to see whether there are some Support/Resistance or MA or Trendline Support/Resistance ahead to act as a barrier to the move I want to make. If there is, then I use the next S/R or MA or trendline S/R as a new point of calculation for my Buy Stop or Sell Stop Order. I repeat this step on the H4, H1, M30, M15 and M5.

Here is an example :
Prev High of H4 : 1.6300
Prev Low of H4 : 1.6250
Spread : 3 pips

Buy Stop order : 1.6300 + 10 + 3 = 1.6313 --> TP 20 pips = 1.6333
Sell Stop order : 1.6250 - 10 = 1.6240 --> TP 20 pips = 1.6220

I check my H4 Chart, to see if there is any resistance from 1.6313 to 1.6333, if not, then I go to my H1.
I continue repeating the above step. Suppose I find Resistance on 1.6320. I then recalculate making 1.6320 the new basis for calculating my Buy Stop Order.
So my new calculation is : 1.6320 + 10 + 3 = 1.6333 ---> TP 20 pips = 1.6353.
Then I recheck to see if there is any resistance that might prevent me from reaching my new target.

I do this until I get to M5.

This is why I called this strategy : No Man's Land.
Pivot's, S/R, MA, Trendline's S/R are things that I consider landowners.

For example:
There is Pivot Resistance at 1.6250 and Trendline's R on 1.6265. This 15 pips distance I consider as "Pivot's Land and Trendline's Land."
I don't want to fight either Land's owner, so I avoid them. I prefer to trade on "No Man's Land" where, there is no land owner who will be angry if I steal a few pips from the market.

I do the exact opposite for my Sell Stop Order. For the trendline I use the DeMark Indicator found at the Forex Factory.

The idea behind this strategy is to make a high percentage of winning trades. It works very nicely at the London open, around 6-7 GMT, depending on H4 cycle from the broker's chart we use to analyze. ( I like to use the ALPARI-UK, as I trade the London open).

I usually look to gain 20 pips; but if I am constantly profitable with this strategy, I think I can be one of the few winner in the forex market. The BIG BOSS who drives the market, that come from the big financial institutions and old-fashioned people who use just candlestick pattern and support-resistance as their trading guide; I am trying not to fight them, but to align myself with them.

Thanks Eko and Aan

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Gold: The Ultimate Un-Bubble

STOP LOSSES ARE YOUR FRIENDS

Many traders fear placing stop losses because they are afraid that they will get stopped out. This is the wrong mindset. A stop loss is a friend that helps you preserve your capital when you are on the wrong side of the trade.

A stop loss is simply what it says, it is a system that you put in place to stop the loss of your capital, just in case the trade goes against you strongly. Don't place stop losses with the idea that you are going to get stopped out, but place it with the idea that you are protected if a trade does something differently than you expect. It will give you the opportunity, if it is hit to step back and position yourself for a more profitable trade set-up and entry.

What happens when you ride a losing trade to long. It depresses your emotions. It keeps you locked in a losing mentality. It takes up margin that you can be using on a better more profitable trade. A stop loss gives you the freedom to move on, and be free from all of the negative things that comes from seeing that losing trade over and over.

Even if you have the capital to ride out a losing trade for months, then whenever you see a more profitable trade set-up in that same currency pair, you are not free to take advantage of that new opportunity because you are stuck in a losing trade waiting for it to turn back in your favor......one day 8^( .

Let's go back and look at that trade from day one. What if you had taken that hit the first day with a 60pip loss. That is quite a hit. You could have simply made 10 pips a day for the next 7 trading days, and you'd be a head 10pips. What that would have done is free up your capital as well as your mindset. There is an extra confidence that comes when you go to your platform with no losing trades staring you in the face. It is a feeling of power.

Instead you decided to hold that trade 7 trading days. Now you are in the hole 150 pips, plus you paid 7 days of rollover fees, but things have begin to turn in your favor like you knew they would. That is 7 days that you have locked yourself out of more profitable trades in that currency pair, and who knows when you are going to break even on that pair.

When you have losing trades on your platform, then you are fearful of taking other good trades that you see, because of your margin level, the new trade may go against you and wipe you out, or any number of negative messages that we hear in our heads when we are in losing trades.

Dearest traders stop losses are your Friends. Here is a video that can help you decide how you may want to place your stop losses.

Placing Stops, Traders Whiteboard #4 Click Here

I am certainly not encouraging you to take unnecessary losses, if you are in a situation where you are in harmony with your trend and you have a little retracement that has gone against you temporarily, by all means allow that trade to close profitable.

Just don't allow losses to run on and on and on and on, because it's like spiderwebs in the mind and pretty soon, they cloud your vision and your judgment until you are paralyzed and can not do anything until that position comes back into profit. It is better to be out of a good trade wishing that you were in, than to be held hostage in a bad trade that you wish you were out of. Lastly letting trades go to far against you is just breeding grounds for stress and anxiety.

Remember strong dips and rally punish traders who don't have proper stop losses in place.

Trade well, Live Well, Laugh a lot and have Loads of Fun (^_^)


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This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Green Shoot Alert --> Nov. Unemployment Down!

Metamorphosis

4 KINDS OF MARKETS

There are 4 kinds of markets in Forex. You have a range bound market. A bull market. A bear market and a choppy market.

Your range bound market is a market that trades between a set support and resistance.

A bull market (which can also be range bound within a trend channel) is a market that is moving toward higher prices.

A bear market (which can also be confined to a diagonal channel) is a market that is moving toward lower prices or value.

A choppy market is an incoherent market that has no particular direction and is too haphazard to follow.

HOW TO TRADE THESE MARKETS

The best way to trade a range bound market is to buy at support with proper confirmation signals, and to sell at resistance with proper confirmation signals.

The best what to trade a bullish market is to buy pull backs (when price take a dip, or goes lower for a while before continuing to move upward).
The best way to trade a bearish market is to sell peaks (When price goes up for a while before moving downward again).
Stay away from choppy market, they have no direction and make no sense, if you chose to trade in this kind of a market. Trade on a shorter term time frame off of proper signals. Long term trading in this type of market can wipe you out fast, because it has not established a real direction yet.



Have a super trading week.

LIVE WELL, LOVE HARD AND HAVE FUN!
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This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Happy Thanksgiving!

Gold is Wealth

New NFA Regulation

What do the new NFA Regulations mean for you?

For those of you who have not fully grasp what it means for you, it means that you will have to have more money to hold the same size positions that you have been holding.

If you have an open position with a 200:1 margin, that requires $500.00 to keep the position opened; when the new rule goes into effect, that same position will require you to have $1,000 to keep it opened.

If you don't have the required margin, your position will be liquidated by your broker, unless they have told you otherwise.

PLEASE CHECK all of your open positions to be sure that you are not in danger of being liquidated. If you are unsure, please call your broker to be sure that your open positions are going to stay safe. Thank you

Open Forum

WHAT MAKES A MARKET WIZARD???

How much do you think you could learn if you had a chance to sit down with over 15 of the most successful day, value, and long term investors of all time? Do you think you’d finally get that one piece of advice that takes your trading from OK to extraordinary? Today you have the chance to pick the brain of one man who has sat down with experts and got your top questions answered.

The key ingredient with ‘super-traders’ isn’t as complicated as you think, as most of them share the same traits and behavioral patterns, but it’s how they put them to work in the markets that sets them apart.

Visit the link to watch the seminar that brings the experts to you:
http://www.ino.com/info/36/CD4033/&dp=0&l=0&campaignid=9

Don’t delay and once you visit the seminar you’ll notice 3 other seminars…that’s a special bonus just for you, from me!

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Trade well, Live well (^_^)

Taking a loss

This is a really important subject that I need to deal with because taking a loss paralyzes most traders and keep them for potential future profits.

Many traders equate losing a trade with being a loser, allowing that loss to paralyze them and cripple their judgment. This is the wrong attitude toward a loss.

A loss is only a lesson that you have paid for, learn from it. You pay for college and you pay for seminars, and you never beat yourself up for paying to increase your knowledge in those arenas. My Friend a loss is simply an opportunity that you have paid for to increase your knowledge.





When you pay thousands for college or a seminar, you never say, how could I have been so stupid, why did I do that. The truth is, a loss is just an opportunity to learn. STOP BEATING YOURSELF UP FOR WHAT IS ONLY A NATURAL PART OF TRADING. That attitude only puts you at a huge disadvantage to other traders.

The successful trader understands that the market is very generous and will give him/her plenty of opportunities for a profit.

One day, this is before I learned better, I lost about half of my account balance. I simply waited until price hit the lower trend line and went long. It only gave me the opportunity to recover a little more than half of what I loss, before continuing downward, but it was more than I would have gotten had I done nothing.

There are no absolutes in trading. Trading is more of an art of interpretation. Too many traders see losses as a flaw with themselves instead of seeing a loss for what it really is. A LOSS IS ONLY A LESSON TO HELP YOU TRADE MORE EFFICIENTLY. A LOSS GIVES YOU THE CHANCE TO IMPROVE AND PERFECT YOUR STRATEGY, IT SIMPLY TEACHES YOU WHAT DOESN'T WORK, SO THAT YOU CAN DISCOVER WHAT DOES WORK.

You can have a perfect analysis and still enter a losing trade, because the market sentiment can change, like with an engulfing pattern. It happens and it is OK.

When we set up a trade we have expectations of how that trade is going to play out. A loss is a great disappointment to that picture and a bruise to the ego. We have more trouble letting go of the dream of our glorious ideal trade, than we do taking the loss. The money is gone and it is over, but we still hang on, allowing that one hit to ruin our day and sometimes our week.

A loss allows you to build a new more profitable trading dream for yourself. LET GO of that old dream that no longer fits you and climb into a new successful dream that is more becoming of you.

STOP !!! LETTING LOSSES BE A REFLECTION OF WHO YOU ARE ! It is just part of the game. Learn it's lesson and move on.

A LOSS IS A LESSON (^_^). YOU PAID FOR IT. IT HAS SO MUCH WISDOM TO TEACH YOU, IF YOU'D ONLY LISTEN. THIS IS ONLY ANOTHER OPPORTUNITY TO PERFECT YOUR STRATEGY

Learn from your losses so that you can move on more quickly to capture more profitable trades.

TRADE WELL (^_^)

Traders Whiteboard #4 Click Here

This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Is the Dollar "Good as Tungsten"?

Gold Urinals or Smokes?

New Open Forum

CONFIDENCE !

Confidence, is a key ingredient in successful trading.

What do you need confidence in????? You need confident in your ability, and you need confidence in your strategy.

But I have gotten it wrong so much.

So what I went broke, it is ok. You can do this!!!! (^_^)

How do I start to rebuild??????

You start by taking a deep breathe, taking a break and investing in more education.

I have already gotten education till my head is going to fall off, and I still can't get it right. I JUST WANT TO QUIT!

That is exactly why you need to take a break, if you quit now, you will miss out on how good it feels to win.

Let me explain something, the market will give you plenty of opportunities to make profit. Every trader has losing trades. The successful traders have more winning trades. You just have to learn to take trades that are going to put the odds in your favor. You only have to win most of the times. If you lose, the market is generous and will give you another chance to try again

Trust me, you can do this. Part of your biggest challenge is overcoming the feeling of hopelessness that comes from the idea that you have failed.

YOU HAVE NOT FAILED, you didn't meet your goal, but it is ok. You just discovered how not to do things, and now you are ready to learn a better way (SMILE). I know it is hard now, but if you hang in here with me, I assure you that it will be ok.

Do you still have money in your account?

Yes, but it is just a little.......

Great, leave it alone. I want you to open up a demo or practice account, and practice on it.

I already did that 2 months before I opened my real account.

I went broke two times and almost three, so trust me here. Even though I am very profitable now, I still open a practice account to practice new strategies.

I want you to go to your library and pick up Steve Nison's books:
Beyond Candlesticks and/or Japanese Candlestick Charting Techniques.
Either book is a good place to start.

If you can't find it yet, go to my youtube channel and look at my favorites. I have uploaded lessons there on candlestick trading, it is a good place to start, but the books are better.

http://www.youtube.com/user/TRADERSFRIEND

Do you have an understanding of a lot of your indicators?

I understand them pretty well. I know you don't really use them, do I need to stop using them?

No, they are important for giving you an idea where price might go. Just don't over do it.

I want you to start where most traders should start and that is with the basics, it is so critical for traders to understand where price might reverse on them.

Yes, I can see now that is how I ended up with losing trades, because I would start out good many times and ended up losing and it would make me madder than hell.

We don't want you to be madder than hell, we want you to win at this game. Forex is a zero sum game, it has no mercy, winner take all. YOU CAN BE THAT WINNER!

Once you learn your patterns and understand more of the market psychology, then I want you to practice only on your demo account until you build your confidence back. Forex is like Poker, in that, it is a game where the ones with the confidence will go home with the pot!!!!!!!

I also want you to remind yourself often that you are not that same losing trader, and that you have grown. You have got to tell yourself that or those ghost (of your losing days) in your head will scare you to death. Those past fears will keep you out of good profitable trades which you end up kicking yourself for later.

Listen to me. YOU CAN GO LONG, YOU CAN GO SHORT!!! YOU ARE NOT JUST A BULL OR A BEAR, YOU ARE A CHAMELEON AND CAN CHANGE WHEN THE MARKET CHANGES!

YOU ARE NOT THAT SAME TRADER. YOU ARE BETTER AND MORE INFORMED. YOU CAN DO THIS!!!!!!!

Once you understand your reversal patterns, then you can combine them with what you already know. The practice on your demo account will only lend to your confidence.

When you are ready, you can start back on your real account; but make small short trades. Since you don't have much money left, trade mini if you can.

I only have a mini account.

Great, then we are in business!

Take small trades on reversal signals, but only in the direction of your trend. This will help your confidence, and help you realize that this game is not rocket science, though it can be tricky. YOU CAN DO THIS!!!

Finally come to your platform well rested, if you are fighting with your love, don't trade because a more well rested focused trader is going to take your money.

In order to trade successfully you must identify your trend, be able to read your chart, wait for proper market set-ups, recognize reversal patterns, have confidence in your ability to trade successfully and be focus. My dear Friend, never stop learning and growing the market is always teaching a new lesson

You know where to reach my if you have any questions and I will help you all that I can, I promise (^_^). It will be ok, we can do this together.

HANG IN THERE!


This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

The New Global Reserve

Open Forum

Freegold

Guest Traders Syndicate

ADVICE:

Hi, Gypsy here.... 8^)

Most of us who are successful traders went broke at one time or another; but if you're still trading, chances are, you have learned the valuable lesson of money management. One thing I want to point out that is just as important and goes hand in hand with money management is over trading!!!!!

Even if you have the best money management skills, and over trade chances are, you're still going to end up as broke as the day you were born....as time goes on....I will share more with this blog..for now institute good Money Management and don't Over Trading your account.. Have a wonderful evening, and good luck in your trades......

Strategy:

For the beginner day traders out there. One of my favorite most basic trades is when the market has an extreme move, it will almost always drift back towards the pivot point as we get near the end of the day.

For example, if the market rallies big, around 10:30 -12:30 I'll short the SP selling usually an hour before the close. Rarely the last 45 minutes as we almost never trade the last 45 minutes or the first 30 minutes of any session.
Crude O.

Advice:

Create a game plan and act accordingly. Preserve wealth, drill and rehearse on your demo account. Find a better way to trade, through continual education. Under no circumstances do you ever truly give up FOREX. If you need help, find it! There are advisers out there who are willing to help you be successful. NEVER GIVE UP!!!!!! NEVER SURRENDER!!!! REST IF YOU MUST!!!!!! PRACTICE DRILL AND REHEARSE ON A DEMO, BUT DON'T QUIT!!!!!!!!!!
Micheal C.


Free e-mail trading course:
http://www.ino.com/info/447/CD4033/&dp=0&l=0&campaignid=6



YOU CAN BE SUCCESSFUL AT FOREX!!!!!!

This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.

Money Talk Continued

Happy Halloween

Golden Avalanche

Nick from www.sharelynx.com shared some quotes with me that I'd like to pass on. They are from a book written in 1939 by Graham & Whittlesey called Golden Avalanche:

“Before leaving the subject of gold supply it is interesting to relate present gold reserves to the monetary circulation of this country and the world. The gold reserves of the United States are almost two and a half times the total of all ordinary money now in circulation in this country. We could replace at its present value every piece of paper money with a gold coin and would still have enough left over to do the same for every country in Europe. There is enough gold in the monetary reserves of the world to replace all ordinary currency of the entire world 100 per cent with gold coins. Never until the present decade was such a situation as this even approached.” p.15

"It has been estimated by a number of writers, on the basis of conditions prior to 1914, that the production of gold would have to rise by about 3 per cent a year in order to preserve approximately stable price levels. The best known of these calculations are those of the Swedish economist, Professor Cassel. This estimate tends to exaggerate the rate of expansion in the demand for basic reserve money. It is based on a period when population and production, and, therefore, the money-work to be done, were increasing at an exceptional rate, and when the non-monetary demand for gold was at its highest. During these years, moreover, the need for gold rose as rapidly as it did partly because of the extension of the international gold standard system to embrace a growing list of countries.

Even if the gold standard system were again established as it was in 1913 the need for gold could not be expected to increase as it did in the half century before the World War, simply because there would not exist the same possibility of extending the use of gold over a steadily widening area.

As was noted earlier, the monetary reserves of the world are today nearly three times as great as in 1929. If commodity prices were to return to the 1929 level, if business activity were to increase at an annual rate equal to that maintained in the sixty fat years prior to 1914, and if all the countries then on the gold standard should return to it, we should still have enough gold to meet all monetary requirements for many years to come, even though not one single ounce was produced during that time. If the gold standard is not restored on such a scale, then the world is long on gold to a corresponding degree. It is absolutely fair to say that, ignoring entirely the possibility of increasing the efficiency of our monetary and banking systems and making the most liberal assumptions as to growth in the monetary and non-monetary demand for gold, there is not the remotest prospect of the world’s needing to have another ounce of gold mined for several decades." p. 18-19

YOUR FOREX EDUCATION 8^)

As a forex trader, you have entered one of the most difficult and tricky playgrounds in the world; with price hiccups and retracements often causing you to second guess your previous decision. In a market with so much panic and loss going on. Allow me to ask you; how much time have you invested in your Forex education today??????

Many highly competent professionals who are at the top in other fields come into Forex and get wiped out. The most important thing you can do to insure your success in Forex is to keep learning. When you are in the market live, you need this stuff to be automatic, because lots of time when you see price moving randomly, you forget your objective.

Everyday, take some time and invest in educating yourself in this market, if you don't, you will lose here. Once you learn what is going on, you will find that Forex is not hard, but it is no stroll in the park either. You must stay alert, develop patience and be ready when the opportunity for profit presents itself.

Keep a practice account, because it helps build market confidence and helps you overcome many of the fears that have been created from your losses.

When you have taken a loss in the market, it is an education you paid for. Learn from it!

Continual education gives you the advantage. Never stop learning!

Lastly you can be successful at Forex! While experience is a great teacher, it is not necessarily the best; pick the brain of a good trader when you can. When you learn something important from your chart studies, a book, a video or another trader; WRITE IT DOWN!

Discard what doesn't work, and review what does OFTEN!!!!!

Get 10 Trading Lessons FREE Click Here

Happy Trading!

This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.


Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.

Gold is Money - Part 3

Gold is Money - Part 2

Guest post: My forex trading

HOW TO BEGIN LEARNING MY FOREX TRADING


- Forex isn't a place where you're gonna become rich over the night, it isn't made for this purpose.

1. I think that new traders shouldn't use leverage at all !!!(1:1)

2. They should a find pair that is fully up or down on a monthly basis.

3. If price is at an all time high, then they need to consider exactly where to sell!
If price is at an all time low, then they need to consider where to buy !
(Only with a proper candlestick reversal confirmation, on a smaller time frame like the weekly chart)

4. Learn the ABC's or 123's of trends to understand price behavior because price is the number one indicator !

Traders Whiteboard #4 Click Here Using Stop losses!

5. Learn to use moving averages (I use SMA 5,10,20,100)!

6. If you don't use leverage, you don't need money management!

7. When your position shows profit, put your stop loss order on break even!

8. When you are in profit, don't be greedy! Take little and repeat when you have a chance!

9. If you don't use leverage, you don't need to use STOPS

WHEN YOU BUY OR SELL CURRENCY, YOU NEED TO KNOW WHAT IS HAPPENING WITH THE ECONOMY IN THAT COUNTRY AND EVERY OTHER COUNTRY THAT IS RELATED TO IT.

Bloomberg or CNN are excellent choices to work with.

NOW YOU CAN START STUDYING THE FOREX MARKET!!!

T. Forex

Market club info:
http://www.ino.com/info/447/CD4033/&dp=0&l=0&campaignid=6

This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.

The King of Currencies

A reader has asked me to comment on these two recent GATA articles www.gata.org/node/7908 and www.gata.org/node/7911, which claim that London unallocated metal is a fractional reserve system.

Adrian Douglas’ assertion is that there is at a minimum four owners for each ounce of unallocated metal held in London. His support for this is to apply the ratio of average daily share trading in GLD (11.9m) to its shares outstanding (325m), rounding to a ratio of 1:30, to an estimate of the daily trading in gold in London to derive the amount of gold London should have. This is then compared to an estimate of what London does have, resulting in the 1:4 fractional ratio.

For his estimates of the London market, Douglas relies on a report by Paul Mylchreest. I haven't had time to review Mylchreest’s numbers in detail, but his report takes a very logical approach and is fact based to estimating of the amount of gold in London. His conclusion is that there is

"an aggregate pool of gold of just over 16,866 tonnes of gold to support an average of 2,134 tonnes of daily spot gold trade. On this basis, 12.7% of the pool of available gold is being turned over every day on average. … And the entire pool is turned over every 7.9 working days. In my opinion, this level of trade relative to the estimated pool of gold liquidity is excessive and doesn’t pass the smell test."

Firstly, he makes a series of assumptions to get to his figures. For example, his 16,866t figure relies on World Gold Council/industry estimates of above ground gold and the percentage that is investment. Being a trade organisation representing miners who want a high gold price one should expect that “stock” numbers will be estimated on the downside. When estimating what the real trading volume of gold is, then he steps into a more rubbery area because he is relying on only two guesses from some industry people - we need more than that.

As a result, one must consider his 12.7% turnover figure to have a fair margin of error considering all the assumptions and estimations used to derive it. This is not to say that it should be 1%, just that it is not a “hard” number.

Secondly, even if 12.7% is correct, I don’t think it logically follows that this “doesn’t pass the smell test", a conclusion he comes to by comparing gold to equity, other commodities and fiat currencies. The last one is probably the most relevant. In this he has to again make some assumptions about currency trading turnover to come to a figure of 2.6% for Sterling, conceding that when including forwards and swaps “daily Sterling turnover is only equivalent to 8.4% of UK broad money”.

Why stop at Sterling? If one does the same calculations for the Australian dollar, you get 4.1% for spot and 13.3% including forwards and swaps. Does gold’s 12.7% (which could be lower if some of Mylchreest’s assumptions are changed) now appear as an “excessive amount of gold trading relative to the likely pool of available gold”?

Mylchreest’s final conclusion is that either 1. there is “more than one ownership claim on each gold bar” or 2. “there is far more gold bullion held in private hands than is acknowledged by current industry estimates”.

I would suggest that there is another OR that Mylchreest has not considered: the very fact that gold is no one’s liability and cannot be printed means it attracts a disproportionate amount of trading and speculation. Why is it assumed that 12.7% is excessive and unreasonable? Could not the 12.7% figure be proof of the special monetary nature of gold, proof that it is the King of Currencies?

I have spent a bit of time on Mylchreest’s report because it is the key input into Adrian Douglas’ calculations. Before I move on to his numbers, I would like to say that I have a lot of respect for Mylchreest’s report and look forward to it being improved with more accurate data.

On that, I note Mylchreest’s statement on page 25 that “I haven’t a clue what COMEX inventories were in 1997, but let’s assume 200 tonnes …” That information is available at Sharelynx.com going back to 1975. A subscription is required but would be worthwhile as Sharelynx has a lot of other data that would be very useful for Mylchreest’s analysis.

Now on to Adrian Douglas’ calculations. He is basically applying GLD's turnover of 3.66% to Mylchreest’s turnover figure of 2,134t to come to an implied stock holding that London should have of 64,000t. This is then contrasted to Mylchreest’s estimate of 15,000t of non-leased physical to derive the 1:4 fractional ratio.

This analysis assumes that the behaviour of over-the-counter (OTC) players is/must be the same as those trading GLD. Let us consider each of Douglas’ statements in support of this.

“The purpose of buying investment gold is for it to store wealth. This necessarily implies that it is held for a long time.”

This is a very broad statement and one that I don’t think can be supported. Investors have all sorts of different time horizons. Remember we are talking about trading in unallocated and whether that is backed. The fact that it is unallocated rather than allocated bars would imply, if anything, that the investors have shorter time frames rather than long.

“If gold is bought and traded quickly it would destroy wealth, not store it, because there would be a large loss due to transactional fees.”

It is actually the other way around. The quicker you can trade something the less risk you have to changes in prices. Bullion banks have a spread between their bid and ask prices – they MAKE money from quickly trading gold. For those dealing with bullion banks in the OTC market, the tightness of those spreads combined with the volatility of gold mean it is entire reasonable for them to make money day trading gold.

“Considering these limitations [minimum trade limit of 1,000 ounces] it is likely that OTC participants would turn over a lot less than 1/30th of the inventory in a day.”

I do not see how the $1 million trade size must mean a lower turnover. That is not a big figure for wholesale market participants. With bullion bank spreads of $0.50 to $1.00, a 1000oz deal only means $500 to $1000 profit. This would mean that a spot gold trader would need to do a lot of trading to make a decent return on the capital employed, which means they would trade more frequently, rather than less.

As with Mylchreest’s comparisions to currency trading, I don’t think Douglas’ comparisions to GLD make any conclusive case that London gold turnover is suspicious.

For further support, Douglas notes that

“In the last 14 years the supply of dollars has increased from $4 trillion to $15 trillion (+275 percent) while the gold price has risen from $400 in 1995 to $1,000 in 2009 (+150 percent). How could this happen? … There has to be an alternative massive supply of gold to make the price rise slower than the influx of dollars.”

How it could happen is that those extra dollars were diverted into equities and house prices, rather than gold, pushing up their price more instead.

He also says that “If the OTC market traded only gold that was in the vaults on a 100 percent reserve ratio, there could never be a lack of liquidity.”

Lack of liquidity has nothing to do with stocks, backed or not. It has to do with a depth of buyers and sellers. If you have 100% backed unallocated, but few of the holders want to sell, then you have a lack of liquidity as well.

For some closing comments, I’ll quote Lawrence Williams from Mineweb:

“The big problem, though, with much of this kind of analysis is that the analysts and observers are working with a mixture of real and assumed figures. It thus tends to rely on statistics being manipulated, perhaps subconsciously, to support pre-conceived theories.”

Gold is Money - Part 1

Trading Strategy

This is my contribution to an easy trading strategy for new traders. It is an effective strategy, that is easily traded. Please keep in mind that price can go as far as the previous day's high or low depending on the direction of your steps. Also be mindful that this is a short term strategy. Have a killer trading week, and make money!!!!!!!!!!




Here is a link to some more free lessons. Some of them are actually good!

http://www.ino.com/info/447/CD4033/&dp=0&l=0&campaignid=6






This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.

FOREX PAWN SHOP

Forex is like a pawn shop where the big wigs want to buy from you below wholesale and resale to you at retail.

Many times at market tops, the news is good and the masses are buying, at the going retail rate while the big wigs are unloading what they bought at the bottom for below wholesale to make a nice profit. (You will usually notice smaller price movement during these periods)

Many times at market bottoms, (which are much harder to predict by the way) the news is usually grim. The public is usually selling cheaply out of panic, trying to save their hides and cover their butts. Then the big wigs who were smart enough not to be in that panic, come in and pick up the valuables at below wholesale prices. It is bargain basement shopping at it's best. Supply and demand, accumulation and distribution. That is the cycle of the market my Friend!

Sell
Buy
Unfortunate most investors get this wrong. They buy at market tops and sell at market bottoms. You don't want to buy when price has gone too far upward, because you too are looking for a bargain, which can often be found on a nice pullback. Of course only with proper confirmation to the upside. You only want to sell when you have a nice fat profit in your pocket; so you want to sell at the top as well. Again with a proper confirmation to the downside.

Never ever hold on to losing positions thinking you can out wait the big wigs, instead cut your losses when they are small, (not on market hiccups or retracements, you will learn the difference). Then wait for a valid market set-up to enter the market when it is in the best interest of your money . You too can be like the pawn brokers and buy cheaply and sell expensively! There are always opportunities to make money in the market as long as you have capital. Preserve your capital, so that you too can get in on these sweet deals.

Happy Trading My Friends


How to get rich slowly in forex. Click Here
This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.

Fair Value Gold?

Guest post #1 Money Management

Since I only know what I know, I have invited some other seasoned traders to share some of what they have learned over the years as well. I hope that you will find these posting helpful. As always take it slow, be patient and exercise discipline.




Subject: Money management

Hi Traders Friend,

I'll focus this post on money management which is one of the most important parts of trading. The first rule of money management is to preserve your capital. Simply stated, be patient and wait for a good setup according to your own strategy.

Professional traders only risk between 1% to 3% per trade. I personally risk 2% per trade. So how can you determine your risk and keep it between 1% to 3%? I personally use a website calculator at:

http://www.facebook.com/l/a4c62;www.forexhit.com/calculators/aec/allocation-efficiency-calculator.htm


You can pay for a calculator that you can download but the good ones cost about $ 100. Or you can use a free one on a web page. The choice is yours.

You need to know how many PIPs you may have to loose in order for the trade to be invalidated. This depends on your level of tolerance, your trading style, and your trading system. That is another lesson in itself so let's just stick to the task on hand. :)

So let's say you have $ 2,500 in your account and your risk for the trade is 50 PIPs. If you risk 2% of your account for the trade you can only trade one mini lot for that trade. If your risk for the trade is 25 PIPs with the same amount of capital than you would be able to trade 2 mini lots.

If you only made 25 PIPs per week profit, in less than a year you will double your account. Just 25 PIPs per week. You don't have to hit "home runs" every time to grow your account in a substantial way. Nor do you need to risk a large amount for every trade to grow it substantially either.

By keeping your risk low, when you get on a loosing streak (also called a draw down) you can take quite a few hits in a row and not do severe damage to your account and to your trading psychology. Every person and every trading system has draw downs. George Soros and Warren Buffett have had plenty of draw downs, but they keep their risks low and are still Billionaires.

I hope this quick post helps you to start understanding the basic principles of money management.

Alexander.

Get 10 Trading Lessons FREE Click Here


This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.

TOOLS OF THE TRADE

My Friends, as most of you know, I am not the biggest champion of indicators; however I do know how to use them. I am creating this post for my Friends who want more information about different technical tools. I hope you find this very useful. If you have any questions about anything you have seen here you know where to find me. Also you may check out my youtube page that has videos that I think are helpful for both newer and seasoned traders. http://www.youtube.com/user/TRADERSFRIEND.
Education will help you to do what you need to do with Forex. NEVER STOP LEARNING!!!!!

17 Moneymaking Candlestick Formations You Can Use Today Click Here

Fibonacci... it's a technical tool that can make you rich. Click Here

Double Tops and Pivot Points explained! Click Here

Traders Whiteboard #4 Click Here



For all of my Friends who were seeking to broaden your understanding, I hope this helps. Thank you for all of your kindness and support always.

Happy Trading My Friends!

If you have any questions, you may reach me
at TradersFriend@yahoo.com


This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.


Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.