Author Bio

A big trend right now in the industry is automated Forex trading of signal providers. Most of the Forex brokers today offer their own proprietary solutions and there are various independent providers like Zulutrade, collective2 and others that offer the ability to automatically execute signals.

I’ve spent some time over the past few months looking at these automated trading solutions and, as a trader I have to tell you, I don’t see how anyone will be able to make money with these platforms, as the lack of transparency and accountability is astonishing. I’ve looked at a few leading signal providers and they trade without stops, keep losing positions open forever and hide poor performing months under different names. Also, the lack of properly presented performance information makes it impossible for the educated investor to reach an informed conclusion that will make him money.

The main problems these platforms have, are that they 1) rely on trading signals that are executed in demo accounts and 2) don’t rely on a specific trader that manages real money. In these scenarios, replicating a signal lacks the most important components of trading, which are money and risk management and trading on a demo account versus a real account. This simulated trading style relieves the trader from worrying about his losing positions as it’s not real money anyway and the market will eventually turn around.

We see a change in this market of traders following with the launch of Covestor’s and Kaching’s new services. Here at Currensee, we’re working on an innovative way to give our members the ability to follow real trades made by real people with real names and real performance using a real Forex trading account. We call it full transparency and are seeding this change and will be the first company to offer such capabilities in the Forex space.

If you are a consistently good trader and you are interested in learning more about how you might participate in this new service, we’d love to hear from you!

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

This post is the first in a weekly series of Forex market analysis. As an avid market-watcher and trader, I am always looking back to see what happened and looking forward to consider what might happen. An interesting twist on my market analysis is adding the Currensee social analytics and seeing how the trader network performed and what they’ll be thinking about in the week ahead. I welcome your thoughts, comments and suggestions on how to make this unique analysis more valuable to you. So, without further delay, let’s talk about this week in Forex trading.

Another big week ahead for traders with many top events to look forward to including Friday’s Employment report out of the US.  There are also a slew of central bank meetings around the globe and although there may not be any major surprises this may present the stage for one or more of the central banks to hint that their ultra low rate policy is nearing an end.

Of course May will be remembered for the continued positive impact from the reflation story as most stock markets turned in positive performances and foreign currencies such as the Euro, Gbp and NZD made sizable gains versus the dollar with Euro/$ closing above 1.40 for the first time since last August.

Though, that doesn’t mean it’s been a one-way move in the markets.  In fact, when I look at the Currensee strategy set-ups, the trading strategies that have produced the best results of late have been more defensive strategies.  One such member strategy is a “Pairs trade” which is a market neutral strategy that places an emphasis on the correlations of currency pairs.  Another successful member strategy is one that focuses on divergence in stochastics with momentum considerations.

Back to the importance of the Employment report, one could argue that the gains in many foreign currencies last month, such as the Euro and Aud, can be attributed to two economic reports:  1) the better than expected NFP report back on May 8^th and 2) the more recently released and much improved Consumer Confidence report.  This only lends confidence that the worst of the recession is now behind us and the US consumer is as resilient as ever.

Initial expectations for this Friday’s report are for another loss of 530k jobs with the unemployment rate hitting 9.2%.  Will we see another report that shows a reduction in layoffs, or as some traders expect, will this report disappoint the markets?  Traders at Currensee as of right now are expecting a disappointment as 75% remain short EUR/USD thus not all are convinced that the US economy is improving.

Of course there are plenty of economic events ahead of the NFP that will grab trader’s attention including the latest PMI and Service PMI (or ISM) readings in many of the industrialized countries.

As we previously mentioned, not to be discounted, will be the outcomes of a few central bank meetings this week.  This includes the Bank of England and the ECB on Thursday.  Although expectations will be for an Unchanged outcome from the ECB, comments from Gov. Trichet’s press conference will as always be closely watched for any hints on his and their level of concern of inflation in the Euro zone.

The Bank of England has had its bank rate at 0.5% since March.  Last month they stated that global demand was “weak” but they also were expecting a recovery in due course as they state there is plenty of ‘stimulus in the pipeline’.    Similar to EUR/USD, the vast majority of traders on Currensee remain Short the GBP/USD currency pair.  Cable traders will be certainly be paying close attention to any signs that the Bank of England will not remain in an ultra low rate policy for too much longer.

Not to be outdone on Thursday will be the Bank of Canada interest rate decision.  They cut their repo rate to 0.25% in April thus the duration of their ultra-low rate policy will be in question going forward.

One currency to keep in mind this week will be the Australian Dollar (AUD).  It’s up approximately 30% versus both the USD and JPY this year as the RBA has kept their base rate far above their peers at 3%.  Thus although they have more than halved rates since last summer the currency has exploded this year.  As a country that relies heavily on commodities, which have been flying high of late, will the RBA start to signal that they are becoming uncomfortable with the prospects of higher inflation this week?  Or is it time to take profits on long positions as a strategy that utilizes momentum divergence, such as MACD, signals that this upward move is losing strength?

Either way, look to see how traders react on Currensee this week. Until next time, happy trading.

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Be sure to read the full risk disclosure before trading Forex.  Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

Automated Adam, Discretionary Derrick…meet Team-trading Tom.

There are many types of traders on this earth. Regardless of whether you trade forex, futures, or equities, you understand one thing. Your success depends on your long term ability to determine accurately which securities to play in, how much you enter a position with, and when you enter and exit a position.

For automated system traders, the initial parameters of mixed oscillators and indicators can be a large determinant to how you perform even after you’ve optimized it. You understand the market can be bipolar and act completely irrational and work against your system when you least expect it. You make money from the market largely due to the statistical edge you’ve gained through proper back testing and scrutinizing the losses far more than your possible winnings. Even then, you realize that not all systems will be forever profitable for the lone reason that the market is essentially human and no mathematical model can accurately and fully describe human behavior.

If you are the discretionary trader, then you realize what the automated trader does but you also see patterns; some may even “feel” them. Profitable intuitive traders can “feel” the current of the market’s waves much like a surfer “feels” the ocean’s flow. Discretionary traders are also adept with support & resistance, chart patterns, candlestick patterns, Elliot wave theory, and Fibonacci points – on top of risk management theories and the usual list of indicators and oscillators.

Now. There is a third type of trader. One who can be one of the aforementioned types of traders on top of being a team player. This trader is capable of gauging support and resistance without needing to draw a line at all. This trader is capable of connecting to those which are better than them, those who are equal to them, and those who want to be as good as them. This ability to collaborate adds a “whole ‘nother way of lookin’ at the game.” This trader realizes that this information resource is invaluable since they realize that they can see what most others cannot. They may have the insight of a discretionary trader or the discipline of a automated trader. However, with this new level of analysis, traders will have the ability to filter out their methods of trading with social indicators and can see the community bias on the balance of the market.

Years ago when I starting doing forex, since it was all new to me, I spent a lot of time just reading website after website looking for information and learning everything I could get my hands on. It was to the point that I woke up every morning and immediately starting thinking forex. I was not trading live yet, but I learned everything I could. This included risk management involving gambling theory, chart patterns, various indicators, and trading systems. I starting getting into it, digging myself a hole until I was buried. Why was I drawn to it so much? It was a few things: I liked how everything could be visual on graphs, the way money exchanges hands has mesmerized me since I was in elementary school, it involves technology, but most of all it involves people. People watch birds; I watch people. Not in a creepy way but to observe human social interactions and motivations. I think I’ve always been like this. So, when I had the chance to jump on board with Currensee, I was all over it.

This opportunity lets me see things in a completely new way. If I had to describe myself, I’d be mostly an automated trader. I like developing a mechanical means of reading the market where discipline is absolute and it can work for me non-stop. At Currensee, I’m a bit of all these types of people. I’ve taken it upon myself to beat my biggest weakness, discretionary trading and discipline. I’ve narrowed it down to the necessity for me to follow my rules and to learn from my mistakes. And, now, I’m teamed up with other people. I can trade real-time with them while messaging, posting and starting new discussions. I can even make strategies around them if I care to. I can also learn from traders who are better than me and teach traders who don’t know as much as me. All while getting information on the community’s trades and opinions on fundamental news and currency pairs.

If you asked me a few months ago if I thought I’d mix up my automated trading approach, my answer probably would have been “hell no.” It works and why change something that’s not broken. I’ve gotta say that team trading has opened up a whole bunch of new ideas and strategies for me. I’ve connected with people around the globe – people who trade differently than me. And I’m challenging myself by using several different approaches – something that’s hard to do with a machine.

So, that’s my take. I’m curious to know what you think. Is your trading style open to some team spirit?

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Be sure to read the full risk disclosure before trading Forex.  Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.