In it's quest for 1.70 is GBP the new safe haven asset?

Positive Momentum Shift

In the past two weeks we have witnessed an epic 750 pips + rally in Cable of the back of amazingly positive data from the UK, with both Retail Sales & GDP posting results above expectations.

Cable touched 1.59 for the first time this year yesterday, as it shook off the "2015 story" of range-bound cobwebs of 1.45-1.52 marks. By breaking the important structure level of 1.58... we shift back to harmonics as the AB=CD pattern lines up pointing towards further demand.

The A-Kill zone stars around 1.5850's and if you are a trend trader this market looks like it is going to be bullish and current levels would be a buying at a bargain price.

So... is GBP the new CHF? 

With absolutely 0 hope for Greece reaching a deal the risk looks to be all on the EUR, as the bulls look for shelter. And with EURUSD potentially breaking parity..Where will all these sellers flock? The GBP? Possibly so!

With heavy risk on the SNB post the break and with CHF Economic data all over the place, investors are looking for a new safe haven. The GBP offers a large financial sector and capital markets strong enough to absorb the influx of flow. Historically, GBP has been used as a "quasi" safe haven in times of stress, for example during troubled times in the Middle East and the Economic recession of 2008-2009. However, the correlation between the EUR and GBP would be critical in determining the extent of damage caused from a prospective Grexit.

The Pound Packing A Punch

With the UK job market recovering, industrial activity heavily expanding and GDP at a healthy 2.7%... We are almost back to 2007 (pre-crisis) levels. - In fact, creating a huge contrast in the Euro zone.

With EURGBP heading south... it could be argued that the GBP is even more of a sage haven.

With the BOE looking to increase rates in either the 3rd or 4th quarter - the ECB in line is still committed to it's QE program and I am just so darn excited about this move.... I genuinely think we will hit 1.70 soon and then 1.80 all before 2016...

Trading with Atom8

For range-traders... Trend Followers... Scalpers... Carry guys/girls.... Atom8 offer superior conditions for FX trading... especially on GBPUSD and other GBP crosses.. with raw ECN spreads as tight as 0.3 on Cable.. no wonder we are growing so fast...  (anyways)... Check us out at www.atom8.com and if you have any questions, you can always mail me.

Peace & Love

Anish

Is Gold powering to $1,000 per oz?

The biggest quarterly fall in Gold 

Growing prospects of the FED raising rates have kept this shiny metal posted below the recently tested $1,200oz mark and expectations of higher borrowing rates in the future has also helped to hold the price of this precious metal down, as it now struggles to compete with yield-bearing assets when rates are on the rise. 

A Fear-Based Asset

Firmer US data supported the biggest 2-day dollar move in recent times as the price of Gold fell to only find stability at around the 1170/80 levels. However, reports from Asia say there is still no stopping demand from price-sensitive customers. 

China's new $16bn Gold Fund

China's initiative to boost Gold trade is firmly embedded into their Economic policies.   The new entitiy may include an exchange traded fund for Gold and aims to raise about $16bn or £10bn in three separate tranches. 

This news could restore some Asian buying strength, struggling to offset the prospect of US rate rises.  China still remains the largest Gold producer and consumer of Gold (according to the World's Gold Council. However, the USA still holds the largest Gold Reserve. 

The Future of the Gold Price

If you ever like to know what the Banks think - Commerzbank expects a significant Gold recovery and pin the move lower down to "uncertainty" over rate rises - they expect Gold to be trading back at around $1,250 by 2016.... And moving forward, Chinese officials expect their activity in Gold trading will result in an extra $2.5 trillion in the next 10 years. 

My View

For the best part of the year I have remained bullish on metals, amidst the forthcoming FED rate raises.... and when shit hits the fan... it really does! I think we will still see a large reversal in the Metal as we continue to rest on a support of uncertainty. However, once clarity is restored.... I eye a move higher to the $1300 region. 

As always guys...... Trade Smarter.

Peace & Love - Anish

What does a Conservative victory mean for the £GBP?

The Shooting Sterling Star

Upon confirmation of a Conservative strong-hold on today's election, Cable (or GBP vs USD) soared through a significant psychological barrier (1.545), as a sign of investor support for PM David Cameron and also a sigh of relief.

Cable has trades with steady strength today nearing fresh monthly highs, as investors eye a referendum to be held on the UKs exit from the EU.


Why did the polls get it so wrong? 

A few months back, large banks were calling for further lows in Cable past 1.30, as we were in for the most "uncertain" election of recent times and the prospect of another hung parliament was not likened among investors.

The idea of a Labour victory did not sit right with most traders as they planned to slower the pace of fiscal tightening leading to a BOE tightening of the UKs Monetary Policies.  However, in recent weeks the dust settled and Cable has been posting strong gains of around 4.3% in the past month as the markets now eye a Conservative backed EU referendum.

"The most market-friendly outcome" Goldman Sachs

The thing is... Markets like security and by continuing on from where we left of... we keep our "status quo".

The Conservative Economic Policy focuses around reducing the UKs huge budget deficit through cutting expenditure (Goodbye NHS)... rather than raising Taxes (Yes!).

Also, there is a more probable chance of a UK exit from the EU following a commitment to hold a referendum in 2017. Albeit a negative for trade or UK assets, our nation has slowly began to accept the reality of our shores (relying on becoming more self-sufficient) and a cry for true independence is seen as more acceptable for the public.  However, could this then spur another Scottish referendum, causing further outcry for an independent state to the North of the capital.

My long-term view for GBPUSD

On a monthly time frame we can see the impacts caused over the build up from last year into 2015 and also the knock-on effects of the (nearly 40%) fall in the Euro against the Winter/Spring bull of he USD.  However, as Yellen becomes more dovish and US rate cuts loom daringly in June, this has given strong grounds for a spur in Cable - especially for today's power move.

I anticipate a move back to the 1.68-1.70 mark through to the end of 2015 and early 2016 as the Conservatives begin another 5 year term in power.

Any thoughts/feedback would be greatly appreciated. 

Written by, Anish S. Lal, Atom8 FX 

So you think you can trade like Sarao?

#FreeNav..... (I just want to touch briefly on this...)

So as soon as the Sarao story dropped in the media, I had 4 journalists contact me attempting to find out if what he did was possible & if so - how could 1 trader be the causation factor for such a huge crash?... Is this just a cover up for someones fat finger?  Why did it take 5 years to uncover him and not 5 minutes? Why was he allowed to take money from his broker?...... What did he actually do wrong? ... 350 years for making money trading the Markets??? WTF!

Nick Neeson (Ex-Bearings Bank "Rogue Trader" said "No Trader comes into the market to lose money")....Fact is - NAV Beat the system! 

This week has been pretty monumental with regards to authorities "stamping out" (scapegoating) high-frequency traders subject to risk-management algo blips (on the broker/bank side).. With a view to possibly deterring a lot more HF traders & funds.... These modern day Robin Hoods are a risk to huge institutions and the general order of the markets (is what is likely to be said in Court).. However, with the dynamics of an ECN pool & given available market-depth... Their still lies a huge loop-hole which brokers/banks aim to hedge against. 

An IOC order is pretty common among API HF traders and 19,000 orders in a blink of an eye is not really that rare (or unheard of) amongst UHFTs.. HF firms have been making money via these widely available strategies for years. However, this is what strikes me..... Nowadays, (and even back in 2010)... Large institutions have been paying £Millions to Nerds to design risk management algorithms to protect their liquidity pools from being hit..... So why did this not trigger with Nav?

Another Fact : Nav was based in London... Connecting into NY Servers (presumably).... There is inherent latency involved here in terms of speed of ticket travel from Server-Server (unless he has the worlds best VPS service).... Why is this not accounted for? 

We call them "Pirates" in the Broker world as over the past 2-3 years it is has been extremely hard to cater for their strategies... as they aim to continuously hit stale prices with the view of arbing feeds (slower vs faster) & making exponentially high returns in short periods of time... (i.e. News Traders or other latency based strategies). 

Below is a trading statement of one such client (latency based arbitrage trading - Ultra High Frequency Trading)... THESE GUYS EXIST in numbers (albeit declining)...: 

There are many others like this..... So how can they get away with this? 

I will leave this questions up to the #FBI

Signing out on a sad week for Traders. 

Russia's Barbaric Cry For A Gold Standard Currency

Putin's Love Affair

As Russia increases it's Gold buying by 123% this year as it continues to hedge against the notion of an unstated "Global Currency Crisis"... 

The perfect combination of geopolitical tension, stringent isolation, ruble depreciation & steady economic decline have forced the Federation to take a drastic step into adopting a Gold-standard currency. Albeit, pretty far-fetched, this blog post aims to break down the economic viability of a new Gold-exchange and why it is a possible step for Russia.

A Brief History 

The Soviet Union through the 40's and 50's viewed Gold & Silver as strategic metals and for National Security... Anybody holding Gold in a personal capacity would of been put in Jail.

Here is a picture of an Old Soviet Bank Note - reading "Currency backed by Gold, Precious Metals & Assets of State Bank". 

Russia aimed then and now to play hard-ball with the West - in protest against being held at mercy of the US Monetary policies - as they present their Gold backing as a Currency-War weapon. 

Russia recently overtook China in terms of Gold reserves whilst their economy remains structurally weak.  However, with supply threatened Oil prices along with several other falling energy prices & the depreciation of the ruble - A move to Gold will allow the country to be seen as a more efficient, perhaps a  more trustworthy trading partner. 

Strangling the USA 

An official move to Gold would be monumental and China would be more than likely to follow suit.... Huge threats of inflation would immediately flare upon the US Economy.... Ultimately, the Fed's worst nightmare.

A weapon of mass Financial Destruction 

Given the growing influences of Russia, China & other Asian states... a large accumulation of Gold indicates a move away from the USD for easier cross-border trade. 

But in reality....

What does the near-term have in store for Gold... Could this Russian buying spree come back and bite them in the ass? Will $1200 hold or could we see potential for lower commodity prices as the USD continues its endless bull run & lower Western % demand for metals. However, this does go against Putin's aim - which is based around using the Gold-backed Ruble to pay odd the countries debt. 

Another major drawback is that the Ruble is already heavily backed with Oil and it is pretty unlikely that they would back it with 2 commodities. 

What will a continuation of this buying spree cause? 

Yet continuing to threaten the US currency, Russia's growing stockpile of Gold would be aimed at taking away the US Dollar monopoly over the metal & with the BRICS on their side a realistic defiance against the threat of a US debt backlash could be on the cards. 

Are we prepared for this? 

If Russia's biggest Oil Tycoon could be reprimanded and sent to Jail... Could Putin too? Is Putin hedging his bets?....

Trading Gold with Atom8

As Gold continues to grip the $1200 handle... The market is waiting patiently for the next FOMC talk in June to decide on the next direction, as rate cuts linger... 

Atom8 offers XAUUSD and XAGUSD trading from 10 cents and 2 cents (spread + commission) respectively alongside leading DMA execution... it is a fine offering to check out.

Any questions or feedback would be greatly appreciated. As always, Peace & Love..

Anish

Are Women Better Traders Than Men?

...... So are you distracted? 

If you are Male you probably will look at her for about 2-3 seconds then notice that she is looking at charts.... If you are a Male trader you will more likely look back at her for a few more moments..... Still distracted?..... 

Well you can find the full image link here - as our broker licensed her for our landing page (hehe) : 

https://www.atom8.com/lp/english/

The Fintrader study 

Fintrader, like Atom8 offers online retail FX accounts and came out with an interesting study stating that 25% of their clients are women (compared to virtually 0) 10 years ago and one of their analysts claimed that the reason behind their trading success was due to "Women psychology".... 

Think like a women to succeed in trading 

Like all, I am pretty skeptical but as I dig within my own research base... even though we have a handful of female clients, as I scan their performances - they are pretty darn profitable. Perhaps the "Man-Ego" is naturally alerted once such claim arises but it now makes some sort of sense why many traders are teaching their wives strategies & letting them get on with it... (even though their volumes are no-where near as high.... argggghhh!) 

By nature we have balls & with balls we have a natural "Alpha" about us... leaders of the pack... hunters...providers for our families.. This sense of maninism rests on our shoulders & the perceived responsibility is huge! 

I put it down to about 3 reasons why Women are better :

1. Women are probably better at "Crisis-Management" and less emotional - therefore more disciplined and less likely to panic when losing trades occur or are in huge drawdowns; 

2. As we may have experienced.... Women are better at saying "NO" lol - (loling on a blog - yes I do that) -  On the contrary, we all see trades that we know we should not really take... but the reward just looks so tempting... Women however, stick to their manuals & perhaps approach trading with a more measured approach instead of diving in head-first! ; and

3. Mainly because Men have balls. 

Some Statistics 

I remember in University I was looking at something similar and came across a study by Gary Belsky who in said that men traded 45% traded more frequently or "hyperactively" than women and concluded that the explanation for lower net returns (men vs women) was due to male overconfidence - leading to counterproductive trades... 

Why are only 20% of Investment Bank Traders are Women?

What is the one word you associate to Trading?.... "RISK"...

It is simple... Men take more risks than Women... We wouldn't be in an industry of $4 Trillion volume per day if women were sitting behind desks... We would have stagnant market movement in fact...
In a world where cost matters

Brokerages run on commissions & need volume....  Therefore, we have a natural conflict of interest... Albeit, women trade more profitably... but they don't break the rules enough... Are they crooked enough to play the Finance game?

So ladies... if you are already trading - well done! Keep it up & make full use of your time trading profitably whilst the volume is there - take advantage!.... Gentlemen... Pay attention... Learn something from these delicate flowers... Teach your girl/wife the skills & grow with each other... Do this together instead of letting her nagging you about your livelihood from trading... Take a holistic approach & reap the rewards...

I personally think our roles as Men is to protect our women & learn form them... We have a lot to gain...

You be glad to know that Women or Man you can trade your FX with Atom8 :)

Peace & Love
Anish 

My Golden Strategy to Mastering the Markets

Mastering the Markets... The story of the Retail FX/CFDs Market

I have seen thousands of Trader's come & go....

Most get greedy, thinking they can repeat amazing Demo performance in the Live arena's & end up blowing up their accounts faster than they can say "PROFIT"... Some get into the markets way too early - especially after fancy FX education sales talk urging their clients to start churning accounts on a 3 pip EURUSD spread... More often than not they lose money on their first few trades & completely stop trading... Very few.... Actually make Money.

So what is the Secret?

Once over-complicated, trading becomes extremely difficult to digest. For me & from what I have seen, the key is to stick to a simple strategy that is proven to work.

Stay disciplined, keep your emotions at bay & never trade with money that you can't afford to lose (again a blunder that I see way to often)...

Patience & consistency are very much key, as it takes many years for those who are profitable (not lucky) to perfect their strategies - willing to risk a stake to support their development. Also -keep your expectations low... Most traders looking to make a "passive income" think they can do a consistent 10-20% a month - which is very unrealistic...

So... Step 1. Find a strategy that works & Step 2. Stick too it!

Time to share my Golden Secret... 

I am always keen to get personal with the guys making money from trading FX - & making money consistently. So I found a guy who made at least 14% per week and had been doing so for the past 60 weeks with a very simple strategy.

So I took the best bits from his strategy & formulated by own system (which is now running decently well on an automated basis)...

Going back to basics here.... but let's get straight to the point. Take a 3 day EMA and a 20 day EMA and but nice Bold colors on your chart. (I like to use yellow for the 3EMA and purple for the 20EMA) & look at a 30 Minute TF.... Something like this :

My rules 

As the 20EMA crosses above the 3EMA we have a short signal and as the 3EMA crosses above the 20EMA we have a long signal...

Somewhat simple... but you have to know which time frame to pick... I usually find that the 30M works ideally for Gold - especially when the market is trending well. However, it is important to avoid the choppy markets.

The key, therefore, is to study the "gradient" of the breakouts and have a fixed take profit amount in your mind before entering the trade.

 Live Example 

Let's take the breakout from this afternoon. A long at the cross-over of the 3>20 around $1195 would be up 70 cents profit right now...





So where do I take my profit now?

You have two options, you can either close when the 20 goes back above the 3 or you have a fixed 30 pip or 50 pip TP integrated within your strategy.

Remember - Avoid choppiness & essentially this trend following strategy works well once followed consistently on the correct time-frame. 

Would greatly appreciate your feedback & I hope this works out well for you guys.

Trading Gold with Atom8

We arguably offer the best conditions for XAU margin trading in the market. With spreads starting from 15 cents (raw) and commissions average $25 per million - Many sophisticated traders are enjoying our ECN conditions & with our FCA underlay... Atom8 aim to be the hub for the XAU trading community..

Check us out here www.atom8.com or email me with any questions you may have - anish.lal@atom8.com


- Peace & Love

Anish