4th UPDATE: NYSE Board Rejects ICE-Nasdaq Takeover Offer
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
Monday 11 April 2011
What's this 'QE2' all about?
What's this 'QE2' all about?
The Fed has proposed a second (2nd) round of quantitative easing (QE) in efforts to forestall deflation. Will it work, and if so, at what cost?
The Fed has proposed a second (2nd) round of quantitative easing (QE) in efforts to forestall deflation. Will it work, and if so, at what cost?
Federal Reserve Chairman Ben Bernanke is pushing for another significant round of “quantitative easing” – now dubbed “QE2” by Fed observers – on the grounds that the economy’s response to simulative macro policies since 2008 has been anemic. What the economy needs, this thinking goes, is some inflation. While much of the public sees the run-up of growth in government and exploding deficits as keys concerns, Bernanke, continuing his soft stance on deficits, has argued that fiscal restraint would threaten the recovery. Instead, he argues that monetary policy still has arrows in its quiver that should be used to lower the unemployment rate and rejuvenate the economy while also preempting the dreaded prospect of deflation
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
QE2? More Like QE 1.5. The Fed’s Balance Shrinks Even As It Expands
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
Current silver prices analysis compare with gold prices March 2011 | Trading Energy
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
Macke’s Purple Crayon: Why Investors Need Sell Discipline...
By Jeff Macke | Breakout – Fri, Apr 8, 2011 1:11 PM EDT
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
I've been a puppet, a pirate, a pauper, a poet, a pawn and a king. Also a few other things, among which are trader and pundit.
Let me push you up my learning curve and, hopefully, prevent you from paying too much tuition in the school of hard knocks. Being a puppet, pirate, pauper or pawn is terrible. Being a poet can be fun, but the pay is lousy. Being king, by which I mean you are good at what you do, are in control of your own destiny to the extent life allows such control, and you have enough in the bank so you're much more than one missed paycheck away from being forced into pauper-hood.
There are two things you need to know about the relationship between the kingdoms of punditry and trading. First, when you suggest selling assets in the midst of glorious rallies, viewers and readers get very, very upset. Second, traders make the bulk of their money trading against people who let being upset control their decision-making. That's not a moral judgement; trading isn't exactly roaming the earth bathing lepers in terms of adding value to society. Feeding on the weak and emotional is simply how life in the trading pit works.
Smart traders accept in advance that some trades are going to go horribly wrong and prepare their exit in advance. For me that means always, always, knowing the price at which I'm a seller. "Higher" is a fine upside target, but "lower" is a totally unacceptable exit plan. That's why I'm always asking "Breakout" guests what negative price or scenario would cause them to get out of a position -- not because I'm mean but because controlling your downside is the only way to trade profitably over the long term. I'm simply not going to let anyone tell viewers otherwise as long as I'm on the "Breakout" set.
My personal trade exigency plan for 90% of my holdings is literally as simple as I can make it. I draw a trendline and sell if the price falls below the line. Watch the video, and you'll know how I go about it. I kick myself, hard, when I'm wrong, but I don't question my process. In my world the market is never "stupid," I'm never "in for the long term" and I don't tell myself nonsense like "you never take a loss until you sell." I try to win and to bail quick when I lose.
To quote Huey "The Kingfish" Long, one of the great, albeit corrupt and misguided, political kings in American history: "Every man or woman can be king." It's simply a matter of staying alive and in the arena. After years over-thinking it, I realized I could limit my downside on literally any position for the price of a ruler and a box of crayons.
You can use your own system. My purple crayon has worked for me. If it stops working, I won't take it personally. I'll simply try to figure out something else.
Until then, enjoy the video and tell us what you think. Email us at breakoutcrew@yahoo.com.
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
Google on BlogSpot: Google to Acquire Blogger
Google on BlogSpot: Google to Acquire Blogger: "Posted by Brett Wiltshire, Blogger CEO This morning we’re beyond thrilled to announce that Blogger has signed a definitive agreement to be ..."
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
Bursa Malaysia Market News: CIMB Research sees iron-clad prospects for Malaysi...
Bursa Malaysia Market News: CIMB Research sees iron-clad prospects for Malaysi...: "KUALA LUMPUR: CIMB Research sees iron-clad prospects for Malaysia Steel Works (KL) Bhd which is on an expansion programme that is set to dou..."
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
Getting Started in Foreign Exchange Futures
Getting Started in Foreign Exchange Futures
Forex Futures versus Traditional Futures
Both forex and traditional futures operate in the same basic manner: a contract is purchased to buy or sell a specific amount of an asset at a particular price on a predetermined date. (For an in-depth introduction to futures, see Futures Fundamentals.) There is, however, one key difference between the two: forex futures are not traded on a centralized exchange; rather, the deal flow is available through several different exchanges in the U.S. and abroad. The vast majority of forex futures are traded through the Chicago Mercantile Exchange(CME) and its partners (introducing brokers).
However, this is not to say that forex futures contracts are OTC per se; they are still bound to a designated 'size per contract,' and they are offered only in whole numbers (unlike forward contracts). It is important to remember that all currency futures quotes are made against the U.S. dollar, unlike the spot forex market.
Here is an example of what a forex futures quote looks like:
Hedging and speculating are the two primary ways in which forex derivatives are used. Hedgers use forex futures to reduce or eliminate risk by insulating themselves against any future price movements. Speculators, on the other hand, want to incur risk in order to make a profit. Now, let's take a more in-depth look at these two strategies:
Hedging
There are many reasons to use a hedging strategy in the forex futures market. One main purpose is to neutralize the effect of currency fluctuations on sales revenue. For example, if a business operating overseas wanted to know exactly how much revenue it will obtain (in U.S. dollars) from its European stores, it could purchase a futures contract in the amount of its projected net sales to eliminate currency fluctuations.
When hedging, traders must often choose between futures and another derivative known as a forward. There are several differences between these two instruments, the most notable of which are these:
• Forwards allow the trader more flexibility in choosing contract sizes and setting dates. This allows you to tailor the contracts to your needs instead of using a set contract size (futures).
• The cash that's backing a forward is not due until the expiration of the contract, whereas the cash behind futures is calculated daily, and buyer and seller are held liable for daily cash settlements. By using futures, you have the ability to re-evaluate your position as often as you like. With forwards, you must wait until the contract expires.
Speculating
Speculating is by nature profit-driven. In the forex market, futures and spot forex are not all that different. So why exactly would you want to participate in the futures market instead of the spot market? Well, there are several arguments for and against trading in the futures market:
Advantages
• Lower spreads (2-3).
• Lower transaction costs (as low as $5 per contract).
• More leverage (often $500+ per contract).
Disadvantages
• Often requires a higher amount of capital ($100,000 lots).
• Limited to the exchange's session times.
• NFA (National Futures Association) fees may apply.
The strategies employed for speculating are similar to those used in spot markets. The most widely used strategies are based on common forms of technical chart analysis since these markets tend to trend well. These include Fibonacci studies, Gann studies, pivot points, and other similar techniques. Alternately, some speculators use more advanced strategies, such as arbitrage.
Conclusion
As we can see, forex futures operate similarly to traditional stock and commodity futures. There are many advantages to using them for hedging as well as speculating. The distinguishing feature of forex futures is that they are not traded on a centralized exchange. Forex futures can be used to hedge against currency fluctuations, but some traders use these instruments in pursuit of profit, just as they would use futures on the spot market.
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
The spot foreign exchange (forex or FX) market is the world's largest market, with over one trillion U.S. dollars traded per day. One derivative of this market is the forex futures market, which is only 1/100th the size. This article examines the key differences between forex futures and traditional futures and looks at some strategies for speculating and hedging with this useful derivative.
Both forex and traditional futures operate in the same basic manner: a contract is purchased to buy or sell a specific amount of an asset at a particular price on a predetermined date. (For an in-depth introduction to futures, see Futures Fundamentals.) There is, however, one key difference between the two: forex futures are not traded on a centralized exchange; rather, the deal flow is available through several different exchanges in the U.S. and abroad. The vast majority of forex futures are traded through the Chicago Mercantile Exchange(CME) and its partners (introducing brokers).
However, this is not to say that forex futures contracts are OTC per se; they are still bound to a designated 'size per contract,' and they are offered only in whole numbers (unlike forward contracts). It is important to remember that all currency futures quotes are made against the U.S. dollar, unlike the spot forex market.
Here is an example of what a forex futures quote looks like:
Hedging versus Speculating
Euro FX Futures on the CME
For any given futures contract, your broker should provide you with its specifications, such as the contract sizes, time increments, trading hours, pricing limits, and other relevant information. Here is an example of what a specification sheet might look like:
Specification Sheet from CME
Hedging and speculating are the two primary ways in which forex derivatives are used. Hedgers use forex futures to reduce or eliminate risk by insulating themselves against any future price movements. Speculators, on the other hand, want to incur risk in order to make a profit. Now, let's take a more in-depth look at these two strategies:
Hedging
There are many reasons to use a hedging strategy in the forex futures market. One main purpose is to neutralize the effect of currency fluctuations on sales revenue. For example, if a business operating overseas wanted to know exactly how much revenue it will obtain (in U.S. dollars) from its European stores, it could purchase a futures contract in the amount of its projected net sales to eliminate currency fluctuations.
When hedging, traders must often choose between futures and another derivative known as a forward. There are several differences between these two instruments, the most notable of which are these:
• Forwards allow the trader more flexibility in choosing contract sizes and setting dates. This allows you to tailor the contracts to your needs instead of using a set contract size (futures).
• The cash that's backing a forward is not due until the expiration of the contract, whereas the cash behind futures is calculated daily, and buyer and seller are held liable for daily cash settlements. By using futures, you have the ability to re-evaluate your position as often as you like. With forwards, you must wait until the contract expires.
Speculating
Speculating is by nature profit-driven. In the forex market, futures and spot forex are not all that different. So why exactly would you want to participate in the futures market instead of the spot market? Well, there are several arguments for and against trading in the futures market:
Advantages
• Lower spreads (2-3).
• Lower transaction costs (as low as $5 per contract).
• More leverage (often $500+ per contract).
Disadvantages
• Often requires a higher amount of capital ($100,000 lots).
• Limited to the exchange's session times.
• NFA (National Futures Association) fees may apply.
The strategies employed for speculating are similar to those used in spot markets. The most widely used strategies are based on common forms of technical chart analysis since these markets tend to trend well. These include Fibonacci studies, Gann studies, pivot points, and other similar techniques. Alternately, some speculators use more advanced strategies, such as arbitrage.
Conclusion
As we can see, forex futures operate similarly to traditional stock and commodity futures. There are many advantages to using them for hedging as well as speculating. The distinguishing feature of forex futures is that they are not traded on a centralized exchange. Forex futures can be used to hedge against currency fluctuations, but some traders use these instruments in pursuit of profit, just as they would use futures on the spot market.
by Justin Kuepper
Justin Kuepper has many years of experience in the market as an active trader and a personal retirement accounts manager. He spent a few years independently building and managing financial portals before obtaining his current position with Accelerized New Media, owner of SECFilings.com, ExecutiveDisclosure.com and other popular financial portals. Kuepper continues to write on a freelance basis, covering both finance and technology topics.
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
Introduction To E-Micro Forex Futures
Introduction To E-Micro Forex Futures
While there is no central marketplace for the foreign exchange (forex) market, foreign exchange futures are one way to trade forex through exchange-traded contracts. Forex futures are similar to other futures contracts in that the currency pairs’ exchange rates act as the underlying commodity in the exchange. In 2009, the Chicago Mercantile Exchange(CME) introduced a smaller version of currency futures contracts – the E-micro forex futures suite. These six currency pairs trade at one-10th the size of the corresponding forex futures contracts and make forex futures trading more accessible to a wider variety of traders and investors, including active individual traders, small commodity trading advisors (CTAs) and small and medium enterprises (SMEs). Here we'll take a look at these forex futures and show you how you can incorporate them into your trading.
TUTORIAL: The Forex Market
What Are E-micro Forex Futures?
E-micro forex futures contracts include six exchange-traded currency futures contracts that are one-tenth the size of the traditional currency futures contracts. For the trader or investor, this equates to reduced margin requirements and less risks than are associated with the E-micro’s big brothers. The E-micro forex futures contracts are traded exclusively on CME Globex, which is the Chicago Mercantile Exchange’s electronic trading platform and the world’s largest regulated forex marketplace. Figure 1 shows a comparison of contract specifications between the standard currency futures contracts and their corresponding E-micro contracts. These three smaller contracts are fully fungible with the full-size forex futures contracts.
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
E-micro forex futures contracts include six exchange-traded currency futures contracts that are one-tenth the size of the traditional currency futures contracts. For the trader or investor, this equates to reduced margin requirements and less risks than are associated with the E-micro’s big brothers. The E-micro forex futures contracts are traded exclusively on CME Globex, which is the Chicago Mercantile Exchange’s electronic trading platform and the world’s largest regulated forex marketplace. Figure 1 shows a comparison of contract specifications between the standard currency futures contracts and their corresponding E-micro contracts. These three smaller contracts are fully fungible with the full-size forex futures contracts.
 |
| Figure 1: A comparison of contract specifications between the standard currency futures contracts and their corresponding E-micro contracts |
Three of the contracts are fully fungible with the CME group's full-sized forex futures contracts: EUR/USD, GBP/USD and AUD/USD. Margins and exchange fees are scaled down proportionately to the full-size contract. For example, if the full-size EUR/USD contract had a $4,050 margin requirement per contract, the E-micro EUR/USD contract would have one-10th the margin requirement, or in this example, $405 per contract. Regularly updated margin requirements for the E-micro contracts can be found by contacting the CME. (For related reading on margin, take a look at Forex Leverage: A Double-Edged Sword.)
E-micro Forex Futures Contract Specifications
The CME offers six currency pairs as E-micro forex futures contracts as seen in Figure 2: EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF and USD/CAD. Like other futures products, each contract has specifications regarding the size of the contract, the minimum price increment and the corresponding tick value. These specifications allow traders to understand the dynamics of each contract and determine the potential profit or loss for particular price movements.
 |
Figure 2: The contract specifications for each of the six E-micro forex futures contracts. |
The EUR/USD contract, for example, has a minimum tick size of 0.0001; each price tick up or down will result in a corresponding US$1.25 increase or decrease in value. If a long trade is entered at $1.3957, for instance, and price moves to $1.3967, the 10-tick price increase would be worth 10 X $1.25, or $12.50.
Figure 2 also shows each contract’s ticker symbol. As futures contracts, each symbol must also be followed by the contract month and year to define the particular contract. The E-micro forex futures contracts trade with set expiration dates on a quarterly cycle, with contract months falling in March (designated as “H”), June (“M”), September (“U”) and December (“Z”). The EUR/USD contract for December 2010, then, would be referred to as M6EZ10:
M6E | Z | 10 |
Contract | Month | Year |
Safety and Security of the E-micros
As futures contracts, E-micro products are part of an exchange-traded, regulated market. The E-micros market is regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). Unlike the cash forex market, where different participants see different prices (depending on the broker), pricing is centralized and all market participants have access to the same wholesale bid and ask prices with E-micro forex futures contracts. (Forex futures operate differently from traditional futures. To better understand forex futures, read Getting Started In Foreign Exchange Futures.)
CME Clearing acts as the counterparty to every trade. In other words, CME Clearing is the buyer to each seller, and the seller to each buyer, virtually eliminating any counterparty credit risk. All trades are matched and settled by CME Clearing. In addition, customer funds are kept completely segregated.
The Bottom Line
When the CME launched the E-micro forex futures contracts in 2009, six products were introduced. At one-tenth the size of the full-size contracts, the E-micros offer traders the opportunity to trade forex in a regulated marketplace and with reduced margin and risk exposure. In addition, for traders interested in the full-size contracts, the E-micros provide a practical introduction to their big brothers. (Learn how to enhance your forex trading system with a strategic schedule. Read How To Set A Forex Trading Schedule.)
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
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