If the Martingale system is a joke – then the anti-Martingale is a seriously bad joke. As risk-management it leaves something to be desired.

The anti-Martingale is exactly as the name suggests, the Martingale in reverse, and again it comes out of roulette ‘theory’ – any game where there’s roughly a 50/50 win/lose. Instead of doubling up on your lot size following a losing trade, you double on a successful trade. Continue the doubling and watch the money mount up.
Continue reading »

Housing starts data measure the number of residential units on which construction is begun. These, taken with related figures, (Pending Home Sales, Construction Spending m/m) go a long way to make up the economic backdrop that affects USD.

In the UK, other indices, for example, Mortgage Approvals, the Halifax House Price Index m/m also play a major part in the fundamental strength of GBP.
Continue reading »

Here’s a forex market movement for our times:-

Despite forecasts for a depreciation of the Dollar, many economists are now saying that the negative housing data released from the United States yesterday may actually bolster the USD.

Let’s state the effect in the simplest possible terms.

Bad news for the US economy, lower jobs, lower GDP, leads to lack of confidence
Which leads to a rush towards safe haven currencies…
Which leads to buying USD – because USD is in itself, considered a safe-haven currency…
So bad US news leads to USD going up.

This rush to a safe haven, any safe haven, after every news announcement is creating some weird effects. It flies in the face of logic, well, simple logic anyway – and is a sign of the present dominance of USD

No, I don’t know of any name for this upsidedown, wrong-way-round, echo, reverb effect – but it certainly ought to have a name…
Continue reading »

Camarilla Pivot Points are (unfortunately) covered in the same mystique as Fibonacci retracement – involving higher mathematics to produce a magic formula that somehow the markets are bound to follow – well, to be honest, the math involved is more simple arithmetic than anything else.

8 levels, 4 of resistance, 4 of support, are produced, using High, Low and Close data for a preceding time period.

R4 = (H – L) x 1.1 / 2 + C
R3 = (H – L) x 1.1 / 4 + C
R2 = (H – L) x 1.1 / 6 + C
R1 = (H – L) x 1.1 / 12 + C
Continue reading »

A consumer price index (CPI) is a measure of the average prices of consumer goods and services – basically it’s the “inflation rate”. It’s one of the most important indicators of confidence in, and the strength of, a national economy.

In the different currency zones, governments or (semi)independent organizations publish CPI figures on a monthly and yearly basis – in the US, it’s the Department of Labor, while in the UK, it’s the Office for National Statistics – where it’s called the Retail Prices Index (RPI).
Continue reading »

At first sight, it’s great – Twitter is absolutely made for the forex market and traders – up-to-the-second tweets about what’s happening on the markets, a global perspective, maybe the odd bit of free advice from people who know… But then the problem comes… too much information.
Continue reading »

Pivot points are a quick method of assessing trend and likely levels of support or resistance – they’re not all you’ll ever need to know, just another weapon in the forex armory, particularly useful in the short-term.

We’ve added to a pivot point calculator to our free tools section – at the moment, just for standard (floor) pivot points – the more exotic formulae, De Mark pivots, the Camarilla system, will be following shortly.
Continue reading »

In times of global recession, it’s always the bad news first. Falling indices everywhere, crisis, panic…

At some point in the wonderful economic cycle that we seem permanently locked in, the good news – the green shoots of recovery – starts to become more important. Now, this is particularly so in the stock and bond markets, but with fundamental analysis in the forex market also. Durable goods orders are one of the important indicators of future industrial production and expenditure.
Continue reading »

There’s a fair amount written and spoken about volume analysis in forex trading, volume spread analysis, VSA, etc. but, in very simple terms, volumes can be a good indication of who’s doing the buying and selling – is it large volume professional money going into the market, or is it just the smaller traders twitching the currencies around a little at the moment?
Continue reading »

The martingale system, or martingales, in forex is a play on statistics.

Let’s say there’s a 50% probability that a currency pair goes up or down (and we’ll ignore the broker’s spread for now…) – spin a coin and make your trade (place your bet) – you win, great, keep going… You lose? Then double your wager and go again…

The principle of the martingale system involves a single initial bet – every time the bet loses, the wager has to be doubled up so that, given the time and opportunity, a single winning trade will recoup all previous losses and put you back into profit. An apparently 100% forex system.
Continue reading »