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TRADING TECHNIQUES | EDUCATION FROM BROKERS Fri 15 Jan

5 trading indicators to use in 2021

A look at five trading indicators to enhance your trading this year Everyone can trade forex, but not everyone can trade forex well. In this day and age, making profitable returns can be achieved by using trading indicators. The forex market does not operate at random. On the contrary, many economic theories suggest that there are patterns that can be identified through various mathematical equations. If you're not great with numbers, trading indicators can soon become your best friend. What is a Forex trading indicator? Trading indicators are tools used for technical analysis when trading forex or CFDs on stocks, indices, commodities and more. Essentially, indicators are complex mathematical calculations that are presented in the form of lines and graphs on a market chart. The purpose of implementing these indicators is to help traders understand what's happening on the price charts and identify trends to make better decisions when opening a position. Indicators come in many forms and, if you're using MetaTrader 4, many will already be included on the trading platform. Who are Forex trading indicators for? Forex trading indicators form part of any technical trader's strategy, as they provide insight into price trends over time. Following a year of much volatility in 2020, adding indicators to your trading strategy in the year ahead can help you understand the markets to earn higher profits. When it comes to choosing which Forex trading indicator to use, you will need to consider your own personal trading style, experience and skill. If you want to take your trading strategy to the next level by trying out different indicators, you can practice on a free demo account. In this article, we'll go through five popular trading indicators that you can use to enhance your strategy. Keep in mind that each indicator is best suited for a specific trading style and may also vary on your own trading psychology. 1. Simple Moving Average Indicator (SMA)The Moving Average Indicator, or simple moving average, is used to indicate the direction in which a price is moving along a trend, excluding shorter-term price movements. The SMA identifies significant price points for an asset in a chosen time frame, dividing the totals by the number of data points to present a single trend line. Traders can choose the time period that they want to focus on, to view and analyse historical price action and determine future price patterns! 2. Exponential Moving Average (EMA)Another type of moving average indicator is the Exponential Moving Average. The EMA places greater emphasis on more recent data points, which may have a more significant impact on future price trends. This indicator can be used alone or in combination with other indicators to judge the legitimacy of trends spotted by other indicators based on newer data. Much like the SMA, this indicator can be applied to both long-term and short-term timeframes with averages ranging from 12 to 200 days. 3. Moving Average Convergence Divergence Indicator (MACD)The Moving Average Convergence Divergence Indicator, or MACD, is another useful tool in a trader's toolbox. This indicator is particularly suited for identifying differences in momentum between two moving averages. If two moving averages are moving closer together -ie. 'converging' -momentum is decreasing, whereas if they are moving away from each other -ie. 'diverging' -momentum is decreasing. As a result, traders who use this tool are in a better position to analyse price action around the support and resistance levels of an asset, helping them know when it's a good time to buy or sell. 4. Bollinger BandsThere's a reason why Bollinger bands have become so popular, and that's because they're a useful indicator for when markets become more rebellious than usual. Bollinger bands provide an established price range within which an asset is normally confined, widening or tightening based on recent volatility levels. This indicator, therefore, can be used to forecast long-term price movements to understand when an asset may be overbought or oversold, too. 5. Stochastic OscillatorIf you're looking for an indicator that shows both momentum and strength of a trend, the Stochastic Oscillator is the solution. By comparing specific closing prices of a particular asset, to its price ranges over a period of time on a scale of 0-100, this indicator helps traders identify when a market is oversold or overbought. Forex trading indicators have stood the test of time, providing a reliable means of analysing markets based on technical factors. If you're looking to expand your trading horizons, try implementing a few trading indicators into your strategy and make the most of market movements. With CedarFX, you can get access to a 0% Commission Account with up to 1:500 leverage and all the indicators you need to trade smarter. Create a free account at www.Cedarfx.com. This article was submitted by CedarFX. For bank trade ideas, check out eFX Plus

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FUNDAMENTAL STRATEGY | EDUCATION FROM BROKERS Thu 14 Jan

What next for the GBP following Brexit?

A look at the pound outlook post-Brexit Four and a half years on from the initial Brexit referendum in the UK, which saw the UK electorate voting 51% - 49% in favour leaving the EU, the exit has been completed. The Brexit transition phase expired on December 31st, meaning that the UK has now left the single-market customs union and will now deal with the EU as per the terms of the trade deal agreed in the final week of 2020. The trade deal itself was the product of a tense and laboured year of negotiations which saw several original deadlines abandoned as Boris Johnson's negotiators were forced to abandon the PM's ultimatum's in pursuit of a deal. GBP Rallies on Trade Deal News News of the trade deal has been met with optimism in the UK. The British Pound was seen rallying against the Dollar and the Euro as traders displayed relief at having avoided a no-deal scenario which the Bank of England warned would be "catastrophic" for the UK economy. Indeed, UK asset prices have also been higher in the wake of the deal as investors avoided the need to withdraw capital, which had been a main concern over the initial impact of a no deal exit. Criticisms of The Deal: UK Service Sector Under Threat However, there has been criticism of the deal which many, both in politics and in the market, feel was not properly executed and does not suitably cater for the UK economy. The major criticism is that there has been no provision made for the UK services sector. The deal primarily covers goods trading between the UK and EU and not trading of services. With the services sector accounting for roughly 80% of the UK economy, the lack of framework here is likely to be reflected negatively in business investment and hiring over the coming year. Specifically, with regards to the financial services sector, the deal sets out a placeholder agreement for now with details to be clarified at a later date. UK Financial Services at Risk With the EU having refused to grant "equivalence" for UK financial services firms, there has already been an exodus of capital from UK financial markets. In the first ten days of the year £1.2 trillion has already been repatriated from UK to European financial markets. Indeed, on January 4th alone, the first trading day of the New Year, the UK lost £5 billion in equities trading to European markets with many in the city warning, this volume will be lost for good. Looking ahead, this exodus of capital has the potential to unseat London's reputation as the financial heart of Europe. A negative shift in investor sentiment will likely be reflected in a weaker GBP and lower asset prices. "Level Playing Field" Constraints Additionally, other parts of the Brexit deal, such as the "level playing field`' agreement have the potential to hinder British business. Under the terms, the UK is vulnerable to the EU imposing tariffs and other barriers should UK business deviate too much from EU laws and regulations. This level of constraint poses an active threat to the UK PM's plans to turn the City of London into a "Singapore on Thames". Downside Risks For GBP With the initial optimism at having avoided a no-deal Brexit likely to wane in the coming months as the reality of post-Brexit British business starts to sink in, the risks are skewed to the downside for GBP. The impact on the services sector is the biggest threat, with the exodus from financial services likely to deepen in coming months. The delays to supply chains is also a big threat given the new regulatory requirements involved in trade between the continent and the UK. A survey by the UK manufacturers organisation Make UK revealed that almost 50% of its members are concerned over customs delays which they identify as their biggest risk. A further 39% are concerned over the cost of new regulatory requirements. Increased Risks Due To COVID The risks around the new conditions are notably amplified given the current fragility of the UK economy as a result of the ongoing COVID pandemic. With the intensifying second wave of the virus, caused by a more contagious strain, leading to fresh nationwide lockdowns, the economy is already teetering on a knife edge. The majority of economists are now forecasting a double dip recession in the UK with the chancellor of the Exchequer, Rishi Sunak, warning this week that the economy will get worse before it gets better. Bank of England Easing Expectations In light of the risks from both the ongoing COVID pandemic and disruptions to the economy as a result of Brexit, markets are now increasingly anticipating a fresh round of easing from the Bank of England. The BOE has recently been discussing the implementation of negative rates in the UK, even surveying regional banks on how such a move would impact them. Just this week we have seen BOE policymaker Silvana Tenreyro calling for negative rates to be used in the UK to help stimulate the economy. With this in mind, the risks are clearly dovish heading into the next BOE meeting on February 4th with GBP likely to trade lower in response to fresh measures. Technical Views GBPUSD GBPUSD continues to trade higher within the bullish channel which has framed the 20% recovery off the 2020 lows posted during the height of the pandemic. Price has recently broken above the 1.3516 level which has been a key resistance level over 2019 and 2020. However, the recent appreciation has been laboured, reflected in choppy price action, and accompanied by bearish divergence in momentum studies, suggesting the risks of a reversal lower. A break back below the channel low and the 1.3191 level could pave the way for a much deeper correction lower. To the topside, should the channel continue, bulls will be looking for an eventual move back up to the 1.4343 highs. This article was submitted by Tickmill. For bank trade ideas, check out eFX Plus

FUNDAMENTAL STRATEGY | EDUCATION FROM BROKERS Wed 13 Jan

Will INR appreciate against the US dollar in 2021?

Is the Indian Rupee set for a third straight year of fall against the USD or will it make a comeback in 2021? Image source: PixaHive 2020 has been a highly volatile year for the major international currencies, as international trade and supply chain disruptions combined with mixed investor sentiment led to extensive fluctuations. As an aftermath of the pandemic, the world's reserve currency the U.S. dollar (USD), has declined steeply throughout the past year, making it the worst-performing currency among the G10 currencies. This is reflected in the US Dollar Index's 7.53% decline over the past year. The Indian Rupee (INR) did not fare any better, as it was the worst-performing currency in the Asian subcontinent over the past year. INR and USD - 2020 Performance India has been grappled with the worst recession in history, with its GDP contracting 23.9% year-over-year in the April- June quarter, and 7.5% year-over-year in the July - September quarter. This compares to the United States' 9.1% decline in the fiscal second quarter, anda record 33.1% annualized growth in the fiscal third quarter. However, despite the biggest contraction on record, India enjoyed a plethora of foreign direct investments (FDI). According to data released by the Department for Promotion of Industry and Internal trade, in the April - August period, foreign fund inflows crossed the $500 billion mark, reflecting investor optimism regarding the country's recovery potential post-pandemic. Foreign equity inflow rose 21% year-over-year in the April - October period to $35.33 billion. The interest rates observed by the Reserve Bank of India (RBI) is substantially higher than the Federal Reserve's near-zero rates, which can be accredited as one of the reasons behind the equity fund inflows. Also, the impressive gains of the Indian stock indexes contributed to the high volume of fund inflows. Sensex gained 19.03% over the past year, beating S&P 500's 16.41% returns over the same period. However, the RBI kept on buying US dollars for its reserves over this period, leading INR to decline against the greenback. This was done primarily to promote the domestic export industry, which was heavily affected by the pandemic-induced barriers to international trade. As a result, INR declined 2.85% against the USD over the past year. Also, the pandemic has propelled an anti-Chinese sentiment among the masses and governments alike, resulting in a structural transformation of the global industrial sector from China to other developing economies. The United States, along with seven other countries, found the Inter-Parliamentary Alliance on China in June 2020, with the aim to curb the global interdependence on the Chinese economy, which manufactures a third of the global industrial output. However, China's economic recovery has been miraculous, while the US is still struggling to control its surging coronavirus infections. This has led investors to lose faith in the USD, thereby contributing to the currency's decline. 2021 Outlook The United States has assumed a dovish monetary stance and quantitative easing measures to recuperate from the economic slump, which is likely to maintain pressure on the USD. The country passed two of the largest fiscal-stimulus bills in the past year, totaling nearly $3 trillion. The incoming Biden administration and the Democratic majority in both the houses of Congress imply another round of fiscal stimulus plans is one the cards, thereby further depreciating the US Dollar. India, on the other hand, is expected to recover gradually in 2021, with a substantial rise in GDP growth and consumer spending. The Center for Economics and Business Research predicts India to expand by 9% in the current year.  Also, India's staggering development in the domestic industrial sector has exacerbated investor sentiment over the country's growth potential, which should further channel funds from the developed economies. Though India pulled out of Regional Comprehensive Economic Partnership (RCEP) last year, citing economic and sustainability concerns, the country has a provision to rejoin at a later date, at its discretion. This free trade deal signed between 15 countries in the ASEAN region, forms the world's largest free multilateral deal. India's decision to rejoin the group should bolster its economic growth significantly, particularly following the 2020 recession, while improving its reputation in the global economy. If India consolidates its position as a major economy crucial to international trade by joining this trade bloc, the Indian Rupee should appreciate.   While this should allow INR to gain sharply against the US dollar over the next couple of months, the actions taken by the RBI might reverse this growth. The RBI has propagated its aim to keep its export markets competitive in the international region while curbing import- driven inflation. According to a report from FX Leaders, the USD/INR pair has been retreating lower since last April and forecasts the price of Indian Rupee to move lower until it reaches the 20 monthly SMA (simple moving average) post which it will resume a bullish trend. However, it should be noted that India's currency sterilization policy has been noted by the United States, which placed the former under the currency manipulator watchlist late last year. Following this announcement, INR has increased slightly, by 0.69%, against the USD. Provided the Indian central bank does not intervene in the floating exchange rates over the next couple of quarters, INR should gain significantly against the US-Dollar in 2021. For bank trade ideas, check out eFX Plus

BASICS | EDUCATION FROM BROKERS Wed 13 Jan

Why do traders need to lock trades?

A lesson on money management I suppose, everyone knows that for successful trading, you need just "a unique trading system" that brings its inventor 100% of the profit a day. Apart from a working system, another important element of profitable trading is skillful money management. However, many traders neglect the latter, which is utterly wrong. Inefficient money management is a direct way of wasting your deposit. Conditionally, there are two types of money management (MM): The first one suggests managing your money before you enter a trade.The second one is managing your money when you are already in the market. Most traders use the first option only. There are reasons for it, certainly: some feel it easier to trade this way, others do not know about the second type at all. Before entering a trade, the trader calculates the lot size and the SL placement according to their MM (the classic way is 1-3% of risk per trade). This is all the MM they do. However, it is equally important to follow your trade and manage your capital wisely while your trade is open - this is the second type of MM. This helps maximize your profit or minimize losses, depending on the market situation. One method of MM for open trades is locking. An open trade locks when the price goes against it. What is locking? To put it simply, it means that an opposite trade of the same volume opens. To get it better, look at an example in the chart. Your trading system gave you a signal to open a long position (point 1), you entered the market but a while later, the price reversed against you. Reaching a certain level, you realize that in the nearest future, the price will simply not go your way and decide to lock the position. You open an opposite (selling) trade of the same size as your first trade (point 2). Now you are locked: the profit from the second trade will compensate for the losses from the first one; hence, your loss literally gets locked and grows no more. The second crucial thing is to open (exit) the lock correctly. Imagine the price has reached point 3; you forecast that it will not go further and close the first position with a profit (the one opened in point 1). This is how you unlock the lock. Now, we again have a losing position, but the price keeps going your way, and you close the second position in point 4, with a profit also. Thus, instead of one losing position you had at the beginning, you close two positions with a profit. Also, there is partial locking. In this case, if you open a trade for 1 lot, and it goes against you, open a selling trade but a bit smaller one (0.7 lot, ex.). This is a method for situations where a large pullback is unlikely to happen, and the price soon returns to the desired direction. Sure, I have described a perfect, so to say, locking picture. In reality, things do not always go as smoothly as in the examples above. Experts can construct whole chains of locks, while amateurs can be harmed a lot by their locking. That is why there is a constant argument about whether locking is useful and necessary: some say it is a good and flexible instrument that requires no special skills of technical analysis or fundamental analysis and, hence, can be used by anyone. However, others state that locks are useless and never lead to any good. Even among traders who do use locking, there is no general agreement: some say it is the last resort that can save the deposit, others use it as their main strategy. Well, to each their own. Also, note that locking is used instead of Stop Losses. Locks have several advantages over SLs. As said above, a lock can drag even a losing position to a profit, while an SL will simply close it. Locking is easy to use (the very mechanism is), though you need to know how to use it. Some geniuses open trades at wild guesses and then make a profit by locking. However, this is not an advisable approach. Hope you liked the article and good luck to you! This article was written by Dmitriy Gurkovskiy, Chief Analyst at RoboForex For bank trade ideas, check out eFX Plus

FUNDAMENTAL STRATEGY | EDUCATION FROM BROKERS Wed 13 Jan

Brexit: The future of EUR/GBP

A look at how Brexit is impacting EUR/GBP Off the radar Throughout the entire year 2020, Brexit has been one of the main headlines in the media. Eventually, during the very last week of December, the UK-EU deal was agreed. A couple of weeks passed since then, and we hardly hear of Brexit since. In the meantime, its effects will start manifesting soon enough. What might they be? Winner's view According to Boris Johnson, the finalized Brexit is a big victory for the UK. And the Brexit deal - as opposed to the previously possible option of no deal - is even a bigger achievement. From a human point of view, that's understandable. Boris Johnson and his supporters long sought the separation from the EU, and eventually, they did it. For them, it's a reward for a "long day's march". They see the restoration of the complete sovereignty of Great Britain as the main outcome of the Brexit process. The UK is no longer obliged to follow any overriding legislation such as the one the EU previously had over it. It's a completely sovereign and independent state. In this context, even a no-deal Brexit would be a success, just for a higher price. Therefore, making the deal with the EU puts the UK even in a better position. Roughly speaking, Boris Johnson presents the deal this way: the UK can enjoy free trade with the EU almost like it was before while it can also enjoy all the liberties of independence. It's a "Canada-style" agreement, according to the UK PM's words. A victory, in other words. That's the impression you get after listening to the speech Boris Johnson gave in Brussels on December 24. Observer's view Most analysts agree now that the UK will suffer more than it gains having left the EU. Therefore, the benefits of the deal do not seem to outweigh the losses that come from the strategic separation of the UK. Yes, the fisheries - as Boris Johnson specifically mentioned in his speech - will gain: the UK's portion of the catch increases from ½ to 2/3 over a few years, and then becomes completely unlimited. Fair enough: a sovereign state can fish as much as it wants, in its own waters. But fishing accounts for less than 1% of the British economy - and even that one percent is largely coming from selling British fish in the European markets which will be more selective from now on. That very much represents the entire state of affairs with Brexit outcomes for the UK: as long as it wants to make business with the EU, it will need to comply with the EU now-external-for-the-UK rules. In the meantime, many businesses, especially those of finance, already choose to re-base to France or other European countries as they don't have legal permits to stay in the UK. Strategically, there will be more bureaucracy - and hence, more fees and non-tariff barriers - for every British business that wants to do trade with the EU. The international investment will see it harder to get into the UK, too. Overall, an average estimation of the Brexit outcome is the following: the UK is now free to do what it pleases, but this liberty may cost it weaker international investor interest, lower economic output, slower business activity. So, generally, less of everything. How much less - we are yet to see. Pound's view 0.90 has been the baseline level for EUR/GBP over the last year. Now, as Brexit tension is over, and the emotional element in the pair's behavior is weaker, it is likely to follow fundamentals more. In the mid-term, it will be about which one's economy is weaker against the virus fallout: the UK, or Europe. In the long-term, when the virus will be gone (more or less, eventually), it's about which one's economy is more robust and attractive to investors. In the latter comparison, the EU seems to be up for a better outlook. Therefore, in the mid-term, EUR/GBP will possibly fluctuate around 0.90 and may check the depths of 0.87. However, in the long-term, 0.93 may be a very feasible target for bulls. This post is written and submitted by FBS Markets for informational purposes only. In no way shall it be interpreted or construed to create any warranties of any kind, including an offer to buy or sell any currencies or other instruments.  The views and ideas shared in this article are deemed reliable and based on the most up-to-date and trustworthy sources. However, the company does not take any responsibility for accuracy and completeness of the information, and the views expressed in the article may be subject to change without prior notice. For bank trade ideas, check out eFX Plus

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BASICS | EDUCATION FROM BROKERS Wed 13 Jan

How to trade in volatile markets

Trading volatile markets No matter how long you've been trading Forex, your feelings towards market volatility have probably not changed much from when you were just starting out. Typically regarded as something to avoid at all costs, traders often abstain from the markets during times of increased volatility out of an overwhelming sense of fear. Those with an increased appetite for risk, however, might find themselves more excited and inclined to trade during periods of higher volatility. While these two types of personalities may seem to be opposites, they are more similar than you think. Psychology claims that the feelings of fear and excitement are, in chemical terms, the exact same thing. The same chemical reaction taking place within our mind can make itself known as gut-wrenching fear, or an exhilarating thrill. Individuals can learn to master their emotions and train their mind to interpret adrenaline differently. Once a trader understands this, they become unstoppable. Of course, turning the fear one feels towards volatility markets into excitement is easier said than done. This is why we put together a few tips to help you take control of volatile markets, spot opportunities to profit, and overcome your fear. Open a LonghornFX Account What markets are most volatile? Market volatility is a characteristic that exists within all financial markets, to a varying extent. Cryptocurrencies are highly prone to volatility, which is why coins such as Bitcoin can swing from $19,000 to $22,000 in a matter of minutes. The Forex market can also become highly volatile, particularly during the overlap between major trading sessions. Since Forex prices are heavily influenced by breaking news stories, extreme volatility can also emerge out-of-the-blue, so traders should always be prepared. Be Prepared for Market Volatility When traders realise the opportunities that can be found within large market swings, it's easier to turn market volatility in their favour. Still, there are a few things to keep in mind to avoid getting swept away. Benefit from trading during periods of volatility with these tips: Trade CFDs: Unlike traditional trading, CFDs allow traders to benefit during both bull and bear markets since one can open both 'long' and 'short' positions. Widen your stop loss and take profit targets to avoid exiting the trade too early. A volatile market may run for hundreds of pips in either direction before switching direction, so widening targets will enable your position to last longer and turn a profit.Minimise losses by focusing on current market movements; if a market is moving chaotically within a smaller price range, you may be better off tightening your take profit and stop loss before the price breakout. Look at the overall picture to avoid short-sightedness. While a market may be experiencing high volatility, looking at price movements over a longer period can help you understand the overall price support and resistance levels of the asset. Once you've mastered these skills, you'll never need to fear a choppy market again. Sign up to LonghornFX to start trading with up to 1:500 today at www.longhornfx.com! This article was submitted by LonghornFX. For bank trade ideas, check out eFX Plus

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FUNDAMENTAL STRATEGY | EDUCATION FROM BROKERS Tue 12 Jan

Europe and UK risks after the deal

A look at how things are playing out in Europe and UK post-Brexit trade deal The last two weeks were thin on data and full of trading holidays, but the last minute agreement on a Brexit deal and virus developments were key events and will be decisive for growth and central bank policy over the next months at least. The Brexit deal secured frictionless goods trade, but didn't cover financial services, which has already led to some shifts. The sharp rise in Covid-19 case numbers over the holiday period and the resulting tightening and/or extension of restrictions meanwhile will put fresh pressure on economic growth and thus keep economies reliant on fiscal and central bank support. A Brexit deal materialized on Christmas Eve, and has since been ratified by the UK parliament and unanimously approved by all 27 EU ambassadors. The deal took effect on January 1, and in the Eurozone is operating on a provisional basis until the EU parliament formerly ratifies it. The new "Trade and Cooperation Agreement" provides tariff and quota free trading of goods between the EU and UK. For fishing there are transitional arrangements, but in general EU law will cease to apply in the UK, and the jurisdiction of the European Court of Justice will end. The biggest hurdles to a deal being reached were the level playing field rules and state aid issues, which were overcome with the principal of "managed divergence", which gives both sides the right to a review and retaliation mechanism if they believe the other side has gained an unfair competitive advantage. Financial services are still in limbo though, despite the trade deal. The agreement struck between the EU and the UK, last week ensured tariff and quota free trade in goods, but the UK's important financial services industry still doesn't have clarification on what exactly will change in the future, as the deal doesn't cover financial services. Some area are covered by "equivalence" assessments, but not all. Both sides hope to get a memorandum of understanding in place by the end of March, but that won't be as high profile and extensive as the trade deal. Britain's Financial Conduct Authority was forced to announce last week that it would temporarily alter its rules to ease fears of market turbulence in interest rate swap trades at the start of this year. The EU has so far not granted equivalence to the UK market to help smooth cross-border transactions and the FCA will temporarily allow London-based branches of European investment banks to trade on EU venues, as long as they are trading for EU clients. The relief will not apply to the firms' trades on behalf of non-EU clients or their own proprietary trades and the measure will be reviewed on March 31. Share trading is also shifting and with companies not really expecting equivalence rulings to materialise may were prepared with big shifts reported for yesterday's trade. An FT article (paywall) highlighted that on the first trading day of 2021 "nearly €6bn of EU share dealing shifted away from the City to facilities in European capitals". This may not be the city's biggest area of revenue, but it may give a flavor of what is to come. The FT also highlighted that EU regulators yesterday "withdrew registration of six UK-based credit rating agencies and four trade repositories - data warehouses that provide authorities with information on derivatives and securities financing trades. EU companies and investors will now have to use EU-based entities." Meanwhile, the UK is back in the strictest lockdown since March last year and despite the rollout of vaccines, it may don't expect restrictions to be lifted before the end of February. Germany is also extending its lockdown, with the hospitality sector and non-essential shops already closed for a while and now set to remain shut until the end of the month at least. Under discussion are also further restrictions of movement in areas were incident rates are particularly high. It may be the result of the new and more infectious virus mutation, or just the natural result of a more relaxed attitude over the holiday period, but it is clear that vaccination programs will take a while to have sufficient impact to get economies back to normal. Against that background data releases looked already out of date The final December UK manufacturing PMI may have been revised slightly higher, to a 57.5 headline in the final reading yesterday, but like the German numbers the data already look outdated considering subsequent developments. German jobless numbers came in better than expected in December readings released today, with the sa unemployment total unexpectedly falling -37K over the month, despite the tightening of lockdown restrictions last month that saw restaurants, hotels and non-essential shops close once again. Expectations had been for a rise in the jobless total as well as the jobless rate, but in the event the sa rate remained steady at 6.1%. However, the fact that official numbers haven't exploded is largely due to government wage support and job retention schemes, which have helped companies to hang on to staff. That is a costly exercise and not all companies will survive once government support ends and the ECB also starts to tightening policy. That means the real impact on the labour market from the pandemic will only become apparent over time and much later in the year. ECB waiting for fiscal stimulus after extending PEPP & Brexit deal takes pressure of BoE The EU has finally cleared the next medium term budget and with it the pandemic recovery program that will be jointly financed and should go some way to get the economy back on track. In the best case scenario, the ECB is pretty much on hold for now, although clearly if there is Brexit chaos or the virus situation doesn't improve, ECB officials will be ready to step in with additional measures. Meanwhile in UK, developments could also lead to renewed speculation that the BoE will have to step in again, although the Brexit deal removed any immediate pressure on the central bank to consider negative rates. The BoE's Monetary Policy Committee left official rates unchanged at the meeting in December, but extended the Term Funding Scheme by six months, while focusing on flexibility in the asset purchase program. Should market functioning worsen materially again, the Bank of England could increase purchases, but at the same time, there is flexibility to slow the pace of purchases later if the economy recovers as planned next year. Fiscal policy is already stepping in again to get companies and employees through this latest crisis and clearly with the budget deficit rising sharply BoE support will be needed to keep financing conditions favourable, even in the best case scenario. This article was submitted by Andria Pichidi, Market Analyst at HF Markets. Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission. For bank trade ideas, check out eFX Plus

FUNDAMENTAL STRATEGY | EDUCATION FROM BROKERS Tue 12 Jan

Biden to introduce trillions of spending

More stimulus is coming US President-elect Joe Biden has suggested over the weekend that there was a need for more economic relief from the coronavirus pandemic, and that he would deliver a plan costing trillions of dollars in the coming week. If that comes to fruition, some of the highlights will include raising the minimum wage in the United States to $15 an hour and sending out $2000 checks in direct payment to individuals. Biden said "We need more direct relief flowing to families, small businesses, including finishing the job of getting people that $2,000 relief direct payment. $600 is simply not enough." The plan is set to be unveiled on Thursday, and with the pair of Senate seats going to fellow Democrats, it is likely that spending will reach a new climax in the United States, and perhaps put an extraordinarily strong downward pressure on the US dollar. On the other hand, the so-called "Blue Dog Democrats", members of the Democratic Party that come from traditionally conservative states, may have a hard time going along with deficit fueled spending yet again. Apple and Hyundai to make car Hyundai Motor and Apple Inc. announced a plan over the weekend to partner on autonomous electric vehicle cars by March and start production somewhere around 2024 in the United States according to Korean news outlets. The report follows a statement on Friday that Hyundai Motor was already in early talks with Apple. This news has pushed the price of Hyundai stock up nearly 20%. Currently, it is believed that the new vehicle may be manufactured in the Kia Motors (which is owned by Hyundai) factory in Georgia, or perhaps in a new factory to produce roughly 100,000 vehicles in 2024. The annual capacity of the proposed plan would be roughly 400,000 vehicles. Democrats push for impeachment yet again As there is only 10 days left in the Donald Trump presidency, there has been another push towards impeachment from the Democrats. This has been a long-running situation even before the term started for Donald Trump, so this should not come as much of a surprise. Impeachment means that Trump would never be able to take a seat in Government again, not least as future president. This plan to impeach Trump however will likely end up some kind of a political show or media circus, as it is almost impossible to imagine that impeachment proceedings will be conducted between now and the end of his term. To impeach an ex-president would be unprecedented, and one has to wonder whether or not Joe Biden will then be impeached in two years if the Republicans take the House of Representatives? At this point, there are various videotapes and criminal cases against Hunter Biden, his son that seem to hint that perhaps there is an argument for a reactionary case against him too. Unfortunately, this will probably be the case going forward, a simple tit for tat war between the two main parties in the United States. Politics have become increasingly divisive, and with a recent survey suggesting that half of the Republicans in the country agreed with storming the Capitol, it is hard to imagine how things could settle anytime soon. With that in mind, political risks are certainly going to be a mainstay of 2021. This article was submitted by Trade360. For bank trade ideas, check out eFX Plus

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TRADING PSYCHOLOGY | EDUCATION FROM BROKERS Mon 11 Jan

The effect of too much information

Sometimes too much of something isn't always a good thing Ruining trades with too much information might look unlikely, but it can complicate the trades and end up in losses. There is a distinct chance of getting 'information overload' or 'analysis paralysis.' To make it simpler, traders have far too much information to make a clear and accurate decision. Though it sounds strange, too much information can overwhelm traders to the point where it makes them afraid to start a position at all. The concept of placing a trade on is stressful enough, but if they have conflicting information, it can make things quite complicated. Generally, when there is too much contradictory information, traders better stay out of the market. It's much better if they are confident when they put money into the marketplace. However, that confidence in a trade does not mean it's going to work out. In placing a trade, there is one thing to remember; it's important to focus on crucial information, not all information. What Matters Traders usually have issues as they tend to get sidetracked by all news articles, tweets, or rumors they hear. Sadly, news reporters and people on social media commenting on politics or the economy typically have very little knowledge or expertise on the way the markets will move. In fact, financial reporters are just that: reporters. Their job is to show the news, not to offer their opinions. On the other hand, traders must read and analyze economic announcements. But reading an analysis of economic announcements doesn't seem to count as reading the news. Also, the trend is another vital thing to pay attention to. Trades must accept that when a currency pair is in an uptrend, it is so for a reason. And it won't matter how right or wrong they think a news article is as price action is how they make money. Traders need to read economic announcements together with trend analysis, not as a standalone piece of news. And this is because economic announcements can change at times in their importance. And they must consider the overall trend of economic announcements for a specific currency. Agenda While traders dig through information, they should remember that everybody has an agenda. For instance, their brokers want traders to believe that there is a massive amount of money waiting at every given moment of the day. With that, brokers publish news that they hope will push traders to action. And this is all because they make money on the spread, and every time there is a losing trade. Do not allow a broker's news feed to be the only information responsible for the trade decisions. Forums are another place where there's a lot of destruction done to people's accounts. Unfortunately, when traders begin trading, one of the first things they will notice is that there are a couple of large forums that many people visit.  Some common sense can go a long way when it comes to their conversations on these forums. Also, they must think of these as entertainment and nothing else. If the old adage that about 90% of traders lose money in the long term is true, then that means at least 90% of the people in the forums are losing money. If that's what is happening, then why would traders bother listening to their opinions. This article was submitted by Kiexo. For bank trade ideas, check out eFX Plus

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BASICS | EDUCATION FROM BROKERS Mon 11 Jan

The different types and styles of social trading in forex

What are some of the norms in social trading? Social trading in forex or binary options is the practice of imitating other traders' trades found through an online social trading community. Also, traders can use the trading community as their personal support system and as a place to learn ideas and talk about strategies. There are plenty of different ways to communicate with other traders through social forex trading - like forums, profiles, blogs, signals services, brokers, and particular platforms providing copying abilities. The forms of social communication help every trader interact with each other and enhance their trading strategies. Social forex trading has a unique advantage for new or worried traders. It lets them follow others and 'hold hands' with a more experienced trader over the trading process. In addition to that, it offers distinct advantages for more experienced traders as it allows them to be trade leaders and profit by recruiting more followers. From newbies to experts, it's better to determine the different social offerings available to find a comfortable place in the industry. Signals or Tips For traders starting in social trading, search for signals and tips to see the right way. And these can be found from simple sources like a trader sentiment indicator showed on a broker's site or emanated from very sophisticated computer-generated systems. People won't see any kind of interaction from this sort of social trading. Also, they may not completely understand what they see because they can't ask the trade leader. However, with signals or tips, traders can get the direct market position to follow if they want. Copy Trading Copy trading is the act of copying trades of other traders. Some copy trading platforms enable traders to copy another trader and echo success. They pick a trader from the leader board where every trade the person makes goes into the traders' account. Restrictive controls monitor the accounts, so they don't follow someone blindly. But still, the overall responsibility is in the trader. Copying is a quicker way to trade without the concern of making choices as they all need to do is choose the trader that seems to be the best and copy it. Forums and Profiles Forums and profiles are essential if traders aim to be a serious trader and be the fun part of social trading. Forums lets traders talk to each other while profiles help in getting to know them. The best platforms will give full profiles with biographical information, details about trading style, and a tally of open and closed trades. A lot of brokers offer forums for account holders. Most of the time, they can enter the discussion rooms of more public forums. A good forum consists of hundreds, if not thousands of active users, and traders can join the threads of their choice - such as those dedicated to strategy, tools, tips, and forecasts. Auto-Bots Auto-bot trading is not really social trading. It gets rid of the social aspect of the trade. Also, these are robots that make trades every time a specific strategy or pattern becomes triggered. Social trading requires human traders to execute the trades, while auto trading bots do not need human monitoring at all. The system generates a signal and automatically executes it into the traders' accounts.  The good thing about auto-bots is that traders don't have to worry about human error. However, people lose human monitoring, meaning trades are executed even when the lead trader might want to override the suggestion. This article was submitted by Commercewealth. For bank trade ideas, check out eFX Plus


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