Goldman Sachs, the solid asset?

Among the largest and most prestigious banks in the world, the Goldman Sachsinvestment banking division focuses on asset management and other financial services, with primarily institutional and international partners and investors.

It could be said that the Goldman Sachs reputation rests on years of reliability. Indeed, the Bank of the Big Apple continues to demonstrate its stability on the New York Stock Exchange with enviable stock market performance: the stock trades at 211.38 per share with a momentary decline but growing steadily when viewed in the long term.

As indicated by its historic highs of 235.92, Goldman Sachs is confirmed as one of the most solid assets to invest in, presenting great prospects for the coming months.

The gold market resists, pushed between dollars and rupees

After months on the threshold of the minimum, the gold market continues to suffer. Nevertheless, the haven asset par excellence has managed to maintain altitude despite the sharp weakening caused by the recent appreciation of the dollar.

The Asian market has been an absolute life saver in this case, especially since last week India’s expansionary monetary policy led to a surge in cash, and their citizens started to seek a more convenient way to convert cash into a tangible asset that can function as a real investment. It’s easy to predict that a cap on gold imports will be imposed in the country soon, as the government has already long been considering this possibility.

Obviously, this move has also contributed to an increased demand for Indian gold: many investors and ordinary citizens try to maintain sufficient reserves of gold in order to use it opportunely. Appreciation of the dollar and high demand from India are two strong currents flowing in opposite directions, but they are keeping the most noble of the metals afloat above the 1200 level.

Top 5 Things to Know in the Market on Monday

Top 5 Things to Know in the Market on Monday

1. Oil jumps to 3-week high on Putin freeze comments

Oil prices rallied to a three-week high on Monday, adding to last week's strong gains after Russian President Vladimir Putin said he sees a “high probability” that an agreement to curb oil production will be reached at a meeting later this month.

Speaking at a news conference in Lima after an Asia-Pacific Economic Cooperation summit on Sunday, Putin said Russia is willing to freeze its crude oil output at current levels.

U.S. crude was up 87 cents, or 1.88%, to $47.23 a barrel by 5:55AM ET (10:55GMT), while Brent tacked on 88 cents, or 1.88%, to $47.73.

Prices jumped almost 5% last week on growing expectations that global oil producers will find a way to cap output at a meeting scheduled for the end of this month.

2. Dollar rally shows signs of fatigue

A rally in the U.S. dollar showed signs of fatigue early on Monday, after the greenback hit its highest level in nearly 14 years against a basket of major currencies in the previous session.

The dollar index was last down 0.35% at 101.06 in early trade, after climbing to 101.54 on Friday, a level not seen since April 2003.

Against the yen, the dollar was down 0.2% at 110.69, pulling back from a five-and-a-half month high of 111.19 touched earlier.

The euro was up 0.45% at 1.0637, bouncing off Friday’s 11-month lows of 1.0568.

Meanwhile, the yield on the U.S. 10-year Treasury was down 1.4 basis points at 2.323%, retreating from a one-year high of 2.364% set late last week.

3. Global stocks mostly higher

U.S. stock markets pointed to modest gains at the open on Monday morning, ahead of a four-day Thanksgiving trading week. Wall Street will shut Thursday and then close early on Black Friday, the traditional kickoff to holiday shopping.

Meanwhile, European and U.K. stocks were broadly higher in mid-morning trade, as dollar strength took a breather and oil prices jumped.

Earlier, Asian shares closed mostly higher, with Japan's Nikkei rising to a 10 1/2-month high, thanks to the weaker yen.

4. Fed rate hike odds approach 100%

According to Investing.com's Fed Rate Monitor Tool, odds for a rate hike at the Federal Reserve's December 13-14 meeting are at around 96%, up from 86% late last week, as markets wagered that increased fiscal spending and tax cuts under a Trump administration will spur economic growth and inflation.

A speech from Federal Reserve Vice Chair Stanley Fischer at 8:00AM ET (13:00GMT) Monday is likely to draw attention.

5. ECB President Draghi speaks to European Parliament

ECB President Mario Draghi is due to testify about the European Central Bank's Annual Report before the European Parliament, in Strasbourg on Monday at 16:00GMT (11:00AM ET).

Investors will be looking for indications that the ECB is moving towards boosting monetary stimulus at its December meeting.

While the ECB has not been clear about its bond-buying program plans, most economists expect the bank to announce an extension to its quantitative easing program beyond the originally-planned end date of March 2017.

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EURAUD. Eurozone Refinancing Rate Decision (20 October 14:45 GMT)

Economies of Eurozone and Australia are under the pressure. The ECB leaders can’t solve their biggest issue – boost of CPI and debt crisis. Apart from that, there is a massive concern regarding the “Brexit” and EU-UK asset sharing, as EU leaders no longer want their assets to be traded on London exchange.

On the other hand, there are problems in the economy of Australia due to slowdown of Asian economy and unstable commodity prices which is one of the key aspect of Australian economy.

If the leaders of European Central Bank decide to cut either the deposit facility rate or the  interest rate it will have a negative impact on the European currency.

EURAUD chart:

There is a similar situation with EURUSD D1 on EURAUD D1 price chart – the downward trend also starts to accelerate. Both indicators of technical analysis “Parabolic SAR” and “Awesome Oscillator” prove it. But traders have to keep in mind that fundamental factors prevail on this asset and commodity prices have a vital role in pricing on EURAUD.

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EURJPY. Publication of Japanese Industrial Production report (October 17, 04:30 GMT)

Low inflation is the key problem of Eurozone at the moment. On the latest meeting of European Central Bank representatives it was decided to keep both deposit facility rate and interest rate unchanged (-0.40% and 0.00% respectively).

Head of ECB Mario Draghi said that there will be no additional measures of economy of stimulation at the moment and the asset buyback program will remain on the same level.

On the other hand, representatives of Bank of Japan are also playing a risky game by decreasing the rates regularly and having all sorts of interventions. Rate increase or decrease does not mean the strength of the national currencies, that’s rather a weakness.

If the numbers of Industrial Production report are higher than expected it will have a positive impact on Japanese Yen.

EURJPY chart:

There is still a flat rate movement on EURJPY D1 chart despite the fact that there are minor upward or downward trend movement. According to the indicator of technical analysis “CCI” the rate got back into the neutral area and further flat rate movement is expected now.

EURUSD. FOMC Meeting Minutes (October 12, 18:00 GMT)

Last Friday US labor market data was published and it was insignificantly lower than the forecast. Level of unemployment increased by 0.1% from 4.9% to 5.0% while theNonFarm result was 156,000 against forecasted 175,000.

Despite the fact that the level of unemployment remains significantly lower that 6% (optimal value) it keeps increasing (in June the level of unemployment was 4.7%) and market participants start to worry about the future of US labor market.

Now traders emphasize the FOMC Meeting Minutes report as most likely some information and vision regarding the future of US economy will be described there. If market participants won’t find the ways how to solve all the issues in US economy then there will be a high chance that the refinance rate will remain on the same level and that is why USD might be under pressure.

EURUSD chart

There is still a flat rate movement on EURUSD D1 chart and the rate is moving in the narrowing price range (highlighted with yellow on the price chart). According to the indicator of technical analysis “Awesome Oscillator” the possibility of downward rate movement prevail. Also, the factors of fundamental analysis point at the same scenario.

NZDUSD. Reserve Bank of New Zealand Meeting (Rate Decision) 21 September 21:00 GMT

New Zealand’s economy is going through the opposite. The country’s economic stats are continuously improving, which is backed up by the latest GDP data, which – although still at a high level – is gradually slowing down.

Over the course of the last year and a half the NZRB have already cut the rates several times, and experts believe the practice could continue.

Dynamics of interest rate of New Zealand change between 2012 until now:

Should the refinancing and the interest rates indeed get cut, it might have a negative effect on the New Zealand dollar.  

NZDUSD chart:

Last week the rate broke the bottom line of the upward trend and according to the indicator of technical analysis “Awesome Oscillator” further downward rate movement is possible as the zero-line was breached.

What is more, there will be plenty of fundamental reports which might have an impact on the national currencies of these countries and the downward trend might accelerate.

8 uncommon ways to become a disciplined trader

Many of you have been asking about the ways to control your emotions and be in charge of the situation. We have gathered 8 tips that you might not heard of before but you will definitely agree with us on their effectiveness.

1) Do not play the money game

Are you playing the money game? You need to stop and start playing the game of discipline. Switch your attention to the self-control. Play the game of checking yourself and having the control in your hands. Watch your discipline grow and not the account (it is good with the demo funds for sure). Let the others go greedy, you are stronger and you can handle it!

2) Skilled trader is watching

Have you heard of any famous skilled traders? Like Richard Dennis, for example. So imagine Richard Dennis sitting next to you and watching you trade. He has carried out so many trades, conqured the market and has become a trading icon and now he is behind your back, eager to see how well you can manage, will you save your face?

Once you realize the responsibility you bear, the emotions will go away, you will cool down and weigh every deal you conduct. Analyze, let your mind think ahead of the trade. Surprise him with your skills!

3) Talk to yourself

“Do I want to be like everyone else and trade without any strategy or discipline? No way, I will do my homework, get ready and make the right choice. As a result of this deal I will get $10 000!” Yes, make promises to yourself, step by step you can assure yourself of your future winnings and encourage the inner trader.

4) Write it down

Why do you trade? What do you wish to achieve? Think of these, write them down. Shape the aim and what needs to be done to achieve the goal. If you can not think of anything particular, then why are you here?

5) No stress

Discipline should not be a burden to you. You must not fight yourself to get organized. You must love the state of being disciplined, as it is your choice to be the winner. Create your own plan and follow it, the process must overwhelm you and make you realize that this is the only right way. Once you love it, you will achieve it!

6) Do it for your family

Do you have someone close to dedicate your victories to? Think of someone inspiring, become disciplined for them, if you can not do that for yourself. Promise them you will do that for them (in mind or in the real life) and imagine bringing them down if you do otherwise.

“Oh, what would dad think of me now?!”

7) Procrastinate

Postpone being emotional and undisciplined. Promise yourself to be disciplined today only but then start the new day with the same mood. This is a great human trait, putting off things for some other time (which often never comes  )So use it in your favor. Cheat your brain and become disciplined on a daily basis.

8) Process VS result

Many traders trade for the result and not for the process sake. Try to see your trading succes not through the profit prism but through the growth of your discipline.

After each trade you can ask yourself: “How disciplined I was this time, where did it take me?”.

If you were 100% disciplined and yet the deal got closed with no profit, you have still done well, praise yourself for the diligence. The error was with the system and not on your side. Yes, it is not what you expected but it is an experience you will be able to use and implement it in your strategy.

Australia’s GDP Report (7 September 01:30 GMT)

The economy of the Pacific region continues going through a tough time: GDP growth of China – the main trading partner to Australia and New Zealand –  is slowing down, tradable commodity prices remain low, domestic demand is showing no signs of improvement.

That’s why the Bank of Australia had to cut the refinancing rate by 25 basic points (from 1.75% to 1.50%) to stimulate the country’s economy.

Should the GDP figures turn out to be disappointing as well, it will have a negative effect on the Australian dollar.

What is more, this Tuesday at 07:30 GMT +3 representatives of Bank of Australia will held a meeting and they will consider whether the rate should should be changed or not.

..it is expected that the rate will remain on the same level, but market participants will pay a lot of attention on RBA Rate Statement report which will be published right after the meeting.

AUDUSD chart:

An upward trend still can not accelerate on AUDUSD D1 chart, as after each and every upward rate movement (highlighted with yellow lines on the price chart) there was a downward correction. It is highlighted on the price chart that there is a high probability of AUDUSD rate to start increasing yet again and the indicator of technical analysis “Awesome Oscillator” proves it. But traders have to be accurate as the strength of the upward trend is decreasing.

Trading Signals 2016-09-06

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 GBP/USD          Duration  1 h.

 AUD/USD          Duration  1 h.

7 Risks in Foreign Exchange Market

Foreign exchange market (Forex) is the biggest challenge a market can offer you. With its average traded value of approximately $383 billion per day, Forex market surpasses by far any other market out there, including the stock market.

There are many opportunities Forex puts at your disposal, but there is also a great deal of responsibility whenever you play this game. Assets are volatile 24 hours a day, so certainty has no place in this world. However, there are seven main currency risksthat you can avoid. Let’s see the stages of your Forex activity requires more caution from your side.

1. Interest Rate Risks

Your main focus in dealing with the Forex risks should be the interest rate. The interest rate is influenced by the 8 global central banks, which base their decisions on external economic indicators (The Consumer Price Index, Consumer Spending, Employment Activity, Subprime Market or Real Estate Sales). Follow Economic Calendar.

The higher the interest rate, the higher the profit. However, currency fluctuation has a volatile nature, and this is your risk point.  Predictions are not equal to certainties, and your large bet can be lost by dramatically weakened currency.

2. Country Risk

Currency risks depends a lot on the economic phenomena a country goes through. Before investing in your chosen currencies, you should research the level of stability of the country in question. Any feeble rumor which concerns the economic aspect of a country has great power. The investors can withdraw their assets whenever they want from the Forex market under the pressure of even the thought of losing them, triggering a domino effect.  More and more investors will consider retreating a safe strategy, hence a rapid decrease in currency value.

3. Transaction Risk

Due to the unpredictable fluctuation of the Forex market, the currency values can experience a sudden change any moment of the day, and it won’t take your contract regulations into account. As long as the exchange market has a capricious nature, you won’t be safe from risks. Individuals and companies must assume the risk of paying substantial transaction costs that are likely to occur between the moment their contract is decided and the moment their contract is activated.

4. The Risk of Ruin

The risk of ruin can become a reality whenever there is risk-reward ratio bigger than 3:1. That is, however, a too limited safety measure, but beyond this ratio you are hunted by great risks. For the binary options it means that if income percent goes lower 50%, you are taking big risks. The risk of ruin intervenes in any emotional activity. Thus, this makes the risk of ruin a reality in the foreign exchange market.

In order to minimize this risk, it is recommended to resort to diversification. Don’t place your assets on a single bet. This strategy allows you to cross some boundaries, but only on educated guesses also.

5. Settlement Risks

As the rules of Forex market depend on the 8 global central banks, the settlement risk plays an important role in your trading activity. The settlement risk is a side effect of the time zones of different continents. During the same trading day, the same currencies can be found at different prices. So, your success does not depend only on choosing a good day for your chosen currencies, but also a specific moment of that day.

6. Dictatorship Risk

This is when a government uses its influence to interfere directly in the Forex marketplace. It’s why it is important to also have a strong cultural knowledge of the world’s history. Even though this risk is the least probable one from this list due to the fact that all major currency markets are located in U.S., you should still pay great attention to worldwide events.

7. Technical risks

Most of the trading platforms nowadays are online to facilitate the access to anyone to the Forex market. However, no matter how many benefits the Internet provides us, we shouldn’t rely 100% on it. A low Internet disconnection or a website maintenance procedure might be the difference between winning and losing your assets.

All in all, these are the seven main risks of trading that you should take into account in your decision-making process. Once you strike a balanced connection between the risks you are facing and the opportunities you can take advantage of, you are ready to start your investment.

Indikator Relative Strength Index

EURUSD. Unemployment Rate (Aug) Report + Nonfarm Payrolls (Aug) on the 2 of September 12:30 GMT

Will Unemployment Rate and Nonfarm Payrolls august reports positively affect US ecomomy? During her speech last Friday the FOMC chairman Janet Yellen said that the possibility of a refinancing rate hike is increasing, because the labour market data and the GDP are both on an excellent level. All that’s left to do is to solve some issues pertaining to boosting the inflation and the rate hikes can continue. 

It is important to emphasize that a new cycle of rate US rate hikes is one of the most anticipated global economic events at the moment, because it might have a positive impact on world economy. At the moment there is a floating rate in the US = 0.25%-0.50% and it expected that it will be increased either to a fixed value = 0.50% or it will be increased by another 25 basis points up to 0.50-0.75%.

It is vital for labor market statistics to remain on a decent level so that further rate hike would be possible. During the last two months unemployment rate remained on 4.8-4.9% level (significantly lower than target level = 6.0%) while the NonFarm data remain on a very high level (over 250,000):

If the latest unemployment rate figures don’t disappoint, it will have a positive effect on the US dollar.

EURUSD chart:

After the press-conference held by Janet Yellen last Friday, US Dollar significantly strengthened on EURUSD D1 chart and the lower line of an uptrend was broken. What is more, according to the indicator of technical analysis “CCI” the lower line (-100) was broken and it means that there is a high chance of further downward trend.

USDCAD. Canada’s GDP Report (31 August 12:30 GMT)

Thanks to the consolidation of oil prices – Canada’s main export – the country’s economy has stabilized. This enabled the government to revisit its goals and methods and to optimize the spending. Just like in the other countries where the main export is a raw material, Canada is trying to venture more into high-tech industries and reprofile the economy.

That’s why if the GDP growth data exceeds expectation, it will give the Canadian dollar a boost.

On 2nd of August crude oil price got back to 47.64 level from 39.15 (increased by 21.56%) and even tested psychological level = 49.00 before that. It had a positive impact on Canadian dollar.

USDCAD chart:

There is still a tiny upward trend on USDCAD D1 chart, but according to the indicators of technical analysis “Relative Strength Index” and “ADX” there are no factors have an impact on the rate, it means that fundamental factors prevail at the moment.

Trading signals 2016-08-29

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 GBP/USD                Duration  1 h.

 EUR/USD                 Duration  1 h.

GBPUSD. UK Preliminary GDP Report (26 August 8:30 GMT)

Ever since the chairmen of Bank of England decided to cut the refinancing rate from 1.50% to 1.25%:

..England’s economy started showing signs of growth – inflation, retail sales and the level of unemployment as well as Producer Price Index significantly improved:

..while profitability of long-term bonds decreased. This tells us that economic risks are now significantly lower.

If GDP figures remain on a good level it will positively affect the price of Pound.

GBPUSD chart:

After the decision of representatives of Bank of England to cut the rate from 0.50% to 0.25% there are no massive price changed on GBPUSD D1 chart and the rate is moving in a narrow price range.

What is more, indicator of technical analysis “Relative Strength Index” proves it.

USDJPY. Japan’s Inflation Report (25 August 23:30 GMT)

Inflation is one of the more problematic aspects of Japanese economy at the moment. Low inflation level forces Bank of Japan to take unpopular measures – cutting the refinancing and interest rates, as well as introducing various monetary interventions.

Should the inflation figures turn out to be higher than previously expected, the Yen will likely get a boost.

Overall, due to the fact that Japanese Yen is increasing against the main currencies it is a perfect timing for representatives of Bank of Japan to apply unpopular economic measures, because it will help to boost the inflation as well as the overall economic growth. That is why some massive upward rate movements might occur on the price chart from time to time.

USDJPY chart:

The rate is still close to the most important psychological level = 100 on the USDJPY D1 chart (highlighted with orange). This level was tested couple of times lately, but it is yet to be broken (close price of these candlesticks is higher than specific level).

Still, there is a downward rate movement on the price chart (highlighted with yellow).

PIN BAR strategy

PIN BAR trading strategy

“IQ Option is gambling, lost it all”

Binary options are a hot topic at the moment, people search information online, read non-factual feedback and get scared away, we have therefore decided to come up with an article to clarify the difference between trading and gambling, as there is one.

In different countries regulators do not know whether to classify binary options as a financial instrument or gambling. This statement shows a shallow understanding of binary options as well as financial instruments and due to this fact we had to leave a number of countries lately, among them are Canada, Australia and Belgium as the latest. From today, that is August 18th, we have stopped providing services to both old and new customers from this country.

Gambling or financial instrument?

According to the Merriam-Webster dictionary, gambling is defined as “to bet on an uncertain outcome”. Isn’t trading any financial instrument according to this definition gambling? Well, it is if you are just looking at the outcome of one individual trade in isolation. If on the other hand, you are trading a system that has a positive expectancy then the outcome of a large enough number of trades is not uncertain anymore – you will be making profit.

The risk will always be there and the higher the payouts the riskier the investment is. With binary options, the payouts are high but the risk is fixed. You will never lose more than what you’ve invested in one position and with IQ Option the payout is always known in advance.

This is actually similar to bank deposits, you invest a certain amount of money, you may be protected up to a certain sum depending on your government, and the bank offers you a fixed annual percentage. However, with banks since the risk is relatively low so is the payout on those savings accounts. In most cases the payout doesn’t even cover inflation.

When you trade binary options, it is important to ask yourself:

1. What am I trading? If there is no system that can be developed that has a positive expectancy, then you are gambling and what you are “trading” is not a viable financial instrument.
2. How am I trading? If you trade any financial instrument without a strategy that has a positive expectancy, then you are gambling.
   
3. Let us take a look at a few examples to see whether you are gambling or trading.
   1. Playing the slot machines in a casino. This is clearly gambling as the odds are in the favor of the slot machines over time. If you play long enough you will always lose. The casino always wins.
   2. Trading options with a system that has a positive expectancy. This is clearly trading and not gambling as you will make money over time even though the outcome of any one trade is unknown.
   3. Trading assets without a system that has a positive expectancy. This is clearly gambling, as it is uncertain whether you will make money over time. So in this example, you can see that even though you are “trading” a financial instrument, what you are doing is still considered gambling.

   Some analysis can make a difference

   To sum up, if there does not exist a system of trading that has a positive expectancy, then you are gambling and what you are trading is not a financial instrument. Why? Because trading binary options includes risk management and both technical(indicators) and historical (news) analysis. Trading requires a lot of concentration and feeling of responsibility for the actions you take as there will be positive or negative consequences and you are solely responsible for them.
   Develop your trading system, build a strategy by training and learning, enhance your approach with analysis and don’t forget to address our support in case you need any advice on your profit line improvement.