New Argentine treasury minister set to take charge of troubled economy

© Reuters. Newly appointed Argentina's Economy Minister Hernan Lacunza attends a news conference at the Casa Rosada Presidential Palace in Buenos Aires © Reuters. Newly appointed Argentina’s Economy Minister Hernan Lacunza attends a news conference at the Casa Rosada Presidential Palace in Buenos Aires

By Hugh Bronstein and Jorge Otaola

BUENOS AIRES (Reuters) – A new treasury minister, Hernan Lacunza, took charge of Argentina’s troubled economy on Tuesday after the local peso took a dive last week following business-friendly President Mauricio Macri’s harsh beating in the Aug. 11 primary election.

Lacunza, formerly the chief of economy for Buenos Aires province, was sworn in by Macri before the local financial markets opened.

“I ask you to focus on reducing the cost that this electoral process is having on the day to day life of our people, and to reduce the uncertainties that are doing damage,” Macri told Lacunza during the swearing-in ceremony.

Macri, struggling to revive his campaign for a second term in the Oct. 27 general election, is betting that the new treasury chief can help stabilize the recession- and inflation-racked economy.

The cost of insuring against an Argentine sovereign default rose on Monday after opposition candidate Alberto Fernandez said the country would struggle under present conditions to repay a loan to the International Monetary Fund. Fernandez, a center-left Peronist, is the front-runner ahead of the October vote.

The peso tumbled 18% last week to 55 to the U.S. dollar.

In early action on Tuesday, the bond market registered more nervousness about a possible Fernandez presidency. Argentina’s portion of the JP Morgan Emerging Markets Bond Index Plus saw the country’s risk spread shoot to 1,880 basis points from 1,659 on Friday. Monday was a market holiday in Argentina.

Lacunza was expected to give a news conference to outline his policy plans later Tuesday morning. Outgoing treasury minister Nicolas Dujovne quit on Saturday, saying he believed the country needed “significant renewal” of its economic team.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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U.S. and Britain discuss trade deal that could take effect on Nov. 1

© Reuters. U.S. National Security Advisor John Bolton arrives for a meeting with Britain's Chancellor of the Exchequer Sajid Javid  at Downing Street in London © Reuters. U.S. National Security Advisor John Bolton arrives for a meeting with Britain’s Chancellor of the Exchequer Sajid Javid at Downing Street in London

LONDON (Reuters) – Britain and the United States are discussing a partial trade accord that could take effect on Nov. 1, the day after Britain is due to leave the European Union, a senior Trump administration official said on Tuesday.

The official also said visiting U.S. national security adviser John Bolton and British trade minister Liz Truss had discussed the possibility of the two countries’ leaders signing a road map declaration toward a trade deal at this month’s G7 summit meeting in France.

The official told reporters that Bolton and British finance minister Sajid Javid had discussed the possibility of a temporary trade agreement that covered all sectors and could last for something like six months.

During his two-day London visit, Bolton told British Prime Minister Boris Johnson that President Donald Trump wanted to see a successful British exit from the European Union on Oct. 31 and that Washington would be ready to work fast on a U.S.-UK free trade agreement.

Bolton, who has now left Britain, was seeking an improved U.S.-British relationship with Johnson after sometimes tense ties between Trump and Johnson’s predecessor, Theresa May.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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AUD lower: Australian flash PMIs key take away is on the employment market

The PMIs slowed a little in July, data is here ICYMI:

Still expanding, just more slowly.

  • Softer new order growth
  • a reduction in new export orders … manufacturers posting a decline for the third time in the past four months
  • slower rise in new orders
  • softer accumulation of backlogs of work
  • Outstanding business increased at the weakest pace in five months … manufacturers posted a decrease for the third time since April

And, this, bolding mine:

  • Employment decreased for the first time since April, and to the greatest extent since the survey began in May 2016. The overall reduction was centred on the service sector, while manufacturers continued to see job creation. 

ICYMI, the RBA is focused on the jobs market, wanting to see unemployment around 4.5% from its current 5.2% The Bank lowered its cash rate in June and again in July in effort to drive this forward. 

The employment indication in this report from CBA/Markit, while mixed (services down, manufacturing up) will be  a nigle for the RBA. Fowrad indicators for the labour market have turned for the worse. 

AUD lower:

The PMIs slowed a little in July, data is here ICYMI:

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YouTube: ‘We don’t take you down the rabbit hole’

Media playback is unsupported on your device

YouTube has defended its video recommendation algorithms, amid suggestions that the technology serves up increasingly extreme videos.

On Thursday, a BBC report explored how YouTube had helped the Flat Earth conspiracy theory spread.

But the company’s new managing director for the UK, Ben McOwen Wilson, said YouTube “does the opposite of taking you down the rabbit hole”.

He told the BBC that YouTube worked to dispel misinformation and conspiracies.

But warned that some types of government regulation could start to look like censorship.

YouTube, as well as other internet giants such as Facebook and Twitter, have some big decisions to make. All must decide where they draw the line between freedom of expression, hateful content and misinformation.

And the government is watching. It has published a White Paper laying out its plans to regulate online platforms.

In his first interview since starting his new role, Mr McOwen Wilson spoke about the company’s algorithms, its approach to hate speech and what it expects from the UK government’s “online harms” legislation.

Algorithms

YouTube uses algorithms to recommend more videos for you to watch. These video suggestions appear in the app, down the side of the website and also show up when you get to the end of a video.

But YouTube has never explained exactly how its algorithms work. Critics say the platform offers up increasingly sensationalist and conspiratorial videos.

Mr McOwen Wilson disagrees.

“It’s what’s great about YouTube. It is what brings you from one small area and actually expands your horizon and does the opposite of taking you down the rabbit hole,” he says.

Media playback is unsupported on your device

“Very often it doesn’t take you to content that’s exactly like the one you’ve watched before.”

Even so, Mr McOwen Wilson says YouTube has started adding a sort of “warning” label to certain conspiracy topics.

“If it’s misinformation, we provide correct information around that. We work with Encyclopaedia Britannica and Wikipedia to provide knowledge panels that come up on the side of the screen. So if you’re watching a flat Earth video… we will present to you a link to the facts about that.”

Facebook used to do something similar with fake news. It would label false stories as “disputed” with a red warning label, and offered up other sources of information. But the social network later said this had often entrenched people’s pre-existing views and made the problem worse.

“We haven’t found that,” says Mr McOwen Wilson. He says the platform reduces the spread of content designed to mislead people, and raises up “authoritative voices”.

He names BBC News, the Guardian, the Telegraph and the Sun as examples of authoritative sources.

Some conspiracy theories – such as Holocaust denial – have been banned on the platform completely.

LGBT row

In June, a row erupted between two YouTube video-makers.

Vox reporter Carlos Maza posted a video showing all the times that comedian Steven Crowder had mocked him for being gay, or used insulting language attacking his sexual orientation and ethnicity. Mr Crowder said the videos were “friendly ribbing”.

After a series of muddled statements on Twitter, YouTube eventually confirmed that Mr Crowder had not broken its hate speech rules.

“Was the language used hate speech? Was there incitement against Carlos Maza from the other creator? In that instance, we found that there was not,” says Mr McOwen Wilson.

“I think that remains the right policy decision to have made.”

That decision disappointed Mr Maza’s supporters – and many of YouTube’s own staff. More than 100 signed a petition asking for Google to be kicked out of the San Francisco Pride parade.

The language may not have been “hate speech”, but critics argue that mocking somebody for being gay crosses a line into bullying.

“It doesn’t currently breach our harassment policies,” says Mr McOwen Wilson.

But he adds: “We are inarguably pro-LGBT. I wouldn’t want anyone to judge us only on that. I don’t think it invalidates everything else that we’ve done.”

He points out that YouTube has provided a platform for people to express their sexuality in a largely “supportive environment”.

“I don’t think any of that should be invalidated because of where we have drawn this line on the Maza-Crowder issue.”

Time well spent

YouTube tells its video-makers that one key to success on the platform is “watch time”: making sure viewers stick around for longer.

Facebook, on the other hand, has been talking more about “time well spent” on the platform. It says it is more important that people have a good time on Facebook.

How do the two approaches compare?

“One of the biggest and most positive steps that was taken on the platform, that drove down a huge amount of trashy content, was the shift from ‘views’ to watch time”, says Mr McOwen Wilson.

“The best way for an audience to tell us whether they like what they’re being served isn’t whether they click on it in the first place, but whether they spent any of their time with it.”

But does the system encourage video-makers to make longer videos, and draw out simple how-to clips into a 20-minute extravaganza?

Mr McOwen Wilson says the videos which are most viewed are those that people watch in their entirety.

And he adds: “Clearly a longer one that is viewed the whole way through by the majority of its audience is more likely to come up.”

Regulation

The UK government is currently weighing up how online platforms such as YouTube could be regulated. In April, Culture Secretary Jeremy Wright said the “era of self-regulation for online companies is over”.

Is YouTube worried?

“The moment you put somebody in charge… there is somebody who is filtering what content goes out,” warns Mr McOwen Wilson.

“If they’re government-appointed, that begins to look very much like censorship, and we don’t launch in markets where that is a risk.

“I don’t think it would be the right answer to have anybody at YouTube – or indeed anywhere else – editorialising all of the content that comes up on to our platform.”

And either way, it would be impossible. About 500 hours of video are uploaded to YouTube every minute.

The summer holidays have started – or are about to start – across the UK for thousands of children.

“By the time most of them go back to school, there will be more content uploaded to YouTube than has ever been created in the history of television or film globally,” says Mr McOwen Wilson.

He suggests a regulator could determine areas where online platforms should have policies, but the platforms themselves should create the policies.

“The world will be watching where the UK lands on this,” he says.

“There are regimes out there who will mirror – in their own ways – the position that they view the UK has taken.

“There is a risk – and actually a huge opportunity – for the UK to show leadership on what balanced regulation could look like in an open environment.”

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If you think about trading USDCAD, take two aspirin and lie down until the feeling goes away.

Brutal up and down price action

Looking at the USDCAD price action of late, I am reminded of what an old colleague of mine at Citibank used to say when markets were particularly choppy. 

He would say “If you think about trading ____________, take two aspirin and lie down until the feeling goes away.”   

You can fill in the blank with the “USDCAD” of late.  There has been lots of choppy action including today’s run lower on the higher core CPI, and the snap back rally that erased the declines.  

Nevertheless, in the ugliness, is there any broader technical themes in play when you see such price action.  This is what I think:

  1.  Realize that anything is possible.  I am always looking for a break in an up and down market, but realize that there can also be failures
  2. On the chart, find technical areas that “seem” to be working.  Put faith that they will  give bias clues and levels to lean against to define risk, 
  3. Be humble and don’t fall in love with positions
Brutal up and down price action

Looking at the hourly chart of the USDCAD, the 1.32966 area was home to 4 swing lows (see red circles). Yes there was a failed break on April 9 (anything can happen), but subsequently the price level was reestablished as a low on Monday (red circle 3 and 4).  Key level. 

The other thing is the 200 hour MA (green line in the middle of the chart) has done a good job of dissecting bullish and bearish bias in the middle of the up and down range.

Finally, there is a double top at the highs (see green circles 1 and 2). That was yesterday’s “best trade”.

So what happened today?

The price fell below the 200 hour MA earlier and stayed below (bearish).  On the CPI data, the pirice tumbled lower and below the 1.32966. That is even more bearish. The price should have gone lower below the 1.32966 level.  It did for a little while reaching 1.3273 on the break. 

However, the price rebounded and then held the low from April 9 at 1.32832.  Having the mindset that “anything can happen”, a red flag goes up.  You gotta be careful. You also have to be humble and realize you can’t be in love with positions. 

So sellers shifted – despite the bullish news – and turned to buyers.  The race was on to the upside.  

The price rise got close to the 200 hour MA (green line) at 1.33454 (high reached 1.3339). Sellers may be leaning and hoping the price stays below.  

What now?

You always have the option to take two aspirin, lie down and wait for the trading feeling to go away. 

Alternatively, you can lean against the 200/100 hour MAs and hope that the buyers off the low, are sellers against the MAs above.  

The hope is the the price retests the 1.32966 level again, but remember, anything can happen and be humble.  It will help you make sense of horrible up and down price action.  If you are lucky and nimble from the homework, you may make a few bucks (but don’t fall in love with the position).  

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Formula One celebrates 1,000th race, give or take a few

© Reuters. F1 Formula One - Austrian Grand Prix © Reuters. F1 Formula One – Austrian Grand Prix

By Alan Baldwin

LONDON (Reuters) – Formula One celebrates its 1,000th world championship race this weekend at the Chinese Grand Prix in Shanghai, one of the sport’s newer tracks, but the milestone requires careful wording.

The sport has often had a problem with anniversaries, with statisticians quibbling over how many starts teams and drivers have made according to different definitions, and this one is no exception.

The fact is that some of the 999 championship races thus far have been questionable grands prix and several past race winners never even drove a Formula One car.

From 1950 to 1960 — 11 races in all — the Indianapolis 500 was included as part of the championship even if very few Formula One drivers crossed the Atlantic to compete in it and homegrown racers took all the points and raced to their own rules.

Bill Vukovich finished seventh in the 1953 Formula One championship, and sixth in 1954, after winning the Indy 500 in those years but racing in no other rounds.

His death in the 1955 Indy technically made him the first driver to be killed while competing in a Formula One championship race.

Yet Vukovich never drove a Formula One car even if his F1 record stands at a remarkable two wins, one pole position, three fastest laps and 19 points from five races — all of them in Indiana.

By the time Britain’s Jim Clark won at The Brickyard in 1965, followed by compatriot and fellow F1 champion Graham Hill in 1966, the Indy 500 was no longer part of the F1 calendar.

In 1952 and 1953 the world championship was run to Formula Two rules due to there not being enough Formula One cars to fill the grid after Alfa Romeo pulled out.

That means, therefore, that 26 races included in the championship tally since the first at Silverstone in 1950 did not actually feature Formula One cars.

The sport cannot truly say China is the 1,000th grand prix either, since there have been such events since the early 20th century when France set the terms and language of automobile racing.

Hungarian driver Ferenc Szisz is generally regarded as the first winner of a grand prix, at Le Mans in 1906, while the Monaco Grand Prix, glamour race of the current calendar, dates back to 1929.

Silverstone, a former World War Two airfield in central England, hosted grands prix in 1948 and 1949 before Giuseppe ‘Nino’ Farina won the first Formula One world championship race there on May 13, 1950.

Calling China the 1,000th Formula One race would be similarly inaccurate since there have been numerous non-championship Formula One races staged down the decades.

The last was at Brands Hatch in 1983 when reigning world champion Keke Rosberg stood on top of a podium that also featured American Danny Sullivan and Australia’s 1980 F1 champion Alan Jones.

Nigel Mansell, Formula One world champion in 1992, was a non-finisher that day.

While it is often stated that only two women have raced in the Formula One world championship, South African Desire Wilson won a round of the British Formula One championship in a Wolf at Brands Hatch in 1980.

South Africa also had its own local Formula One championship in the 1960s and up until 1975.

The 1,000th race to count toward the official FIA drivers’ world championship standings? More accurate perhaps, if not exactly catchy.

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Take Five: The shape of you – world market themes for the week ahead

© Reuters. Traders work on the floor of the NYSE in New York © Reuters. Traders work on the floor of the NYSE in New York

(Reuters) – Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them.

1/ YIELD CURVEBALLS

Which is it – growth or gloom? With 10-year U.S. bond yields below 3-month T-bill rates for the first time in more than a decade, recession fears are swirling. After all, an inverted yield curve, when longer-dated yields drop below shorter maturities, have proved to be fairly reliable predictors of U.S. recessions in the past. As a result some investors are busy putting cash behind bets the Fed is gearing up for rate cuts.

But there are many who scoff – they point to a world economy chugging along at a decent clip, dovish central banks and company earnings that are still growing, albeit more slowly. So while Treasury yields are down 30 basis points this quarter, world stocks are up more than 10 percent. Recession skeptics may also note that U.S. equities are not far off record highs and credit spreads have retraced most of their December losses.

Also, while past recession discussions have focused on inversions of the 2-year/10-year U.S. curve, that hasn’t reacted so far. Fed policymakers too, such as voting member John Williams (NYSE:), say they are not worried about recession this year or the next. Others such as James Bullard seem to be endorsing the “this time is different” argument, hinting that the curve’s predictive power has weakened.

But policymakers around the world have already taken heed. The ECB has hinted at further rate cut delays and at tiering interest rates to help banks; other central banks, from New Zealand to Canada, are hinting at rate cuts ahead.

2/THE END OF THE ROAD?

No. No. No. No. Parliament’s cold response to Prime Minister Theresa May’s Brexit deal so far means the manner of Britain’s exit from the European Union – originally scheduled for March 29 – is unknown.

Brussels has let Britain delay its departure while May battled to find a way forward but there is little enthusiasm in parliament or the population even for the stripped-down version of May’s twice-defeated deal. But lawmakers have also given the thumbs-down to a series of other amendments, including revoking Brexit, delaying it further or holding another referendum.

Dismayed investors have been avoiding the pound but the resulting shortage in trading volumes just exacerbates price swings. The question now is whether the most hardline Conservative euroskeptics and Northern Ireland’s DUP, the party propping up May’s government, can ever be convinced to back an exit deal before the new April 12 deadline.

If the withdrawal agreement does somehow scrape through, sterling would likely surge above $ 1.35. For the time being though, the bleak, if unlikely, alternative scenario – a chaotic no-deal departure – persists.

Options markets aren’t optimistic. The price investors are willing to pay for one-month sterling protection – insurance against sterling falls – is at the highest since the 2016 referendum vote.

3/WORKIN’ FOR A LIVIN’

U.S. factory job growth was its weakest in February since the summer of 2017 but still managed to extend the streak of monthly gains to 19, the longest in nearly a quarter century. If, as expected, Friday’s March payrolls report makes it 20 in a row – economists polled by Reuters predict a 10,000 increase – it would mark the longest uninterrupted run of manufacturing employment expansion in a generation, matching the run from January 1983 through August 1984.

But while comparable in length, the current manufacturing renaissance pales in terms of total jobs created. Back then, U.S. factories added 1.34 million workers, more than three times the 417,000 new jobs since the current streak began in August 2017.

For early clues on the jobs data, cast an eye on Monday’s ISM Manufacturing Index. Its employment component is closely correlated with the Labor Department’s manufacturing payrolls series. ISM’s February reading on factory employment, at 52.3, was the weakest in more than two years. Should it drop below 50, the level separating expansion from contraction in the ISM series, it could signal an end to manufacturing employment’s long run. The last time ISM had a sub-50 print was September 2016. That month, U.S. factories cut 3,000 jobs.

4/DEAL WITH IT

A month has passed since the United States and China missed an initial deadline to agree a trade deal. The first face-to-face meetings between the two sides since that deadline were apparently “constructive” and “productive”; now Chinese Vice Premier Liu He is to travel to Washington for further talks.

In the meantime though, tariffs on Chinese goods worth $ 250 billion are in play and that is hurting – China as well as its Asian neighbors who are linked to it through complex supply chains. March Purchasing Managers Indexes are expected to show a further deterioration in sentiment across the region and another source of pressure is the worry of a recession in the United States.

The one thing preventing panic is the hope Beijing will provide enough stimulus to offset slowing trade. Central bankers around Asia have started hinting at interest rate cuts, relieved at the end of the Fed’s policy-tightening campaign. But the upcoming activity data might show how soon they need to act.

5/NO THANKSGIVING FOR THIS TURKEY

Last year’s lira crisis tipped Turkey into a painful recession, ended its credit-fueled economic boom and complicated President Tayyip Erdogan’s task of selling his economic success story to voters. They are headed to the ballot box on Sunday for the first time since last year’s currency meltdown.

Polls suggest Erdogan could lose Ankara, the city from which he has ruled Turkey with an increasingly iron grip since 2003. His AK Party could face a tough race in Istanbul, where Erdogan was once mayor. But policymakers’ efforts shore up the currency before the election have run into trouble and moves to curb offshore lira supply has pushed investors into selling Turkish stocks and bonds.

The question now is how quickly policymakers will normalize their approach to markets. And even if they do, will pressure on the lira ease up and can they win back the trust of investors, some of whom will have taken losses from the recent episode? For an economy that’s already reeling how much damage have these unorthodox measures inflicted? And finally, will the stress percolate to European banks active in Turkey? BBVA (MC:), Unicredit (MI:), ING, HSBC and BNP Paribas (PA:) all have varying degrees of exposure.

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Italian leaders take aim at central bank

Populists say central bankers need to be held responsible for bank weakness

League chief Matteo Salvin said on Saturday that the  Bank of Italy and the market watchdog need to be cleaned out.

“We are here because those who should have supervised didn’t supervise,” he said at a gathering of former clients of banks that were wound down in 2017.

Three of the bank’s five-member executive have terms due in the next four months.

Bank of Italy Governor Visco started his six-year term in 2017 despite opposition from Di Maio.

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How to make sure that you take all your profit

Tips for taking profits

Tips for taking profits

Trading is a game of patience and mental resilience. If you want to get your pips of profit from the market, you need to be like a hunter: determine the exit levels in advance and stay on a stakeout until the market settles the bill.

A feather in the hand is better than a bird in the air. That’s why we have a positive opinion about take profit orders in general. You never know whether the market will be able to give you more, so it’s necessary to place a TP somewhere and not to be too greedy.

Ways to find a nice spot for a TP

Different trading strategies imply different techniques of placing take profit orders, so we will review several options here.

Support and resistance levels

It’s a simple but elegant solution. The most evident S&R levels (trendlines, previous highs and lows, Moving Averages, Fibonacci, pivot points, etc.) act as a magnet for the price. Billions of traders recognize them and tie their orders to them, so it’s only natural that the price goes there.

Don’t forget to check higher timeframes as there can be recognizable levels that are ideal for TPs. If several things point at the importance of a particular level, there are even more reasons to use it as an exit point.

In most cases, it’s safer to be a little conservative and place a TP a few pips below the resistance and a few pips above the support. After all, S&R are not levels as such but more like areas. In fact, this piece of advice is good for other methods of locating TP as well. 

Fibonacci retracement

Fibonacci retracement and moving averages offered a good place to take profit in GBP/USD long. 

2. Chart patterns

Chart patterns (Head and Shoulders, Double Top and Bottom and more complicated ones like the harmonic Gartley and others) offer rather distinct guidance on where to put a TP. The best thing is that this guidance has a solid logical foundation. For example, H&S shows how traders gradually lose confidence in a trend.

This pattern attracts attention of many investors who are willing to trade the reversal. As a result, in the majority of cases, the price goes down as much as the height of the pattern and it often happens that a bigger downtrend follows.

head and shoulders

A H&S and a round level offered a place for a TP in EUR/NZD short. The market went further down, but that can offer ideas for further trades: there’s no point in trying to catch all moves of the market in a single trade.

3. Daily scope

It’s always necessary to judge the relative size of candlesticks on the chart to estimate the scope of the potential price movement and the time it will take to arrive there. The ATR indicator can give you a hand in measuring volatility during a certain period of time. Add the value of ATR to your entry point and you’ll get your TP. Notice though that it would make sense to adjust it for the evident S&R levels you see nearby.

EURUSD chart

Daily ATR is 64 pips. With EUR/USD already up by 20 pips, it’s possible to set a TP for a buy trade 40 pips away.

4. Your level of risk

It’s a golden rule of trading: your potential profit in a trade should always be bigger than your risk. As a result, you can start from risk: if you have determined a specific stop loss, you can calculate TP using an acceptable risk/reward ratio. A classic solution is a risk/reward ratio of 1:3 (if a SL is 20 pips, the TP should be 60 pips). 

Intraday traders can use time TPs in order to have all trades closed before the end of the day. Although this approach is worthy of existing, it looks too detached from what’s actually happening in the market, so it is not our first choice.

If you choose not to set TPs in advance and “see how it goes”, then you can take cues from big candlesticks (they are usually followed by consolidations or corrections, so it can be wise to take profit right after them), divergence between the price chart and oscillators (as well as overbought/oversold oscillators) and the appearance of a signal in another direction. Yet, experience shows that if you are doing something more than scalping, it’s wise to keep calm and set a TP.  

Conclusion

A poorly placed take profit can kill a brilliant trade idea. Don’t underestimate the importance of this step in your trading and always make sure that you are acting in line with the rules of risk management.

The art of a good take profit is the ability to keep in mind several things (S&R, average range, risk/reward ratio) and find a TP position that would fit them all in a maximum possible way. Another critical thing: don’t move your take profit closer to the entry price and fight the temptation to manually close a trade ahead of time: you should have trust in your initial analysis and planning. Otherwise, there will be no point in searching for a good place for a TP.

Remember that the market loves planning and precise execution – these are the vital elements of a sustainable profit. Good luck!     

This article was submitted by FBS.

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Take Five: The Year of the Bear! World markets themes for the week ahead

© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York © Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York

(Reuters) – Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them.

1/BEAR HUGS

After swallowing markets from Germany to China, the bears reached U.S. shores in December.

Markets there are fighting back but the outlook is not great. For one, growing numbers of global indices have notched up the 20 percent peak-to-trough drop denoting a bear market. U.S. stocks, which seemed invincible until mid-year, have posted the worst December performance since the Great Depression. Second, the world economic outlook is steadily darkening and upcoming PMI data should confirm that.

Sure, the U.S. economy is still expanding nicely. But when high-growth, investor-darling tech stocks fall prey, it shows optimism about growth is fizzling. And segments such as the small-cap benchmark are stuck deep in the bears’ lair. Small firms often carry higher debt loads than larger peers so falling share prices highlight credit risks.

In Europe, Germany’s fell to the bears in early December and the euro zone bank and auto sectors are down a whopping 40 percent and 36 percent respectively from this year’s peaks. This week, the leading pan-European equity index confirmed it too had entered bear territory, following Wall Street’s Christmas Eve shakeout.

– How bears are taking over world stock markets

– After Fed selloff, is a U.S. bear market next?

– China’s factory activity seen shrinking for first time since 2016

https://tmsnrt.rs/2RcN2S6

https://tmsnrt.rs/2A3z63h

2/ PART OF THE JOB

U.S. President Donald Trump had several things going in his favor as he headed into 2018, and the two he most frequently trumpeted were the roaring stock market and booming jobs market. As we leave the year, the picture has changed somewhat, with U.S. stocks enduring their worst month since the financial crisis. But … he still has that strong jobs market. December’s non-farm payrolls data is due on Friday (it will be reported despite the government shutdown) and the 178,000 new jobs estimated to have been created will push total U.S. employment over the 150 million mark for the first time ever.

And as employment expansions go, this one is starting to rival some of the biggest in the past 40 years or so. Since hitting a post-crisis low in February 2010, more than 20 million jobs have been created. Under Trump’s watch, more than 4 million have been added. Assuming this pace is maintained, the current run will, by this time next year, surpass the 21.1 million jobs created between December 1982 and June 1990 under the Ronald Reagan and George H. W. Bush administrations.

It will still take some time to catch up with the 1990s, however. Between May 1991 and February 2001, more than 24.5 million jobs were created, most of that under Bill Clinton’s presidency.

U.S. job growth slows in November, monthly wage gains modest

https://tmsnrt.rs/2AiHmw8

3/A YEN FOR SAFETY

As 2018 fades, Japanese policymakers’ hearts must be sinking. The yen has zoomed to eight-month highs versus the dollar, stocks sank into bear territory and 10-year bond yields sank below zero for the first time since Sept 2017.

All the data, from price growth to industrial output and retail sales, shows disinflationary clouds gathering — yet again. By all accounts, Japanese funds are retreating from U.S. equity and bond investments, driven out by prohibitive hedging costs. That, along with an inflow of safety-seeking foreign cash, could lift the yen further. So any dreams the BOJ might harbor of ending stimulus are receding further into the future.

Here’s a thought though. Could the yen’s safe-haven status come into question? After all, Japan’s export-focused economy is vulnerable to a trade war, and an upcoming sales tax hike rekindles memories of 2014, when a similar measure hurt the economy. And notwithstanding dovish BOJ signals, officials privately acknowledge the demerits of prolonged easing, notably the hit to financial institutions from negative interest rates.

– Japan factory output falls, sales slow as risks to economy rise

– Japan bond yields fall deeper into negative as domestic, foreign money rushes in

– Japan’s cabinet approves record $ 900 bln budget, aims to soften sales tax blow

https://tmsnrt.rs/2S8LwOk

4/ SENTENDO L’AMORE

Investors are back in love with Italy, where a budget deal with the EU has put 10-year bond yields on track for their biggest monthly fall since July 2015. They affirmed their love at this year’s last bond auction, agreeing to lend 10-year cash to the government at 2.70 percent — in November they held out for 3.24 percent.

But Italy will test the relationship again next month, when it sells 27 billion euros’ worth of new bonds.

January will be Italy’s heaviest month for bond sales in 2019. Sales are typically heavy at the start of a year, but the difference this time is that the European Central Bank will not be buying. After ending its asset purchase program, it will reinvest the proceeds of maturing debt but has allocated a smaller share of the pie to Rome next year.

In total next year, Italy hopes to sell bonds worth 250-260 billion euros. So will private creditors step into the breach? Perhaps not — local retail investors gave the cold shoulder to a specially targeted bond last month. With the ECB backstop fading, a weak economy and still-high political risk, Italy may find it still needs to woo its investors if it is to stay afloat next year.

– Italy budget deal pushes bond auction yields back to pre-selloff levels

– Italy needs to woo private bond buyers as ECB bows out

– Italy’s bond market cheers budget deal with EU

https://tmsnrt.rs/2R5PrxY

5/ DOLLAR DARLING

As bears maul equities, where does one hide? The answer seemingly is: the dollar. Bank of America (NYSE:) Merrill Lynch’s monthly investor survey showed the greenback regaining the "most crowded trade" crown, snatching it back from the FAANG/BAT tech stocks group. The dollar dash is unsurprising — it’s liquid, U.S. yields are high and the U.S. economy is growing faster than other developed countries.

A word of caution though. Investors following the "most crowded trade" bandwagon have fallen flat on their faces in recent years. They went into 2017 loaded up with dollars but the greenback fell relentlessly after that, ending the year with a near-10 percent loss.

In December 2017, the most crowded trade, according to the BAML survey, was — a 70 percent rout ensued in 2018. We can rule out a fall of that kind for the dollar. But the U.S. yield curve suggests an economic slowdown is ahead, if not recession. So notwithstanding the robust labor market, the Fed may struggle to raise interest rates much more. An investor exodus from U.S. stocks and bonds would not be good news for the dollar.

– King Dollar’s reign faces challenges in 2019

– Investors gloomiest in a decade about world economy – BAML

– Fed still the only hiker in town, but dollar refuses to play ball: McGeever

https://tmsnrt.rs/2R9NaSj

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