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Market Wrap – September 2019

Concerns over global growth, Brexit’s looming deadline and the ongoing trade wars continue to dominate markets in September.  The head of the International Monetary Fund (IMF) Christine Lagarde has said in a recent interview that the trade war between the United States and China is weighing on the global economy ‘like a big, dark cloud’.  Ms Lagarde asserted that the ongoing tariffs are forecast to remove 0.8% off global economic growth in 2020. “That’s a massive number.” Lagarde said in an interview. “It’s fewer jobs. It’s less business going on. It’s less investment. It’s more uncertainty. It weighs like a big, dark cloud on the global economy.”

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How Long Should I Hold an Open Position in Forex Trading?

One of the biggest challenges of forex trading for beginners is knowing when to close your position. When your open position keeps rising in value, it’s tempting to believe the earnings will never stop. And when prices take a turn for the worse, pride and ego are often begging you to hold on and wait for things to turn around.

But timing is everything. When you hold an open position for too long, it almost always ends up eating away at your profits. In general, how long you should hold an open position is dictated, at least in part, by the type of trade you’re trying to win. Different traders use different strategies to turn a profit on forex price movements, and it’s always important to stick to your guns when allowing a strategy to play out.

With that in mind, here are some guidelines on how long you should hold an open position, depending on the type of strategy you’re using.

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Why So Many Traders Use Technical Analysis

It is fair to say that the foreign exchange market is very news driven.  For example, a central bank governor says something unexpected and there can be a significant impact on currency prices in a short period of time.  Even something as simple as a different word used from the previous month, to describe market conditions can send a ripple through the markets.  

When central banks change monetary policy and change the official cash rate, that countries’ currency may also move very quickly.  

There are also numerous regular reports which provide an insight into how well an economy is performing or not.   These can lead to assumptions on what central banks decide to do in order to stimulate an economy or keep in inflation in check, which then has a direct impact on currency prices. 

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Market Wrap: August 2019

Global growth (or lack thereof), Brexit and trade wars were the main concerns in August, however it was the trade wars between the United States and China that resumed its spot in the limelight in the markets.  According to some market strategists and US economists, the ongoing trade wars increases the chances of equities declining and more significantly, a global recession over the next 12 months. Morgan Stanley’s chief economist, Chetan Ahya has suggested that the global economy would fall into recession around six to nine months after the U.S. and China enforce their new round of tariffs.  “Risks remain skewed towards further escalation at least until material market or economic weakness shows,” Ahya told clients in a note.

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MT4 vs. MT5: Which Forex Trading Platform Should You Choose?

If you’re involved in forex trading, you probably have at least some familiarity with the Metatrader 4 and 5 platforms. These software solutions rank among the most popular trading platforms for a wide range of traders and advisers, thanks in large part to the value of their trading tools and resources when evaluating positions and taking action.

Although their names might suggest that MT5 is an updated version of this trading platform, the reality is that these two solutions offer different functions and features that serve distinct trading audiences. Choosing whether to use MT4 vs. MT5 can depend on your background and your trading goals, among other factors.

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Market Wrap – July 2019

 

Throughout July, the trade talks (or lack thereof) between the United States and China have taken a back seat as a leadership change in the United Kingdom along with its looming Brexit deadline have been a focus, as well as ongoing concerns about global growth and the U.S. Federal Reserve’s first rate cut since 2008.  The International Monetary Fund (IMF) trimmed its forecast for global economic growth again thanks to trade wars, inflation concerns and Brexit. “Risks to the forecast are mainly to the downside,” the IMF said. “They include further trade and technology tensions that dent sentiment and slow investment; a protracted increase in risk aversion that exposes the financial vulnerabilities continuing to accumulate after years of low interest rates.  Mounting disinflationary pressures that increase debt service difficulties, constrain monetary policy space to counter downturns, and make adverse shocks more persistent than normal.”

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What To Know When Trading GBP/JPY

Known informally among forex traders as “Geppy,” the GBP/JPY pairing is viewed as a reliable indicator of global economic health. These individual currencies provide a strong reflection of economic health and policymaking in both the Asia-Pacific region as well as Western Europe.

But this reliance on GBP/JPY as an economic indicator shouldn’t mislead traders into treating it as a safe pairing for beginners to get their feet wet with. Though the pairing’s volatility is great for generating potential earnings, it also creates significant risk for forex traders. This is why “Geppy” has one of the most fearsome reputations among all forex pairs.

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How to Profit from CFD Trading the US30

Index trading is a popular, easy way to invest in a group of businesses, or a representative sample of a country’s largest companies, without being forced to invest in individual companies.

For forex traders, index trading is an attractive alternative to directly investing in a specific country’s stock market. Typically, these indices are designed to offer a reflection of a given country’s economic strength. But these indices can also serve as a high-performing collection of select holdings from a single market, offering a more concentrated investment opportunity in a foreign country’s economy.

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Understanding Currency Pairs: What to Know Before Trading USD/CAD

The United States and Canada have vastly different economic structures, with Canada leaning toward more liberal economic policies and looser immigration regulations than its southern counterpart. 

While the U.S. depends on the economic boost of educated, talented immigrants entering its workforce, the country also benefits from a much larger volume of trading activity, as well as a mature presence in virtually every major global industry.

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A Beginner's Guide to Trading the HK50

If you’ve never traded the HK50, you might be missing out on a great opportunity to capitalize on economic growth in a promising foreign market.

Although the Hong Kong Stock Exchange is the third-largest stock exchange in Asia, and the sixth largest in the world, it often gets overshadowed by the Chinese and Japanese markets, not to mention the markets in New York and London. But seasoned investors are aware of the trading opportunities available in Hong Kong, especially with the HK50.

The Hang Seng Index, or HK50, tracks the 50 largest and most liquid companies on the Hong Kong Stock Exchange (HKSE), offering a reliable reflection of the economic strength of Hong Kong as well as China.

Here’s an overview of the HK50, including a primer on how to approach trades in this market.

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