You may not have heard of them yet, but professional traders have been using them as tools for years.  Now they have gone mainstream which means almost anyone can trade and be a part of the markets which they didn’t think they had the capital to trade.

CFDs or Contracts for Difference have revolutionized how people can access the markets.  With no commissions and high leverage, it means that a person buy share of major indexes with as little as $100…giving them exposure to some of the largest markets in the world.  Of course, gold, oil, platinum and silver can also be traded.  Being able to participate in the price movements of the world’s major cash cows – for a small investment with no commissions is a true breakthrough.  Meaning there is no longer an excuse to not participate in the worlds markets.

A contract for difference works like this.  Let’s say you buy 10 ounces of gold, which is currently trading at $1200/ounce.  That means if you bought the gold directly it would cost you $12,000….a little steep for many people.  But with a CFD you only put up $120 and that gives you a position of 10 ounces of gold.  Now as gold moves so does your profit or loss.  If gold goes up $1 (and it can move $30 in one day) you make $10.  Nothing to write home about, but wait…that $10 on a $120 investment is a little less than 10%.   Put that way, it is fantastic!  If you had to put the whole $12,000 you would never take a $10 profit because it would be inconsequential.  But the minimal investment allows you freedom to take small gains or hold out for larger ones.  Now, if you are investor or someone who holds trades for longer than a few minutes, maybe gold goes up $40 (meaning gold goes up $40×10 ounces) on your 10 ounces.  This nets you $400 on a $120 investment.  The power of leverage is huge and magnifies your returns.  You more than tripled your money!  Of course you must watch the downside as well.  If gold drops $10 and you bought the contract, you will lose $100.

This kind of leverage can be provided because you do not actually own the gold, rather you are simply making trades based which direction you think either an index or commodity (such as oil, gold, etc) will go.  It means anyone can access these markets and take part in the price movements.

You can try out an account for free.  Demo everything out and get the hang of how it all works.  Then when you are ready…and only when you feel ready, you can start trading and making live trades.  You will also be able to trade currencies.  Currencies are the worlds largest market, and basically are the flow of money around the world. All trades are commission free.  Each trading “instrument” has a spread (all markets have spreads).  A Buy price and a Sell price.  As a client you will buy at the sell price, and sell at the buy price.  This is called the spread.  The best way to get involved is to open a totally free, no obligation practice account.  Play around with it and understand it.  Develop strategies and then move to a live account where you partake in real price movements of the worlds markets.

Open a free practice account now, and start trading today (you can trade all night too…there is almost always a market open somewhere in the world)!  You can start here:

Http://Www.Forexyard.Com/En/?Zone_id=2925

~Know your risks in trading.  See our Legal Disclaimer page.

(Be sure to read this short note because this
email gives you access to a brand new Forex method
that ‘flip flops’ the approach most people take…

…and shows you how select groups of traders can
get in on the huge volatility in the Forex markets
RIGHT NOW that’s being created by the problems in
the other global markets)

Here’s what’s up…

In the past week, thousands of traders got exclusive access to
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p.s. I’ve seen this developer’s trading courses disappear in a
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Forex trading ‘game-changer’ coming next week (video 3)

Read every word of this email because it has BIG NEWS for you if you trade Forex (or have always wanted to)…

BIG NEWS ITEM #1

I just got my hands on Part 3 of Bill Poulos’s new Forex training video series.

This one is cool, and very unique… it shows a “live” recording of Bill trading during lunchtime using his new “Flexible Forex” method.

See it
here…

You’ll see a live, intra-day chart of the Euro / US Dollar pair… HEADS UP – if you listen closely, you can even hear Bill eating his lunch

When you watch the video, put yourself in his shoes and imagine what it would be like. Then ask yourself if you can see yourself trading this way.

I think you’ll agree that it’s pretty exciting.

BIG NEWS ITEM #2

Ever since Bill released Part 1 of his new Forex video training, his office has been getting bombarded with emails asking things like:

• Is there a way to get more details on this method?

• Are you going to release more training?

• How can I get started?

HERE’S THE DEAL… Bill is going to reveal all the details of this method in a brand new home study course he calls:

“The Forex Income Engine 2.0″

He originally planned on releasing this in the Fall, but because
of so many requests, he decided to move it up and plans on
releasing the entire course…

-NEXT TUESDAY, JUNE 29th, at 10am Eastern time.

BIG NEWS
ITEM #3 <– (you’ll LOVE this!)

I’ll send you more info on Bill’s new course as soon as I have it… but in the meantime, he’s celebrating with something I think you’ll LOVE…

• Bill’s going to give away the very first copy of the Forex
  Income Engine 2.0 to one lucky trader next week.
  

For all the details on how to join the giveaway, just go the Video 3 page here…

…and follow the link in the lower-right corner of the page after you watch the video.

It’s not every day we get to sink our teeth into this much complimentary, juicy Forex content as well as participate in a big giveaway “on the house”… so I hope you are enjoying it as much as I am…

More soon…

Good Trading,

Cory Mitchell, CMT

Dear Trader,

Last Fall, during a late-night Forex trading research session, one of the industry’s most respected trading educators made a discovery around day trading Forex that he shared with a limited group of traders.

Now, 6 months later… the same trading educator recently re-emerged from a marathon follow-up research session where he analyzed the killer results his initial group of traders got…

-and discovered 3 different ways to make them even BETTER.

From what I’ve seen, NO ONE is trading Forex like this (yet)…not to mention this completely turns traditional “day trading” on its ear…

He recorded a new training video this past weekend that “pulls back the covers” on this updated discovery & reveals how you can shield your portfolio from risk every single time you trade…

-especially if you’re inexperienced & have little time.

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THE BIG SURPRISE?

During his research, he confirmed what I (and others) suspected for a long time:

• The collapsing global stock markets and economies are creating
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That may come as a big surprise, especially if you’re new to trading… but he explains in his training video why this is happening, and how you can get in on it.

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If you’re interested in Forex, or have been a little “spooked by what’s been going on in the markets, then this may be the most important trading video you’ll ever see this year.

Why? Because after you watch it, you’ll be SCRAMBLING to start trading Forex using this type of trading.

It finally brings flexibility and customization to Forex day trading so that ANYONE can have an “edge”, whether you only have 20 minutes to trade, or if you have all day. Your choice.

It’s awesome.

Watch it here…

Good Trading,

Cory Mitchell, CMT

p.s. Due to
“web server” limitations, this video might not be online
for long, so make sure you watch it TODAY here:

Go here to see it…

I used to include a caption below my name when I wrote an analysis, that caption was: “Remember, False Breakouts are Tradable Too!”

It was meant to be a reminder that just because a trade looks like it may not be working out, does not mean there isn’t money potential there.  In fact, false breakouts are especially powerful signals for the exact reason that many people just got proven wrong in their trade decision.  Make no mistake, in every transaction that take place someone is going to be right and someone is going to be wrong across time frames, but at pivotal levels more transactions are drawn into the market place which creates buyers/sellers who are more aggressive to get into positions and then to get out of positions.  Sellers were more aggressive on Thursday, Buyers were more aggressive on Friday.

Thursday saw a drop below support and this indicated another leg down in the downtrend.   If that move was missed confirmation was needed to enter a position and that confirmation would have come with a drop below 1.3200, Thursday’s low (see Euro Sell Off Breaks Swing Lows).  Alas that did not come, and a rise back above the “breakout” line indicated a false breakout.   This has been all too common in this pair over the last two and half months.

Bias has been to the downside through almost the entirety of this period (upward trendline was broken recently as well but quickly corrected as well) but reversals have been sharp and generally clear out logical stop levels.  This too is not uncommon but with volatility overall decreasing and trending moves moving less in magnitude the pair is not acting like its normal “trending tendency” self.

This too has been discussed multiple times over the last two and half months.  This choppy trading and more ranging environment is not historically typical for long periods of time.  Longer term trend traders are advised to say out until a trend emerges.  Swing traders and day traders may enjoy this trading environment if they incorporate trading false breakouts.

EUR/USD-Daily Chart

So where does the EUR/USD stand in terms of future movement?  A move below 1.3200 has a target of 1.3000 followed by 1.2700.

On the upside, a move above 1.3700 followed by 1.3800 would break up the range, highs providing a target between 1.4200-1.4300.

With weekly average movement of just over 300 pips the upper targets are out of range this week, but the first lower target is possible…but so is the swing high at 1.3700 and/or 1.3800.   The pair closed out the week at 1.3383.

I will say it one more time….  False breakouts remain highly likely.

Cheers,

Cory Mitchell, CMT
Know Your Risks. Please read out Legal Disclaimer.

In relation to the analysis above….

When it comes to Forex trading, here’s what most traders do - they try to trade every “wiggle & waggle” of the market.  In other words, they think they need to trade ALL THE TIME because they think they’re going to “miss out” on a great trade.  This is NONSENSE and a surefire way to drive your trading account down to ZERO.

Successful traders, on the other hand – those who have discovered an “edge” over others – know to look for the SWEET SPOTS in the markets… and only trade those.

Check out this “quick hit” video that reveals exactly what it means to trade the SWEET SPOTS of the Forex market (and why you should AVOID the “wiggle & waggle”).

Watch it here:

http://www.4xtrainingmaterial.com/y/?i=1083859&u=3&l=f6

In this weekend look at the EUR/USD currency pair we will be looking at the daily chart.  It provides a longer term perspective than the time frame looked at in the analysis I publish each night.

No major levels were broken during the week, namely 1.3800 or 1.3265.  If 1.3800 is breached in the upcoming week targets are 1.3900, 1.4200 and 1.4300. A move back lower and a penetration of 1.3265 indicates another leg down with a target of 1.3060.

Trading remains choppy with no strong directional bias.  The downtrend was broken at the begining of the previous trading week.  Old trendlines often continue to hold significance even after they are broken.  The downward (broken) trendline has been left on the chart as it may provide support near Fridays low which just approached the trendline level.

Other important levels are the swing highs and lows and market with horizontal lines.  Targets for a move outside this trading region are marked with ellipses.

A move back below the trendline, which will come in just above 1.3420 on Monday, indicates downward pressure and a retest of the 1.3300 region.  Penetration of the two previous swings lows is likely to be the catalyst to take us to the downside target area.

Ability to remains above that trendline indicates some Euro stability, but the rate needs to move back above 1.3700 and then 1.3800 to indicate any sort of uptrend.

The average  (14) weekly price for the is 297 pips.

Longer term trend traders are likely better off allowing the market to breakout instead of trying to pick a direction at this point.  If the initial wave of a trend is missed, there are generally 2 more waves of even greater magnitude which provide safer trades and more reward.  False breakouts remains likely the current environment.

Cheers,

Cory Mitchell, CMT
Be Aware of your risk.  Please read our Legal Disclaimer page.

In relation to my last paragraph above….

When it comes to Forex trading, here’s what most traders do - they try to trade every “wiggle & waggle” of the market.  In other words, they think they need to trade ALL THE TIME because they think they’re going to “miss out” on a great trade.  This is NONSENSE and a surefire way to drive your trading account down to ZERO.

Successful traders, on the other hand – those who have discovered an “edge” over others – know to look for the SWEET SPOTS in the markets… and only trade those.

Check out this “quick hit” video that reveals exactly what it means to trade the SWEET SPOTS of the Forex market (and why you should AVOID the “wiggle & waggle”).

Watch it here:

http://www.4xtrainingmaterial.com/y/?i=1083859&u=3&l=f6

An interesting week for the markets.  Apparently the Greece problem is solved…but no.  If anything we have only hit the tip of the iceburg.  Even according to Greek officials they will need more money shortly.  And despite having what looked like a reversal in the Euro early in the week, tension set in once again by the end of the week.  As a trader I don’t worry about the news at all in terms of how I place my trades…but it is very interesting none the less.  Later I will address the technical outlook of the EUR/USD, but for now the follow tidbits I found quite insightful.

The following segment provides some perspective on the things shaping the future of our global economies.  The excerpt is from:

The Daily Reckoning...Examining Stock Market Valuations: Brace for Turbulence

By Dan Amoss

… Napier thinks that the catalyst to end the unsustainable status quo of the developing world financing US trade deficits will be inflation in the emerging markets. Emerging economies believe that they can export their way to prosperity, but they cannot. “40% of the world’s population has a great plan to get rich by selling stuff to 14% of the world’s population,” Napier observed. “That can work for several years, and it has – particularly if 14% of the world’s population is prepared to gear like crazy to buy all of this stuff.”

Now that US consumers are deleveraging, Asia’s mercantilist economic and currency policies aren’t as effective as they once were. These countries will not be focused on undervaluing their exchange rates forever. If aggressively debasing your currency were a guaranteed road to high growth and low inflation, paper money would have a much better reputation among historians.

The downside of this currency policy is that it can lead to inflation at the local level. Eventually, the supply of existing and new money will overwhelm the growth of productivity in China’s industrializing economy. These emerging markets will have to eventually allow currencies to rise to prevent inflation from getting out of control.

We’re seeing more examples of rising imported commodity prices hurting Chinese industry. The price of iron ore is soaring, thanks to China’s aggressive infrastructure investment and its suppressed currency. International iron ore markets are so tight that supply contracts are switching from yearly to quarterly pricing adjustments. The Financial Times this week reported on this evolution in the pricing of iron ore, which will feed through to higher steel prices: “The new price system will lift the cost of iron ore to Asian steelmakers to about $110-$120 a tonne during the April-June period, up between 80 and 100 per cent from the $60 level at which the 2009-10 annual contracts were settled.”

If China allowed its currency to appreciate, it would pay less to import iron ore and other crucial imports like oil. A strengthening Renminbi would increase demand for imported oil, which translates into more expensive oil for US consumers. A few years from now, Washington, DC may come to regret its push for China to appreciate its currency.

Napier also addressed the subject of Europe, Greece, and the Euro. He said, “The creation of a single currency is not an economic event, it’s a political event. Unfortunately, the ten guys in Europe who run this currency have all got Ph.D.s in economics.”

Napier then told us about his experience working in Hong Kong in 1998. That year, the French senate sent a delegation to Honk Kong to investigate the Asian financial crisis, and consult Napier about the evolving project that was the Euro.

The French delegation was convinced of the merits of establishing the Euro, because it would supposedly bring lasting peace along with economic integration. WWII was still a searing memory. The delegation asked whether the Euro would help “iron out the inefficiencies” across Europe. Napier replied, “The things you call ‘inefficiencies’ here in Hong Kong are the things in France you call ‘culture.’” He knew that currency integration without political integration wouldn’t work.

Napier fears that the political will to save the Euro is forcing “economic deflation” in Greece and the other spendthrift countries within the Eurozone. Those running the ECB may rightly note that wages in Greece might decline to achieve a healthier Eurozone equilibrium. But Napier believes that if too much harsh austerity is imposed on the Greek economy, the democracy in Greece might be destroyed in the process. Napier points out that democracies very rarely deflate. They instead devalue their currencies and push new money supply through the channels of commerce.

Napier is concerned that “the ECB will not change its mind on hard money until it destroys one of the democracies in Europe.” Then came the most shocking thing Napier said in his hour-long speech: a prominent Greek businessman confidently assured him that the United Nations will be running Greece by September. If so, this should keep fear in financial markets at healthy levels through this spring and summer. Greece is not resolved, yet the markets appear to believe so.

When asked for a forecast of the best potential asset class over the next decade, Napier’s replied: “A basket of Asian currencies.”

The part about China appreciating their currency is especially interesting I find.  Politicians will always be behind the eight ball because they feel they need to make things fair and by doing so they simply push things to the opposite extreme.  Hmm, maybe the other problem is that the idea of “fair” is: “I get what I want”.  Yup, that sounds fair to me… but only as long as I get what I want too.   See the problem here?  Market forces naturally correct human error, but when we try to interrupt that cycle the resulting extremes become all the more severe.

It will be no different with proposed legislation or pressure to change regulations in the stock and currency markets.   Nothing will change…no regulation change was worked to avert “disaster” in the past, why would it all of a sudden change?  The people who are making money are making money because they find ways to take advantage of opportunity, and they will continue to do so no matter what new political idea is introduced.

The technical outlook for the EUR/USD will be posted shortly.

Cheers,

Cory Mitchell, CMT
~Know your risks when trading. Please read the Legal Disclaimer page.

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This is your weekend look at the EUR/USD.  We will take a slightly longer term view outlook than what is covered in the EUR/USD day trading analysis which is posted each day.

After all was said and done over this last week of trading the pair ended up flat.  No lower lows were created, although former lows were tested, and rejected.  Friday saw buying in the Euro, but no critical levels were breached…yet.  The week begin at 1.3500 and we close out the week within a couple of pips of that.

A rise above 1.3600 indicates a retest of former range highs at 1.3800.  If 1.3800 is breached targets are 1.3900, 1.4200 and 1.4300.

A move back lower and a penetration of 1.3265 indicates another leg down with a target of 1.3060.

EUR/USD Daily, FreeStockCharts

The pair remains in a downtrend on the longer term, but that could potentially be broken by a move above 1.3500 (a rise above 1.3600 confirms).

The average (14) price range covered in a week is 297 pips.

Cory Mitchell, CMT

Looking to trade Forex, Oil, Gold, Silver, Platinum and even Stock Indexes?  With tight spreads and extremely low margins?

Check out one of the brokers I use here.

Can’t afford full size contracts?  Trade “mini” oil and  ”mini” gold contracts for just $25 and $100 in margin respectively!  It all trades from one account, and one platform.  Trade Mini Forex too or open a Pro Account for incredibly tight spreads when doing large volume.

(They even have an iPhone app you can trade on!)

This is your longer term outlook of the EUR/USD.  We will look at the daily chart in this analysis, and what can be expected over the next week.

Despite having having a “It might actually breakout!” moment, ultimately that breakout was short lived as we traded well within the former range most of last week.

The trend remains down on the longer time frames, but remains in a sideways correction.  Trading was not as choppy as we had seen in the weeks past, but a renewed push in the trend we did not see.  The breakout downward was false, at least for now, and can be deemed so until the pair drops below 1.3400.  A move back below that point would be our first indication of another downward move, and would be confirmed by a penetration of the lows at 1.3265.  That would indicate another leg down in the downtrend.  A target remains as 1.3060.  Support along the way is at 1.3270 and 1.3200.

EUR/USD Daily, FreeStockCharts

The daily downward trendline currently crosses at 1.3600.  A move above this would be first indication of a reversal higher.    There is a bit of “no mans land” between this point and 1.3800.  A daily close above 1.3800 would confirm the reversal.  Targets on the upside are also marked at 1.4030, 1.4170 and 1.4300.

Keep in mind also the small upward sloping trendline which has developed over the last 8 days.  A break of that trendline can also give early signals of a decline.  Given it’s small length it is a not a pivotal signal, but can be used if desired.

Cory Mitchell, CMT

Looking to trade Forex, Oil, Gold, Silver, Platinum?  With tight spreads and extremely low margins?

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(They even have an iPhone app you can trade on!)

The EUR/USD broke below the 1.3430 level, and provided a nice trade for short-term traders.  I outlined a method that can be used for trading breakouts which is safer than the traditional “pile in as soon as it breaks” approach.  You can read about that here: http://vantagepointtrading.com/archives/3055

That strategy can be used on different time frames.  The EUR/USD has cooperated and I get to fully explain what I mean by that.  The chart from the article is 15 mins, but the method can also be used by longer term trades.  Those who use a daily chart to trade will see that the EUR has pulled back to near the breakout price.  Thus we can now use the method on this time frame…

We broke below the horizontal line which marked the bottom of the former range.  We moved lower and and have now moved back to the line, or very close to it.  We will accept a bit of a move inside the line, but we really want to see the pair get pushed down off this level in order to use this method.  If the pair can push back down towards 1.3300 our strategy would be in play and the short would look quite favorable.  If we push aggressively back into the former range the breakout can be considered false a move higher within the former is indicated.

EUR/USD-Daily

So with that providing a bit of a context, the downside target is 1.3060.  Support along the way comes in at 1.3270 and 1.3200.

A push back above the breakout line (1.3430 and some penetration is ok) indicates a move back higher.  Resistance is at 1.3500 and 1.3560.  Beyond this: 1.3650 followed by range highs around 1.3800.

Weekly average movement is about 293 pips.

Cheers,

Cory Mitchell, CMT

Looking to trade Forex, Oil, Gold, Silver, Platinum?  With tight spreads and extremely low margins?

Check out one of the brokers I use here.

Can’t afford full size contracts?  Trade “mini” oil and  ”mini” gold contracts for just $25 and $100 in margin respectively!  It all trades from one account, and one platform.  Trade Mini Forex too or open a Pro Account for incredibly tight spreads when doing large volume.

(They even have an iPhone app you can trade on!)