Forex Education Perspective: August 2015

Monday 31 August 2015

31st August 2015 Currency markets, news and analysis

Forex Market Commentary

The rout being said and done now comes the erosion.

The drama is over down and up we went as the Chinese precipitated the worst global equities crisis in 3 years. But are we out of the woods yet? Most probably not. yes the drama is gone but now a new emotion has crept into global equities: Fear.

An old Chinese proverb says: "Never catch a falling knife!"

When something drops it usually drops like a stone and then it starts skidding and sliding until it's momentum becomes exhausted. Overall, we're not entirely done with global equities in the months to come.

The drama over and done; now comes the hard part: gradual, grinding, toiling slippage. Bit by bit we can see very little to cheer global equities to Christmas. Yesterday the Dow closed down 114 points to 16528.03. Lurking in the minds of the traders is the US Fed and talks of a rate hike. Still! In spite of the China avalanche the US economy is relatively unshaken.

For currencies EUR/USD still holding at the 1.12 but is only holding because of US Labor day after which we should see a mild decline once again fi the worst of the China crisis has passed. However on the other side, Europe has emerged from this crisis as a safe haven with low inflation in the zone at 0.2% and stability which is a plus factor propping up the Euro currency.

Read on Bloomberg:

http://www.bloomberg.com/news/articles/2015-08-31/euro-yen-correlation-reach-highest-since-2007

Crude oil has risen dramatically to the 47 mark on the cash WTI on the back of storage flexibility appearing. Consumer demand maybe falling somewhat but production is caught within a trap of a time lag. Manufacturing is always ante planned and at least 6 months behind subtle changes in consumer demand in the present. In reality economic equilibrium boils down to this 6 month gap at its very best with production trying to meet demand. In saying that; today's production decisions are based upon consumer facts at least 6 months old. Thus far China production in the present is meeting international and domestic demand figures from yesterday. But 6 months down the road by Spring next year we will really see how manufacturing in China slows down and that can affect demand for crude oil and inventory stockpiling and keep crude oil at a more stable and less volatile price range of 40-50 USD.

Read on Reuters:

http://www.reuters.com/article/2015/08/31/us-markets-oil-idUSKCN0R006K20150831

In speaking of moving averages; markets are not rational and daily price action volatile, but in the longer run trader expectation and negative sentiment can be collectively summed up through the 50 day moving average. Always look to support and resistance band lines as the key to understanding in the long and short term where prices are converging. Professional technical traders use 50 day and 200 day medium and slow moving averages as fundamental cornerstones for interpreting the direction of price action.

USDX

US Dollar
95.759 -0.167 -0.21%
Support 95.008 Resistance 96.918
Forward 1 year - 96.878s.

EUR/USD
1.12265     -0.00087 -0.08%
Support   1.10643      Resistance 1.13723
Forward 1 year - 1.12810s.

Crude Oil WTI

47.43 -1.77 -3.90%

Support 40.18 Resistance 48.42
Forward 1 year - 51.56s.

Gold

1135.195 +0.410 +0.04%

Support 1,115.0 Resistance 1,149.2
Forward 1 year - 1,139.2s.

Pieter Bergli - DeLoren Trust Holdings

A non-profit commitment to provide education on the properties of currency markets

Forex market commentaries and media reports for free

Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission

Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.

* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies

Sunday 30 August 2015

Increasing your Productivity as a Trader

Forex Market Education

Time is a difficult concept to come to terms with.

Either we have to much Time on our hands or so very little of it. Time is a relative concept according to the professions we choose and how we use Time determines the measure of our success in the attempt to reach our chosen goals in life. As a trader invariably the pace of life adds to the tension of the occupation. The market pulse is intense, price changes dynamic and consequently the trader finds him or herself trapped within a framework of a speeding clock. The pressures of trading a concept of Time at the extreme measure of speed often forces the trader into mistakes, some of which can be recovered and some of which may tend to lead to disastrous circumstances. Living in the fast lane is not advisable in the long run and wear and tear and fatigue will take it's toll. A better understanding of Time and how we choose to structure our lives within the framework of the Time speed we choose becomes the mainstay of mental and physical health.

A frenetic trading style is unsustainable. There is a misconception about currency trading that it is an arena for the elite. Bank dealing rooms are full of dealers that constantly make markets making 2 sided bid/ offer posts on their Reuters or Bloomberg terminals. Dealers are the conduits for commercial customers to secure their spot and forward currency orders. The market is very active and bid/offer spreads set by dealers can change every 30 seconds. traders on the other hand are not led by commercial orders and therefore become a mismatch in a day currency market session in that they are attempting to emulate dealers and trade for profit. Bank dealers are obligated to deal spreads; day traders are not and should not be there in the first place! Traders should enter the FX markets with longer term positions in mind than developing mindsets to mimic bank dealers and watch news releases and 5 minute candlestick charts to try book some pips on the day. Traders need to slow down and deal in the Forex markets from the outside and not from the inside of the arena. The inside of the arena belongs to the bank dealers.

Please watch here the video of a class session by Dr Michael J. Duckett on 'Expanding your production in life' :

Thank you,

Pieter Bergli - DeLoren Trust Holdings

A non-profit commitment to provide education on the properties of currency markets

Forex market commentaries and media reports for free

Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission

Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.

* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies

Saturday 29 August 2015

Select Education Short Courses For Currency Traders.

Forex Market Education

Education is an ongoing process.

Successful traders will never stop learning; it is part and parcel of the psyche to hone one's trading instincts and develop better judgements and clearer insights in the fastest possible course of time. Those that react first usually become winners in life; those that are left to run with the herd usually get trampled when the herd decides to change about face. The trend is always your friend according to the time old wisdom; but keeping your wits about you and smelling changes in the air is what distinguishes those that lead the pack and those that blindly follow with the group mentality in momentum.

Currency trading does not entirely depend upon technical chart analysis; much of the trading decisions revolve around two other very important bodies of knowledge, being a) a grounding in International Economics and the framework of the global monetary system and b) an understanding of mathematical studies in probability.

EdX , or edX Inc. is an online service in education that offers short term online courses, some are paid and some are for free. The courses are offered by universities and institutes of distinction around the globe.

Please review here and register for a course of your choice:

https://www.edx.org/

Here are several recommendations on the US central bank, theory of probability in application and options pricing which are 3 very important areas of understanding for the Forex trader:

1. Understanding the Federal Reserve

Learn about the structure and purpose of the Federal Reserve and how its actions impact not just the US economy, and financial institutions, but individual investors and savers alike.

Available at edX courtesy the New York Institute of Finance.

Enroll here at edX: https://www.edx.org/course/understanding-federal-reserve-new-york-institute-finance-yca2015-1-2x

2. Introduction to Probability

- The Science of Uncertainty

An introduction to probabilistic models, including random processes and the basic elements of statistical inference.

Available at edX courtesy Massachusetts Institute of Technology, MITx courses.

Enroll here at edX: https://www.edx.org/course/introduction-probability-science-mitx-6-041x-0

3. Pricing Options with

Mathematical Models

Introduction to the Black-Scholes-Merton model and other mathematical models for pricing financial derivatives and hedging risk in financial markets.
Available at edX courtesy of Caltech.

Enroll here at edX: https://www.edx.org/course/pricing-options-mathematical-models-caltechx-bem1105x-0

Pieter Bergli - DeLoren Trust Holdings

A non-profit commitment to provide education on the properties of currency markets

Forex market commentaries and media reports for free

Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission

Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.

* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies

Forex Charts 29th August 2015 Currency markets, news and analysis

Forex interactive charts

Powered by ForexGoer

Forex charts for technical analysis

Pieter Bergli - DeLoren Trust Holdings

A non-profit service for free education on in the forex markets

Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission

Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.

* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies

Friday 28 August 2015

28th August 2015 Currency markets, news and analysis

Forex Market Commentary

Its been a difficult week for global equities.

The shock of China left traders dismayed when on Friday 21st august China announced to the world the slowest manufacturing data since 2009. of course the PMOC knew this all along and last week's Yuan devaluations were supposed to be part of the cushion to stop the kind of capital flight which went and happened anyways with the SSE Composite nearly losing all this year's gains.

The problem really started not in so much as the Chinese date was really bad but more so because the last few years we have mistakenly built up this misperception that China is this engine which continues to roar agaisnt the laws of gravity. So when the data release came out last Friday nobody knew how to react and those that did first jammed the fire exit tight as the whole theater of dreams came tumbling down. Nevertheless, exactly 4 trading sessions later, the smart traders started wondering to themselves what on earth is all this panic about anyway? Europe with all it's Greek drama never pushed markets to and fro like this and is showing orderly ability to fashion shape from debt chaos. The US at near full employment mode and gentle inflation remains upbeat. The fundamentals of both USA and Europe look strong irrespective of this Chinese drama.

Overall, EUR/ USD has slipped a massive 500 pips to 1.11 with the market re-correction. USDX has come back strong to where it should be. Crude oil goes back up on inventory numbers being down and gold bullion stabilizes as a safe haven after the global equities rout.

Important Indicators:

Equities:

Dow Industrial 16,643.01 Down 11.76 (0.07%)
Euro STOXX50 3,286.59 Up 5.81(0.18%)
Nikkei 225   19,136.32 Up 561.88 (3.03%)
SSE Composite Index    3,232.35 Up 148.76(4.82%)
Hang Seng    21,612.39 Down 226.15 (1.04%)

Fixed Income Markets:

US Federal Reserve - +0.25%
ECB Base rate 0.050 %
Chinese interest rate PBC    China    4.60 % (Down -0.25%)
Japanese interest rate (BoJ)   0.10 %

Important moving averages:

USDX below the 50 day m.at 96.5.
EUR/ USD above 50 day m.a at 1.11
Crude Oil WTI below 50 day m.a. at 48
Gold above 50 day m.a. at 1130
US - 30 DAY FED FUND at 50 day m.a. at 99.83
US - 10 YEAR T-NOTES above 50 day m.a at 127

Overall reflection: USDX, economy.

USDX

US Dollar
96.075 +0.310 +0.40%
Support 95.008 Resistance 96.918
Forward 1 year - 96.878s.

EUR/USD
1.1182     0.0000 0.00%
Support   1.10643      Resistance 1.13723
Forward 1 year - 1.12810s.

Crude Oil WTI

45.22 +2.75 +6.07%

Support 40.18 Resistance 48.42
Forward 1 year - 51.56s.

Gold

1133.540 +5.115 +0.45%

Support 1,115.0 Resistance 1,149.2
Forward 1 year - 1,139.2s.

Thursday 27 August 2015

27th August 2015 Currency markets, news and analysis

Forex Market Commentary

Adage: It's the economy stupid! Part 2

Another a stormer! Looks like the smart pack have all of a sudden stopped running and started to scratch their heads wondering why theyre running in the very first place!!! Is not the end of the world if China stutters and tumbles.

Rather daft if you ask me. Mean time trillions of dollars was wiped off the global equities markets and countless small traders lost their shirts in the process. Then some bright spark decides that it's not all there at all. What on earth are we running from? the Yuan devalued, everyone ran for cover and now back they come with a sheepish look and pile back into equities realsing how daft it all is and really after all: IT'S THE ECONOMY STUPID! Heads should roll, China tottered and half the traders round the planet panicked when reality read that the US economy and the mighty Greenback could still stand strong. A lot of small traders got wiped out on the wrong side in the process like deer dazzled in front of the oncoming lights of a train wreck.

The Dow climbs back up again with a massive +369.26 points or +2.27% on the day to close at 16654.77 and claw back a decent trillion Dollars in the process! Day before it was up a massive +619.07 points or +3.95%. Asian equities are sparing their blushes and modestly recorrecting themselves.

This without doubt has been the biggest test to the US economy since 2008 and the US came out very strong indeed traders please note.

Now the EUR/ USD having rose with astonishing speed to the 1.16, fell like a stone over 200 pips day before yesterday at the 1.13 mark and fell another 1.12 with another 100 pips today. it's almost like the perfect script for the smart short traders that waited and knew this storm would pass very soon and could enter shorts at 1.116. Fundamentals indicate that a retest of the 1.08 will be on the table in the weeks ahead. We have had the weaker shorts flushed out of the market with a period of sideways trading the last couple of months and now it looks as if the pause in the market is coming to an end. large specs are looking at another assault on the 1.08 to continue to the trade trend direction towards the 1.05 and eventual parity. USDX will take another look at the 98 in tandem and possibly test the 100 mark by the end of the year.

Crude Oil consolidating rises a whopping 3 Dollars to 43 mark on the front end WTI as fundamentals show oversold conditions and gold bullion consolidates at 1125.

Read on Bloomberg:

http://www.bloomberg.com/news/articles/2015-08-26/oil-advances-as-u-s-crude-inventories-unexpectedly-decrease

USDX

US Dollar
95.616 -0.149 -0.19%
Support 93.212 Resistance 96.202
Forward 1 year - 95.740s.

EUR/USD
1.12685     +0.00257 +0.23%
Support   1.11673        Resistance 1.13893
Forward 1 year - 1.14570s.

Crude Oil WTI

43.01 +0.45 +1.16%

Support 41.03 Resistance 44.11
Forward 1 year - 46.68s.

Gold

1130.945 +2.520 +0.22%

Support 1,119.2 Resistance 1,135.0
Forward 1 year - 1,165.5s.

Wednesday 26 August 2015

26th August 2015 Currency markets, news and analysis

Forex Market Commentary

Adage: It's the economy stupid!

What a stormer! Reality is sinking back into the currency trading market. The Dow climbs a massive +619.07 points or +3.95% to close at 16,285.51 as the SSE composite in Shanghai settles as most of the damage appears to have run it's course. The Yuan devaluation that train-wrecked global equities for the better part of a week has now run it's course. Consequently the EUR/ USD fell like a stone over 200 pips to recorrect itself at the 1.13 mark.

Yes; it's the economy stupid! The pandemonium is over and economic fundamentals back to the fore.

Commercials were in the thick of the action the last 5 days buying EUR/USD spot in great amounts. Several large specs suffered great knock-backs as EUR/ USD shot up to the 1.16 in a knee-jerk reaction as investors panicked on the USD. However we did not touch large options and buy stops near the 1.17 to further complicate spec positions on the short trade of the EUR/ USD. ETF's were dangerously close to piling on fresh EUR/ USD longs with algorithmic trading potentially leading specs into larger losses on the back of the sudden surge up which was entirely based upon a false premise of Euro currency strength. Now, this is where market wisdom comes to play; to suss out reality from the confusion and step aside when things go awry. Dealer noise buzzing round bank floors were abundant with hedge fund agony every time the EUR/ USD climbed another 10 pips. However the tsunami like action caused by equities on a global scale has now subsided and the worst is over and the 1.15 barrier stands insurmountable at the moment even with bond yields on the US Treasuries slipping down.

Now if I was a massive hedge fund spec I would definitely be computing my risk/reward scenarios for a fresh spot short EUR/ USD at the 1.13 with call option cover for a short target of 1.08 for a late Q4 exit for a gross 500 pip gain over the next 3 months. That's how currency large specs think. The US economy took a knock head on but like a mighty tree it merely swayed in the wind.

See the credit Suisse report on volatility here:

http://www.thefinancialist.com/spark/volatility-back-with-a-vengeance/

Its back to the fundamentals: Dollar rates have an upward sloping yield curve that attracts investment in the USDX

Markets move up, markets move down and markets move sideways. In all 3 markets the channels of price action will experience low volatility and high volatility which will mark the boundaries of the 3 channels.

Crude Oil consolidating at 39 on the front end WTI as fundamentals show oversold conditions and gold bullion slipping even further from 1138 to 1125 as the panic dies away and the global equities markets shake their heads and re-balance.

Read on Bloomberg:

http://www.bloomberg.com/news/articles/2015-08-25/zhou-serving-as-circuit-breaker-under-pressure-to-ease-more

and

http://www.bloomberg.com/news/articles/2015-08-25/china-s-yuan-shock-gives-carry-trade-crowd-worst-year-since-08

USDX

US Dollar
95.205 -0.076 -0.10%
Support 93.212 Resistance 96.202
Forward 1 year - 95.740s.

EUR/USD
1.133610     -0.017590 -1.53%
Support   1.13673        Resistance 1.16893
Forward 1 year - 1.14570s.

Crude Oil WTI

39.50 +0.90 +2.27%

Support 37.03 Resistance 41.11
Forward 1 year - 46.68s.

Gold

1125.085 -13.490 -1.18%

Support 1,119.2 Resistance 1,135.0
Forward 1 year - 1,165.5s.

Expectations in a Forex trading career are far too high

Forex Market Commentary

Adage: The trend is your friend

Now let's just pause and hold that thought. What is the definition of a trend? Quite simply put; it is the delineation of price action over a longer period of time, usually constituting 52 weeks or a single year. Such being the case why traders have to jump on to the volatility band-wagon is beyond my comprehension and certainly defeats all understanding of identifying a trend and moving your positions within that trend.

Volatility in daily price action is caused by big commercial banks and large speculators moving the demand for a currency for commercial and investment reasons. Withing this daily tussle, particularly over the last 10 years since the likes of Refco and Man Financial with innovative trading platforms for simple retail traders, the accessibility to the Forex markets has become universal. Moreover, bred with a false marketing image of the Forex trader in the guise of some swashbuckling hero, there seems to be an erroneous myth that Forex traders make huge amounts of money. Contrary to common knowledge I must state that successful Forex traders barely make 30% return per annum on their portfolio, year in, year out. Yet the myth persists that Forex traders make huge money and this in part may be caused by the lack of understanding through the media presentation of the original billion Dollar currency victory of George Soros way back in the early 90's.

Apart from George Soros, if we peck our way down the Forbes list, we cannot find a single true Forex trader that has become a billionaire. But people make a billion dollars in all other walks of life.

Forex trading requires years of discipline and constant learning. 80% of Forex traders will perish and a mere 20% of Forex traders will use their portfolio growth as a means to other accomplishments in trading and as a complement to an eventual bigger plan in life. Day trading on news releases and swing trading over 2-3 day horizons can being opportunities but also enormous risk of price reversals. usually swing traders do not last long before they blow up their portfolio. the First year maybe exciting but then the second year can easily wipe out a portfolio. But the trader who waits and identifies the trend and moves within the trend and rides the storms of volatility is the trader that persists. the longer one persists, the more likely one succeeds.

Portfolio building is better served where positions can combine different elements of risk. If you are going to run a sprint over a course that stretches to the horizon then eventually you are going to run out of steam. Similarly; to trade Forex per se over a 10 year span career is akin to sprinting a marathon race. A wise trader like the marathon runner sets his pace so that he may optimize his energy expenditure to reach the horizon with efficiency. a better trader chooses to trade Forex only as a high risk category when balanced with equal weight to a market position in equities and fixed income. Trading over the long term requires a sense of balance in the exercise of portfolio building. The successful trader spends more of his/ her daily time researching and analyzing than to hang on to a screen searching for 50 pip moves on sudden news releases. A few trend trades in the monthly or the quarterly horizon is better suited with the ability to hedge and obtain a higher degree of success than naked trading on the daily winds of change. The glamor of day trading eventually takes its toll.

Read again the Credit Suisse article on volatility in the currency markets over the last week:

http://www.thefinancialist.com/spark/volatility-back-with-a-vengeance/

Markets move up, markets move down and markets move sideways. In all 3 markets the channels of price action will experience low volatility and high volatility which will mark the boundaries of the 3 channels which identify the trend.