SOMETHING TO READ - ENTRIES & EXITS: VISITS TO 16 TRADING ROOMS

Entries & Exits: Visits to 16 Trading Rooms
Come behind closed doors and see real trades made by real traders.

Dr. Alexander Elder leads you into 16 trading rooms where you meet traders who open up their diaries and show you their trades.

Some of them manage money, others trade for themselves; some trade for a living, others are on the semi-professional level. All are totally serious and honest in sharing their trades with those who would like to learn.

You will meet American and international traders who trade stocks, futures, and options using a variety of methods. All are normally very private, but now, thanks to their relationships with Dr. Elder, you can see exactly how these traders decide to enter and exit trades.

Each chapter illustrates an entry and an exit for two trades, with comments by Dr. Elder.

With this book as your guide, you can get closer to mastering the key themes of trading-psychology, tactics, risk control, record keeping, and the decision-making process.

The companion Study Guide is filled with striking insights and practical advice allowing you to test your knowledge and reinforce the principles outlined in Entries & Exits.

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KIWI RISES VS GREENBACK WHILE AUSSIE STEADY NEAR 2-WEEK LOWS

On Thursday the New Zealand dollar rose against its U.S. counterpart, despite the release of downbeat New Zealand trade balance numbers, while its Australian counterpart was steady near two and half week lows.

NZD/USD hit 0.6308 during late Asian trade, the session high; the pair subsequently consolidated at 0.6288.

Earlier Thursday, Statistics New Zealand reported that the country's trade deficit expanded to NZ$1,035 million in August from NZ$649 million the previous month. Analysts had expected the trade deficit to widen to NZ$850 million last month.

Elsewhere, AUD/USD hit 0.6992 during late Asian trade, the session low; the pair settled at 0.6983.

The U.S. dollar had strengthened after comments by some Federal Reserve officials Monday night signaled that a U.S. rate increase is still on the cards this year.

In separate comments, St. Louis Fed President James Bullard and Atlanta Fed President Dennis Lockhart signaled that the Fed rate increase is not off the table this year.

Investors were now awaiting a speech by Fed Chair Janet Yellen later in the day for additional clarity on the bank’s decision last week to leave interest rates on hold.

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NEW METATRADER 4 ANDROID UPDATE: 24 ANALYTICAL OBJECTS AND OTP AUTHENTICATION

Recently, we have reported on the addition of analytical objects and two-factor authentication in the MetaTrader 5 Android. Now, the same features are available in the new MetaTrader 4 Android build 846.

You now have access to 24 graphical objects for technical analysis: lines, channels, Elliott waves, Gann and Fibonacci tools, as well as geometric shapes that can be applied both to charts and indicator windows.

New MetaTrader 4 Android Update: 24 Analytical Objects and OTP Authentication

The second major innovation is the OTP (One Time Password) system providing additional level of security when working with trading accounts. Now, a verification code may be enabled by a user in addition to login and password when logging in to a desktop or tablet terminal. The code is generated by a MetaTrader 4 Android application. To start using one-time passwords, users should bind their trading accounts to the password generator.

Update your MetaTrader 4 Android to receive 24 graphical objects for market analysis and enhanced security tool!

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GOLD DIPS AFTER HITTING ONE-WEEK HIGH AHEAD OF FOMC

Gold prices were trading close to their highest level in a week on Thursday as weak U.S. inflation data weighed on the dollar and raised hopes that the Federal Reserve would hold off hiking interest rates.

Comex gold futures for December delivery were dipped 0.15% to $1,117.30 an ounce, compared to overnight highs of $1,122.4.

Meanwhile, the dollar remained under pressure ahead of the conclusion of the closely watched Fed policy setting meeting later in the day amid uncertainty over whether the central bank would hike short term interest rates for the first time in almost a decade.

A rise in interest rates would boost the greenback by making it more attractive to yield-seeking investors, while putting gold under pressure, as it doesn’t yield interest.

EUR/USD was last at 1.1318, higher 0.23%, and GBP/USD also added 0.23% to trade at 1.5527.

We’ll get the Federal Open Market Committee statement with the rate-hike decision at 2 p.m. Eastern, with Yellen’s news conference half an hour after that.

Several economic reports come out before the Fed grabs the spotlight. Readings on weekly jobless claims and housing starts are slated to hit at 8:30 a.m. Eastern, followed by the Philly Fed survey at 10 a.m.

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HOW WILL THE MARKETS RESPOND? FOUR WAYS TO TRADE FED DECISION

Who has been buying in the last couple of weeks? Maybe those that are hopeful the Fed will keep rates artificially low are buying ahead of that awaited announcement? Or are people are buying for no other reason than others are buying? It is really hard to predict the market movements after the Fed announcement. But analyst Jani Ziedins projects four possible outcomes and four possible ways to trade them:

1) Rally after hike

This is a bullish signal as it tells us the market no longer cares about China or rate hikes. Everyone who is worried these things sold weeks ago and when there is no one left to sell a headline, it stops mattering.

2) Selloff after hike

Over the medium-term this is a bullish outcome because the rate-hike discussions and lack of confidence are finally over. While the knee-jerk reaction was to sell the news, a 0.25% jump in short-term interest rates will not have a material impact on the U.S. economy. There will be plenty of value oriented buyers ready to jump in and snap up discount shares from fearful sellers. While it is possible to slide to the lower end of the trading range, even undercutting the 1,860 lows, the Fed hiking rates tells us they believe in this economy and so should we.

3) Rally after no hike

This will mark a temporary relief rally that will fade. Postponing the rate hike by six or twelve weeks will not make much of a difference and isn’t something to be happy about.

Jani says he would be worried over the Fed not hiking rates because it would mean they think they economy and stock market are too vulnerable to handle such a nominal rate increase. If they’re worried, then investors should also be.

4) Selloff after no hike

A collapse following good news will signal to stay clear of this market, says Ziedins. If the central bank doesn’t believe in this market, we could smash through the lows.

The situation is further complex because the cloud of rate hike uncertainty continues indefinitely. The market can handle bad news because it is quantifiable. This uncertainty and indecision is what really drives it crazy.

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YEN HIGHER AS BANK OF JAPAN STANDS PAT

On Thursday the greenback edged lower against the yen after the Bank of Japan decided to stand pat on the monetary policy which spurred demand for the Japanese currency.

In a widely expected move, the Bank of Japan’s nine policy board members voted 8-1 to maintain the policy of buying assets at an annual pace of ¥80 trillion. The BOJ last raised the purchase amount in October.

The yen was boosted by the news with the greenback last seen at ¥119.59, lower 0.52%. That compared with ¥120.23 late Monday in New York.

The U.S. currency was higher against the euro, which was at $1.1300 midday from $1.1315 late Monday.

Takuya Kanda, senior researcher at Gaitame.Com Research Institute, said he did not expect such a reaction. He said he had felt expectations for BOJ easing were mounting from earlier this morning, as indicated by a rise in the benchmark Nikkei Stock Average.

After rising 2.0% in mid-morning, the Nikkei trimmed most of its gains, and was up only 0.2% immediately after the BOJ decision. The index was last up 0.9%.

Elsewhere in the currency market, the Australian dollar was weaker at $0.7107 and ¥85.52 midday from $0.7138 and ¥85.19, respectively.

The Aussie gained earlier in the session as investors viewed the country’s new prime minister as positive. Malcolm Turnbull, a 60-year-old former investment banker, will succeed Tony Abbott.

However, the local currency turned down after the Reserve Bank of Australia issued the minutes of its Sept. 1 policy meeting, at which it maintained a neutral tone on the outlook for interest rates.

The euro was at ¥135.47 from ¥136.08.

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GOLD PRICES QUIET AHEAD OF FOMC; U.S. STOCKS LITTLE CHANGED AT OPEN

Gold prices are slightly higher in subdued early U.S. trading Monday.

Analysts have seen some light short covering in the futures market and bargain hunting in the cash market. At the same time, many market players are standing on the sidelines before this week’s highly-anticipated FOMC meeting.

December Comex gold was last up $1.50 at $1,104.80 an ounce.

December Comex silver was last down $0.12 at $14.385 an ounce.

The Federal Open Market Committee meeting on Wednesday and Thursday is the epicenter of attention this week.

A statement and press conference from Fed Chair Janet Yellen are set for Thursday afternoon.

Market analysts have not come to a consensus on whether the central bank will make an interest rate hike for the first time since 2009 at this week’s meeting, or wait until December, or next year.

The U.S. Fed funds futures market presently suggests the Fed will not make a rate hike in September.

Asian stock markets were weaker overnight, as there was more mostly downbeat economic data coming out of China.

China’s industrial output in August was up 6.1%, year-on-year, which was better than July’s 6.0% growth, but lower than the consensus forecast of up 6.6% for August. Fixed asset investment in China during January-August was also lower than expected. However, China’s retail sales in August were higher than expected.

China’s Shanghai gauge was down 2.7% Monday and Japan’s Nikkei stock index was down 1.6% on the day.

U.S. stocks opened little changed on Monday. The S&P 500 opened flat at 1,960. The Dow Jones Industrial Average opened unchanged at 16,427. The Nasdaq Composite began the day up 6 points, or 0.1% at 4,828.

In other news Monday, industrial production in the Euro zone rose 0.6% in July from June and was up 1.9% on the year, which was better than expected.

The dollar was mostly higher against its rivals with EUR/USD plunging 0.28% to 1.1307. GBP/USD hit 1.5396, lower 0.19%.

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HOW TO TRADE NEWS EVENTS: ECONOMIC RELEASES THAT MOVE US DOLLAR

How the market reacts to economic releases is generally determined by two factors:
How important the market considers a particular release to be.
How close to market estimates the number comes in at.
How important the market considers a particular economic release to be, is something that changes over time depending on what is happening from a US Dollar fundamentals standpoint. If there are worries that the economy is going into recession, then the market is going to be extra sensitive to any numbers, such as non farm payrolls and consumer spending, which may provide early warning signs that this is the case.

The most market moving indicators, in order of importance are:

Non Farm Payrolls
FOMC Releases
Retail Sales
ISM Manufacturing
Inflation
Producer Price Index
The Trade Balance
Existing Home Sales
Foreign Purchases of US Treasuries (TIC Data)

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THE LITTLE BOOK OF CURRENCY TRADING BY KATHY LIEN

The Little Book of Currency Trading: How to Make Big Profits in the World of Forex (Little Books. Big Profits)
by Kathy Lien

An accessible guide to trading the fast-moving foreign exchange market

The foreign exchange market, or forex, was once dominated by global banks, hedge funds, and multinational corporations, but that has all changed with Internet technology and the advent of online forex brokers. Now, hundreds of thousands of traders and investors around the world can participate in this profitable field.

Written by forex expert Kathy Lien, The Little Book of Currency Trading will show you how to effectively invest and trade in today's biggest market. Page by page, she describes the multitude of opportunities possible in the forex market, from short-term price swings to long-term trends, and details practical products that can help you achieve success, such as currency-based ETFs.

Explains the forces that drive currencies and provides strategies to profit from them
Reveals how you can use various currencies to reduce risk and take advantage of global trends
Examines financial vehicles that can help you make money without having to monitor the market every day
The Little Book of Currency Trading opens the world of currency trading and investing to anyone interested in entering this dynamic arena.

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Steps to Successful Currency Trading

15. We get serious and start concentrating on learning a 'real' methodology. 

16. We trade our methodology with some success, but realize that something is missing. 

17. We begin to understand the need for having rules to apply our methodology. 

18. We take a sabbatical from trading to develop and research our trading rules. 

19. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. 

20. We add, subtract and modify rules as we see a need to be more proficient with our rules. 

21. We go back into the market and continue to donate. We go back into the market and continue to donate. 

22. We start to take responsibility for our trading results as we understand that our success is in us, not the trade methodology. 

23. We continue to trade and become more proficient with our methodology and our rules. 

24. As we trade we still have a tendency to violate our rules and our results are erratic. 

25. We know we are close. 

26. We go back and research our rules. 

27. We build the confidence in our rules and go back into the market and trade. 

28. Our trading results are getting better, but we are still hesitating in executing our rules. 

29. We now see the importance of following our rules as we see the results of our trades when we don't follow them. 

30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better. 

31. We continue to trade and the market teaches us more and more about ourselves. 

32. We master our methodology and trading rules. 

33. We begin to consistently make money. We begin to consistently make money. 

34. We get a little overconfident and the market humbles us. 

35. We continue to learn our lessons. 

36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size. 

37. We are making more money then we ever dreamed to be possible. 

38. We go on with our lives and accomplish many of the goals we had always dreamed of.

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Steps to Successful Currency Trading

1. We accumulate trading information - buying books, going to seminars and researching. 

2. We begin to trade with our 'new' knowledge. 

3. We consistently 'donate' and then realize we may need more knowledge or information. 

4. We accumulate more information. 

5. We switch the forex we are currently following. 

6. We go back into the market and trade with our 'updated' knowledge. 

7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in. 

8. We start to listen to 'outside news' & other traders. 

9. We go back into the market and continue to donate. 

10. We switch forex again. 

11. We search for more trading information. 

12. We go back into the market and continue to donate. 

13. We get 'overconfident' & market humbles us. 

14. We start to understand that trading success fully is going to take more time and more knowledge then we anticipated.

Many Traders Will Give up at this Point as they Realize Work is Involved

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