Archive for the ‘Important Announcements’ Category

The Giant’s Story So Far

Thursday, September 13th, 2012
The Giant’s Story So Far
“A journey of a thousand miles begins with a single step.” -Laoze
It was not so long ago since China was referred to as the “sleeping giant.” Its secluded existence and its rich culture which has been passed down to thousands of generations, known only to those within, has just been broken free a few decades ago.
After the giant opened its door to world, opportunities swiftly entered. One of the many which are given the opportunity to show itself to the outside world is the Yuan. The Chinese currency which may be literally translated as “round object” is originally a round and silver coin used in Qing Dynasty. It slowly made a scene after its debut by showing a very promising growth.
But according to the most recent news,its growth had come to a slow pace. One of the main issue which surrounds the change is the economic slow-down of China. The import slid last month and the cooling of industrial production are the main contributors of this unfriendly situation. The targeted economic growth, which is the lowest in 22 years, may not be met.
However, interventions may be put into action. According to Chinese Premier Wen Jibao, “ Be it monetary or fiscal, we still have ample strength,” The strength which amounts to a billion yuan will be used for preemptive measures which will be directed to fight against bad loans and shackle the inflation.
Another issue is currently swerving like a vulture over the Chinese economy. News of “shadow” banks are arising and may result to a social unrest. The victims are continuously increasing and the public is quickly losing its trust to investments thus slowing the money circulation. Private capitals are now stagnant because of this.
Despite the pessimistic prediction of experts and alarming incidents, the Chinese Premier is still confident that the economic development will go as planned.

A journey of a thousand miles begins with a single step.” -Laoze

It was not so long ago since China was referred to as the “sleeping giant.” Its secluded existence and its rich culture which has been passed down to thousands of generations, known only to those within, has just been broken free a few decades ago.

After the giant opened its door to world, opportunities swiftly entered. One of the many which are given the opportunity to show itself to the outside world is the Yuan. The Chinese currency which may be literally translated as “round object” is originally a round and silver coin used in Qing Dynasty. It slowly made a scene after its debut by showing a very promising growth.

But according to the most recent news,its growth had come to a slow pace. One of the main issue which surrounds the change is the economic slow-down of China. The import slid last month and the cooling of industrial production are the main contributors of this unfriendly situation. The targeted economic growth, which is the lowest in 22 years, may not be met.

However, interventions may be put into action. According to Chinese Premier Wen Jibao, “ Be it monetary or fiscal, we still have ample strength,” The strength which amounts to a billion yuan will be used for preemptive measures which will be directed to fight against bad loans and shackle the inflation.

Another issue is currently swerving like a vulture over the Chinese economy. News of “shadow” banks are arising and may result to a social unrest. The victims are continuously increasing and the public is quickly losing its trust to investments thus slowing the money circulation. Private capitals are now stagnant because of this.

Despite the pessimistic prediction of experts and alarming incidents, the Chinese Premier is still confident that the economic development will go as planned.

Stephen Stevenson

Euro’s Answered Prayer – Unlimited Bond Buying

Thursday, September 6th, 2012

The world has watched as euro’s untold fate unfolds. Nations, prominent and influential individuals of the financial plane, optimistic and pessimistic investors, down up to even the commoners had been scrupulously observing the currency’s dire situation. The every tick is guarded by the watchful eyes of the financial guard dogs. Alerting everyone whenever something is fast approaching, whether be it good or bad.

The whole world bear witness on euro’s graceful downfall. The debt crisis which lay euro on its sickbed is slowly decaying the prominent alliance as rumors of bailouts sprout like mushrooms. But not all is lost. A glimpse of hope in a form of a bank is trying to put a halt to the threat.

Just a few months ago, Mario Draghi, the current president of European Central Bank (ECB) announced its willingness to provide whatever assistance that euro will require. The unyielding support had not come unnoticed as ECB’s every step is being watched.

Though real plans of euro’s salvation is still to be lain to the public, certain actions had already been taken. The knight, who has yet to prove its true might, had parried the current decrease by announcing its plan for unlimited sterilized bond buying to suppress the crisis.

ECB’s latest move lifted the spirit of investors and permitted an optimistic atmosphere. As a result, the currency gained from the spiced up investors as it rose against its competitors.

But not everyone in ECB supports its cause. The president of the Deutsche Bundesbank, Germany’s central bank, considered resigning because he sees it as a loss cause if carried out without proper support. The threat had put more pressure on Draghi to take an another glance on the plan. Rumor has it that Jen Weidman was dissuaded by German government from leaving the position but still his stand on the topic is still steadfast. The involved chief didn’t confirm its authenticity.

Stephen Stevenson

Economics 101 – Import and Export

Friday, August 31st, 2012
Different goods and services are bought and sold by different countries all over the world. The products and services that are produced outside the country brought inside a country are called Import. Furthermore, the products and services produced inside a country and shipped outside a country are called Export.
Import transactions are done through a non-resident selling the goods to a resident which will then forward it to the locals. For example, a foreigner will sells a basket of apple to a local which will in turn sell it to local market. Meanwhile, Export transactions are done when a local sells goods and services to a foreigner. The rate of import and export affects the growth of a country’s economy.
In the Fundamental analysis, those macroeconomic indicators are regarded as the Import and Export prices. Import and Export prices are released on the 10th day of every month at 8:30 EST (NY) which will have an impact  on the key growth expectation. If there’s a increase in the export then the US dollar rate will  increase. But if the import increases then the rate will decrease.
Moreover, It is attributed to the income and expense of a country. If the income surpasses the expense then a surplus may arise. But if the expense outweighs the income then a deficit will probably occur.
Though Import and Export prices only has a little influence on the market, it is needed for a long term economic analysis. Traders that are trading in long positions in Forex may need to regard this index.

Different goods and services are bought and sold by different countries all over the world. The products and services that are produced outside the country brought inside a country are called Import. Furthermore, the products and services produced inside a country and shipped outside a country are called Export.

Import transactions are done through a non-resident selling the goods to a resident which will then forward it to the locals. For example, a foreigner will sells a basket of apple to a local which will in turn sell it to local market. Meanwhile, Export transactions are done when a local sells goods and services to a foreigner. The rate of import and export affects the growth of a country’s economy.

In the Fundamental analysis, those macroeconomic indicators are regarded as the Import and Export prices. Import and Export prices are released on the 10th day of every month at 8:30 EST (NY) which will have an impact on the key growth expectation. If there’s a increase in the export then the US dollar rate will increase. But if the import increases then the rate will decrease.

Moreover, It is attributed to the income and expense of a country. If the income surpasses the expense then a surplus may arise. But if the expense outweighs the income then a deficit will probably occur.

Though Import and Export prices only has a little influence on the market, it is needed for a long term economic analysis. Traders that are trading in long positions in Forex may need to regard this index.

Stephen Stevenson

Knowing the Fundamentals – CPI

Friday, August 24th, 2012

Consumer Price Index ( CPI ) is one of the main tools to measure Inflation. Inflation as we know it, is a very vital factor in the fundamental analysis. It defines the decrease in the purchasing power of a currency which may lead to a higher unemployment rate.

The CPI as defined as Bureau of Labor Statistics in the United States of America is “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

In order to calculate CPI, there are two basic data types that is needed: price data and weighting data. The price data is acquired by getting a sample of a product on a sales outlet within a sample location on a particular time. The weighting data is an estimate of the shares on the overall expenditure that is within the context of the index.

It has a scheduled released at 8:30 am EST on the 15th of each month, to keeps track on the average changes in the price of a basket of goods and services. Food, Accommodation, Clothes and Services, Transport, Medical Service, Entertainment, Other goods and services are the main categories that belongs to CPI. All of the changes in the price of mentioned categories together with other items are averaged to form the overall CPI. Since it is released annually, the cost of living may also be assessed through it.

Aside from the CPI, it is also essential to look at the “core rate.” It is also known as “Core Inflation” which excludes other products that are prone to price shocks, an unexpected change in the price, which may lead to a false impression to an inflation.

Stephen Stevenson

Acquaintance with the Charts

Thursday, August 16th, 2012

Forex is measured through charts. It is a virtual representation that reflects the price movement of a quotation within a specific time. There are 2 coordinates that makes up a chart – Price and Time.
The price is shown on the vertical Y- axis while the time is shown in the horizontal X- axis.

The time which is broken down to different time frames may be viewed depending on the trader. The available time frames are usually: 1 month (MN), 1 week (W1), 1 day (D1), 4 hours (H4), 1 hour (H1), 30 minutes (M30), 15 minutes (M15), 5 minutes (M5), 1 minutes (M1), and an individual quoting tick or simply tick which materializes through the form of Bid and Ask.

The time frames are composed of 4 components: Open, Close, High Low

Open – the market price that is formed when the trading period starts.

Close – the market price which is given at the end of the trading period.

High – the highest price that is achieved within the trading period.

Low – the lowest price that was achieved within the trading period.

Chart Types:

Tick Chart – shows the tick movement of a specific currency pair without a specific time frame. It reflects the individual quotes of Bid and Ask prices given by market-maker and is often used to determine the support and resistance level.
tick

Line Chart – it may be easily distinguished through its simple form – Line. Line charts are plotted with the closing price that gives an easier view on technical analysis patterns. But this chart has a downside. The lack of some information, due to the fact that the closing price is reflected in the chart, hinders traders from evaluating the rise and fall of the price within the period.
line

Bar Chart – are composed of stalk like vertical lines which has a small horizontal line on both sides. The upper end of the stalk is the maximum price achieved within the period. While the lower end of the stalk shows the minimum price within the period. The horizontal line on the left shows the opening price while the right horizontal line is for the closing price. The analysis with the help of this chart is a bit tricky. You have to consider the right line as the open price and the left line as the closing; if the left line is higher than its counterpart then the price has decreased within the period; and vice versa.
bar

Japanese candlesticks – it is the most famous chart and also has the same composition with the bar chart. The only difference is that it is more comfortable to look at when compared to the bar chart. Each candlestick has the same composition with the bar chart’s stalks.

The candlestick has 2 parts; the real body, and the shadow. The real body is depicted by a a vertically inclined rectangle which reflects the opening and closing price of the trading period. If the body is highlighted then it is called a solid real body which means that the closing price is lower than the opening price. A hollow or transparent body signifies that the closing price was higher than the opening.

The shadow depicts the minimum and maximum value achieved within the time period. The upper shadow located at the top of the candlestick shows the maximum value while the lower shadow located at the bottom of the candlestick shows the minimum value.
candlestick

Stephen Stevenson