What are the Secrets of a Successful Trader?

Who are the successful people in the markets? How are they doing it? Who are considered as the losers and why? The answers to the questions you have been asking are important for the evaluation and improvement of your own trading, as well as to its success.

Forex attract different types of people: clueless newbies, gamblers, deluded investors, those who want to make fast money, and others. But aside from that, there are other groups that make a living from these markets: the professionals. So, who are these traders and how do they do it?

Characteristics of a Successful Trader

  • Information

Professionals are informed traders. They know the “what”s, the “how”s and the “why”s of the market. To be a doctor, you need to know the important medical information about your expertise; to be a lawyer, you need to be well-versed with the law; so, why would it be any different in trading? The way they trade is validated by their experience and that’s exactly how they know how to use the information they’ve gathered.

  • Mentality

They trade using their brains, rather than their emotions. When trading, emotions should only play a small role as it is the fastest and most sure way that you’ll lose money in the markets. Average traders, on the other hand, subjects themselves to emotion because they:

  • Fear losing
  • Fear missing out
  • Trade with greed
  • Are impatient

Those are just some ways our brains and the market trick us.

  • Market Perspective

Successful professional traders know what other traders do. Traders don’t simply just look at one’s information and decide the perfect entry spot. Do not expect to see your favorite indicators or the basic information and decide whether the market will rise or fall — your analysis should be confirmed by the condition of the market, as well as their prices and volumes to validate that there are other traders that have the same perspective. A certain currency can be massively undervalued according to the interest rates and export outlooks; but in the end, the supply and demand still governs the market. If other players don’t think the same as you and are dumping sell positions in the market, it’s hardly going to rise sooner; and thus, you should wait until the conditions of the market change.

Therefore, you should know the very important piece of information that you can use in order to understand the markets and make better decisions in trading.

WEF Created a Task Force for the Future of Global Financing

Raghuram Rajan, the Governor of the Reserve Bank of India, has recently joined an effort at the World Economic Forum (WEF) to analyze the future of global financial system, whose members include policymakers and bankers around the world.

The WEF, a nonprofit group based in Geneva, had recently held their 46th Annual Meeting last week in Davos. According to the organization, the high profile “task force” will focus on including the emerging market economies in the global financial system, technological innovation, and the economic cost-benefit of post-crisis regulatory reforms.

What you need to know about the Task Force

The task force was created per request of Mark Carney, the Governor of the Bank of England and the Chairman of the Financial Stability Board, and Klaus Schwab, the Founder and Executive Chairman of WEF. The Financial Stability Board, which is headed by Carney, writes and coordinates regulations for the world’s main financial centers. This means that any recommendations will be put into a hearing by world leaders.

The group is tasked to identify, analyze, and give recommendations in accordance with the major transformative forces that influence the future of world finance and economics, according to the WEF.

The annual WEF meeting in Davos last week tackled about the Fourth industrial Revolution, or the idea that technological advancement will pave the way to an even greater level of automation and transformation of the global economy.

Giancarlo Bruno, the Managing Director of WEF, said that the timing of the establishment of the task force was consistent with the focus of WEF on the Fourth Industrial revolution. “Its work will look into the implications of innovation on stability of the financial system and its role as a growth engine,” he said.

The Members of the Task Force

Citigroup Chief Executive Officer Michael Corbat, BlackRock Chairman and CEO Laurence Fink, HSBC Chairman Douglas Flint, and Bank of America Chief Brian Moynihan are among the members of the task force that represents the private sector.

They are joined by Carney and Rajan, Min Zhu (the deputy managing director at International Monetary Fund), and Liu Mingkang (a popular research fellow in global economics and finance at the Chinese University of Hong Kong).

The task force members have met for the first time at the WEF Annual Meeting. They are expected to come up with a comprehensive set of actions and recommendations at the next Annual Meeting in January 2017.

About World Economic Forum

The World Economic Forum is an International Organization for Public-Private Cooperation. It is committed to enhancing the state of the world. It engages world leaders in politics, business, and the society to help create agendas that benefit the world, a region, and an industry.

WEF was established in 1971 as a nonprofit organization based in Geneva, Switzerland. It is independent, impartial, and is not tied to any special interests. They aim to demonstrate entrepreneurship in the global public interest while upholding their highest standards of governance. In everything that the organization does, they make sure to maintain moral and intellectual integrity.

Australian Chief Stay Still as JC Flowers Acquire the Stocks

JC Flowers & Co had able to acquire stock exchange Chi-X Australia along with Chi-X Japan and Chi-Tech Hong Kong with a concealed amount. The news of the said sale had been making rounds for the past six months following the acquisition of Nasdag of the Chi-X Canada last December.

The managing director of JC Flower & Co, Thierry Porte said in a statement that the Chi-X businesses have established themselves as successful and innovative alternatives to primary exchanges. Furthermore, the executive said that JC Flowers has invested exclusively in financial services.

Porte added: “Their superior technology, service and trade execution performance will continue to drive positive change and improve markets where they operate. We hope to accelerate this growth through continued enhancements to the platform, including new investment products and markets, and by leveraging our strong relationships throughout the Asia Pacific region.”

On the other hand, John Fildes told Fair Media that he will be staying in the position as chief in the Chi-X Australia after the deal is finalized by the end of March. As quoted, “I am definitely staying here. I am very excited about it.”

Mr. Fildes had worked with Mr. Porte as head electronic trading at Morgan Stanley when Mr. Porte headed up its Japanese business. Furthermore he said: “I think it is great for the company. At a time when we have launched a series of new innovative platforms, including warrants and we will soon offer ETFs, JC Flowers has bought the company understanding our plans and wanting to back those and will want to grow the company even more aggressively,”

Chi-X Global chief Tal Cohen, “…in the past five years Chi-X had become an integral part of the financial markets in Asia Pacific region through our commitment to competition and innovation”

Chi-X Global owned Chi-X Australia, but the ultimate owners were Nomura’s Instinet, and minority owners UBS, Bank of America Merrill Lynch, GETCO LLC, Goldman Sachs, Morgan Stanley, and Quantlab Group LP.

Accordingly, Chi-X Australia has now reached 20 percent share of Australian share trading volume and made its first profit in 2015 after four years of operation in Australia. Mr. Fildes also said that the investments its making will likely mean that won’t be happen again this year.

Aside from Chi-X, JC Flowers also has stakes in Shinsei Bank of Japan, KT Capital Corporation, a Korean non-bank finance company and SICOM Ltd, a provider of financial solutions and advisory services in India.

JC Flowers has about US$8 billion ($11.4 billion) in investments.

Manufacturing Sector can be Lifted by New Forex Policy According to Eric Umeofia, CEO, Erisco Foods Ltd

According to the President/CEO of Erisco Foods Limited, Chief Eric Odinaka Umeofia, Nigeria is incomparable to other countries like China, when it comes to producing tomatoes and other farm products. This is because Nigeria is known to have rich soil to support the growth of farm products. This only leads to the idea that Nigeria is more than capable of meeting the needs of people for tomato products thus, importing tomato products from other countries is not necessary.

Chief Umoefia supports the promotion of made in Nigeria products and in his recent interview with Neta Nwosu, he believes that there is no way the country is helped with the continuous importation of goods and the only way to uplift the country’s stagnant industrial sector is to sustain the new CBN Forex Policy.

Here is a glimpse on the highlights of the interview.

When did Erisco Foods Limited start?

Erisco Foods Limited is one of the members of Bonpet Group, which is based in Sokoto State, North-West Nigeria running for more than 30 years now. The operations began in the year 2009 wherein a brand of tomato paste is produced called Nagiko, then followed by another brand the Ric-Giko. Now, they have other products like sugar, rice, and monosodium glutamate. In short, Erisco Foods Limited is known as “home for great nutrition”.

What makes you different when it comes to food production?

The main aim of Erisco Foods Limited is to produce high quality and healthy foods for the nation of Nigeria. For so many years, the products of Erisco Foods Limited are certified good by certain government agencies compared to the substandard imported products, which in fact do not have health benefits for Nigerians.

Are those imported products considered as substandard and unsafe?

Definitely! There is a test on imported tomato paste brands conducted by NAFDAC, which revealed that “Tin Tomatoes” or the imported tomato paste coming from China are substandard showing 91.9 percent in total. These importers do not mean well for the Nigerians. It would be better to produce our own tomatoes locally and stop imports.

Why do you think so?

These cheaper yet unsafe alternatives may cause certain businesses to stop the production of local goods because local industries can’t compete with the prices of imported products. This will only result to the loss of thousands of jobs in the country. Therefore, this practice should be stopped.

According to some importers, they import these products because they believe that the farm produce is lesser in quality than those that are produced in developed climates?

The fact is that Nigeria’s soil is better than the other countries’. In fact, it is the third best soil in the whole world when it comes to growing tomatoes. Farm produce coming from Nigeria, especially tomatoes are the best that you can see. There is only one area that has an issue on growing tomatoes and it is all about the redness. But, this is only limited to some tomato farms but the rest are all good.

FCA Warns Against Trading with Clone Traders

The practice of cloning in the financial industry keeps gaining speed as fraudulent entities are seeking for benefits from misusing some details of authorized investment firms.

Right after the Financial Conduct Authority of the UK warned people about clones of Forex companies Atom8 and ayondo, the regulator has been actively informing the public against transacting with a clone. Today, an unauthorized entity is abusing UK Forex broker Delta Financial Markets Limited, also known as DF Markets.

According to the UK regulator, the cloned entity is not related in any way with the licensed one and that investors should be concerned in case they are being contacted, especially by the fraudsters.

The consumers’ complaints have made firms, offering foreign exchange trading and other commodities, wary. A common feature these unauthorized companies have is that they promised high returns and guaranteed profits.

FCA notes that firms that offer such services in the UK have to be authorized by them. However, a lot of the firms that were reported were unauthorized but claimed to be UK-based as they provided a London address. In reality, they don’t have any physical presence in the UK.

Meanwhile, most consumers reported they received some returns from the firms initially, and then they were encouraged to invest more. Soon after, the returns stop and their account got suspended. They weren’t able to get hold of the firm.

The FCA strongly suggests that if consumers want to trade in high risk investments like Forex, they should ensure that they only transact with authorized firms. To do this, consumers should ask for the Firm Registration Number (FRN) and contact details. They note that consumers should call them back on the switchboard number that was provided on the Register. If no contact details were provided on the Register or if the firm claims that they are outdated, consumers should contact the FCA.

On Monitoring Global Financial Industries

Regulators have made monitoring global clients more difficult and expensive in the time of financial crisis. Brian Moynihan, the chief executive of Bank of America, and Bill Winters, CEO of Standard Chartered, criticized the tightening of regulatory procedures that were implemented since the start of the crisis.

When the two veteran bankers spoke during the World Economic Forum in Davos, they both agreed that the demands of clients for increased global services meet their needs worldwide, which challenges both banks.

“There was a disconnect between the absolute globalization of companies and the ring-fencing of countries’ on a regulatory basis,” says Mr. Moynihan.

Mr. Moynihan emphasized the need for country-by-country regulatory procedures post-crisis, which could be a challenge. He said, “All that stuff is de-globalizing while customers want us to work for them on a global basis.” According to him, customers vary from individuals to large corporations.

Meanwhile, Bill Winters, who is currently running emerging markets-focused Standard Chartered since June last year, commented on the regulatory fragmentation, “It’s real and it’s expensive.”

“It doesn’t stop the global financial system, it just makes it more expensive,” he added.

These two heads agree that there must be a playing field for corporations involved in payment transactions, in response to the rise of advanced financial technology companies that make use of mobile and other payment methods.

“To the extent that large chunks of the population are using their SIM cards as their value store, someone should be watching them,” says Mr. Winters, who named Vodafone as an example of a telecom company that provide such services in countries like Kenya, which aren’t regulated in any way.

“The payment system has to be regulated and participants need to be observed,” he said. “FinTech has a role to play but where the issue is systemic it needs to be dealt in the same way.”

To that, Mr. Moynihan agreed, saying that there should be a standard among financial technology companies like that of regulated banks in terms of cyber security. “If you had a disruption (to the payments system) of any size, you’d have an effect,” he said.

The head of private equity company Blackstone, Steve Schwarzman, who was among the panel, said that regulations made the world less safe in certain aspects. “By forcing banks out of the dealer market, there’s no one to make markets in fixed income. There’s no one to be in the middle,” he added.

Gavin Paterson, CEO of BT Group, said, “This is not just about identity, it is about security and prosperity.”

Are You Ready for the NAPE Summit?

The NAPE Summit has recently announced their lineup for the Nape Summit Global Business Conference this year. Being a part of the largest upstream event for oil and gas industries in the world, the conference is looking to explore global implications of the shale revolution, industry expectations for this year, and the roles of the political landscapes and new and emerging technologies that play in the outlook.

The Chair of the NAPE Operators Committee, Jeanine Haller Piskurich, said, “With the uncertainty in the commodity price outlook going into 2016, it’s critical that oil and gas companies have a thorough understanding of not just domestic, but international factors that could affect future development. We’re pleased to offer international and domestic presentations for the first time at the NAPE Summit Global Business Conference.”

Speakers of the Conference

The CEO of EOG Resources, Inc., William “Bill” Thomas will be the one to keynote the NAPE Summit Global Business Conference luncheon regarding the “Future of U.S. Horizontal Oil”. Other speakers for the conference include the following:

  • Christi Craddick, the Railroad Commissioner of the Texas Railroad Commission will be speaking about “Update from the Texas Railroad Commission”.
  • Dan Naatz, the Senior Vice President for Government Relations and Political Affairs of the Independent Petroleum Association of America, will speak about the “Energy Policy and the 2016 Political Environment”.
  • Harry Sullivan, the International Energy Attorney of Kosmos Energy will speak about “How International is Similar to Differs from the U.S. Oil and Gas Industry”.
  • Robert Clarke, the Research Director, Lower 48 Upstream, Wood Mackenzie, will speak on the “U.S. Onshore Exploration: What to Look for in 2016”.
  • Jeff Sieler, the Managing Director and Co-Head A&D of the Citigroup Investment Bank will speak on “The Anatomy of Mid Con Midstream Deal, Tall Oak”.
  • Allen Gilmer, the Chairman and CEO of Driliinginfo, will talk about “Dynamic Field Development Optimization”.
  • Kenneth Hersh, the CEO of NGP Energy Capital Management, will be talking about “The Global Ramifications of the U.S. Unconventional Resource Revolution”.

The former mayor of New York City Rudy Giuliani will also be featured on the summit as a speaker for the NAPE Charities and Luncheon. While Richard Fisher, the former president and CEO of the Federal Reserve Bank of Dallas, will be speaking during the NAPE Decision Maker’s Breakfast.

When is the Summit?

The NAPE Summit 2016 will be held on Feb 10 to 12, 2016 at Houston’s George R. Brown Convention Center. Aside from the conference, they will feature the annual Decision Maker’s Breakfast and the NAPE Charities Industry Luncheon, which will be a whole day of domestic and international outlook presentations and a two-day Expo on approximately 15 acres of exhibition space.

NAPE is actually the marketplace for the oil and gas industry for buying, selling, and trading of prospects and producing properties. They held 3 expos each year, creating an environment where participants can lay out their expectations of doing business and gathering all the necessary parties for evaluation, funding, and making some deals.

Gold: The Currency of Last Resort

We always hear the question: “What is Advanced Markets’ spread in USD?” According to LeapRate, it is a spread that depends upon the conditions of the market. Advanced Markets, a true STP Prime of Prime, provides liquidity from top tier, global banks. The average EURUSD spread is normally within 0.3-0.5.

Gold & Forex Brokerage

Gold can give a brokerage or Fund Manager more than what the EURUSD spread will when we talk about future revenues. Most people notice the EURUSD first because brokers market their “tight” EURUSD spread for them to attract more clients. However, as soon as these clients came in, they would pile on their markups along with other pairs of their offerings.

We all know that Gold and the US Dollar are considered as the safe havens during times of global financial crisis. But, between the two, Gold is still the best choice against uncertainty. In the eyes of many people, gold represents confidence play compared to the less certain US Dollar and the “flawed” Euro.

Spot Gold, for instance, has a 100 ounce per lot contract size and 0.01 ($1 per lot) increments. Gold remained low for the past 5 years as the dollar rose and predictions of higher US interest rates further curb the “appeal” of bullion. However, if you look at the market in the past week, you’d notice how fast sentiments may change and how Gold will always be the beneficiary of financial upheaval. It will still be the currency of last resort.

Advanced Markets’ Offering

Advance Markets’ offer Gold spread that is within single digits ad high teens, having 1,000 to 2,000 ounces of liquidity on the bid and offer. But, most of the retail brokerages would offer wider spreads to compensate for operating expenses and to generate extra P&L.

The revenue potential of brokers who are giving mark-ups on their offers using Gold is vital. Take for example: EURUSD and Gold will always have the same value per tick; but, the ability to markup the EURUSD spread varies according to market competitiveness. In general, EURUSD has a markup cap of a few decimals to 1 pip.

Gold Spreads are usually found at 50 cents wide, with a 35 cents net markup over its liquidity. The Advance Markets’ firm emphasizes that they aren’t advocating for excessive markup prices and that commissions and markups proposed by brokers are always subject to their approval.

Boosting Economies by Devaluing Currencies

Investors have long adjusted to developed countries boosting their economies by de-valuing their currencies.

The European Central Bank, the Bank of Japan, and Riksbank of Sweden have created new money using asset-purchase programs, which have interest rates that are lower or close to zero. They are expected to easy the policy further this year. They aim to weaken the demand for their currency and boost up inflation and growth as their exports got even more competitive and the imports became more expensive. But, by the looks of it, it isn’t working out as planned.

The Japanese yen had hit its peak for 4 and half months already against the dollar this week. The Euro reached its 12-week high on a trade-weighted basis. Meanwhile, the Swedish crown is almost at its 10-month highs against the euro.

This year may be unstable for the foreign exchange market, especially if we base this analysis on the first weeks that went by. It is unlikely, however, that we could give investors clear, directional trades compared to the past few years.

A 25% rally of the dollar 9 months into March 2015, for instance, gave hefty returns for investors who bought it against a major currency. Despite the hike rates implemented by the US Federal Reserve, it is more likely to increase twice more in 2016.

Overall, 43 central banks have eased the policy in 2015. “Central banks’ mandates are almost becoming mutually exclusive. It’s a staggering situation when you’ve got a negative deposit rate and you can still see your currency appreciate,” said Neil Mellor, the BNY Mellon FX strategist in London.

Market confusion renders the waters unpredictable. Investors are now turning to safe havens, like the yen, as they fear sliding shares and weakened Chinese currency as well as geo-political threats between Iran and Saudi Arabia.

The Japanese yen has recorded its best performance since August 2013 last week and experts are speculating that yen will strengthen over the next months. Expectations for central banks to undertake monetary loosening have increased as well, establishing a bar that is much higher for surprising markets.

Twelve months after the asset-purchasing quantitative easing (QE) programme has been introduced in the late 2008, the dollar fell by 15% on a trade-weighted basis. But the Fed’s QE2 in 2010 strengthened.

“Central banks have reached a point of diminishing returns to their unconventional policies… (and) can no longer ‘shock and awe’ the markets,” says Stephen Jen, founder of the SLJ Marco Partners.

FXSpotStream Entered FXPA

As other industries are trying to keep soaring high both locally and globally, the industry of Foreign Exchange continues to be on top of the list.

An organization based in Washington, DC called FXPA embodies the common interests of the whole professional foreign exchange industry members. This group envisions involving the policymakers, main regulators, and everyone to an effective, transparent and excellent global currency market through the help of research, advocacy, and education.

A Forex trade body (FXPA or Foreign Exchange Professionals Association) that began in September 2014, Wednesday proclaimed that they are having a new member.

FXSpotStream, a provider of multibank FX aggregation services, has joined FXPA as an Associate Member. The CEO of FXSpotStream, Alan Schwarz stated that they are happy about being connected with the Foreign Exchange Professionals Association and be able to uphold its goals to establish and ensure an efficient, competitive, and transparent marketplace. FXSpotStream is a bank-owned group, aiming to provide both transparency and competence in the FX market.

FXPA spokesperson said that this time has been really hard for the market and FXPA is taking a practical approach on this though. In order to be successful in shaping the FX market’s tomorrow, FXPA believes that unity and educating the regulators and the law-making bodies, media, and all people is very important. So now, they welcome FXSpotStream in their growing number of members with open arms.

Forex Trading is very beneficial. It is worth the investment. All you have to do is to keep track on the continuous changes of currency values all around the world. There are a lot of trading platforms to choose from so everyone who would want to try trading can easily to do. The FX industry promises great return on investments, which is very possible for anyone who is determined to succeed in this industry.