マーケットニュースとインサイト

As a trader, you’ve probably found that having the right trading plan plays a significant role in your trading success. A basic trading plan should tell you what, when and how much to trade. It should also have specific instructions on when to close out your trades.

As traders, we all need a well thought out trading plan to navigate our way through the turbulent waters of financial markets, with the added benefit of having something to hang on to when we’re in the middle of a trade. Devising a trading plan needs detailed analysis and careful consideration. Unfortunately, we are not able to go through how to develop a complete trading plan in a short article such as this.

However, we are going to discuss some fundamental points to assist anyone who already has a trading plan or is in the process of developing one, helping to make sure it includes these minimum standards. 1. A trading plan that suits your character In any trading plan lies a trading philosophy that determines the overarching framework. The trading philosophy represents your beliefs about the markets.

For example, it shows whether you believe in short-term technical trades, or if you think success can be achieved by making long-term fundamental trades. It shows if you are a trend trader looking to move with the flow of the market, or if you are contrarian in nature and are looking for opportunities to go against the others. Regardless of the trading philosophy you choose, our suggestion is to make sure that it A) is proven and valid, and B) suits your personality.

If the trading philosophy does not suit your character and the way you look at the markets, you will inevitably deviate from your plan and potentially put yourself in a difficult situation, both financially and psychologically. Once you are confident that your trading philosophy is appropriately reflected in your trading plan, your plan should be capable of delivering and managing desired trading opportunities in the context of your trading philosophy. To achieve this, you need to make sure all the below requirements are met as a bare minimum. 2.

Your trading plan should be bias-free Biases occur because we have pre-set ideas in our minds that stop us from making objective decisions. This problem lies within human nature and is the result of our emotional and cognitive limitations. Within the long list of biases that exist, there are two which are the most harmful to many traders: confirmation bias and hindsight bias.

Confirmation bias is when we systematically look for what confirms our prior beliefs and ignore most evidence that challenges our set preconceptions. An excellent example of this bias is when we are trying to ascertain a simple breakout strategy by looking at a chart, a strategy used by many traders to trade the news. If the market keeps going in the direction of the breakout, we gladly count it as a success (after the fact), but if it fails — that is, it reverses its course after the breakout — we call it a Bull/Bear Trap and forget about the failure which has just happened.

By renaming the model, we have shifted our attention from a failed breakout strategy to a now successful Bull/Bear Trap! Under the influence of the confirmation bias, we are likely to pursue trading patterns which otherwise would have had little to no merit. This bias makes us derive conclusions that we’d like to see, instead of seeing what’s actually happened in reality.

The second most crucial bias traders face is the hindsight bias. Hindsight bias is when we look at a chart and find ourselves counting easy trades that would have worked well in the past. It is the moment that you go “it was an obvious head and shoulder” after seeing what had happened afterwards.

This bias comes from our tendency to distort our judgment towards the successful event. If you are given a set of questions about uncertain events (i.e. is the market going to consolidate, trend, reverse etc…) and the correct answer at the same time, it is very likely that you would distort your analysis to conclude in line with the correct answer, as if it really was obvious. Hindsight bias makes trading look easy, and can trick you into believing in trading rules and your ability to forecast – either of which may not be accurate.

If your trading plan has seemingly worked well on historical data but is failing to deliver desired results in real time, then it may be suffering from the above biases. Biases must be removed from your trading plan in order for it to be objective and testable. 3. Your trading plan should be objective An objective trading plan can enable traders of different market views to arrive at the same trading decision.

It has enough details and instructions that it takes any confusion out of trades and leaves no room for personal judgment. For example, a good trading plan does not allow traders to draw any trend lines they see fit, but instead, it dictates the trend line which is appropriate to be drawn. It has as many detailed guidelines as possible to stop traders from improvising. 4.

Your trading plan should be testable The best way to make sure your trading plan is objective and bias-free is to convert it into a set of clear trading rules and let a computer test the trading plan for you. This is called backtesting. By using a computer to do the testing, you are essentially removing human emotions and biases from the equation.

Often during the backtest, you will get a much better understanding of the strengths and weaknesses of your trading plan. The downside to backtesting is that it is not easy (it requires coding), and validating a backtested result requires some maths and statistical skills to avoid being trapped by the backtest itself. However, this is still one of the better and cleaner ways to ascertain the validity of your trading system. 5.

Information about the market you are trading The trading plan must hold enough historical information about the performance of the patterns and behaviours of markets you are looking to trade. Whilst the type of the information required depends on the trading strategy, below are a few suggestions that we think should be present in any trading plan that is based on intraday charts: Average size and duration of price swings per trading session Average range per trading session Times of major turning points per trading session Correlations between various trading sessions Historical reactions of the currency to news announcements Important pivots and trends Technical indicators that have worked best over recent history Historical reaction to the session opening and closing times Volatilities per trading session (this can be used to set dynamic stop losses) Intraday correlation with other markets The above should be modified based on your trading strategy. Note that the more you can do to add to the list above, the more confidence you can have in your trading plan. 6.

A solid risk management plan Many of us believe that “stop losses” are the same as risk management. The truth is, stop losses are an essential part of a risk management plan, but are only an element of appropriate risk management. A good risk management plan should have three parts: Tradable instruments: Sometimes you may need to leave a specific currencies/indices out of your tradeable universe just because they can’t justify the risks you will have to take to trade them.

On the other hand, you may at times need to add a few instruments to your universe in order to reduce your risk and maximise your return. You should be able to refer to your risk management plan for these types of questions. Trading size: Your risk management plan should be able to tell how much to trade each time.

It must have a mechanism in place to make sure one or two bad trades do not impact the integrity of your account. Stop losses: Your risk management plan should make sure that your stop losses suit the trading strategy you’re pursuing. For example, a trend trading system may require having close stop losses, whereas this might not be the case for a mean-reverting strategy.

Stop losses should be adaptable to market changes and should be backtested and validated during the testing process. Conclusion: Trading plans are vital for trading success. They have many parts which should be carefully designed and tested.

We appreciate that contemplating all the above points can be challenging and time consuming, however you will become more confident in your trading as you will have in place a structured and improved trading plan.

As a pioneer of providing MetaTrader 4 in Australia since 2006, our premium MT4 trading tools help provide you with real time trading alerts and a suite of MT4 add-ons to help improve your trading experience when trading the global markets. Whether you prefer to trade Forex, Indices or Commodities, our choice of premium MT4 trading tools will provide you with the analysis and tools needed to get to the next level. Our premium trading tools include: MT4 Genesis Autochartist You can get access to these premium tools for free!

To help enhance your trading experience, we offer all clients the opportunity to access each of these tools for free. Here’s how you can get our MT4 trading tools for free: Deposit $500 into your GO Markets live trading account and you are eligible to receive one of the following GO Markets MT4 trading tools: MT4 Genesis ; or Autochartist; Deposit $1,000 into your GO Markets live trading account and you are eligible to receive both of the GO Markets trading tools for free. Existing clients who already meet these requirements can also request access to MT4 Genesis and/or Autochartist.

No additional fees or costs apply for access. Accessing our premium tools is simple! Register for a Live Trading Account here Fund your live account with minimum deposit of AUD 500 (or your account currency equivalent) to receive 1 trading tool or AUD 1,000 (or your account currency equivalent) to receive both trading tools into your account Opt-in here to get access to the trading tool(s) of your choice If you would like to talk to an account manager about your options, visit our Contact Us page.

For information on other trading tools, see our Autochartist, Genesis for MetaTrader, VPS for MetaTrader and a-Quant information pages.

Nifty 50 Go Markets are proud to introduce Nifty 50 (India 50 on GO MT4). The Nifty index is listed on the National Stock Exchange (NSE) in India and acts as a benchmark for the Indian equity markets. It is a capitalization weighted index which covers 13 sectors of the Indian economy in one portfolio.

India is the fastest growing economy of the G20 since 2014. The first quarter of 2017 saw an increase of 6.10%. This is double and even triple compared to Australia or United States.

India contains a mind whopping 1.311 billion people. They’re on track to surpass China in the next 5 years to become the most populous country in the world. Unlike China, India’s population will experience growth for decades.

The UN projects 1.5 billion in 2030 and 1.7 billion by 2050. An overlooked aspect of increasing population is what this means in terms of work force. An average Indian is 29 years old, prime working age.

Compare this to an average American or Chinese aged 37, or European at 42 and you can start to understand the long-term prospects that India offers. India in the recent past was a place with unimaginable poverty. In 1994 almost half of the population lived below the international poverty line, which is having an income less than $1.25.

Today that number has been reduced to 23%. With more people lifted out of poverty, consumer spending has skyrocketed from 549 billion in 2006 to 1.06 trillion in 2011. Already by 2025, India is predicted to be one of the largest consumer markets.

As you can see in the graph below the middle class will keep rising. With the Nifty 50, you will be investing in a diverse swatch of the Indian market with the push of a button. The index has been performing relatively well for the last couple of years with a few falls during the Brexit referendum, US election and the demonetization move by the government.

Source: Investing.com Technical analysts have forecasted a bullish trend for the Nifty 50 in 2017. With the spot rate crossing over the moving average indicated by the red line, the Nifty is trending upwards indicating a buying opportunity. More than 70 % of the stocks in the Index has a bullish trend making it worth to have the Nifty on your watch list. ( https://www.moneyworks4me.com/comp-peer/index/index/order/netsales/sort/desc/fid//type//seid//indexid/123/marketcapid//industryid//pagelimit/51 ) Source: GO Markets MT4 A few months ago, the market participants were taken by surprise with a rising Rupee.

It has rocketed against the Dollar with more that 6 % increase. Foreign investors are seizing the opportunity as they are gaining a capital appreciation and an INR appreciation at the same time. With a stronger Rupee, the market is a bull phase. “Growth is high, inflation is under control...by and large it is a positive indicator for the rest of the world.

Inflows from foreign investors have accelerated and Indian stock market is doing very well. This shows confidence in India's economy,” Jalan told BloombergQuint over the phone (Source: Bloomberg). Market participants and analysts are having mixed feelings about the strength of the Rupee.

Whilst it is good for the stock market, an appreciation of the Rupee can hurt exporters and the IT sector mainly. Most of the biggest IT companies in India receive revenue in foreign currencies and with the American clampdown on visas, it is another concern to be dealt with. As a result, the RBI unusual reluctance to intervene is deemed to be good for the stock market.

Would the rise of the Rupee in 2006-2008 whereby stock growth was substantial repeats itself? It will certainly be worth keeping an eye on the Nifty 50 over the next couple of weeks. *The interest rates and dividend adjustments on the Nifty 50 will be similar to GO Markets’ other indices. Overnight interest rates for the NIFTY50 are charged based on 1 month Mumbai Inter-Bank Offer Rate (MIBOR) plus a GO Markets fee of 2.5% per annum.

Dividend adjustments will be made from time to time when constituent stocks go ex-dividend and will result into a cash debit/credit. News about dividend adjustments will be published on GO Markets website under GO Market Daily News. By: Deepta Bolaky & Sam Hertz GO Markets

Most political scientists believe that all problems in the world are related to politics, and most economists believe that all problems are rooted in economics. However, what’s happening in Turkey now seems to be a combination of both as I'll explain. Firstly, investors have always regarded Turkey as one of the Emerging Markets with good economic growth.

We can see from the statistics that the GDP has remained an average 7% to 8% growth in the past ten years, and it even exceeded 10% in 2015. It looks pretty, right? But this is just nominal GDP.

From Economics 101 we know that we should divide nominal GDP by inflation rate to get a real GDP figure. Here is the inflation rate of Turkey: It looks bad. In July 2018 this number soared to 15.8%, which begs the question: what caused such high inflation?

Let me give you the overall picture, and then we can discuss the detail. Firstly, the high inflation is boosted by food prices and household goods such as furniture. Secondly, Turkey relies heavily on importing foods and merchandises from foreign countries, which has created a consistently negative trade balance since the 1990's.

A constant trade deficit means you have to borrow debt to satisfy the consumption of that imported good. See how Turkey’s Government debt accumulated in the past decade: Today only one country, the US, appears to escape from this natural law, by borrowing infinite new debts to cover its old debts and prolong repaying these obligations until...well... the end of the world. On the surface, it would seem all other countries need to obey this rule and repay their debts, unlike the US.

Thus, when a country’s debt is accumulating to a relatively high number (we often use Debt to GDP ratios to monitor), this country’s economy become vulnerable and potentially easier to be attacked by other financial powers. You could argue that this is an unlevel playing field in some respects and the US could well be using its ability to take advantage of this situations as they arise. A perfect example of this was George Soros who famously attacked the currency of southeast Asia Countries in 1997.

Note the foreign debt-to-GDP ratios rose from 100% to 167% in the four economies within the Southeast Asia region during 1993–96. If Turkey can somehow avoid getting involved in any significant conflicts of the world and focus on developing its economy, this whole debt issue might sort itself out over time. But unfortunately, given Turkey’s geographic location, it appears destined to be pulled into most conflicts simply by proximity.

We all know how vital areas such as Istanbul and the Turkish Straits are throughout history. Internally, Turkey has a Kurdish ethnic issue and a high household debt issue; externally it has the downing of a warplane issue with Russia, and also an Armenian genocide conflict with Germany. The list goes on.

In short, this patch of land is no stranger to dealing with massive problems. Ultimately this latest crisis comes down to one thing. Does Turkey compromise with America’s arrogant request, or make a stand against Washington's tactics and attempt to go their own way?

That is the dilemma that President Erdogan is currently facing. Lanson Chen GO Markets Analyst This article is written by a GO Markets Analyst and is based on their independent analysis. They remain fully responsible for the views expressed as well as any remaining error or omissions.

Trading Forex and Derivatives carries a high level of risk. Sources: TradeEconomics.com

US Markets With relatively sound fundamentals driven by strong earnings growth so far in this earning season, US equity markets have continued their bullish trend. The S&P500 bounced back strong from its 100-day moving average in early July, and by going over the 2800 level, it seems to be on track to reach its all-time high of 2870, possibly even winning new grounds. Chart 1: US S&P 500 Whilst it is hard to make a case against the trend above, we also want to be ready for when markets descend into a (possibly overdue) correction phase.

UBS has recently released a note suggesting we are going to see some serious pain should the tariff war between U.S and China intensify. They also argue that the current rate of tariffs has minimal impact on the markets, but if the U.S takes it to the next level by putting a 10% tariff on US$200 billion worth of imports from China, then the S&P500 would most likely be hit by a 10% decline. They also predict that the S&P500 could drop by an additional 10 percent (a total of 20%) if the current situation between U.S and China escalates into a full-blown trade war.

On a macroeconomic level, we note that the difference between short term and long term interest rates is narrowing down rapidly. This phenomenon, also known as yield-flattening, is usually seen as a signal that long-term growth is potentially not as strong as short-term growth. When yield-flattening turns into yield-inversion (where short-term rates are higher than long-term rates) and is combined with increasing cost of borrowing for companies, higher inflation, and rising unemployment, it can be a serious sign of an upcoming recession.

Inflation expectations have somewhat stalled over the past few months, but as shown in the chart below they are on a clear strong upward trend. Chart 2: U.S five year break even (inflation expectation) US unemployment seems to be stable, but corporate borrowing costs are moving higher. Therefore, while traders enjoy the current calm they should also be on the watch for signs of risk.

This article primarily allows readers to understand better risk monitoring; by undertaking a historical analysis, we show some instruments’ sensitivity to volatility. Monitoring Risk: A common way to monitor market risk is to monitor volatility. In simple terms, you can think of volatility as the range of candlesticks in your candlestick chart.

In the more volatile periods, the candlestick ranges are larger, and in the less volatile periods, the candlestick ranges are smaller; as volatility is the magnitude of price swings whether upwards or downwards. Reading candlestick charts or price swings to determine the state of volatility is seen as backward looking. That means you would be only limited to past information to make an inference about the future state of the markets — This can be problematic for traders.

The Volatility Index measures the implied volatility as opposed to historical (or so called realized volatility). It is a forward-looking measure and roughly estimates how much volatility traders are incorporating into their pricing models. One of the reasons volatilities are so important to watch is that high volatilities will usually cause stock markets to fall rapidly.

With stocks falling fast, investors will switch to a risk-off mode, which in turn has a follow-on impact on all other markets including currencies, commodities, etc. To better see how the VIX affects other markets, we have selected 5 scenarios in Chart 3 where volatility has significantly jumped up over the past ten years. Chart 3: VIX over the past 10 years Table 1 shows the duration of each period and subsequent fall in the S&P500.

The last column in this table measures how fast the market has fallen over the volatility period. During the GFC, the market fell on average 0.15% per day for almost 367 trading days. Table1: Volatile Periods and their impact on S&P500 (measured close to close) Period Start Period end No of Days Change in S&P Average %Drop per business day Scenario 1 11/10/2007 6/03/2009 367.00 -56% -0.15% Scenario 2 26/04/2010 1/07/2010 49.00 -15% -0.31% Scenario 3 7/07/2011 4/10/2011 64.00 -17% -0.26% Scenario 4 19/08/2015 11/02/2016 127.00 -12% -0.09% Scenario 5 26/01/2018 9/02/2018 11.00 -9% -0.80% Source: Bloomberg Let’s explore how asset classes have performed during these scenarios.

Equity Indices: Watch the Nikkei We may have heard that correlations go to 1 during crises. This means that if a major risk event were to hit one corner of the world markets, others would be affected too. The table below shows that each time the S&P has sneezed (or gotten sick during the GFC) the rest of the world followed suit.

Table 2: Performance of major indices during crises (measured close to close) S&P 500 DAX 30 FTSE 100 ASX 200 Nikkei 225 Scenario 1 -56% -54% -47% -50% -59% Scenario 2 -15% -7% -16% -13% -18% Scenario 3 -17% -30% -18% -15% -16% Scenario 4 -12% -18% -14% -8% -22% Scenario 5 -9% -9% -7% -3% -10% Source: Bloomberg With the exception of Scenario 3, the Nikkei 225 has almost always dropped more than the U.S market. This means that traders would have received a bigger bang for their buck should they chose to short Japan 225 in risk-off environments. Interestingly, ASX 200 has been a better performer than S&P 500 in times of crises.

Precious Metals: Gold and Platinum We previously wrote about how Gold historically turns into a safe haven asset during crisis periods, as depicted in the table below. Unlike Gold, platinum does not hold up during these times, and in fact seems to have been instead highly correlated with stocks — an interesting fact for pair-traders. Table 3: Performance of Precious metals during crises (measured close to close) Gold Silver Platinum Scenario 1 26% -3% -24% Scenario 2 4% -3% -14% Scenario 3 6% -17% -15% Scenario 4 10% 3% -5% Scenario 5 -2% -6% -5% Source: Bloomberg Energy: A case for short-sellers?

During crises all energies can drop quite significantly. Specifically, let’s look at WTI, Brent, and Natural Gas. On average Oil tends to drop a bit more than Nat Gas, but the gap is not wide enough to make Oil a prime shorting candidate.

Table 4: Performance of energies during crises (measured close to close) Oil (Crude) Oil Brent Natural Gas Scenario 1 -45% -44% -43% Scenario 2 -13% -17% 14% Scenario 3 -23% -16% -12% Scenario 4 -36% -36% -27% Scenario 5 -10% -11% -26% Source: Bloomberg Currencies: Commodity currencies once more We have previously written about how USD, CHF and JPY become safe haven currencies during crises. Seeing the US Dollar Index and JPY going higher was not a surprise for us, but it is quite interesting to see the magnitude of AUDJPY’s drop, as it underperformed all other currencies in this analysis. The last row of Table 4 shows the average drop per currency.

The AUDJPY ‘s average decline is almost twice (or even more) that of others. Table 4: Performance of currencies during crises (measured close to close) USD index EURUSD AUDUSD JPYUSD GBPUSD CHFUSD AUDJPY AUDEUR CADUSD Scenario 1 13% -11% -29% 19% -31% 2% -40% -20% -24% Scenario 2 4% -6% -9% 7% -2% 1% -15% -3% -6% Scenario 3 6% -7% -11% 6% -3% -8% -16% -4% -9% Scenario 4 -1% 2% -3% 10% -8% -1% -12% -5% -6% Scenario 5 2% -1% -4% 0% -2% -1% -3% -2% -2% Average (including GFC) 5% -5% -11% 8% -9% -1% -17% -7% -9% Average (not including GFC) 3% -4% -8% 6% -5% -2% -13% -4% -6% Source: Bloomberg Given current markets conditions in the US, Europe, Asia and emerging economies, the smart trader would want to keep his finger on the pulse for any signs of changes in volatility. GO Markets Pty Ltd

Many traders consider trading daily timeframes but when used to trading the shorter timeframes, overnight holding costs of positions may not be something they have come across previously. This brief article has the aim of understanding why these trading costs exist and how they are calculated. But First…An important message about holding costs… Let us start by stating a little “reality check” perspective.

Holding costs, like “slippage” and Pip spreads are NOT ultimately the deciding factors as to whether you become a successful trader with sustainable positive results. Much is made of these, but the reality is there are other things which are far more impactful such as effective position sizing and appropriate and timely exits from trades. Nevertheless, for those of you that are treating trading seriously enough, indeed, let’s use the term “trading as a business”, as with all the above, holding costs should be considered in your trading.

So how does it work… To understand overnight holding costs it is worthwhile starting by looking at what you are doing when you trade a currency pair. If you are buying 0.5 EURUSD position for example, in practical terms you are ‘borrowing’ US dollars and buying euros with the proceeds. If this position is held “overnight”, (i.e. in practical terms this means at 4.59pm US EST), you pay interest on the US dollars you borrow, but earn interest on the euros you bought.

There is a long rate and a short rate which you can find on your MT4 platform (This obviously changes daily). Rates are set globally, and the actual dollar figure is dependent on the size of position you have. To find this on your platform: a.

Right click on your chosen currency pair in “Market Watch” b. In the drop-down menu choose “Specification”. This brings up a pop-up with details of the contract information relating to that specific currency pair. c.

Scroll down to find the long and short swap rates (the example shown is of EURUSD). This calculation creates either a debit or credit to your account per day (termed the swap rate) and is shown in the “swap” column in your trade window at the bottom of your screen. The calculation is as follows: Current long/short rate x number of lots = swap debit/credit in second currency For example, if we held long 5 mini-lots of EURUSD, the “swap long” shown is Long Swap rate of -12.88.

Therefore this looks like -12.88 x 0.5 (contracts) = -$6.44USD This is then converted into your account currency (so AUD if based in Australia) and shown accordingly as a debit. Likewise, If we held short 5 contract of EURUSD, then the calculation would be: 7.14 x 0.5 (contracts) = $3.57 This is then converted into your account currency) and shown accordingly as a credit. We trust that helps.

Of course, please get in touch with us if you need any more clarity on holding costs at any time. This article is written by an external Analyst and is based on his independent analysis. He remains fully responsible for the views expressed as well as any remaining error or omissions.

Trading Forex and Derivatives carries a high level of risk.