News

Leicester City – Premier League Champions 2016

Posted by on May 20, 2016 in Editorial, Featured, Learning to Trade?, News

Leicester City – Premier League Champions 2016

If you’ve just returned from another solar system, you might not know that Leicester City football club won the English Premier League title for the first time in their history in 2016. Starting the season as 5000-1 outsiders, they triumphed over many well known and better funded clubs. I confess that I am not a follower of football. As a Leicester citizen, I couldn’t help but be riveted to the media coverage of this local success story. So why am I writing about a football success story on a trading website, apart from the fact that Plan B Trading is based in Leicester? I think the undoubted success of Leicester City has many parallels with the trading world. Not least of these is belief. Even if those around them did not believe it was possible to succeed, the team held on to that belief. Their confidence led to many a successful match when pundits would have them in second place. In trading any given strategy, you must have the confidence in the strategy to deliver a result. Hesitation is not a characteristic associated with success. Another lesson we can learn from Leicester’s football success is the time it takes to become a national phenomenon. This did not happen in a single match any more than a single profitable Forex trade makes a successful trader. We cannot measure success in trading in a single trade. During the football season, Leicester did take some losses – not too many as it happens. There were quite a few matches they did not win. Did they let this affect their next game, or did they just train harder? By the end of the season, they had many more points than any other team. As a trader, you must not allow your mindset and confidence to be wrecked by a losing trade or a run of non-profitable trades. You need to cope and not carry this negativity into your next trade. This might mean cooling off by staying out of the market for a period of time. Or reducing your exposure until your confidence returns. Or it might mean spending some time with your coach or mentor revisiting some of the basics. At the end of the day, you must measure your trading success over the longer term and not a trade by trade...

Read More

Out of the Woods

Posted by on Feb 18, 2014 in Featured, Market News, News

Out of the Woods

The non-farm payroll (NFP) figures a week ago did not suggest to me that we are out of the woods just yet. After strong numbers for several months on the spin, January’s low numbers weren’t significantly revised upwards and the numbers for February came in on the low side. This suggests that while growth in the world’s largest economy is continuing, it is not doing so at the pace set last quarter. This is two months of lower than expected jobs growth. Not the end of the world by any means, as it is only two months of data. Maybe the frozen weather conditions are slowing the rate of growth? Once spring arrives, it will be full steam ahead again? I have a niggling doubt in the back of my mind though. It is not just the USA with figures that aren’t as optimistic. We saw GDP figures for Japan today, which while they are growing, are hardly setting the world alight. As for the Eurozone, it seems that growth of 0.3% is treated as really great news. When I look at the UK economic figures for the past month or so, they too have been as damp as the weather. The levels of growth talked about in the final quarter of last year seem to be on hold for now. The sharp drop in CPI does not suggest a strong demand in the UK economy. Confidence is a word frequently associated with the conditions for economic growth. Where is this confidence right now? One look at some of the emerging economies tells a story. Take Turkey for example. Its exchange rate has been hammered recently, leading to the Turkish Central Bank intervening in the markets to protect its currency. Within 48 hours, the impact of the intervention was lost and the Turkish Central Bank responded by raising interest rates quite dramatically to protect the currency. Turkey was not the only emerging market to suffer. Several others raised interest rates as money flowed out of these countries back to “safe haven” assets. For a fortnight or so, there was a real sense of “risk off” again. Growth figures from China are often cited as a trigger for changes in economic expectations and a trigger for the risk attitude. We could be on the verge of economies slowing again. That could be a bit tough for the Eurozone, as it hasn’t really got started. With Yellen, the new lady in charge at the FED, I wouldn’t want to bet on the current taper in QE continuing at the same rate if weak figures continue. This afternoon, Yellen signalled she wants to review more data prior to making any changes. She also said the recovery has been slow by historical standards. The confidence levels seem to be weaker now than a few weeks ago. Mark Carney, governor of the Bank of England gave a similar message last Wednesday. The tales of caution are all around, rather than descriptions of economies that are out of the...

Read More

Trading in progress for 2014

Posted by on Jan 11, 2014 in Commentary, Featured, Market News, News

Trading in progress for 2014

The first full week of 2014 has seen trading activity resume in full. Yesterday, we had the Bank of England and European Central Bank setting interest rate policies for their economies. The UK rates were held, with UK economic news generally continuing to support sterling. With the US economic growth powering ahead, it has to be reckoned that the Eurozone will eventually arrive at the party and benefit from this growth, in turn returning to growth. However, the Euro was under pressure yesterday as growth is lacklustre to say the least. Probably more accurate to say lacking instead. That was yesterday. Of course, today was the big economic announcement, the first non-farm payroll figures for 2014. After solid figures throughout last year, leading up to the tapering decision last month, it was perhaps inevitable that sooner or later a set of figures would disappoint. We didn’t have to wait long. The 1:30 (UK time) wobble for USD came on the back of disappointing jobs figures. Whichever currency pair you chose to trade, you were pretty much ok as long as you were selling dollars. Excepting CAD, which came off worse. But let’s get some perspective on these figures. The shock value spooked the markets today. But the revision to last months figures was upwards. I suspect we will see an upwards revision next month. I remain of the view that the US economy has some momentum behind it and one months job figures are not enough to stop that momentum. The freezing conditions could cause a further blip in February’s figures though. My predictions remain dollar strength for 2014 and sterling strength too, with sterling outperforming the dollar in the first quarter. I remain pessimistic on the Euro, Yen and Aussie for now and my views will colour my trading decisions for the first months of...

Read More

Tapering at last

Posted by on Dec 20, 2013 in Commentary, Featured, Market News, News

Tapering at last

The biggest talking point among traders for several months now has been “When will the FED start tapering?”.  At least we know the answer now. Wednesday’s FED meeting announced a reduction in the amount of money being thrown at the market, reduced by $10bn a month from $85bn to $75bn. This really is a symbolic gesture. In the overall scheme of things, a reduction of $10bn a month being pumped into the US economy is neither here or there. The economic output of the US economy is well over $15,000bn and growing strongly. The other aspect of the FED announcement was not to expect any changes to interest rates anytime soon. This is a factor in most western economies at the moment – a strong growth in demand and GDP is not filtering through to prices. Interest rates are the weapon to slow demand and prices. Until the growth in the economy starts to take up the slack capacity in the economy, we can expect interest rates to remain low. Once the threat of inflation looms, that is when we can expect real interest rates to rise. For now, the FED has set the path into 2014. This has at least given the markets some direction. This should lead to a gradual strengthening of the USD against other currencies. Now compare the US economy with Europe and the Eurozone specifically. Which one would you want to invest in? A stagnant economy trying desperately to come up with something to stimulate growth, or an economy that has already achieved that as an outcome. With that statement, it won’t take too much to work out where I figure the Euro is heading over the next few...

Read More

Farewell Mrs T

Posted by on Apr 26, 2013 in Editorial, Featured, News

Farewell Mrs T

Much has been written and broadcast about the passing on of Margaret Thatcher. Her funeral took place whilst I was in the City of London working with some new traders. A couple of thoughts struck me through the day. Love her or loathe her, and much was broadcast to this end, I believe she was one of the best prime ministers to hold office last century. I agreed with much of what she accomplished, putting Britain back on the global stage and helping us feel proud of our nation. The protests were vile and distasteful, particularly for her family. According to reports I read in the press, some of the protesters included professional people, such as teachers, who are in charge of our children today. If this is representative of attitudes amongst the teaching profession, then all I can say is that these people are totally disconnected from the real world and should book their one way ticket to North Korea. It is hardly any wonder that so many young people in the UK are out of work and available jobs are being taken by migrant workers. Our young people have been let down and lack the understanding of basic wealth creation. It is worth remembering that Mrs Thatcher passed through the education department on her way to the top. The major role Mrs Thatcher played in my current life was the deregulation of the City of London and the abolition of exchange controls. These two acts enabled the trading activities we see today. With the entrepreneurial nature of Britain, these decisions led to London becoming the leading financial centre in the world. With her pro-British stance in relation to Europe and her belief in the individual, rather than the state, we all benefit from the role London has today. As a trader, I am grateful for the legacy of Mrs Thatcher. I hope that future generations of political leadership do not allow London’s position in the financial world to be undermined. Farewell and...

Read More

Two weeks into January

Posted by on Jan 17, 2013 in Commentary, Market News, News

Two weeks into January

It’s pretty snowy and frosty in my part of the world. That said, we are two weeks into January and there have been some exceptionally profitable trading days so far this year, January 2nd being the first of them. It was almost so predictable, the USA did not fall off the fiscal cliff. No real surprise at all. The element of surprise was contained to the extent that the US politicians have been taking careful note, maybe even having private coaching from their European counterparts. Collectively, the US politicians managed to kick the can down the road. It worked in Europe in 2012, so why not in the USA too? So far, all that can be said is that the USA did not kick it that far, only to the end of February. Some tax increases if you earn more than $400,000. No agreement on the deficit, either in the ceiling or the budget cuts. These will be agreed by the end of February. The question then is what time in February? After all, everyone suspects it will be on the 28th already. And will they have another go at kicking the can down the road after that? Can kicking could even become the latest international sport. With two continents playing together, the French would have to contribute the musical accompaniment with the Can Can. Sorry, I digress. To me, the bigger surprise was the positive reaction given by the markets to international can kicking. Europe and the USA are now both making no decisions, solving nothing, putting the problems off until tomorrow when they’ll be bigger. And the market’s reaction? Fantastic. Let’s celebrate and drive the markets to four year highs. Keep...

Read More