Top Trades for 2016: Morgan Stanley

 

1- Short GBP/JPY: Performs best in a risk-off and Brexit scenario.
2- Short CHF/JPY: Relative FX valuation and diverging monetary policies favour the JPY.
3- Long USD vs AUD, CAD, NZD and NOK Basket: Terms of trade weakness and commodity dis-investment should keep commodity FX offered.
4- Long USD vs SGD, TWD and THB Basket: Deleveraging Asian balance sheets create USD demand.
5- Long JPY vs KRW and CNH Basket: A trade benefiting from valuation differentials and Asian balance sheet deleveraging.
6- Short EUR/INR: A carry trade benefiting from high INR rates and a dovish ECB weakening the EUR.
7- Short EUR/MXN: The MXN should benefit from relatively unleveraged balance sheets and strong US trade.
8- Long USD/BRL: We expect a downgrade to non-investment grade, which should drive capital outflows.
9- Long USD/PLN: Upcoming changes to the NBP may bring about new risks for PLN, and widen the USD supportive yield spread.
10- Short CAD/RUB: RUB should benefit from fairer valuations and high yield support. Funding via CAD partially reduces oil sensitivity.

The three worst trading ideas

3 - Picking bottoms and tops

Take a look at a long-term chart, find the bottom and then calculate how much money you would have made if you bought at that exact moment. Now calculate how much you would have made if you waited a few days/weeks to see if the trend was really reversing. It's worth it to wait.

2 - Trading without a plan

Gut instinct isn't a good companion in a trade. Have a good idea where you're getting in and out, or better yet, a detailed plan. Know the calendar, know the risks.

1 - Adding to a losing trade

"When in trouble, trade it double. If you're crippled, trade it tripled." That axiom is meant to be a joke. Nothing blows up an account like adding to a losing trade.

How many ways we can earn from forex trading?

    Great my friend we may be know that forex industry is a good place to earn money but many of us know that we can earn money from forex by trading only, but we can earn money with the following ways-

    1. Becoming a forex trader: Yes we know this very well , we can start forex trading at any time and can be a successful trader if we take it seriously.

    2. Becoming a forex Analyst : Yes can be a fundamental and technical analyst on forex trading and we can earn huge money by publishing, we can join in any broker as a analyst.

    3. Become a broker: we can start forex broker to earn money and to give service to clients. but we have to invest huge money.

    4. Manage Assets of high net worth individuals: Wealth management is a hot cake now in financial industry and we can be hedge fund manager.

    5. We can work with forex trade regulators: I think this is a nice area that we can work the regulatory boards.

    6.Hold Forex trading tutorials: we can give tutorials to those who want to learn forex trading and we can earn from that also.

    7. Write columns in news papers / make TV appearances: I think now a days traders collecting the news from different sources and news paper and TV news is also a great sources.

    8. Open a website on Forex trading and refer people: This is called online marketing and we can do online market on behalf of forex brokers, we can be a partner too.

    9. As a Robot developer: we can develop robot for traders and we can sale it and it is a good online earning source now a days.

    10. As an Employee of Forex broker: we can join at forex broker as an employee, support team, technical team or accounts departments or marketing team

    11. Signal provider: We can earn money by providing signals to traders and it is a good trend now a days in forex trading industry.

    I think there are many more other ways we can use forex industry as our income source but I think as a successful forex trader, we can earn more money. Thanks

Great my friend we may be know that forex industry is a good place to earn money but many of us know that we can earn money from forex by trading only, but we can earn money with the following ways-

USD, EUR, CAD, AUD, NZD: Outlooks for the coming week - Morgan Stanley

USD: USD Strong against EM. Bullish.

We see scope for USD strength to continue. However, we distinguish between the performance of USD against low yielding funding currencies, where we see less scope for depreciation, and against commodity currencies and EM, where we expect strength to be focused. Even the risks of a more dovish Fed are unlikely to drive USD to depreciate against this latter group of currencies, as growth prospects in the rest of the world remain below those of the US.

EUR: A Good Time to be a Funder. Bullish.

We see scope for EUR to make further gains over the next few weeks as risk remains bid amidst an environment of uncertainty. EUR was used as a funding currency for many risk-on trades; as these are unwound the currency should see support. The main risk from our bullish EUR view stems from the upcoming ECB meeting, where there is a risk of a more dovish tone from the central bank in light of recent currency depreciation.

CAD: High Conviction G10 Short. Bearish.

Bearish CAD is one of our higher conviction trades in G10. We believe that there is a risk the central bank will need to take a more dovish tone, weighing on the currency. Latest comments from the BoC that macroprudential tools are addressing financial instability suggest that monetary policy will be free to focus on low growth and inflation. An environment of weak oil prices is unlikely to offer support to CAD as well.

AUD: Commodity and China Play. Bearish.

A weak commodity picture and concerns about growth in Asia are likely to weigh on AUD in the near term, and we would expect it to continue to underperform. Ongoing weakness in capex highlights the risks surrounding the currency. The main upside risks stem from the central bank, which has been more hawkish, most recently highlighting the risks of running easy monetary policy for too long. We will watch the upcoming RBA meeting closely.

NZD: Further Weakness to Come. Bearish.

With macro prudential measures expected to further reduce heightened financial system risk and help moderate the Auckland housing market, the RBNZ has left the door open for more significant easing. Weak commodities prices, a struggling dairy sector, and soft global demand should weigh on the small, open New Zealand economy. We expect NZD to continue depreciating as both growth and rate differentials move against the Kiwi."

How do you find a good forex broker?

The forex trading is a popular trading platform in the world and it is a daily 4-5 Trillion markets in the world. it is the largest financial market in the world, forex traders need to find a good forex broker because there is no central marketplace for trading, there are many forex brokers and everyday new brokers are getting in at forex market, I think before starting the forex trading we need to find out a good trading broker, but what characteristics should be there in a forex broker.
Regulatory compliance / Authorisation:
I think the most important factor for the forex broker, A flashy or professional looking websites do not guarantee that the broker is regulated with sound bodies, we need to find out the authorisation of the broker and we can see at the "About us" section.

Account Details:
Each and every broker has their own strategy and has different account offerings -
Standard accounts,
Mini accounts etc.

we need to check the leverage offering and also margins, I think now a days 1:1 to 1:1000 or more leverage is available at different forex brokers, Leverage is a loan extended to margin account holders by their brokers,

Commissions and Spread : we have to check out the spread size and commissions, basically a broker makes money through commissions and spread. So we have to check all these.

Initial deposits: Many brokers are offering forex accounts with very small initial deposits but we have to check all these, some brokers say something but do something.

Ease of deposits and withdrawal: we need to check the findings and deposit facility too, how many options are there and how easy for the clients etc.

Currency pairs: we are trading here for earning money and we need to check the availability of the currency pairs and their spreads.

Trading Platform: the most important points for the forex traders, we need to check the platform is easy to use or not.

Customer services: Another important issue to check, we need to check is there any opportunity to take live chat, and how quick the support team response etc.

beside above factors we need to check some other issues
1. execution time
2. Bonus facilities
3. PAMM account facility
4. Copy trade facility

EUR/USD: What the Big Players thinking

 

 Credit Suisse: "EURUSD has been capped below the 50% retracement of the recent fall and the 55-day average at 1.1117/32, and reversed lowe," CS notes.

"Beneath 1.0925  can open up a retest of the more important price lows at 1.0819/09. Near-term resistance moves to 1.1022. Above 1.1080/85 is needed to retest 1.1117/32," CS adds.

CS runs a limit order to sell EUR/USD at 1.1020, with a stop at 1.1080 and a target 1.0820.


Barclays: "The move below nearby support in the 1.0925 area encourages our bearish view towards the 1.0810 lows," Barclays clarifies.

"A break below 1.0810 would signal lower towards our next targets near 1.0675 and then the 1.0460 year-to-date lows," Barclays projects.


UBS: "We think the market will be keen to sell any rallies. We recommend a short closer to 1.0990, with a stop above 1.1120/30," UBS advises.

SocGen: "EUR/USD has formed a probable double top at 1.1450/1.1536. Weekly RSI is retracing after testing 50% graphical level which highlights 1.1450/1.1536 as key," SocGen notes.

"The pair looks poised to head towards confirmation level of the pattern at 1.08/1.0780, a break below which will signal a revisit of 1.05/1.04 with intermittent support at 1.07," SocGen adds.

August is a solid month for forex seasonal,

    August is second-strongest month for US Dollar Index

    August is the best month for bonds (worst of yields).

    USDJPY is in the midst of a four month bout of weakness that extends through October. However, it's gained in 3 consecutive Augusts

    We wrote about Australian dollar seasonal weakness in August.

    Not surprisingly, it's also the worst month for NZD.
    August is the third best month for gold, but beware because July was also a strong seasonal month and it's been a dog. Sometimes a market is just a dud and seasonals are only a secondary (or tertiary) factor

    Overall best seasonal trade may be AUD/JPY shorts. The pair has averaged a 2.24% decline in the past 10 years with declines in 8 of 10 years.