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Imagine having access to technical analysis across all the major markets, updated around the clock in real-time and of the same calibre that investment banks around the world receive daily. Then consider having all your favourite Forex and Commodity markets analysed with a trade entry, exit, profit taking levels and a price projection. And what if you could have the analysis running live on your MT4 charts providing trading opportunities throughout your trading day, allowing you to focus on your position sizing?

It may sound like a pipedream, but in fact, this is what you have sitting at your fingertips for those who qualify (don’t worry, qualification is quite simple). What we are talking about is the technical analysis service provided by the research house, Trading Central, and they have been helping traders with their service since 1999. So who are Trading Central and how can they help me?

Trading Central is an independent and leading provider of financial research and technical analysis of financial products. Their approach is simple yet very affective – they combine a technical analysis approach to determine price targets using a range of trading indicators. They now provide their services to more than 100 global financial institutions in 30 countries around the globe.

We are proud to say we have partnered with Trading Central as a result of their proven track record in delivering high-quality analysis of the financial markets and in particular, they extensively cover the Forex and Commodity markets for qualified GO Markets clients. Top 3 ways you can benefit from their research 1. Daily Newsletters with trade alerts Delivered twice a day, the daily Forex technical analysis e­mail service provides you with visual and technical analysis newsletters that detail trading strategies, predictions, commentaries as well as key levels (support, resistance, target, stop pivots) on multiple time frames.

The newsletter provides short to medium term analysis on the following products: AUDUSD, EURJPY, EURUSD, GBPUSD, USDJPY, HANG SENG, SPI 200, & SPOT GOLD. We regularly get feedback on how handy it is to have the key pivot points outlined clearly on each of the instruments they analyse. 2. Web Portal / Research Platform Access Trading Central’s global research directly through the Trading Central web portal.

Receive up-to-the-minute technical analysis on forex, indices and precious metals as Trading Central provides updates throughout the trading day. If you’re a regular technical analysis user who knows what you are looking for, the web portal is a quick and easy way to search for intra-day, short and mid-term updates. There’s a ‘search box’ for instant access, or you can select a report on individual asset classes (Indices, Forex and Commodities).

For those traders who have specific criteria, the web portal has pre-made filters allowing for a quick search and the ability to customise the screen. In addition, you are able to have instant access to the information that matters to you by creating a customizable watch list. 3. Technical Analysis Plug In The Technical Analysis plug-in in MT4 is a user friendly interface offering actionable content and customizable timeframes, allowing traders to fill in orders and program trades based on levels provided by Trading Central.

The MT4 plugin displays Trading Central’s technical analysis strategies, views and market commentaries, as well as Trading Central’s key levels (support, resistance, targets, stop pivots) directly on your MT4 platform. It also allows you to execute orders directly from your MT4 charts based on the levels provided by Trading Central. So whether you’re a novice or an experienced trader, Trading Central can be used to either provide original trade ideas, or provide a handy second opinion.

All major countries’ economies have one thing in common; they are all subject to a central bank. Here in Australia is no different, we have the RBA Reserve Bank of Australia. Their roles are largely the same everywhere: a key role of central banks is to conduct monetary policy to achieve price stability (low and stable inflation) and to help manage economic fluctuations.

Central banks conduct monetary policy by adjusting the supply of money, generally through open market operations. For instance, a central bank may reduce the amount of money by selling government bonds under a “sale and repurchase” agreement, thereby taking in money from commercial banks. The purpose of such open market operations is to steer short-term interest rates, which in turn influence longer-term rates and overall economic activity.

Another key factor is that they have a hand in influencing Interest Rates. This is used to stimulate economies and keep inflation under control (or at least try to do so). For traders, keeping in touch with what our central banks say is hugely important as this can ultimately help you make a profit, or it can turn trades into losses.

This brings me nicely on to perhaps the biggest, or at least one of the most influential roles of the Central Banks: they directly or indirectly have one of the biggest effects on commerce, business and currency fluctuations all over the word. The FED. Keeping an eye on your Economic Calendar, can be beneficial if you are a trader who likes to keep up with the latest reports on the finance of a country, or in this case The FED.

The 26 th January 2022 Federal Reserve meeting might be the single most critical event in determining the future of the economy (directly in the US and indirectly to the rest of the world), here’s a breakdown into why is so important (and maybe why you should care). 2021 was a year of crazy growth, if you bought Stocks, Crypto or Real Estate in 2020, early 2021, you would have personally seen considerable gains compared to recent years. Economic boom? Sounds great!

Unless it goes too far, and the economy overheats. An economy which overheats, is expanding at a rate that is unsustainable in the long term, a red flag that accompanies that is high inflation. It is no secret that the US (and other major economies) has experience high inflation in last few months.

The FED is now faced with a critical decision: increase interest rates or keep them largely the same. Fed Chair Powell is expected to signal to the markets which way the FED is leaning. Two possible outcomes: Do not raise interest rates – Likely the engine keeps running and keeps overheating.

More record highs for the S&P, Stocks, Crypto, Real Estate. Asset prices keep rising… And inflation keeps rising, food becomes more expensive, fuel becomes more expensive, etc. etc. Raise interest rates – Effective way to slow the economy down.

The “eeek” is, it can deepen the current dip being seen in the markets and potential cause a recession. Economists often talk about a soft landing. It means a slow down of the economy without a crash.

A soft landing is easier when inflation is controlled (see below). However, this has usually successfully been done when inflation is under control and is impossible once inflation hits crazy highs – or once the economy has overheated. (See below) In short, if Powell advises that a series of aggressive hikes is coming, a recession becomes likely and expect movements in the markets whether you are trading a USD pair of the S&P. The FED and its policies drive our economies and understanding their roles, its history and their future plans, can help shape your economic future.

Update: The Federal Reserve concluded Wednesday its January monetary policy meeting, indicating that a potential rate hike could come in March. The major stock market averages initially jumped around 2 p.m. ET, when the Fed released its policy statement.

However, stocks gave up those gains and turned lower as Chairman Jerome Powell answered questions from reporters. Christian Ramos Sources: Wikipedia, Kalshi, CNBC, RBA

Cash stock indices such as the Dow 30, FTSE 100 and ASX 200 are made up of constituent stocks which is where their price is derived from. These constituent stocks of an index will periodically pay dividends to shareholders, causing a drop in that stocks price and impacting the overall value of the index. With GO Markets this index adjustment will be made at the open of the index on the ex-dividend date of the underlying stock(s).

This price drop in the index will affect the PnL on an open index CFD trade, to compensate this, there will be credit or debit that will be included in the swap that is made around 00:00 server time. If you have a long index position you PnL will be negatively affected so you will receive a credit in the same amount as the dividend adjustment. If you have a short index position you PnL will be positively affected so you will receive a debit in the same amount as the dividend adjustment.

It’s an important point to remember that index traders do not profit or loss from these adjustments. It is a zero sum situation where any PnL change has a corresponding debit or credit to compensate. Example 1: You have a buy position on the ASX200 contract of 10 lots at 00:00 server time.

The next trading day multiple companies go ex-dividend resulting in a 20 point drop in the ASX200 at the open. The swap on this position will be credited $200 AUD (20 points * $10 per point exposure). The ASX200 will open 20 points lower than it would have without the adjustment.

As a result, the PnL on the buy position is $200 worse off, which was compensated for by the swap credit you received. Example 2: You have a sell position on the FTSE100 contract of 10 lots at 00:00 server time. The next trading day multiple companies go ex-dividend resulting in a 15 point drop in the FTSE100 at the next open.

The swap on this position will be debited £150 GBP (15 points * £10 per point exposure). The FTSE100 will open 15 points lower than it would have without the adjustment. As a result, the PnL on the sell position is £150 better off, which was compensated for by the swap debit you received. (Please note, as dividends are combined with normal financing adjustments, the swap will not be exactly the same as the dividend only) You can view the trading hours and upcoming swap/dividend adjustments in the specifications of an instrument.

Example of ASX200 before a 20 point adjustment below:

Market response to any specific economic data release is far from standard even if actual numbers differ greatly from consensus expectations. Rather the market response is based on context of the current economic situation. This week’s non-farm payrolls, being one of the major data points in the month, is a great case in point.

There are many factors and of course the key one for you as an individual trader is your chosen vehicle you are trading (and of course direction i.e. long or short for open positions). The context of today’s impending non-farm payrolls from a market perspective is interest rate expectations going forward. This week the Fed gave the market the expected.25% cut that was already priced into currency, bond and equity market pricing.

The market response however, as this was already priced in, was as a result of the accompanying statement which was not as dovish as perhaps anticipated and a reduction in expectations of a further imminent cut. From an equity market point of view the result, despite the interest rate cut, was to sell off, whereas from the USD perspective this lessening expectation of further rate cuts was bullish. Perhaps this could be viewed as contrary to what the textbooks would suggest is a standard response.

So, onto todays non-farm payrolls (NFP) figure… Logic would suggest that a strong number is good news for the economy, and so should be positive for equities and perhaps bearish for USD. However, as this may be a critical number in the Feds decision making re. interest rate decisions, a strong NFP is likely to have the opposite effect. A weaker number is likely to be perceived as potentially contributory to thinking that another rate cut may be prudent sooner and so despite on the surface being “bad news”, it would not be surprising to see equities stronger and USD weaker.

It remains to be seen of course what the number is and the actual response but is perhaps a lesson in seeing new market information within the potential context of the current economic circumstances and of course incorporate this in your risk assessment and trading decision making.

Many traders utilise shares or options amongst their investment strategies either for income or capital growth. One key factor that such traders may consider in their choice of specific markets to trade is liquidity, with a higher trading volume impacting positively on the ability to get in and out of trades at a fair price. Others may find the choice to trade specific companies or sectors not as well represented in their local market.

For many therefore, the breadth of choice and liquidity may make this market the preferred market to trade. Like any type of trading, sustainable results require a depth of knowledge and commitment to trading an individual tried and tested system. This system should include in depth reference to risk management throughout.

However, due to the choice of market, a trader can make regular profit and yet lose this (and potentially more) through the currency risks associated with trading in US dollars rather than, for example, their base currency of Australian dollars or GB pounds. Holding a significant position in US shares or options means that many traders have exposure to positions in tens of thousands in USD. So what is the currency risk?

The reality is that profits can be ‘used up’, or losses can be compounded, by adverse currency movements. The reason for this is simple. Let’s assume that your currency is AUD and it is transferred into USD for trading purposes.

The exchange value when converted back to the original currency at some time in the future will be dependent not only on trading results but on the movement of AUD versus USD. While your money is in your account in USD, weakness in AUD will mean a greater worth in AUD when converted back, whereas a lesser conversion worth will result if there is AUD strength while your money is sitting is USD. Let’s give an example...

See below a daily chart of AUD/USD for the last 3 years. Note the price from the end of January 2018 at a level of 0.8134. The price at Nov 2019 was at 0.6776 so a difference of 0.1358 So, an investment to fund a trading account of AUD$30,000 would have equalled an original USD value of $24,402.

With the movement in the currency alone over this period (assuming no movement in share price) the value of the account when transferred back into AUD would have risen to $36,007.59 or in other words a 20.03% increase. So, in this case the underlying currency movement was of benefit. However, if this positive currency outcome is the case when there is USD strength (when your trading capital is in USD), with the same AUDUSD currency movement in the other direction, the loss could be 20.03%.

This would mean that you would have had to profit by this 20.03% in your trades simply to breakeven. This WAS the case if you look at a chart from the beginning of Jan 2016 to Aug 2017. More than this of course, if you have lost $6007.59 on a similar price move in the other direction, broke even on your trades during that period, so your equivalent AUD value is $23,992.41, your trading return would have to be now 25% profit to recover the original capital level simple because of currency movement.

Bear in mind, of course we have chosen only a $30,000 example, some of you may have considerably more than this in the market (and so considerably more currency risk) than the example we have given. Risk management of your hedge Although you are entering a low margin requirement Forex position due to the leverage associated with Forex, we cannot understate the importance of a full understanding of the implications of this. Should the AUD move lower still (as we explained above in looking at what has happened since January 2018), the value of your hedge may move significantly.

If we look at using the analogy of an insurance policy in trying to explain the concept, the maximum risk is the initial “premium” paid in this case. However, with any Forex position there is obviously the risk of losing more than your original investment. Additionally, you are trading your shares/options in a different account and hence there must be the ability to money manage between the two accounts.

Our team can guide you further on these important issues. One last thing… Although we cannot advise when it is right for you, if at all, to put in a currency hedge, it is worthwhile raising the question about what the current AUDUSD chart is telling you now technically. Additionally, with the potential for further US rate cuts, and if you believe there will be some resolution to trade tariff wars between the US and China, both events have the potential to strengthen AUD (and so weaken your USD capital).

If invested in USD based trading for some time you have benefitted, logically, it is not unreasonable to consider whether it is worth ‘locking’ some of this in. So, what can you do? Your choices are twofold. 1.

Allow your invested trading capital to be subjected to the risks associated with underlying currency movements or, 2. Hedge the currency risks with a non-expiring Forex position. If option “2” looks attractive, the reality is you can: • Mitigate the risk through consideration of a Forex hedge. • Attempt to optimise your hedge by timing its placement and exit i.e. use technical landmarks, to decide when to get in and out of a hedge. (Please note: a hedge is for insurance purpose and so although there may be merit in timing entry and exit, we are not suggesting you trade in and out of a hedge on a regular basis).

Learn how to reduce the risk We are happy not only to show you how but guide you step by step in how to set this up. There are a couple of practical issues you would need to have in place to manage this well but again we can go through these to enable you to make the right decision for you. If you think this might be for you, then simply connect with us at [email protected] and we will arrange for one of our account team to discuss a currency hedge that may be a fit for you.

Irrespective of what vehicle you are choosing to trade (Forex, CFDs, share CFDs ), position sizing is a crucial part of your trading risk management. It is position sizing, along with effective exit strategies, that have an undoubted major impact on your trading results both now and going forward. At a basic level, the following are part of a position sizing system: a.

Identify a tolerable risk level per trade based on your account size (often 1-3%) meaning you aim to keep any loss sustained within this tolerable limit. b. Using any stop level for specific trades and your tolerable limit to work out how many lots/contacts you can enter to achieve this goal. c. Ensuring you are not inadvertently over-positioning in one market idea (e.g. broad-based USD strength or weakness, by entering multiple trades across currency pairs/ commodity CFDs that will multiply the impact of USD movement).

But what then? How do we explore refining our position sizing to potential optimise results? Here are two initial ideas for potential testing… Idea 1 – Position sizing according to volatility When exploring using volatility for any trading decision it is not just the level but potentially, more importantly, the direction of the volatility i.e. increasing/decreasing.

Volatility is often seen as a reflection of market certainty but perhaps consider volatility as a measure of the likelihood that an asset e.g. Fx pair, is more likely to move away from its current position (and that can be either positively or negatively of course). Logically, therefore, increasing volatility in either direction could represent an increase in risk (and of course visa versa).

Consequently, it is not unreasonable to consider altering your tolerable risk level according to this. So, for example, if your standard is 2% of account capital on any one trade, if you were to implement this as an idea, increasing volatility could mean a decrease in risk level to 1% and decrease to 3%. The challenge, of course, is to determine a method through which you can determine this change.

The ATR is a volatility measure commonly used and would be a potential tool that can assist. Of course, the other aspect is to choose the timeframe to measure this variable. Logically, the shortest timeframe should be the timeframe you are trading but there may be wisdom in looking at longer-term timeframes also.

Idea 2 – Ensure that trail stops account for your tolerable risk level. Arguably a common mistake made by many traders is to view trades on their P/L and make decisions on the fact they are “up” on the deal and as long as the trade is closed before getting back to breakeven then they have a win. An alternative and logically an advanced approach is your net worth in the market is where it is right NOW and hence any pullback in any position is a “loss” from your current place.

This is the rationale behind trailing a stop in an attempt to still have access to the further upside (“letting your profits run”) whilst capping any pullback to a new an improved level to that of your initial stop. There are many ways of trailing a stop e.g. retracement, price/MA cross but again would it not make sense to use your tolerable risk level as part of your trail stop equation. So lets see, for example, use an account size of $10,000 and you are trading a 2% maximum risk level to set your initial stop.

This means that your contract/lot size is based on your technical stop and $200. You have a position that is now up to $350 if you were to adopt this approach when you trail your stop you should ensure that it is placed at a level that would mean that the worst scenario would be that you would close the position at $150 profit. There are of course other advanced position sizing techniques you could test which will be the topic of an upcoming Inner Circle session.

Make sure that you are part of this through registering for these sessions so you can jump on board with this advanced trading education group to access the topics applicable to your trading development. In the meantime, we would be delighted, as always, to hear from you, so if you are using an advanced position sizing technique it would be great to hear from you at [email protected]