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Advocacy Articles 2013


December 31, 2013

How I use the Commitment of Traders Report

By John M. Bland

There has already been an open letter sent to the CFTC by Jay Meisler citing the flaws of the Commitment of Traders (CTT) Report. I agree with them all. There is no reason with current technologies that the COT Report cannot be published daily with  periodic revisions as needed.  Nevertheless we are stuck with what we've got.

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December 27, 2013

Don't Trust End-of-Year Forex Forecasts

by John M. Bland

This is the traditional time of year for institutions and the financial press to release surveys of forex forecasts for the new year. While we find the surveys are interesting because they offer a snapshot of sentiment, we hasten to add that they have little, if any predictive value. What is consistent about these surveys is their poor performance.

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December 26, 2013

Open Letter to the CFTC: Improve the Commitment of Traders Report (Update)

The following are replies from the CFTC to our Open Letter. We appreciate the prompt and detailed reply to our letter. We still feel that the Commitment of Traders report can be improved and plan on continuing our efforts to get it delivered in a more timely manner.

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December 24, 2013

End of Year Trading: Does the Early Bird Catch the Worm?

Typically end of year forex trading is characterized by position adjustments and book squaring ahead of the Christmas break and then fresh positioning by those looking to get a head start on the New Year. The latter I refer to as early bird trading.

This year has been complicated by the FOMC decision one week before the Christmas break. The Fed announced it will start tapering its bond purchases while emphasizing forward guidance that short term interest rates will stay low for an extended period. This saw the dollar rise, bonds fall and stocks rally on a combination of the prospect of

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December 21, 2013

Forex Trading Themes for the Week of December 22, 2013

Bernanke going out with a bang

We were convinced the Fed would not "taper" before the new year, but they surprised us once again. In fairness, we were not surprised by the taper itself. No one was. The only debate had been about its timing. The Fed announced a USD10bln reduction in its monthly asset purchases to USD75bln a month. The consensus opinion in and out of the Fed was that the utility of the program has run its course. Put it to bed. Importantly, the markets took the Taper decision as indication that the U.S. economy has improved to the point where it is in a self-sustained recovery. We will see if Ben Bernanke is leaving Janet Yellen with a time ready to go off.

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December 20, 2013

Open Letter to the CFTC: Improve the Commitment of Traders Report

One role of the Global Traders Association is to advocate on behalf of the global trader with regulatory agencies. One of our stated goals is to work for a level playing field for the average trader. In this regard, I have written a letter to the CFTC making a suggestion to improve the reporting of the Commitment of Traders report (COT).

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December 17, 2013

What Differentiates a Winning from a Losing Trader?

As a participant and student of the global markets for over 20 years, I have always been fascinated by what makes a trader successful and what differentiates the winners from the losers. Trading success I define as one who can consistently make money while avoiding major drawdowns...See what differentiates a wiining trader f

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December 14, 2013

Forex Trading Themes for the Week of December 15, 2013

Fed Meeting The Highlight of the New Week

Markets spent the better part of the week just ended setting up for the Fed policy decision on Wednesday (December 18). The media is obsessed with the timing of the Fed taper decision. We all know that the central bank would like to exit from its $85 bln/mo purchase of government and mortgage-backed debt. Their concern is how to do it as quickly as possible once they judge the economy is in a self-sustained recovery. Everyone knows the Fed wants out, the only question is timing. As for timing, the vast majority of observers feel the Fed will start to "taper" their asset purchases by mid-March at the latest. The surprise would be if they do not. We do not expect the Fed t

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December 12, 2013

A Case for Regulation: Probe After $70 mln Trading Loss

By Jay Meisler

Regulation works both ways, sometimes it is seen as too onerous and other times it is seen as needed to prevent situations lile this one. Those investing their funds with a third party should always investigate whether local regulations require the individual or trading firm to be registered. Ask for an audited track record when you do your due digence.This holds true for forex trading and any other market.

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December 12, 2013

United States Budget Battle Looms (Continued)

By John M. Bland

The advance warning we got on a possible budget agreement appears to have been accurate with a budget vote in the House likely this week. You never know these days with party discipline not being what it once was, but it appears that that the agreement will make it through both chambers of Congress before the Christmas-New Years break.

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December 03, 2013

How the Volcker Rule May Impact Trading (Update)

paul volcker

This is a follow up to How the Voicker Rule May Impact Trading. Note the oress release (see blow) and the exemptions to the rule.

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December 10, 2013

How the Volcker Rule May Impact Trading

paul volcker The following article is worth a read as the Fed, FDIC and three other agencies are due to sign off today on the ban on the Volcker Rule. The Volcker Rule has potential to affect the retail forex industry to the extent that there is any restrictions on bank market making operations. Banks act as market makers by supplying pricing to retail forex brokers who in turn use the liquidity to price markets to their clients. :

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December 07, 2013

Forex Trading Themes for the Week of December 8, 2013

Solid November U.S. Jobs Data

We mentioned last week that it is looking like the global economy has been recovering. Friday saw a solid November jobs report from the U.S. I still feel the Fed will want to see more data before it starts to "taper" its Asset Purchase program. This is one of the final major pieces of data that will be released before the December 18 FOMC. As for the Fed taper decision, we do not feel the Fed will be making a major policy move before January 30, just two days before Bernanke retires. March 20 would be the first meeting with Janet Yellen at the helm. Also, the March meeting is the next time a press conference scheduled. That date would make a lot of sense to us.

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December 06, 2013

Beware of Rigged Markets (Update)

By John M. Bland

This is an update to my article in the Monthly newsletter. It was pretty clear to me that the forex market was trading on the better than expected U.S. jobs report for November today well before the data was reported by the various data sources I use. It does not seem like it was even close.

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December 05, 2013

Is Good News Good Forex News or Bad News?

By Jay Meisler

Part of our advocacy is providing insights as we feel strongly that knowledge is power. In this regard, I would like to discuss how to interpret news in the current environment.

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December 04, 2013

United States Budget Battle Looms

By John M. Bland

John Harwood on CNBC indicated a little while ago that progress is being made in the budget talks between Republicans and Democrats and the two Houses of Congress. Their goal is an agreement by December 13. 

There is a good chance of an agreement because the Republicans don't want to lose the public opinion war by forcing the government to shut down again. On the other hand, the Republicans are perfectly happy with extending the sequester agreement because it has had a big impact on the budget deficit. The Democrats apparently are willing to trade some entitlement cuts if they get some discretionary spending powers back.

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December 01, 2013

Forex Trading Themes for the Week of December 1, 2013

Global Economy Picking up?

I tend to look at the global economy in groupings for forex trading. So I look individually at North America, the U.K., the Eurozone, the Far East (ex-Japan) and Japan for the purposes of forex trading. There is little doubt that the U.K recently has been the best performer as its recovery seems to be solidly in place. The U.S. is showing signs of improvement, although we have serious doubts about the sustainability of the housing rebound. By definition the Eurozone is a mixed bag. Here we play close attention to the words and actions of the ECB. Clearly, the central bank is worried about the risk of deflation and needs of ALL the economies in the currency union, no longer just Germany. In

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November 24, 2013

Forex Trading Themes for the Week of November 24, 2013

To taper or not to taper?

We find it hard to believe that the timing of a Fed tapering continues to be up in the air. Even St Louis Fed President Bullard, who seems to have a lot to say, appears to be confused. On Wednesday of the week just passed, he indicated that a Fed tapering was possible in December if the November Jobs were strong. Then on Thursday he seemed to indicate that a tapering is not imminent. I wish I had a dollar for every time I heard a Fed official over the years say that policy is not made by a single statistic, but here we stand in late November waiting for a single volatile number, which typically is subject to major revisions, as the determinant of a major Fed policy decision.

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November 20, 2013

News vs. Charts

By Jay Meisler

There seems to be a never ending debate between those who trade strictly by charts and those who use charts as just one tool in formulating trading decisions. The former will say it is all in the charts. The latter will say that news matters. The volatility seen around news events, more often than not driven by a headline, supports those who say you have to have to be aware of the news to trade these markets effectively. I am in that camp and feel strongly that you must be aware of what is moving the market so you can evaluate what you see on charts.

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September 18, 2013

The Global Traders Association is your advocate in the global world of trading.

According to Merriam Webster an Advocate is

  1. one that pleads the cause of another.
  2. one that defends or maintains a cause or proposal
  3. one that supports or promotes the interests of another

All three definitions apply to the Global Traders Association.

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