January, 2010

Forex Money Management

Posted by Mulder Venture at 5:14 pm

This is might easily be the most important news item we have published so far and of those to come.
This is a key issue for every trader who is looking for long-term trading success.
Everybody can tell you: “I had an amazing last month” but a few can say this every year.”

Why this so important and sometimes so difficult? It’s against human nature, to take necessary losses. Typically, the runaway loss is a result of sloppy money management, with no hard stops and lots of average downs into the longs and average ups into the shorts. Above all, the runaway loss is due simply to a loss of discipline.

The reality is that very few traders have the discipline to practice this method consistently. Not unlike a child who learns not to touch a hot stove only after being burned once or twice, most traders can only absorb the lessons of risk discipline through the harsh experience of monetary loss. This is the most important reason why traders should use only their speculative capital when first entering the forex market. When novices ask how much money they should begin trading with, one seasoned trader says: “Choose a number that will not materially impact your life if you were to lose it completely. Now subdivide that number by five because your first few attempts at trading will most likely end up in blow out.” This too is very sage advice, and it is well worth following for anyone considering trading FX.

We recommend two methods for money management, there can be found many more that might do you just as well:

Never risk more than 2% of your total equity on any trade. This a good approach, you as trader can be wrong 20 times in a row and still have 60% of your equity.
If you don’t trust yourself, you miss discipline. What you could do is, don’t transfer all of your potential money to your forex broker.
Set your own  bar, what’s your risk, 2% of total equity maybe more or less.
To give you an example based on using 4% of your equity: Say you want to invest 20’000 USD, so 4% is 800 USD. Taking the ACM leverage 1:100. So you buy EUR/USD on 1.3850, 1 lot size(100’000 USD) and your margin will hit around 1.3775. This is automated by your broker. In the meantime if you don’t get the margin call, you can let your profit run. Don’t forget this, don’t take profit by 1.3950, wait for 1.4050 or even higher.

Why is this important? Well, we are in the business of making money, and in order to make money we have to learn how to manage it. Ironically, this is one of the most overlooked areas in trading. Many traders are just anxious to get right into trading with no regards to their total account size. When you trade without money management rules, you are in fact gambling. You are not looking at the long term return on your investment. Instead you are only looking for that “jackpot”. Money management rules will not only protect us, but they will make us very profitable in the long run.

Conclusion
You want to be a winner in the FX market? Read this post twice or maybe even three times. In this article we don’t tell you how you should trade, you need to find your own way of good money management. Of course a 10% loss of total equity doesn’t sound like good money management, but exact numbers and percentages differ from person to person, strategy, capital, currency pairs traded (GBP/USD less volatile than GBP/JPY).
We believe everybody might have a different money management strategy that works for him/her you just have to find it and stick with it.

Good luck trading!

Mulder Currency Fund Performance January 2010, +15,9%!!

Posted by Mulder Venture at 3:57 pm

Latest Performance Update Mulder Currency Fund. (January, 2010)

No more trading days left in January, so time to have a look at how well we have done this month. We have managed to make a solid 15,9% gain on our initial starting capital of €50.000.

Which translates into a added €7945 euro for everyone participating in our currency fund (based on €50.000 initial deposit).

Join us now and profit from our currency fund as we continue to trade our way towards the ultimate goal.

Mulder Currency Fund the future of investing brought to your doorstep!

View the progress bar below for the current will status and the amount remaining to complete our goal of 1.000.000 euro.

Live Status Mulder Currency Fund

To receive a update on our status, please subscribe to our feed or follow us through Twitter

How much did you make in  January?

If you did not make at least 5%, why not consider participating in our Currency Fund or signing up for a Managed Account.

It is not to late for you to start making money, join us now..

Account Summary and performance/trades overview will be posted weekly, to view this month’s “January Results” click here..

(click to open the PDF in a new window)

Euro: Can the ECB Make Conditions Even Worse for the Currency?

Posted by Mulder Venture at 11:32 am

Fundamental Forecast for Euro: Bearish

-    Greek debt sales show little confidence in the country’s and the Euro Zone’s future
-    German business confidence hits an 18-month high
-    Did EURUSD find a medium-term top in January?

Fundamental pressure has been building up behind the euro for quite some time; but for a long time, the strong current of capital away from the US dollar was compensating for the currency’s shortfalls. However, now that the dollar is finding its bearings, the market’s second most liquid currency will be left to its own devices (though we can’t discount the impact that a strong dollar bid can have on EURUSD and therefore the euro itself). Looking for significant threats on and off the economic docket, there is plenty to keep track of. But the greatest risk to calm markets likely comes from unexpected indicators and unpredictable events.

While there is an extraordinarily busy economic docket for the euro over the coming week, these events can be accounted and prepared for. The same cannot be said for the wavering level of confidence among international investors for the regional economy. There are many reasons to doubt the strength of the Euro Zone and its currency; but the most politicized and media-hyped peril is Greece’s burgeoning budget deficit. The Greek Finance Minister has repeatedly assured the market that the government was taking the necessary steps to reduce its budget shortfall and they were not seeking a bailout from the European Union nor trying to sell debt to capital-rich countries like China. At the same time, the EU has repeatedly warned Greek that it was not doing enough to meet its goals to bring its deficit back within the limit within their time frame. Perhaps more disconcerting is the suggestion by EU Economic and Monetary Affairs Commissioner Almunia that there is no “plan B” for Greece and that “in the euro area, default does not exist.” If the economy cannot meet the group’s strict rules and the nation’s neighbors do not provide assistance, something will have to give. Whether that means a bailout (that spreads the pain) or a defection from the euro (which throws the stability of the currency into immediate doubt); the outlook for the currency is not bright. What’s more, Greece isn’t the only troubled EU member. Ireland, Spain, Portugal, Italy and many others are feeling the pain.

Where the euro finds some reprieve from the tumultuous seas that surround the health of its individual members and whole, there will be plenty of scheduled event risk that could generate volatility or add a fundamental aspect to sentiment concerns. Looking over the calendar, the ECB rate decision is top event risk. However, there is a very low probability that the market will be able to draw enough from the event to alter the time table for an eventual return of rate hikes. This past week, ECB member Mersch remarked that the group would not likely discuss altering policy until the March meeting. Fundamentally, there is little to encourage a near-term rate hike. Inflation pressures are muted, the economic outlook is tepid and policy officials realize that raising rates too early can turn a difficult recovery for many members into an impossible one.  Other economic readings will be several steps down in terms of economic impact. Factory and service activity indicator, retail sales and trade figures are all second or third tier indicators.

US Dollar Forecast to Appreciate versus Euro Ahead of NFPs Data

Posted by Mulder Venture at 9:32 am

Fundamental Outlook for US Dollar: Bullish

-    US Dollar surges to 6-month highs against Euro
-    Japanese Yen and US Dollar surge on financial risk aversion
-    January effect in the S&P 500 points to US Dollar gains in 2010

The US Dollar was far and away the best-performing G10 currency on sharp losses in the US S&P 500 and broad deterioration in financial market risk sentiment. A positive surprise in highly-anticipated US Q4 GDP results likewise helped boost the low-yielding Greenback, and the currency now boasts three consecutive weeks of fairly substantial appreciation against the Euro. Given previous bearish extremes in US Dollar sentiment and positioning, we have frequently argued that the otherwise-downtrodden currency could stage a major comeback through the new year. Already we see that both the Euro/US Dollar and S&P 500 have posted significant declines on the month, and the January Effect in stocks and currencies points to further Greenback appreciation into February and beyond.

The first week of February likewise promises a great deal of economic event risk, and forex options markets have priced in considerable price moves in the days ahead. The critical question is whether the US Dollar will react positively to better-than-expected data or instead respond to cues in the S&P 500 and other measures of financial market risk sentiment. Traders will get their first clue on the results of Monday morning’s US Personal Income and Spending as well as ISM Manufacturing survey results in rapid succession. Consensus forecasts call for modest pullbacks in Income and Spending growth in December, while domestic Manufacturers are likely to report slower gains in activity for January. Substantive surprises in either release could easily force US Dollar moves, but the true fireworks may wait until later-week ADP Employment Change, ISM Services, and US Nonfarm Payrolls releases.

US Dollar traders will pay extremely close attention to surprises in NFPs results, while earlier ADP and ISM numbers will likely shape consensus estimates for the monthly employment figure change. Economists currently predict that the US labor market added a net 13,000 jobs through the month of January, but the monthly figures are notoriously difficult to predict, very volatile, and prone to major revisions. Suffice it to say, most analysts often question the flawed report’s relevance to the US Dollar and other major asset classes. Yet traders respond to the data at hand, and any significant surprises in earlier ADP Employment and ISM Services Employment Index figures could easily set the stage for similar surprises in clearly market-moving Nonfarm Payrolls numbers.

Current market conditions make it extremely difficult to predict price action a day ahead and much less a week in advance. Yet recent momentum clearly favors US Dollar appreciation, and our research on the “January Effect” for currencies and the S&P strongly suggest that the Dollar could finish the year considerably stronger against the Euro and other major counterparts. What happens between now and December, however, is anything but clear. Shorter-term traders should keep a close eye on the S&P and other risk barometers surrounding major news events out of the US and other large economies. We remain bullish the US Dollar on the Euro’s break below 1.40, but sharp Greenback gains warn that a very-short-term correction is possible.

Forex Competition Update 29th January

Posted by Mulder Venture at 12:45 pm

The table below gives a overview on the current ranking of the Mulder Forex Competition. (January 29th)

At the moment of taking the daily rankings:

We have 10 people banking a profit with Pedrag Jovanovic still  the undisputted leader with a respectable 39% profit, (we do have a new runner up in the name of Sebastian Nawrocki with a 11% profit after Sara Bader has been fallen out of the top the table)

At the moment of writing we have  23 people with a negative balance (being Niklas Johnsson the leader of the pack with a 64% loss).

If you have any questions regarding the forex competition or concerning current rankings please send us a email

Euro sinks below $1.40, first time in 6 months

Posted by Mulder Venture at 1:29 am

The euro fell below $1.40 Thursday for the first time in six months as risk-averse investors parked money in dollars following disappointing economic reports.

More worries about public finances in the eurozone also brightened the dollar’s shine.

Weaker-than-expected news on employment and durable goods orders, a looming overhaul in U.S. banking rules and fears of default on European government debt all helped drive the dollar higher Thursday, continuing its gains over the past two months.

The 16-nation euro fell as low as $1.3938, its weakest level since July 2009. In later trading Thursday in New York, it fetched $1.3978 compared with $1.4038 late Wednesday.

The British pound dropped to $1.6127 from $1.6179, while the dollar was flat at 89.90 Japanese yen.

On Thursday, the government said orders to U.S. factories for big-ticket manufactured goods rose a meager 0.3 percent in December, while a drop in the number of newly unemployed people filing for jobless benefits fell short of expectations. The disappointing reports compounded uncertainty about how strong the U.S. economy is.

Meanwhile some investors are looking ahead to when the Federal Reserve may feel ready to raise interest rates off their historic lows, which would be a positive factor for the dollar.

On Wednesday the Fed held short-term rates near zero but also said economic activity continues to strengthen. One Fed official voted against the Fed’s plege to keep rates at record lows for an “extended period.”

“The upgraded outlook, the single vote to revoke the ‘extended period’ mantra, and the continued planning to unwind credit easing are all important steps toward tightening,” said UBS currency analyst Geoffrey Yu.

Low interest rates can weigh down a currency as investors move funds to other currencies that have higher yields. The U.S. has one of the lowest official interest rates of the major economies, and many emerging-market countries have substantially higher rates.

UBS is predicting a value of $1.35 for the euro as concerns over Greece’s public finances continue. Greece’s problems are also causing anxiety about high levels of indebtedness in other European countries such as Portugal.

Fed chief Bernanke wins 2nd term in closest vote

Posted by Mulder Venture at 3:28 pm

(AP:WASHINGTON) Embattled Federal Reserve Chairman Ben Bernanke won confirmation for a second term Thursday, but only by the closest vote ever for the crucial post and after withering criticism from lawmakers for bailing out Wall Street while other Americans suffered in recession.

The Senate confirmed Bernanke for a new four-year term by a 70-30 vote, a seemingly solid majority but 14 votes worse than the closest previous vote for a Fed chairman.

The Senate battle over Bernanke’s confirmation has been a test of central bank independence, a crucial element if the Fed is to carry out unpopular but economically essential policies. Its decisions on interest rates can have immense consequences, from the success or failure of the largest companies to the typical home-buyer’s ability to get an affordable loan to the price of cereal at the grocery or gas at the corner station.

Created by Congress in 1913 after a series of bank panics, the Federal Reserve is an independent agency, supposedly outside politics, but its chairman is typically assailed by lawmakers and others when the economy falls and jobless ranks lengthen.

“Bernanke fiddled while our markets burned,” huffed Richard Shelby, of Alabama, the top Republican on the Senate Banking Committee, during Thursday’s debate. “Ben Bernanke’s Federal Reserve played a key role in setting the stage for the financial crisis.”

Shelby and other opponents blame Bernanke for failing to spot problems leading up to the crisis, for lax bank regulation and for not cracking down on dubious home mortgage practices. All those missteps contributed to the recession, they contend.

Supporters see it far differently, crediting him with preventing the Great Recession from turning into the second Great Depression.

“The chairmanship of Ben Bernanke has in no small measure made it possible for this nation to avoid a catastrophe,” said Senate Banking Committee Sen. Christopher Dodd, D-Conn.

Supporter Chuck Schumer, D-N-Y., worried that the bitter fight over the nomination would send “the message that the Federal Reserve and its monetary policy decisions are under the thumb of Congress. Businesses will be faced with the prospect that the Fed might not be able to do what’s necessary for the economy because of pressure from Congress.”

The vote on his confirmation came at nearly the last possible moment _ Bernanke’s current term expires Sunday.

The confirmation vote was preceded by a critical preliminary ballot to block a filibuster by opponents. He needed 60 votes rather than a simple majority and got 77, to 23 against. The closest previous final confirmation vote for a Fed chairman was 84-16 for Paul Volcker’s second term in 1983 following another severe recession.

After Thursday’s vote, Treasury Secretary Timothy Geithner said, “The Senate did the right thing. Chairman Bernanke will continue to play a vitally important role in guiding the nation’s economy.”

First appointed by President George W. Bush and then re-nominated by President Barack Obama, Bernanke found himself without a broad partisan constituency in the Senate.

“Although the Fed can print money, it can’t print political capital,” said Karen Shaw Petrou, managing partner at Federal Financial Analytics, a consulting firm that advises financial institutions.

Bernanke’s role in bailing out Wall Street has angered many Americans, who are still struggling under double-digit unemployment, stagnant paychecks, cracked nest eggs and record home foreclosures. In an election year in which the economy’s health is still precarious, senators were hearing those complaints loud and clear.

“A vote for Ben Bernanke is a vote for bailouts,” said Sen. Jim Bunning, R-Ky., a longtime critic.

Bernanke has especially upset lawmakers with his support of a $182 billion rescue of insurance giant American International Group Inc. Hefty bonuses to AIG executives and billions in payments to AIG’s Wall Street partners added to the outrage. Criticism mounted as unemployment rocketed to 10 percent.

Bernanke advocates argue that the Fed chairman is being blamed for the failure of institutions over which the Fed had no authority. What’s more, they say the countermeasures he took to intervene were exactly what Congress created the agency to do.

“Much of the anger directed at the Fed and the uncertainty regarding Bernanke’s reconfirmation is terribly unfortunate _ both because of the impact it might have on the central bank going forward, and also because much of the scorn is undeserved,” said John Dearie, a former officer of the New York Fed now serving as executive vice president of the Financial Services Forum, an industry group.

The Federal Reserve acts as the “lender of last resort” to banks when they can’t get money elsewhere. That’s important for the nation’s financial and economic stability.

Bernanke’s confirmation comes as Congress is writing an overhaul of financial regulations aimed at avoiding another financial crisis. The chairman has had to defend the Fed against efforts to diminish its authority.

A House bill would remove its power to oversee consumer protections and would subject it to a sweeping congressional audit. A Senate bill seeks to create a separate consumer entity as well, and would create a single banking regulator that would also strip the Fed of its supervision of bank holding companies.

Bernanke has admitted making mistakes _ including underestimating the threat of a booming housing market that eventually went bust and the resulting fallout to the economy. But he insist he has the tools, the know-how and the political backbone to safely steer the recovery from the worst recession since the 1930s. The biggest challenge facing Bernanke this year: deciding when and how to reverse course and boost interest rates to sop up the unprecedented money pumped out during the crisis. That’s important to prevent an outbreak of inflation.

A scholar of the Great Depression, Bernanke, 56, spent most of his professional career in academia, including 17 years teaching economics at Princeton. He came to Washington to take a job at the Federal Reserve, working with then-Chairman Alan Greenspan. Bush selected him to be his top economist. After that, he was sent to run the Fed starting in 2006.

USD/JPY Classic

Posted by Mulder Venture at 3:22 am

The measured move objective off of the double top triggered on the break below neckline support at 91.25 has now been reached and although the overall trend appears to be grossly bearish at present, shorter-term technicals are starting to look a little stretched and could potentially be warning of an upside reversal over the coming sessions.

USD/JPY: The measured move objective off of the double top triggered on the break below neckline support at 91.25 has now been reached and although the overall trend appears to be grossly bearish at present, shorter-term technicals are starting to look a little stretched and could potentially be warning of an upside reversal over the coming sessions. At present, we see the risk for a break below 89.00 and into the 88.00’s. However, any setbacks beyond 88.25 are seen limited with the level coinciding with the 61.8% fib retracement off of the November-January move. Setbacks were also very well supported in the 88.00 area back in the Fall of 2009 and as such, we will look to take advantage of a dip into the lower 88’s to establish a fresh long position. STRATEGY: BUY @88.30 FOR AN OPEN OBJECTIVE; STOP 87.30. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON WEDNESDAY. 3X LEVERAGED.

Performance Update Mulder Currency Fund: 14,8% halfway week 4!!

Posted by Mulder Venture at 3:04 am

Latest Performance Update Mulder Currency Fund. (27th January, 2010)

We are 4 weeks in and have added a profit of €7412 to our €50.000 live-model account. Which brings us at a 14,8,% profit within 18 trading days.

View the progress bar below for the current will status and the amount remaining to complete our goal of 1.000.000 euro.

Live Status Mulder Currency Fund

To receive a update on our status, please subscribe to our feed or follow us through Twitter

How much did you make since Januari the 1ste?

If you did not make at least 5%, why not consider participating in our Currency Fund or signing up for a Managed Account.

It is not to late for you to start making money, join us now..

Account Summary and performance/trades overview will be posted weekly, to view last weeks “January 21th” click here..

(click to open the PDF in a new window)

Forex Competition Update 27th January!!

Posted by Mulder Venture at 12:45 am

The table below gives a overview on the current ranking of the Mulder Forex Competition. (Januari 27th)

At the moment of taking the daily rankings:

We have 7 people banking a profit with Pedrag Jovanovic as the undisputted leader with a respectable 39% profit,

and 11 people with a negative balance (being Sara Bader the leader of the pack with a 40% loss).

In the conditions you could read to compare all competitors: open an account of 50.000 USD but the most opened an account size of 5.000 USD. This is not in your own favor, because the margin call is tighter than in other situation. So all new competitors open an account of 5.000 USD.

if you have any questions regarding the forex competition or on current rankings please send us a email